#Ideas about the company and potential catalysts
Jeffrey E. Eberwein (and all the companies related to him) owns around 10% of the shares of Superior Drilling Products, Inc. This information is taken from the latest Form 13D (Filing Date: 2022-09-09). And now the percentage may be even higher than 10% as he keeps on buying. At the website of his company and in the SEC reports, Jeffrey E. Eberwein suggests various strategic alternatives for Superior Drilling Products, Inc.
A few year ago, I owned shares of some shell companies that were traded at OTC Markets and belonged to Jeffrey E. Eberwein. In the end, all those shell companies found private companies for merging and concluded Reverse Merger deals. Since then, I have been monitoring from time to time what that man is doing and what kind of deals he participates in.
I do not know if Jeffrey E. Eberwein is going to succeed in playing the activist investor role in relation to Superior Drilling Products, Inc. But I find it very interesting to see how it all ends up and if they conclude any kind of M&A/RM deal in the end! However, I like it better when the strategic alternative initiative comes directly from the company management, not from activist investors.
#Information about Jeffrey E. Eberwein
Mr. Eberwein became Executive Chairman in January 2021 and has served on our Board for almost 9 years. He has over 25 years of Wall Street experience and was the Founder and CEO of Lone Star Value Management, an investment firm. Prior to founding LSVM in 2013, Mr. Eberwein was a Portfolio Manager at Soros Fund Management and Viking Global Investors. In April 2018, Mr. Eberwein became CEO of Hudson Global, Inc., a global recruitment company, and has been on that board since 2014. Previously, Mr. Eberwein served as Chairman of the Board for AMERI Holdings, Inc., an IT services company, ATRM Holdings, Inc., a modular building company, and Crossroads Systems, Inc., a technology company. Mr. Eberwein also served as a director of The Goldfield Corporation, On Track Innovations Ltd., and NTS, Inc. Mr. Eberwein served on the Board of Hope for New York, a 501(c)3 organization dedicated to serving the poor and marginalized in New York City where he was Treasurer and on the Executive Committee. Mr. Eberwein earned an MBA from The Wharton School, University of Pennsylvania and a BBA with High Honors from The University of Texas at Austin.
Star Equity Holdings, Inc. - Management Team
https://www.starequity.com/star-equity-holdings-management-team-0
#Information about strategic alternatives for Superior Drilling Products, Inc.
Star Equity is a significant shareholder of Superior Drilling Products, Inc., owning as a group approximately 6.7% of the Company’s outstanding shares. We trust the Board shares our goals of maximizing value for all SDPI shareholders and creating a thriving, well-regarded Company where customers, employees, and shareholders all benefit from its products, services, and overall presence in the marketplace.
We strongly believe to best achieve these goals SDPI should become part of a larger entity. The most likely way for this to happen would be for SDPI to sell itself to a larger company. The Company could also pursue a merger of equals or allow a larger private company to go public via a reverse merger into SDPI. Alternatively, SDPI could be taken private if none of these options materialize. We strongly believe all these strategic options should be considered by the Board and pursued with a sense of urgency. Remaining a small public company is a poor outcome for shareholders due to the Company’s microcap status and its high SG&A expenses, including management compensation and public-company costs, as a percentage of revenue.
Star Equity Issues Open Letter to Board of Superior Drilling Products, Inc. - (May 10, 2022).
https://starequityfund.com/open-letter-board-superior-drilling-products/
The Star Equity Fund, LP 13D Group (“Star Equity” or “we” or “our”) currently owns approximately 9.9% of Superior Drilling Products, Inc. (“SDPI” or the “Company”).
As we have stated previously, we strongly believe SDPI should become part of a larger entity. The most likely way for this to happen would be for SDPI to sell itself to a larger company. The Company could also pursue a merger of equals or allow a larger private company to go public via a reverse merger into SDPI. Alternatively, SDPI could be taken private if none of these options materialize. All of these strategic options should be considered by the Company’s board and pursued with a sense of urgency. Remaining a small public company is a poor outcome for shareholders due to the Company’s microcap status and its high SG&A expenses, including management compensation and public company costs, as a percentage of revenue.
Proxy Disclosure Letter (September 9, 2022).
https://www.sec.gov/Archives/edgar/data/1600422/000191567322000016/sdpiproxydisclosureletter_.htm
#Principal Stockholders
Form DEF 14A (Filing Date: 2022-07-15).
https://www.sec.gov/Archives/edgar/data/1600422/000149315222019437/formdef14a.htm
The Star Equity Fund, LP 13D Group (“Star Equity” or “we” or “our”) currently owns approximately 9.9% of Superior Drilling Products, Inc. (“SDPI” or the “Company”). We are writing this letter because we believe the Company’s July 5 and July 15, 2022 Schedule 14A proxy statements filed with the Securities Exchange Commission (”SEC”) were erroneous and omitted certain required ownership disclosures. Specifically, we believe the Company failed to properly disclose certain ownership of SDPI shares at the time it requested votes from shareholders within its 2022 annual proxy.
Star Equity filed a Schedule 13D with the SEC on May 9, 2022 disclosing group beneficial ownership interest of 6.73%. Thereafter, Star Equity filed amendments on May 10 and June 14, and in its June 24 filing disclosed its then 9.03% interest, yet the Company’s Preliminary 14A filed on July 5, 2022 failed to mention either Jeffrey Eberwein or Star Equity as beneficial owners of more than 5%. The Definitive 14A also failed to mention our ownership, and it only mentions SDPI’s CEO and COO as owning over 5%. This omission misled shareholders by not properly disclosing a new significant shareholder pushing for changes beneficial to all shareholders. We believe this critical omission may have discouraged some shareholders from voting or caused certain shareholders to vote differently – given some shareholders may not have been aware that an almost 10% shareholder group existed and was advocating for change at the Company. At this time, we believe the error was not intentional and we expect the Company will take all actions necessary to provide accurate information in future filings, including correctly reflecting the ownership information of SDPI shares.
Proxy Disclosure Letter (September 9, 2022).
https://www.sec.gov/Archives/edgar/data/1600422/000191567322000016/sdpiproxydisclosureletter_.htm
This Form 3 is filed jointly by Jeffrey E. Eberwein, Star Equity Fund, LP ("Star Equity Fund"), Star Equity Fund GP, LLC ("Star Equity GP"), Star Investment Management, LLC ("Star Investment Management"), Star Value, LLC ("Star Value") and Star Equity Holdings, Inc. ("Star Equity Holdings") (collectively, the "Reporting Persons"). Each of the Reporting Persons may be deemed to be a member of a Section 13(d) group that collectively beneficially owns more than 10% of the Issuer's outstanding shares of Common Stock.
Form 3 (Filing Date: 2022-11-30).
Form 4 (Filing Date: 2022-11-30).
Form 4 (Filing Date: 2022-12-06).
Form 4 (Filing Date: 2022-12-09).
Form 4 (Filing Date: 2022-12-14).
Form 4 (Filing Date: 2022-12-20).
#Information about Superior Drilling Products, Inc.
Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is an innovative drilling and completion tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. Our headquarters and manufacturing operations are located in Vernal, Utah. Our drilling solutions include the patented Drill-N-Ream® well bore conditioning tool (“Drill-N-Ream tool” or “DNR”) and the patented Strider™ Drill String Oscillation System technology (“Strider technology” or “Strider”). In addition, the Company is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field service company. We operate a state-of-the-art fabrication facility, where we manufacture solutions for the drilling industry, as well as various customers’ custom products in other industries.
Our history dates back to 1995 when we were founded by Troy and Annette Meier as a drill bit refurbishment company. Our co-founder, Troy Meier, developed the first commercially-viable process for refurbishing PDC drill bits after a successful 13-year career with a predecessor of Baker Hughes Inc. He was also co-inventor of the patented Drill-N-Ream® well bore conditioning tool. We were incorporated on December 10, 2013 under the name SD Company, Inc. in order to facilitate (a) the reorganization of the entities that are now our consolidated subsidiaries and (b) the subsequent acquisition of Hard Rock Solutions, LLC (“HR”). We changed our name from SD Company Inc. to Superior Drilling Products, Inc. on May 22, 2014 in conjunction with closing of that reorganization and our initial public offering, which occurred on May 23, 2014 (“Offering” or “IPO”). Our corporate headquarters and manufacturing operations are located in Vernal, Utah. Our common stock trades on the NYSE American exchange under the ticker symbol “SDPI”.
Our subsidiaries include (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) HR.
Form 10-K (Filing Date: 2022-03-24).
https://www.sec.gov/Archives/edgar/data/1600422/000149315222007594/form10-k.htm
#Risk of delisting from NYSE
Our common stock could be delisted from the NYSE American due to a failure to satisfy their continued listing standards.
On November 18, 2020, the Company received notification from the NYSE American to the Company indicating that, as a result of the Company’s stockholders’ equity of $4.7 million as of September 30, 2020, and reported losses for each of the last five fiscal years, the Company is not in compliance with the stockholders’ equity standards for continued listing on the NYSE American. On January 28, 2021, the Company received notice from the NYSE American that they had accepted the Company’s plan that was submitted on December 18, 2020, to regain compliance with the continued listing standards of the NYSE American. The Company has been granted a plan period through May 18, 2022 to regain compliance.
NYSE American Regulations staff will review the Company periodically for compliance with the initiatives outlined in the plan. Although the Company’s quarterly updates have been approved by the NYSE American to date, if the Company does not make continued progress consistent with the plan during the plan period, NYSE Regulation staff may initiate delisting proceedings as appropriate. On November 30, 2021, the Company submitted its third quarterly plan update which was approved by the NYSE on December 23, 2021.
Form 10-K (Filing Date: 2022-03-24).
https://www.sec.gov/Archives/edgar/data/1600422/000149315222007594/form10-k.htm
VERNAL, UT, May 19, 2022 — Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or the “Company”), a designer and manufacturer of drilling tool technologies, announced today that it has received notification from the NYSE American LLC (“NYSE American”) that the Company has regained compliance with the continued listing standard of Sections 1003(a)(ii) and (iii) of the NYSE American Company Guide (“the “Company Guide”). At March 31, 2022, SDP had shareholders’ equity of $6.5 million, surpassing the $6.0 million requirement to meet the listing standard.
As of May 19, 2022, the below compliance (“.BC”) indicator will no longer be disseminated and the Company was removed from the list of NYSE American noncompliant issuers on the NYSE American’s website.
Form 8-K/Press release (Filing Date: 2022-05-19).
https://www.sec.gov/Archives/edgar/data/1600422/000149315222014488/form8-k.htm
#Info
Country: USA
Exchange: NYSE American
Stock Symbol: SDPI
Sector: Energy
Industry: Oil & Gas Equipment & Services
Incorporation Information: Utah
Reporting Status: SEC Reporting
52 Week High: $1.84
52 Week Low: $0.62
*Share Structure:
Market Cap: $28M
Common Stock
Authorized Shares: 100,000,000
Outstanding Shares: 29,245,080
Preferred Stock: No
Reverse Splits: No
Dilution: Yes
(i) I own this company’s shares purchased from the open market!*
*Now I have bought a small number of shares of this company. If there is any progress in the conclusion of an M&A/RM deal, I am going to buy more shares.
Disclaimer
All the information in this blog is by no means an investment recommendation or advice! Do not rely on the materials and information from this blog when taking your investment decisions! When buying or selling your shares or other financial instruments, perform your own independent analysis and research! The author can buy or sell the securities mentioned in this blog at any moment without a prior notice. The author of this blog shall never be liable for any damage caused by using the information from this blog. This blog uses sources of information which are considered reliable, but there is no guarantee that their information is always correct, comprehensive or accurate. A big number of the companies mentioned in this blog may appear illiquid and highly volatile! Owning shares of Nano/Micro Cap companies may often become quite risky! Because those are small companies running high risks of bankruptcy, delisting, and various corporate activities like reverse splits or dilution, and many other kinds of risk as well. The investment ideas and catalysts presented here may never get implemented or become a reality after quite a long time!