Current Report Filing (8-k)
February 14 2017 - 4:47PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
Current
Report
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE
OF REPORT (DATE OF EARLIEST EVENT REPORTED):
February
9, 2017
SUPERIOR
DRILLING PRODUCTS, INC.
(Exact
name of registrant as specified in its charter)
Utah
(State
of
Incorporation)
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46-4341605
(I.R.S.
Employer
Identification
No.)
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1583
South 1700 East
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Vernal,
Utah
(Address
of principal executive offices)
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84078
(Zip
code)
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Commission
File Number:
001-36453
Registrant’s
telephone number, including area code:
(435) 789-0594
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On
February 9, 2017, Meier Properties, Series LLC, a Utah limited liability company (“MPS”), and a wholly-owned subsidiary
of Superior Drilling Products, Inc. (the “Company”), sold to Superior Auto Body and Paint, LLC, a Utah limited liability
company (“SABP”), certain real estate located at 3978 West 12600 South, Riverton, Utah 84096 (the “Real Property”)
pursuant to the terms and conditions of a special warranty deed between SABP and MPS (the “Deed”). Prior to the sale,
MPS leased the Real Property to SABP pursuant to that certain lease dated May 25, 2012 (the “Lease”). The Lease was
terminated in connection with closing of the transactions contemplated by the Deed (the “Lease Termination”). The
purchase price for the Real Property was approximately $2.5 million, which is substantially equal to the appraised value of the
Real Property, plus any prepayment fees and accrued interest associated with the Existing Loans Balance, as such term is defined
below. The purchase price for the purchase was financed by Zions First National Bank (the “Zion’s Loan”). The
proceeds of the sale were utilized by MPS to repay in full the outstanding balance for the loans of MPS outstanding on the Real
Property with a cumulative payoff balance of approximately $2.5 million. In connection with the repayment in full of such loans,
the guaranty of the Company of such loans was released.
As
part of the transaction, Troy Meier, the Company’s Chief Executive Officer, and Annette Meier, the Company’s Chief
Operating Officer, were required to pledge 547,000 of their shares of the Company’s common stock to partially collateralize
the Zion’s Loan, as the Meiers have a direct ownership interest in SABP. These shares were previously held as a portion
of the collateral for that certain amended and restated promissory note dated December 31, 2015 in the original principal amount
of approximately $8.3 million issued to the Company by Tronco Energy Corporation, which the Company refers to in its SEC filings
as the Tronco loan. Zions has agreed to transfer the stock pledge back to the Company for security under the Tronco loan after
repayment in full of the Zion’s Loan.
The
foregoing descriptions of the Lease, the Lease Termination, the Zion’s Loan and the Deed are qualified in their entirety
by reference to the text of the Lease, the Lease Termination, the Zion’s Loan and the Deed, which are filed or included,
as applicable, as Exhibits 10.1 through 10.4, respectively, to this Form 8-K and are incorporated herein by reference.
Item
1.02 Termination of a Material Definitive Agreement.
The
text set forth in Item 1.01 regarding the Lease Termination is incorporated into this section by reference.
Item
8.01 Other Events.
On
February 14, 2017, the Company issued a press release announcing the execution of the Deed and the related transactions, along
with preliminary revenue for the fourth calendar quarter of 2016. A copy of the press release is filed herewith as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits.
Exhibit
Number
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Description
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10.1
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Lease,
dated May 25, 2012, between MPS, as lessor, and SABP, as lessee (incorporated by reference to Exhibit 10.56 to the Registrant’s
Registration Statement on Form S-1 (Registration No. 333-195085) filed with the SEC on April 7, 2014).
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10.2
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Loan
Agreement, dated April 3, 2012, between MPS and SABP as co-borrowers, and Mountain West Small Business Finance, as lender;
Change in Terms Agreement dated March 19, 2012, between SABP, as borrower and Mountain America Credit Union, as Lender; and
Change in Terms Agreement dated March 19, 2012, between SABP, as borrower and Mountain America Credit Union, as Lender (incorporated
by reference to Exhibit 10.50 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (Registration
No. 333-195085) filed with the SEC on April 30, 2014).
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10.3
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Loan
Agreement, dated May 25, 2012, between MPS and SABP, as co-borrowers and Mountain West Small Business Finance, as lender (incorporated
by reference to Exhibit 10.52 to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-195085) filed
with the SEC on April 7, 2014).
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10.4
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Special
Warranty Deed between MPS and SABP dated February 9, 2017.*
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10.5
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Termination
of Real Property Lease between MPS and SABP dated February 9, 2017.*
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99.1
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Press
release issued on February 14, 2017 regarding the Purchase Agreement and preliminary revenue for the fourth calendar quarter
of 2016.*
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*
Filed herewith.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date:
February 14, 2017
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SUPERIOR
DRILLING PRODUCTS, INC.
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/s/
Christopher D. Cashion
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Christopher
D. Cashion
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Chief
Financial Officer
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