As
filed with the Securities and Exchange Commission on July 1, 2020
Registration
No. 333-_____
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Superior
Drilling Products, Inc.
(Exact
name of registrant as specified in its charter)
Utah
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46-4341605
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(State
or other jurisdiction
of
incorporation or organization)
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(I.R.S.
Employer
Identification
No.)
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1583
South 1700 East
Vernal,
Utah 84078
(435)
789-0594
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
G.
Troy Meier
Chief
Executive Officer
Superior
Drilling Products, Inc.
1583
South 1700 East
Vernal,
Utah 84078
(435) 789-0594
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Robert
G. Reedy
Kevin
J. Poli
Porter
Hedges LLP
1000
Main, 36th Floor
Houston,
Texas 77002
Telephone:
(713) 226-6674
Telecopy:
(713) 228-1331
Approximate
date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ]
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Accelerated
filer [ ]
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Non-accelerated
filer [ ] (Do not check if a smaller reporting company)
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Smaller
reporting company [X]
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Emerging
growth company [ ]
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
[ ]
CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities to be Registered (1)
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Amount to be
Registered
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Proposed Maximum
Aggregate Offering
Price per Unit
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Proposed Maximum
Aggregate Offering Price
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Amount of
Registration Fee
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Primary Offering:
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Common Stock, par value $0.001 per share
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Preferred Stock, par value $0.001 per share
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Warrants
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Subscription Rights
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Purchase Contracts
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Units
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Total Primary Offering
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$
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20,000,000
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(2)
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$
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2,596
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(3)
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Secondary Offering:
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Common Stock, par value $0.001 per share (4)
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4,000,000
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$
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0.77
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(5)
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$
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3,080,000
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$
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400
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Total
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$
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23,080,000
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$
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2,996
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(1)
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Other
than with respect to the shares of Common Stock registered for resale and described in footnote (4) below, the securities
registered consist of $20,000,000 of an indeterminate number or amount of Common Stock, Preferred Stock, Warrants, Subscription
Rights, Purchase Contracts and Units, as may be issued from time to time at indeterminate prices. In no event will the aggregate
initial offering price of all securities issued from time to time pursuant to this registration statement, other than the
shares of Common Stock described in footnote (4) below, exceed $20,000,000 or the equivalent thereof in foreign currencies,
foreign currency units or composite currencies. This registration statement also covers an indeterminate amount of securities
registered hereunder and listed in the “Calculation of Registration Fee” table above as may be issued in exchange
for, or upon conversion or exercise of, as the case may be, the securities registered hereunder and listed in the “Calculation
of Registration Fee” table above.
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(2)
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The
proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(o) of the Securities Act of 1933.
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(3)
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Calculated
in accordance with Rule 457(o) of the Securities Act of 1933.
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(4)
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Represents
shares of Common Stock registered for resale by the selling stockholders named in this registration statement.
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(5)
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Pursuant
to Rule 457(c) of the Securities Act of 1933, the registration fee is calculated on the basis of the average of the high and
low sale prices of our common stock on June 30, 2020, as reported on the NYSE American.
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
This
registration statement consists of two prospectuses, covering the registration of:
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Shares
of common stock, shares of preferred stock, warrants, subscription rights, purchase contracts and units of Superior Drilling
Products, Inc.; and
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Shares
of common stock of Superior Drilling Products, Inc. that may be sold in one or more secondary offerings by the selling stockholders.
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The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject
to completion, DATED JULY 1,
2020
PROSPECTUS
$20,000,000
Common
Stock
Preferred
Stock
Warrants
Subscription
Rights
Purchase
Contracts
Units
We
may offer from time to time shares of our common stock, preferred stock, warrants, subscription rights, purchase contracts and
units that include any of these securities.
The
aggregate initial offering amount of the securities that we offer will not exceed $20,000,000. We will offer the securities in
amounts, at prices and on terms to be determined at the time of the offering.
Our
common stock is quoted on the NYSE American under the symbol “SDPI.” The last reported sale price of our common stock
on June 30, 2020 was $0.744 per share.
The
aggregate market value of our outstanding common stock held by non-affiliates was $9,954,799 based on 25,434,776 shares
of outstanding common stock as of June 30, 2020, of which approximately 13,380,106 shares were held by non-affiliates,
and based on the last reported sale price of our common stock as noted above. Pursuant to General Instruction I.B.6 of Form S-3,
in no event will we sell securities pursuant to this prospectus with a value of more than one-third of the aggregate market value
of our common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held
by non-affiliates is less than $20,000,000. In the event that subsequent to the date of this prospectus, the aggregate market
value of our outstanding common stock held by non-affiliates equals or exceeds $20,000,000, then the one-third limitation on sales
shall not apply to additional sales made pursuant to this prospectus.
We
may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on
a continuous or delayed basis.
We
will provide the specific terms of the offering in supplements to this prospectus. You should read this prospectus and any supplement
carefully before you invest. This prospectus may not be used to offer and sell our securities unless accompanied by a prospectus
supplement.
Investing
in our securities involves significant risks that are described in the “Risk Factors” section beginning on page 6
of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is July 1, 2020.
Table
of Contents
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “Commission”)
utilizing a “shelf” registration process. Under this shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total dollar amount of $20,000,000. This prospectus provides
you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of the offering and the offered securities. This prospectus, together with
applicable prospectus supplements, any information incorporated by reference, and any related free writing prospectuses we file
with the Commission, includes all material information relating to these offerings and securities. We may also add, update or
change in the prospectus supplement any of the information contained in this prospectus or in the documents that we have incorporated
by reference into this prospectus, including without limitation, a discussion of any risk factors or other special considerations
that apply to these offerings or securities or the specific plan of distribution. If there is any inconsistency between the information
in this prospectus and a prospectus supplement or information incorporated by reference having a later date, you should rely on
the information in that prospectus supplement or incorporated information having a later date. We urge you to read carefully this
prospectus, any applicable prospectus supplement and any related free writing prospectus, together with the information incorporated
herein by reference as described under the heading “Incorporation of Certain Documents By Reference,” and the additional
information described under the heading “Where You Can Find More Information,” before buying any of the securities
being offered.
You
should rely only on the information we have provided or incorporated by reference in this prospectus, any applicable prospectus
supplement and any related free writing prospectus. We have not authorized anyone to provide you with different information. No
dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus,
any applicable prospectus supplement or any related free writing prospectus.
Neither
the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information
in this prospectus is correct as of any date after the date of this prospectus. You should assume that the information in this
prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the
front of the document and that any information we have incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any
related free writing prospectus, or any sale of a security.
The
registration statement containing this prospectus, including exhibits to the registration statement, provides additional information
about us and the securities offered under this prospectus and any prospectus supplement. We have filed and plan to continue to
file other documents with the Commission that contain information about us and our business. Also, we will file legal documents
that control the terms of the securities offered by this prospectus as exhibits to the reports that we file with the Commission.
The registration statement and other reports can be read at the Commission website or at the Commission offices mentioned under
the heading “Where You Can Find More Information.”
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made
to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents.
Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits
to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below
under “Where You Can Find More Information.”
SUPERIOR
DRILLING PRODUCTS, inc.
We
are 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 and the patented Strider™ Drill String
Oscillation System technology. In addition, we are a manufacturer and refurbisher of polycrystalline diamond compact drill bits
We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well
as customers’ custom products.
As
used in this prospectus, the terms “we,” “us” and “our” mean Superior Drilling Company, Inc.,
a Utah corporation, and its subsidiaries and predecessors, unless the context indicates otherwise. Our principal executive office
is located at 1583 South 1700 East, Vernal, Utah 84078, and our phone number is (435) 789-0594.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus, our filings with the Commission and our public releases include “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation
Reform Act of 1995 (the “PSLRA”), or in releases made by the Commission. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements
of us and our subsidiaries to differ materially from any future results, performance or achievements expressed or implied by such
forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements
can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “project,” “may,”
“will,” “would,” “could,” “should,” “seeks,” or “scheduled to,”
or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion
of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the
PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.
The
forward-looking statements contained in or incorporated by reference into this prospectus are largely based on our expectations,
which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based
on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they
are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including:
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the
impact of domestic and global economic conditions as a result of COVID-19 and the future impact of such conditions on the
oil and gas industry and the demand for our services;
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the
volatility of oil and natural gas prices;
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the
cyclical nature of the oil and gas industry;
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availability
of financing, flexibility in restructuring existing debt and access to capital markets;
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our
reliance on significant customers;
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consolidation
within our customers’ industries;
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competitive
products and pricing pressures;
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our
ability to develop and commercialize new and/or innovative drilling and completion tool technologies;
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fluctuations
in our operating results;
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our
dependence on key personnel;
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costs
of raw materials;
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our
dependence on third party suppliers;
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unforeseen
risks in our manufacturing processes;
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the
need for skilled workers;
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our
ability to successfully manage our growth strategy;
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unanticipated
risks associated with, and our ability to integrate, acquisitions;
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current
and potential governmental regulatory actions in the United States and regulatory actions and political unrest in other countries;
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terrorist
threats or acts, war and civil disturbances;
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our
ability to protect our intellectual property;
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impact
of environmental matters, including future environmental regulations;
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implementing
and complying with safety policies;
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breaches
of security in our information systems and other cybersecurity risks;
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related
party transactions with our founders; and
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risks
associated with our common stock.
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Many
of these factors are beyond our ability to control or predict. These factors are not intended to represent a complete list of
the general or specific factors that may affect us.
In
addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking
statements contained in this prospectus and in the documents incorporated by reference into this prospectus are not guarantees
of future performance, and we cannot assure any reader that such statements will be realized or that the forward-looking events
and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements
due to factors described in “Risk Factors” included elsewhere in this prospectus and in the documents that we include
in or incorporate by reference into this prospectus, including our Annual Report on Form 10-K for the fiscal year ended December
31, 2019, and our subsequent Commission filings. All forward-looking statements speak only as of the date they are made. We do
not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise, except
as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on
our behalf.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the informational requirements of the Exchange Act and file reports, proxy statements and other information with
the Commission as required by the Exchange Act. These reports, proxy statements and other information can be inspected and copied
at the Commission’s Public Reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition, the Commission maintains
an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. We maintain a website at www.sdpi.com. Information on our website
or any other website is not incorporated by reference into this prospectus and does not constitute part of this prospectus.
We
have filed a registration statement with the Commission on Form S-3 (including any amendments thereto, known as the registration
statement) under the Securities Act with respect to the securities offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and schedules thereto. You may refer to the registration
statement and the exhibits and schedules thereto for more information about the offered securities and us. Statements made in
this prospectus regarding the contents of any contract or document filed as an exhibit to the registration statement are not necessarily
complete and, in each instance, reference is hereby made to the copy of such contract or document so filed. Each such statement
is qualified in its entirety by such reference.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
following documents, which have previously been filed by us with the Commission under the Exchange Act, are incorporated herein
by reference:
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Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 18, 2020 (File
No. 001-36453);
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020, filed with the Commission on May 11, 2020 (File
No. 001-36453);
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A
description of our capital stock contained in our Form 8-A filed with the Commission on May 12, 2014 (File No. 001-36453);
and
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Our
Current Reports on Form 8-K, filed with the Commission on January 2, 2020, February 25, 2020, March 12, 2020, April 9, 2020,
April 17, 2020, April 27, 2020, and May 8, 2020 (File No. 001-36453) (excluding any information furnished pursuant
to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K).
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All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 on any current report on Form 8-K and any corresponding information furnished under Item 9.01
or included as an exhibit) after the date of the initial registration statement and prior to the effectiveness of the registration
statement and after the date of this prospectus and prior to the termination of each offering under this prospectus shall be deemed
to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents. Any statement
contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
This
prospectus incorporates documents by reference that are not delivered with the prospectus. Copies of these documents, other than
the exhibits to the documents (unless such exhibits are specifically incorporated by reference in such documents), are available
upon written or oral request, at no charge, from us. Requests for such copies should be directed to Superior Drilling Products,
Inc., 1583 South 1700 East, Vernal, Utah 84078, Attention: Chief Financial Officer, telephone number: (435) 789-0594.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You should carefully consider the risk factors and all of the other
information included in, or incorporated by reference into, this prospectus, including those risk factors included in our Annual
Report on Form 10-K for the year ended December 31, 2019, and our subsequent Commission filings, in evaluating an investment in
our securities. If any of these risks were to occur, our business, financial condition or results of operations could be adversely
affected. In that case, the trading price of our securities could decline and you could lose all or part of your investment. When
we offer and sell any securities pursuant to a prospectus supplement, we may include additional risk factors relevant to such
securities in the prospectus supplement.
USE
OF PROCEEDS
Unless
we inform you otherwise in the prospectus supplement or any pricing supplement, we will use the net proceeds from the sale of
the offered securities for general corporate purposes. These purposes may include capital expenditures, repayment or refinancing
of indebtedness, acquisitions and repurchases and redemptions of securities. Pending any specific application, we may initially
invest funds in short-term marketable securities or apply them to the reduction of indebtedness.
DILUTION
Our
net tangible book value at December 31, 2019 was $0.20 per share of common stock. Net tangible book value per share of common
stock is determined by dividing our tangible net worth, which is tangible assets less liabilities, by the total number of shares
of our common stock outstanding. If we offer shares of our common stock, purchasers of our common stock in that offering may experience
immediate dilution in net tangible book value per share. The prospectus supplement relating to an offering of shares of our common
stock will set forth the information regarding any dilutive effect of that offering.
DESCRIPTION
OF CAPITAL STOCK
The
total number of shares of all classes of stock that we have authority to issue is 120,000,000, consisting of 100,000,000 shares
of common stock, par value $.001 per share, and 20,000,000 shares of preferred stock, par value $.001 per share. We had 25,434,776
shares of common stock, and no shares of preferred stock, outstanding as of June 26, 2020.
In
the discussion that follows, we have summarized selected provisions of our articles of incorporation and our bylaws relating to
our capital stock. You should read our articles of incorporation and bylaws as currently in effect for more details regarding
the provisions we describe below and for other provisions that may be important to you. We have filed copies of those documents
with the SEC, and they are incorporated by reference as exhibits to the registration statement. Please read “Where You Can
Find More Information.”
Common
Stock
Voting
rights. Holders of common stock are entitled to one vote per share on any matter to be voted upon by shareholders. All shares
rank equally as to voting and all other matters. The shares of common stock have no preemptive or conversion rights, no redemption
or sinking fund provisions, are not liable for further call or assessment and are not entitled to cumulative voting rights.
Dividend
rights. For as long as such stock is outstanding, the holders of common stock are entitled to receive ratably any dividends
when and as declared from time to time by our board of directors out of funds legally available for dividends. We currently intend
to retain all future earnings for the operation and expansion of our business and do not anticipate paying cash dividends on the
common stock in the foreseeable future.
Liquidation
rights. Upon a liquidation or dissolution of our company, whether voluntary or involuntary, creditors will be paid before
any distribution to holders of our common stock. After such distribution, holders of common stock are entitled to receive a pro
rata distribution per share of any excess amount.
Preferred
Stock
Our
articles of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder
approval, to establish and to issue from time to time one or more classes or series of preferred stock covering up to an aggregate
of 20,000,000 shares of preferred stock. Each class or series of preferred stock will cover the number of shares and will have
preferences, voting powers, qualifications and special or relative rights or privileges determined by the board of directors,
which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights
and redemption rights.
Anti-Takeover
Provisions in Our Articles of Incorporation and Bylaws
Our
articles of Incorporation and bylaws include a number of provisions that may have the effect of encouraging persons considering
unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated
takeover attempts. These provisions include the items described below.
Removal
of directors and filling board vacancies. Our bylaws provide that directors may be removed with or without cause by the affirmative
vote of the holders of a majority of the voting power of all the outstanding shares of capital stock entitled to vote generally
in the election of directors voting together as a single class. Furthermore, any vacancy on our board of directors, however occurring,
including a vacancy resulting from an increase in the size of our board, may be filled by the affirmative vote of a majority of
the shareholders, or by a majority of our directors then in office even if less than a quorum.
Meetings
of shareholders. Our bylaws (a) provide that only those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of shareholders, and (b) limit the business that may be conducted at an annual meeting of shareholders
to those matters properly brought before the meeting.
Advance
notice requirements. Our bylaws establish advance notice procedures with regard to shareholder proposals relating to the nomination
of candidates for election as directors or new business to be brought before meetings of our shareholders. These procedures provide
that notice of shareholder proposals must be timely and given in writing to our corporate secretary prior to the meeting at which
the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not earlier than
the close of business on the 120th day, nor later than the close of business on the 90th day, prior to the first anniversary
date of the annual meeting for the preceding year. The notice must contain certain information specified in the bylaws.
Amendment
to Bylaws and Articles of Incorporation. Except as otherwise required by Utah law, any amendment of our articles of incorporation
must first be approved by a majority of our board of directors and thereafter be approved by a majority vote of the outstanding
shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a
class, except that the amendment of the provisions relating to shareholder action, directors, indemnification and the amendment
of our bylaws and articles of incorporation must be approved by no less than 66 2/3% of the voting power of all of the shares
of capital stock issued and outstanding and entitled to vote generally in any election of directors, voting together as a single
class. Our bylaws may be amended by the affirmative vote of a majority vote of the directors then in office, subject to certain
limitations set forth in the bylaws; and may also be amended by the affirmative vote of at least a majority of the voting power
of all of the shares of capital stock issued and outstanding and entitled to vote generally in any election of directors, voting
together as a single class.
Blank
check preferred stock. The existence of our authorized but unissued shares of preferred stock may enable our board of directors
to make it more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest,
or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that
a takeover proposal is not in the best interests of us or our shareholders, our board of directors could cause shares of preferred
stock to be issued without shareholder approval in one or more private offerings or other transactions that might dilute the voting
or other rights of the proposed acquirer or insurgent shareholder or shareholder group. The issuance of shares of preferred stock
could decrease the amount of earnings and assets available for distribution to holders of our common stock or other classes of
preferred stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may
have the effect of delaying, deterring, or preventing a change in control.
Utah
Control Shares Acquisition Act
We
are organized under Utah law. Some provisions of Utah law may delay or prevent a transaction that would cause a change in our
control. Under our articles of incorporation, we have opted that Section 61-6-1, et seq. of the Utah Code Annotated, as amended,
an anti-takeover law commonly referred to as the Control Shares Acquisition Act, will not apply to us.
Other
Provisions of Our Articles of Incorporation and Bylaws
Our
articles of incorporation provides that, subject to the rights of any issued preferred stock, our board of directors will be a
staggered board of directors consisting of different terms designated as Class I, Class II and Class III, respectively. At each
annual meeting of shareholders, directors of the applicable class shall be elected for a full term of three years to succeed the
directors of the class whose terms expire at such annual meeting. We believe that classification of our board of directors will
help to assure the continuity and stability of our business strategies and policies as determined by our board of directors.
Since
there is no cumulative voting in the election of directors, this classified board provision could have the effect of making the
replacement of incumbent directors more time consuming and difficult. At least two annual meetings of shareholders, instead of
one, will generally be required to effect a change in a majority of our board of directors. Thus, the classified board provision
could increase the likelihood that incumbent directors will retain their positions. The staggered terms of directors may delay,
defer or prevent a tender offer or an attempt to change control of us, even though a tender offer or change in control might be
believed by our shareholders to be in their best interest. Pursuant to our articles of incorporation, shares of our preferred
stock may be issued from time to time, and the board of directors is authorized to determine and alter all rights, preferences,
privileges, qualifications, limitations and restrictions without limitation, which could impact the ability to remove directors
as currently contemplated.
Ability
of Our Shareholders to Act
Our
bylaws provide that any shareholder or shareholders holding at least 10% of the total voting power may call special shareholders
meetings. Written notice of any special meeting so called shall be given to each shareholder of record entitled to vote at such
meeting not less than 10 or more than 60 days before the date of such meeting, unless otherwise required by law.
Our
bylaws provide that nominations of persons for election to our board of directors may be made at any annual meeting of our shareholders,
or at any special meeting of our shareholders called for the purpose of electing directors, (a) by or at the direction of our
board of directors or (b) by any of our shareholders.
In
addition to any other applicable requirements, for a nomination to be properly brought by a shareholder, such shareholder must
have given timely notice thereof in proper written form to our Secretary. To be timely, a shareholder’s notice must be delivered
to or mailed and received at our principal executive offices (a) in the case of an annual meeting of shareholders, not less than
90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided,
however, that if the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice
by a shareholder in order to be timely must be so received not later than the close of business on the tenth day following the
day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting
was made, whichever first occurs; and (b) in the case of a special meeting of our shareholders called for the purpose of electing
directors, not later than the close of business on the tenth day following the day on which notice of the date of the special
meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.
Our
bylaws provide that no business may be transacted at any annual meeting of our shareholders, other than business that is either
(a) specified in the notice of meeting given by or at the direction of our board of directors, (b) otherwise properly brought
before the annual meeting by or at the direction of our board of directors or (c) otherwise properly brought by any of our shareholders.
In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a shareholder,
such shareholder must have given timely notice thereof in proper written form to our Secretary. To be timely, a shareholder’s
notice must be delivered to or mailed and received at our principal executive offices not less than 90 days nor more than 120
days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that if the
annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by a shareholder
in order to be timely must be so received not later than the close of business on the tenth day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever
first occurs.
Limitations
of Director Liability and Indemnification of Directors, Officers, and Employees
Our
articles of incorporation provide that to the fullest extent permitted by the bylaws or the Utah Revised Business Corporation
Act, or the Act, or any other applicable law, as either may be amended, a director shall have no liability to the us or our shareholders
for monetary damages for conduct, any action taken, or any failure to take any action as a director. As permitted by the Act,
directors will not be personally liable to us or our shareholders for monetary damages as a director except liability for (a)
the amount of a financial benefit received by a director to which he’s not entitled; (b) an intentional infliction of harm
on the corporation or its shareholders; (c) an unlawful distribution in violation of Section 16-10a-842 of the Act; or (d) an
intentional violation of criminal law.
These
limitations of liability do not alter director liability under the federal securities laws and do not affect the availability
of equitable remedies, such as an injunction or rescission.
In
addition, our bylaws provide that:
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we
will indemnify our directors to the fullest extent permitted by the Act, including advancing expenses in connection with legal
proceedings, subject to limited exceptions;
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the
corporation may, to the extent permitted by the Act, by action of its board of directors, agree to indemnify officers, employees
and other agents of the corporation and may advance expenses to such persons.
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We
have entered into indemnification agreements with each of our executive officers and directors. These agreements provide that,
subject to limited exceptions and among other things, we will indemnify each of our executive officers and directors to the fullest
extent permitted by law and advance expenses to each indemnity in connection with any proceeding in which a right to indemnification
is available.
We
also maintain general liability insurance that covers certain liabilities of our directors and officers arising out of claims
based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act. Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons who control
our company, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
These
provisions may discourage shareholders from bringing a lawsuit against our directors for breach of their fiduciary duty, or may
have the practical effect in some cases of eliminating our shareholders’ ability to collect monetary damages from our directors
and executive officers. These provisions may also have the effect of reducing the likelihood of derivative litigation against
directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore,
a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements
and the insurance are necessary to attract and retain talented and experienced directors and officers.
At
present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be
required or permitted. We are not aware of any threatened litigation or proceedings that might result in a claim for such indemnification.
Listing
Our
common stock is listed for quotation on the NYSE American under the symbol “SDPI.”
Transfer
Agent and Registrar
VStock
Transfer is transfer agent and registrar for our common stock.
DESCRIPTION
OF WARRANTS
We
may issue warrants to purchase common stock, preferred stock, purchase contracts or units that are registered pursuant to the
registration statement to which this prospectus relates. We may issue warrants independently or together with other securities
that are registered pursuant to the registration statement to which this prospectus relates. Warrants sold with other securities
may be attached to or separate from the other securities. We will issue each series of warrants under a separate warrant agreement
between us and a warrant agent that we will name in the prospectus supplement. We will describe additional terms of the warrants
and the applicable warrant agreements in the applicable prospectus supplement.
General
If
warrants are offered, the prospectus supplement relating to a series of warrants will include the specific terms of the warrants,
including:
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the
offering price;
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the
title of the warrants;
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the
aggregate number of warrants offered;
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the
dates or periods during which the warrants can be exercised;
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whether
the warrants will be issued in individual certificates to holders or in the form of global securities held by a depositary
on behalf of holders;
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the
designation and terms of any securities with which the warrants are issued;
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if
the warrants are issued as a unit with another security, the date, if any, on and after which the warrants and the other security
will be separately transferable;
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if
the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the
exercise price is denominated;
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any
terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants;
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any
special tax implications of the warrants or their exercise;
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any
anti-dilution provisions of the warrants;
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any
redemption or call provisions applicable to the warrants; and
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any
other terms of the warrants.
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Transfers
and Exchanges
A
holder will be able to exchange warrant certificates for new warrant certificates of different denominations, or to transfer warrants,
at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement. Prior to exercise,
holders of warrants will have none of the rights of holders of the underlying securities.
Exercise
Holders
will be able to exercise warrants up to 5:00 P.M. New York City time on the date set forth in the prospectus supplement as the
expiration date.
After
this time, unless we have extended the expiration date, the unexercised warrants will be void.
Subject
to any restrictions and additional requirements that may be set forth in a prospectus supplement, holders of warrants may exercise
them by delivering to the warrant agent at its corporate trust office the following:
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warrant
certificates properly completed; and
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payment
of the exercise price.
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As
soon as practicable after the delivery, we will issue and deliver to the indicated holder the securities purchasable upon exercise.
If a holder does not exercise all the warrants represented by a particular certificate, we will also issue a new certificate for
the remaining number of warrants.
No
Rights of Security Holder Prior to Exercise
Prior
to the exercise of their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable
upon the exercise of the warrants, and will not be entitled to, in the case of warrants to purchase equity securities, the right
to vote or to receive dividend payments or similar distributions on the securities purchasable upon exercise.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the relevant warrant agreement and will not assume any obligation or relationship
of agency or trust for any warrant holder. A single bank or trust company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility if we default in performing our obligations under the relevant warrant
agreement or warrant, including any duty or responsibility to initiate any legal proceedings or to make any demand upon us.
Title
We
and the warrant agents and any of our respective agents may treat the registered holder of any warrant certificate as the absolute
owner of the warrants evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching
to the warrants so requested, despite any notice to the contrary.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
We
may issue subscription rights to purchase common stock, preferred stock, warrants, other securities described in this prospectus
or any combination thereof. These subscription rights may be issued independently or together with any other security offered
by us and may or may not be transferable by the security holder receiving the subscription rights in such offering. In connection
with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other investors
pursuant to which the underwriters or other investors may be required to purchase any securities remaining unsubscribed for after
such offering.
To
the extent appropriate, the applicable prospectus supplement will describe the specific terms of the subscription rights to purchase
shares of our securities offered thereby, including the following:
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the
date of determining the security holders entitled to the subscription rights distribution;
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the
price, if any, for the subscription rights;
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the
exercise price payable for the common stock, preferred stock, depositary shares or other securities upon the exercise of the
subscription right;
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the
number of subscription rights issued to each security holder;
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the
amount of common stock, preferred stock, depositary shares or other securities that may be purchased per each subscription
right;
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any
provisions for adjustment of the amount of securities receivable upon exercise of the subscription rights or of the exercise
price of the subscription rights;
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the
extent to which the subscription rights are transferable;
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the
date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights
shall expire;
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the
extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities;
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the
material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of subscription
rights;
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any
applicable federal income tax considerations; and
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any
other terms of the subscription rights, including the terms, procedures and limitations relating to the transferability, exchange
and exercise of the subscription rights.
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DESCRIPTION
OF PURCHASE CONTRACTS
We
may issue purchase contracts obligating holders to purchase from us, and us to sell to the holders, a specified number, or amount,
of securities at a future date or dates. The purchase contracts may be issued separately or as part of units consisting of a purchase
contract and an underlying security covered by this prospectus, U.S. Treasury security or other U.S. government or agency obligation.
The holder of the unit may be required to pledge the security, U.S. Treasury security or other U.S. government or agency obligation
to secure its obligations under the purchase contract.
If
purchase contracts are offered, the prospectus supplement will specify the material terms of the purchase contracts, the units
and any applicable pledge or depository arrangements, including one or more of the following:
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the
stated amount that a holder will be obligated to pay under the purchase contract in order to purchase the underlying security;
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the
settlement date or dates on which the holder will be obligated to purchase the underlying security and whether the occurrence
of any events may cause the settlement date to occur on an earlier date and the terms on which any early settlement would
occur;
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the
events, if any, that will cause our obligations and the obligations of the holder under the purchase contract to terminate;
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the
settlement rate, which is a number that, when multiplied by the stated amount of a purchase contract, determines the number,
or amount, of securities that we will be obligated to sell and a holder will be obligated to purchase under that purchase
contract upon payment of the stated amount of that purchase contract;
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whether
the purchase contracts will be issued separately or as part of units consisting of a purchase contract and an underlying security
with an aggregate principal amount or liquidation amount equal to the stated amount;
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the
type of security, if any, that is pledged by the holder to secure its obligations under a purchase contract;
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the
terms of the pledge arrangement relating to the security, including the terms on which distributions or payments of interest
and principal on the security will be retained by a collateral agent, delivered to us or be distributed to the holder; and
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the
amount of the contract fee, if any, that may be payable by us to the holder or by the holder to us, the date or dates on which
the contract fee will be payable and the extent to which we or the holder, as applicable, may defer payment of the contract
fee on those payment dates.
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DESCRIPTION
OF UNITS
As
specified in the applicable prospectus supplement, we may issue units consisting of one or more shares of common stock, preferred
stock, warrants, subscription rights, purchase contracts, or any combination of such securities. The applicable prospectus supplement
will describe:
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the
securities comprising the units, including whether and under what circumstances the securities comprising the units may be
separately traded;
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the
terms and conditions applicable to the units, including a description of the terms of any applicable unit agreement governing
the units; and
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a
description of the provisions for the payment, settlement, transfer or exchange of the units.
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GLOBAL
SECURITIES
We
may issue the warrants, purchase contracts and units of any series in the form of one or more fully registered global securities
that will be deposited with a depositary or with a nominee for a depositary and registered in the name of the depositary or its
nominee. In that case, one or more global securities will be issued in a denomination or aggregate denominations equal to the
portion of the aggregate principal or face amount of outstanding registered securities of the series to be represented by such
global securities. Unless and until the depositary exchanges a global security in whole for securities in definitive registered
form, the global security may not be transferred except as a whole by the depositary to a nominee of the depositary or by a nominee
of the depositary to the depositary or another nominee of the depositary or by the depositary or any of its nominees to a successor
of the depositary or a nominee of such successor.
The
specific terms of the depositary arrangement with respect to any portion of a series of securities to be represented by a global
security will be described in the prospectus supplement relating to such series. We anticipate that the following provisions will
apply to all depositary arrangements.
Ownership
of beneficial interests in a global security will be limited to persons that have accounts with the depositary for such global
security known as “participants” or persons that may hold interests through such participants.
Upon
the issuance of a global security, the depositary for such global security will credit, on its book-entry registration and transfer
system, the participants’ accounts with the respective principal or face amounts of the securities represented by the global
security beneficially owned by the participants. The accounts to be credited shall be designated by any dealers, underwriters
or agents participating in the distribution of such securities.
Ownership
of beneficial interests in such global security will be shown on, and the transfer of such ownership interests will be effected
only through, records maintained by the depositary for such global security (with respect to interests of participants) and on
the records of participants (with respect to interests of persons holding through participants). The laws of some states may require
that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws
may impair the ability to own, transfer or pledge beneficial interests in global securities.
So
long as the depositary for a global security, or its nominee, is the registered owner of such global security, such depositary
or such nominee, as the case may be, will be considered the sole owner or holder of the securities represented by such global
security for all purposes under the applicable indenture, warrant agreement, purchase contract or unit agreement. Except as set
forth below, owners of beneficial interests in a global security will not be entitled to have the securities represented by such
global security registered in their names, will not receive or be entitled to receive physical delivery of such securities in
definitive form and will not be considered the owners or holders thereof under the applicable indenture, warrant agreement, purchase
contract or unit agreement. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures
of the depositary for the global security and, if such person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under the applicable indenture, warrant agreement, purchase
contract or unit agreement. We understand that under existing industry practices, if we request any action of holders or if an
owner of a beneficial interest in a global security desires to give or take any action which a holder is entitled to give or take
under the applicable indenture, warrant agreement, purchase contract or unit agreement, the depositary for such global security
would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Any
payments to holders with respect to warrants, purchase contracts or units represented by a global security registered in the name
of a depositary or its nominee will be made to such depositary or its nominee, as the case may be, as the registered owner of
such global security. None of us, the trustees, the warrant agents, the unit agents or any of our other agents, agent of the trustees
or agent of the warrant agents or unit agents will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in such global security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
We
expect that the depositary for any securities represented by a global security, or its nominee, upon receipt of any payment of
principal, premium, interest or other distribution of underlying securities or commodities to holders in respect of such global
security, will immediately credit participants’ accounts in amounts proportionate to their respective beneficial interests
in such global security as shown on the records of such depositary or its nominee. We also expect that payments by participants
to owners of beneficial interests in such global security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form
or registered in “street name,” and will be the responsibility of such participants.
If
the depositary for any securities represented by a global security is at any time unwilling or unable to continue as depositary
or ceases to be a clearing agency registered under the Exchange Act, and we do not appoint a successor depositary registered as
a clearing agency under the Exchange Act within 90 days, we will issue such securities in definitive form in exchange for such
global security. In addition, we may at any time and in our sole discretion determine not to have any of the securities of a series
represented by one or more global securities and, in such event, will issue securities of such series in definitive form in exchange
for all of the global security or securities representing such securities. Any securities issued in definitive form in exchange
for a global security will be registered in such name or names as the depositary shall instruct the relevant trustee, warrant
agent or other relevant agent of ours. We expect that such instructions will be based upon directions received by the depositary
from participants with respect to ownership of beneficial interests in such global security.
PLAN
OF DISTRIBUTION
We
may sell our securities from time to time through underwriters, dealers or agents or directly to purchasers, in one or more transactions
at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. We may also sell our securities upon the exercise of subscription rights that
may be distributed to security holders. We may use these methods in any combination.
We
will describe the terms of the offering of the securities in a prospectus supplement, information incorporated by reference or
any related free writing prospectus, including:
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the
name or names of any underwriters, if any;
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the
purchase price of the securities and the proceeds we will receive from the sale;
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any
underwriting discounts and other items constituting underwriters’ compensation;
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any
initial public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers; and
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any
securities exchange or market on which the securities may be listed.
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Only
underwriters we name in the prospectus supplement, information incorporated by reference or related free writing prospectus are
underwriters of the securities offered thereby.
The
distribution of securities may be effected, from time to time, in one or more transactions, including:
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block
transactions (which may involve crosses) and transactions on the NYSE American or any other organized market where the securities
may be traded;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;
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ordinary
brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales
“at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise;
and
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sales
in other ways not involving market makers or established trading markets, including direct sales to purchasers.
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Underwriters
We
may use an underwriter or underwriters in the offer or sale of our securities.
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If
we use an underwriter or underwriters, the offered securities will be acquired by the underwriters for their own account.
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We
will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms
of the transactions, including the compensation the underwriters and dealers will receive, in the prospectus supplement.
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The
underwriters will use this prospectus and the prospectus supplement to sell our securities.
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We
may also sell securities pursuant to one or more standby agreements with one or more underwriters in connection with the call,
redemption or exchange of a specified class or series of any of our outstanding securities. In a standby agreement, the underwriter
or underwriters would agree either:
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to
purchase from us up to the number of shares of common stock that would be issuable upon conversion or exchange of all the
shares of the class or series of our securities at an agreed price per share of common stock; or
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to
purchase from us up to a specified dollar amount of offered securities at an agreed price per offered security, which price
may be fixed or may be established by formula or other method and which may or may not relate to market prices of our common
stock or any other outstanding security.
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The
underwriter or underwriters would also agree, if applicable, to convert or exchange any securities of the class or series held
or purchased by the underwriter or underwriters into or for our common stock or other security.
The
underwriter or underwriters may assist in the solicitation of conversions or exchanges by holders of the class or series of securities.
By
Dealers
We
may use a dealer to sell our securities.
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If
we use a dealer, we, as principal, will sell our securities to the dealer.
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The
dealer will then resell our securities to the public at varying prices that the dealer will determine at the time it sells
our securities.
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We
will include the name of the dealer and the terms of our transactions with the dealer in the prospectus supplement.
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If
we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting
agreement with dealers, acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities
they commit to purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager
to manage a subscription rights offering for us.
By
Agents
We
may designate agents to solicit offers to purchase our securities.
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We
will name any agent involved in offering or selling our securities and any commissions that we will pay to the agent in the
prospectus supplement.
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Unless
we indicate otherwise in the prospectus supplement, our agents will act on a best efforts basis for the period of their appointment.
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Our
agents may be deemed to be underwriters under the Securities Act of any of our securities that they offer or sell.
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By
Delayed Delivery Contracts
We
may authorize our agents and underwriters to solicit offers by certain institutions to purchase our securities at the public offering
price under delayed delivery contracts.
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If
we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you
when we will demand payment and delivery of the securities under the delayed delivery contracts.
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These
delayed delivery contracts will be subject only to the conditions that we set forth in the prospectus supplement.
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We
will indicate in the prospectus supplement the commission that underwriters and agents soliciting purchases of our securities
under delayed delivery contracts will be entitled to receive.
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Direct
Sales
We
may directly solicit offers to purchase our securities, and we may directly sell our securities to institutional or other investors,
including our affiliates. We will describe the terms of our direct sales in the prospectus supplement. We may also sell our securities
upon the exercise of rights which we may issue.
General
Information
Underwriters,
dealers and agents that participate in the distribution of our securities may be underwriters as defined in the Securities Act,
and any discounts or commissions they receive and any profit they make on the resale of the offered securities may be treated
as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation
described in a prospectus supplement. We may indemnify agents, underwriters, and dealers against certain civil liabilities, including
liabilities under the Securities Act, or make contributions to payments they may be required to make relating to those liabilities.
Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with, or perform services
for us in the ordinary course of business.
Each
series of securities offered by this prospectus (other than common stock) may be a new issue of securities with no established
trading market. Any underwriters to whom securities offered by this prospectus are sold by us for public offering and sale may
make a market in the securities offered by this prospectus, but the underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to the liquidity of the trading market for any securities
offered by this prospectus.
Representatives
of the underwriters through whom our securities are sold for public offering and sale may engage in over-allotment, stabilizing
transactions, syndicate short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment
involves syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit
bids to purchase the offered securities so long as the stabilizing bids do not exceed a specified maximum.
Syndicate
covering transactions involve purchases of the offered securities in the open market after the distribution has been completed
in order to cover syndicate short positions. Penalty bids permit the representative of the underwriters to reclaim a selling concession
from a syndicate member when the offered securities originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the offered securities to be higher than it would otherwise be in the absence of such transactions. These
transactions may be effected on a national securities exchange and, if commenced, may be discontinued at any time. Underwriters,
dealers and agents may be customers of, engage in transactions with or perform services for, us and our subsidiaries in the ordinary
course of business.
Fees
and Commissions
In
compliance with the guidelines of the Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission
or agency fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer
will not exceed 8% of any offering pursuant to this prospectus and any applicable prospectus supplement or other offering materials;
however, it is anticipated that the maximum commission or discount to be received in any particular offering of securities will
be less than this amount.
If
5% or more of the net proceeds of any offering of securities made under this prospectus will be received by a FINRA member participating
in the offering or affiliates or associated persons of such FINRA member, the offering will be conducted in accordance with FINRA
Rule 5121.
LEGAL
MATTERS
Certain
legal matters in connection with the securities offered hereby will be passed on for us by Snell & Wilmer L.L.P., Salt Lake
City, Utah. Any underwriters will be advised about other issues relating to any offering by their own legal counsel.
EXPERTS
Our
consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2019, have been
audited by Moss Adams LLP, an independent registered public accounting firm, as stated in their report, which is incorporated
herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject
to completion, DATED JULY 1,
2020
PROSPECTUS
4,000,000
Shares of Common Stock
This
prospectus relates to the offer and resale by the selling stockholders identified in this prospectus of up to 4,000,000 shares
of our common stock.
The
selling stockholders identified in this prospectus (which term as used in this prospectus includes their respective partners,
pledgees, donees (including charitable organizations), transferees or other successors-in-interest) may offer this common stock
from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices
or at privately negotiated prices.
Our
common stock is quoted on the NYSE American under the symbol “SDPI.” The last reported sale price of our common stock
on June 30, 2020 was $0.744 per share.
Investing
in our securities involves significant risks that are described in the “Risk Factors” section beginning on page 5
of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is July 1, 2020.
Table
of Contents
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the Commission, utilizing
a “shelf” registration process. Under this shelf registration process, the selling stockholders named in this prospectus
or any supplement to this prospectus may sell from time to time the securities described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities the selling stockholders may offer. To the extent appropriate,
we may provide a prospectus supplement that contains specific information about the terms of the offering. A prospectus supplement
may also add, update or change information contained in this prospectus. Any statement that we make in this prospectus will be
modified or superseded by any inconsistent statement made by us in a prospectus supplement. You should read both this prospectus
and any prospectus supplement together with the information incorporated herein by reference as described under the heading “Incorporation
of Certain Documents By Reference” and the additional information described under the heading “Where You Can Find
More Information,” before buying any of the securities being offered.
You
should rely only on the information contained in or incorporated by reference into this prospectus or any prospectus supplement.
We have not authorized anyone to provide you with additional or different information. The selling stockholders are offering to
sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted.
Neither
the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information
in this prospectus is correct as of any date after the date of this prospectus. You should assume that the information in this
prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the
front of the document and that any information we have incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any
related free writing prospectus, or any sale of a security.
The
registration statement containing this prospectus, including exhibits to the registration statement, provides additional information
about us and the securities offered under this prospectus and any prospectus supplement. We have filed and plan to continue to
file other documents with the Commission that contain information about us and our business. Also, we will file legal documents
that control the terms of the securities offered by this prospectus as exhibits to the reports that we file with the Commission.
The registration statement and other reports can be read at the Commission website or at the Commission offices mentioned under
the heading “Where You Can Find More Information.”
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made
to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents.
Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits
to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below
under “Where You Can Find More Information.”
SUPERIOR
DRILLING PRODUCTS, inc.
We
are 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 and the patented Strider™ Drill String
Oscillation System technology. In addition, we are a manufacturer and refurbisher of polycrystalline diamond compact drill bits.
We operate a state-of-the-art drill tool fabrication facility, where we manufacture solutions for the drilling industry, as well
as customers’ custom products.
As
used in this prospectus, the terms “we,” “us” and “our” mean Superior Drilling Company, Inc.,
a Utah corporation, and its subsidiaries and predecessors, unless the context indicates otherwise. Our principal executive office
is located at 1583 South 1700 East, Vernal, Utah 84078, and our phone number is (435) 789-0594.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus, our filings with the Commission and our public releases include “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation
Reform Act of 1995 (the “PSLRA”), or in releases made by the Commission. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements
of us and our subsidiaries to differ materially from any future results, performance or achievements expressed or implied by such
forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements
can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “project,” “may,”
“will,” “would,” “could,” “should,” “seeks,” or “scheduled to,”
or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion
of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the
PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.
The
forward-looking statements contained in or incorporated by reference into this prospectus are largely based on our expectations,
which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based
on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they
are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including:
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the
impact of domestic and global economic conditions as a result of COVID-19 and the future impact of such conditions on the
oil and gas industry and the demand for our services;
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the
volatility of oil and natural gas prices;
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the
cyclical nature of the oil and gas industry;
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availability
of financing, flexibility in restructuring existing debt and access to capital markets;
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our
reliance on significant customers;
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consolidation
within our customers’ industries;
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competitive
products and pricing pressures;
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our
ability to develop and commercialize new and/or innovative drilling and completion tool technologies;
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fluctuations
in our operating results;
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our
dependence on key personnel;
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costs
of raw materials;
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our
dependence on third party suppliers;
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unforeseen
risks in our manufacturing processes;
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the
need for skilled workers;
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our
ability to successfully manage our growth strategy;
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unanticipated
risks associated with, and our ability to integrate, acquisitions;
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current
and potential governmental regulatory actions in the United States and regulatory actions and political unrest in other countries;
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terrorist
threats or acts, war and civil disturbances;
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our
ability to protect our intellectual property;
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impact
of environmental matters, including future environmental regulations;
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implementing
and complying with safety policies;
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breaches
of security in our information systems and other cybersecurity risks;
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related
party transactions with our founders; and
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risks
associated with our common stock.
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Many
of these factors are beyond our ability to control or predict. These factors are not intended to represent a complete list of
the general or specific factors that may affect us.
In
addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking
statements contained in this prospectus and in the documents incorporated by reference into this prospectus are not guarantees
of future performance, and we cannot assure any reader that such statements will be realized or that the forward-looking events
and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements
due to factors described in “Risk Factors” included elsewhere in this prospectus and in the documents that we include
in or incorporate by reference into this prospectus, including our Annual Report on Form 10-K for the fiscal year ended December
31, 2018, and our subsequent Commission filings. All forward-looking statements speak only as of the date they are made. We do
not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise, except
as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on
our behalf.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the informational requirements of the Exchange Act and, file reports, proxy statements and other information with
the Commission as required by the Exchange Act. These reports, proxy statements and other information can be inspected and copied
at the Commission’s Public Reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition, the Commission maintains
an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. We maintain a website at www.sdpi.com. Information on our website
or any other website is not incorporated by reference into this prospectus and does not constitute part of this prospectus.
We
have filed a registration statement with the Commission on Form S-3 (including any amendments thereto, known as the registration
statement) under the Securities Act with respect to the securities offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and schedules thereto. You may refer to the registration
statement and the exhibits and schedules thereto for more information about the offered securities and us. Statements made in
this prospectus regarding the contents of any contract or document filed as an exhibit to the registration statement are not necessarily
complete and, in each instance, reference is hereby made to the copy of such contract or document so filed. Each such statement
is qualified in its entirety by such reference.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
following documents, which have previously been filed by us with the Commission under the Exchange Act, are incorporated herein
by reference:
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Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on March 18, 2020 (File
No. 001-36453);
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020, filed with the Commission on May 11, 2020 (File
No. 001-36453);
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A
description of our capital stock contained in our Form 8-A filed with the Commission on May 12, 2014 (File No. 001-36453);
and
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Our
Current Reports on Form 8-K, filed with the Commission on January 2, 2020, February 25, 2020, March 12, 2020, April 9, 2020,
April 17, 2020, April 27, 2020, and May 8, 2020 (File No. 001-36453) (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K).
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All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 on any current report on Form 8-K and any corresponding information furnished under Item 9.01
or included as an exhibit) after the date of the initial registration statement and prior to the effectiveness of the registration
statement and after the date of this prospectus and prior to the termination of each offering under this prospectus shall be deemed
to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents. Any statement
contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
This
prospectus incorporates documents by reference that are not delivered with the prospectus. Copies of these documents, other than
the exhibits to the documents (unless such exhibits are specifically incorporated by reference in such documents), are available
upon written or oral request, at no charge, from us. Requests for such copies should be directed to Superior Drilling Products,
Inc., 1583 South 1700 East, Vernal, Utah 84078, Attention: Chief Financial Officer, telephone number: (435) 789-0594.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You should carefully consider the risk factors and all of the other
information included in, or incorporated by reference into, this prospectus, including those risk factors included in our Annual
Report on Form 10-K for the year ended December 31, 2019, and our subsequent Commission filings, in evaluating an investment in
our securities. If any of these risks were to occur, our business, financial condition or results of operations could be adversely
affected. In that case, the trading price of our securities could decline and you could lose all or part of your investment. When
the selling stockholders offer and sell any securities pursuant to a prospectus supplement, we may include additional risk factors
relevant to such securities in the prospectus supplement.
USE
OF PROCEEDS
The
selling stockholders have agreed with us that the proceeds of any share sales under this prospectus shall be used to reduce the
amounts outstanding under the Tronco note receivable, as described in more detail under “Selling Stockholders”. The
selling stockholders named in this prospectus will pay any underwriting fees, discounts and commissions, along with certain of
the selling stockholders’ out-of-pocket expenses, incurred in connection with their sale of shares registered under this
prospectus. We will bear all other costs, fees and expenses incurred by us, or by the selling stockholders, in effecting the registration,
offer and sale of the shares covered by this prospectus.
DESCRIPTION
OF CAPITAL STOCK
The
total number of shares of all classes of stock that we have authority to issue is 120,000,000, consisting of 100,000,000 shares
of common stock, par value $.001 per share, and 20,000,000 shares of preferred stock, par value $.001 per share. We had 25,434,776
shares of common stock, and no shares of preferred stock, outstanding as of June 26, 2020.
In
the discussion that follows, we have summarized selected provisions of our articles of incorporation and our bylaws relating to
our capital stock. You should read our articles of incorporation and bylaws as currently in effect for more details regarding
the provisions we describe below and for other provisions that may be important to you. We have filed copies of those documents
with the SEC, and they are incorporated by reference as exhibits to the registration statement. Please read “Where You Can
Find More Information.”
Common
Stock
Voting
rights. Holders of common stock are entitled to one vote per share on any matter to be voted upon by shareholders. All shares
rank equally as to voting and all other matters. The shares of common stock have no preemptive or conversion rights, no redemption
or sinking fund provisions, are not liable for further call or assessment and are not entitled to cumulative voting rights.
Dividend
rights. For as long as such stock is outstanding, the holders of common stock are entitled to receive ratably any dividends
when and as declared from time to time by our board of directors out of funds legally available for dividends. We currently intend
to retain all future earnings for the operation and expansion of our business and do not anticipate paying cash dividends on the
common stock in the foreseeable future.
Liquidation
rights. Upon a liquidation or dissolution of our company, whether voluntary or involuntary, creditors will be paid before
any distribution to holders of our common stock. After such distribution, holders of common stock are entitled to receive a pro
rata distribution per share of any excess amount.
Preferred
Stock
Our
articles of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder
approval, to establish and to issue from time to time one or more classes or series of preferred stock covering up to an aggregate
of 20,000,000 shares of preferred stock. Each class or series of preferred stock will cover the number of shares and will have
preferences, voting powers, qualifications and special or relative rights or privileges determined by the board of directors,
which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights
and redemption rights.
Anti-Takeover
Provisions in Our Articles of Incorporation and Bylaws
Our
articles of Incorporation and bylaws include a number of provisions that may have the effect of encouraging persons considering
unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated
takeover attempts. These provisions include the items described below.
Removal
of directors and filling board vacancies. Our bylaws provide that directors may be removed with or without cause by the affirmative
vote of the holders of a majority of the voting power of all the outstanding shares of capital stock entitled to vote generally
in the election of directors voting together as a single class. Furthermore, any vacancy on our board of directors, however occurring,
including a vacancy resulting from an increase in the size of our board, may be filled by the affirmative vote of a majority of
the shareholders, or by a majority of our directors then in office even if less than a quorum.
Meetings
of shareholders. Our bylaws (a) provide that only those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of shareholders, and (b) limit the business that may be conducted at an annual meeting of shareholders
to those matters properly brought before the meeting.
Advance
notice requirements. Our bylaws establish advance notice procedures with regard to shareholder proposals relating to the nomination
of candidates for election as directors or new business to be brought before meetings of our shareholders. These procedures provide
that notice of shareholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which
the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not earlier than
the close of business on the 120th day, nor later than the close of business on the 90th day, prior to the first anniversary
date of the annual meeting for the preceding year. The notice must contain certain information specified in the bylaws.
Amendment
to Bylaws and Articles of Incorporation. Except as otherwise required by Utah law, any amendment of our articles of incorporation
must first be approved by a majority of our board of directors and thereafter be approved by a majority vote of the outstanding
shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a
class, except that the amendment of the provisions relating to shareholder action, directors, indemnification and the amendment
of our bylaws and articles of incorporation must be approved by no less than 66 2/3% of the voting power of all of the shares
of capital stock issued and outstanding and entitled to vote generally in any election of directors, voting together as a single
class. Our bylaws may be amended by the affirmative vote of a majority vote of the directors then in office, subject to certain
limitations set forth in the bylaws; and may also be amended by the affirmative vote of at least a majority of the voting power
of all of the shares of capital stock issued and outstanding and entitled to vote generally in any election of directors, voting
together as a single class.
Blank
check preferred stock. The existence of our authorized but unissued shares of preferred stock may enable our board of directors
to make it more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest,
or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that
a takeover proposal is not in the best interests of us or our shareholders, our board of directors could cause shares of preferred
stock to be issued without shareholder approval in one or more private offerings or other transactions that might dilute the voting
or other rights of the proposed acquirer or insurgent shareholder or shareholder group. The issuance of shares of preferred stock
could decrease the amount of earnings and assets available for distribution to holders of our common stock or other classes of
preferred stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may
have the effect of delaying, deterring, or preventing a change in control.
Utah
Control Shares Acquisition Act
We
are organized under Utah law. Some provisions of Utah law may delay or prevent a transaction that would cause a change in our
control. Under our articles of incorporation we have opted that Section 61-6-1, et seq. of the Utah Code Annotated, as amended,
an anti-takeover law commonly referred to as the Control Shares Acquisition Act, will not apply to us.
Other
Provisions of Our Articles of Incorporation and Bylaws
Our
articles of incorporation provides that, subject to the rights of any issued preferred stock, our board of directors will be a
staggered board of directors consisting of different terms designated as Class I, Class II and Class III, respectively. At each
annual meeting of shareholders, directors of the applicable class shall be elected for a full term of three years to succeed the
directors of the class whose terms expire at such annual meeting. We believe that classification of our board of directors will
help to assure the continuity and stability of our business strategies and policies as determined by our board of directors.
Since
there is no cumulative voting in the election of directors, this classified board provision could have the effect of making the
replacement of incumbent directors more time consuming and difficult. At least two annual meetings of shareholders, instead of
one, will generally be required to effect a change in a majority of our board of directors. Thus, the classified board provision
could increase the likelihood that incumbent directors will retain their positions. The staggered terms of directors may delay,
defer or prevent a tender offer or an attempt to change control of us, even though a tender offer or change in control might be
believed by our shareholders to be in their best interest. Pursuant to our articles of incorporation, shares of our preferred
stock may be issued from time to time, and the board of directors is authorized to determine and alter all rights, preferences,
privileges, qualifications, limitations and restrictions without limitation, which could impact the ability to remove directors
as currently contemplated.
Ability
of Our Shareholders to Act
Our
bylaws provide that any shareholder or shareholders holding at least 10% of the total voting power may call special shareholders
meetings. Written notice of any special meeting so called shall be given to each shareholder of record entitled to vote at such
meeting not less than 10 or more than 60 days before the date of such meeting, unless otherwise required by law.
Our
bylaws provide that nominations of persons for election to our board of directors may be made at any annual meeting of our shareholders,
or at any special meeting of our shareholders called for the purpose of electing directors, (a) by or at the direction of our
board of directors or (b) by any of our shareholders.
In
addition to any other applicable requirements, for a nomination to be properly brought by a shareholder, such shareholder must
have given timely notice thereof in proper written form to our Secretary. To be timely, a shareholder’s notice must be delivered
to or mailed and received at our principal executive offices (a) in the case of an annual meeting of shareholders, not less than
90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided,
however, that if the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice
by a shareholder in order to be timely must be so received not later than the close of business on the tenth day following the
day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting
was made, whichever first occurs; and (b) in the case of a special meeting of our shareholders called for the purpose of electing
directors, not later than the close of business on the tenth day following the day on which notice of the date of the special
meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.
Our
bylaws provide that no business may be transacted at any annual meeting of our shareholders, other than business that is either
(a) specified in the notice of meeting given by or at the direction of our board of directors, (b) otherwise properly brought
before the annual meeting by or at the direction of our board of directors or (c) otherwise properly brought by any of our shareholders.
In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a shareholder,
such shareholder must have given timely notice thereof in proper written form to our Secretary. To be timely, a shareholder’s
notice must be delivered to or mailed and received at our principal executive offices not less than 90 days nor more than 120
days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that if the
annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by a shareholder
in order to be timely must be so received not later than the close of business on the tenth day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever
first occurs.
Limitations
of Director Liability and Indemnification of Directors, Officers, and Employees
Our
articles of incorporation provide that to the fullest extent permitted by the bylaws or the Utah Revised Business Corporation
Act, or the Act, or any other applicable law, as either may be amended, a director shall have no liability to the us or our shareholders
for monetary damages for conduct, any action taken, or any failure to take any action as a director. As permitted by the Act,
directors will not be personally liable to us or our shareholders for monetary damages as a director except liability for (a)
the amount of a financial benefit received by a director to which he’s not entitled; (b) an intentional infliction of harm
on the corporation or its shareholders; (c) an unlawful distribution in violation of Section 16-10a-842 of the Act; or (d) an
intentional violation of criminal law.
These
limitations of liability do not alter director liability under the federal securities laws and do not affect the availability
of equitable remedies, such as an injunction or rescission.
In
addition, our bylaws provide that:
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we
will indemnify our directors to the fullest extent permitted by the Act, including advancing expenses in connection with legal
proceedings, subject to limited exceptions;
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●
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the
corporation may, to the extent permitted by the Act, by action of its board of directors,
agree to indemnify officers, employees and other agents of the corporation and may advance
expenses to such persons.
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We
have entered into indemnification agreements with each of our executive officers and directors. These agreements provide that,
subject to limited exceptions and among other things, we will indemnify each of our executive officers and directors to the fullest
extent permitted by law and advance expenses to each indemnity in connection with any proceeding in which a right to indemnification
is available.
We
also maintain general liability insurance that covers certain liabilities of our directors and officers arising out of claims
based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act. Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons who control
our company, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
These
provisions may discourage shareholders from bringing a lawsuit against our directors for breach of their fiduciary duty, or may
have the practical effect in some cases of eliminating our shareholders’ ability to collect monetary damages from our directors
and executive officers. These provisions may also have the effect of reducing the likelihood of derivative litigation against
directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore,
a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements
and the insurance are necessary to attract and retain talented and experienced directors and officers.
At
present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be
required or permitted. We are not aware of any threatened litigation or proceedings that might result in a claim for such indemnification.
Listing
Our
common stock is listed for quotation on the NYSE American under the symbol “SDPI.”
Transfer
Agent and Registrar
VStock
Transfer is transfer agent and registrar for our common stock.
SELLING
STOCKHOLDERS
The
following table sets forth information relating to the selling stockholders’ beneficial ownership of our shares as of June
26, 2020. This prospectus covers the offering for resale from time to time of up to 4,000,000 shares owned by the selling stockholders,
Troy and Annette Meier, who are our founders and the chief executive and chief operating officers, respectively, of the company.
As used in this prospectus, “selling stockholders” includes partners, pledgees, donees (including charitable organizations),
transferees or other successors-in-interest selling shares received from a named selling stockholder after the date of this prospectus.
In
January 2014, we entered into a Note Purchase and Sale Agreement under which we agreed to purchase a loan made to Tronco Energy
Corporation (“Tronco”), an entity in which G. Troy Meier is the controlling shareholder, in order to take over the
legal position as Tronco’ s senior secured lender. That agreement provided that, upon our full repayment of the Tronco loan
from the proceeds of the Offering, the lender would assign to us all of its rights under the Tronco loan, including all of the
collateral documents. On May 30, 2014, we closed our purchase of the Tronco loan for a total payoff of $8.3 million, including
principal, interest, and early termination fees. As a result of that purchase, we became Tronco’ s senior secured lender,
and as a result are entitled to receive all proceeds from sales of the Tronco-owned collateral, as discussed below.
On
August 8, 2017, our Board of Directors agreed to extend the terms of the Tronco loan to interest only payments due December 31,
2017, 2018, 2019, 2020, and 2021, with a balloon payment of all unpaid interest and principal due upon full maturity on December
31, 2022. We have the direct legal right to enforce the collateral and guaranty agreements entered into in connection with the
Tronco loan and to collect proceeds from the sale of collateral held to secure the Tronco note, in order to recover the loan purchase
amount. The Tronco loan continues to be secured by the first position liens on all of Tronco assets, as well as by the guarantees
of Troy and Annette Meier, which are directly payable to and legally enforceable by us. In addition, the Meiers have provided
us with stock pledges in which they pledged 8,267,860 shares of our common stock held by their family entities, as collateral
for the Meiers guaranties until full repayment of Tronco loan. The pledged shares are being held in third-party escrow until full
repayment of the Tronco loan. The Company holds 8,267,860 shares as collateral for the Tronco note as of March 31, 2020 The shares
included in this prospectus are a portion of these collateral shares. The Meiers have agreed with us that any proceeds received
by them from the sale of shares under this prospectus shall be used to pay down our Tronco note receivable.
No
offer or sale under this prospectus may be made by a stockholder unless that holder is listed in the table below, in a supplement
to this prospectus or in an amendment to the related registration statement that has become effective under the Securities Act.
We will supplement or amend this prospectus to include additional selling stockholders upon request and upon provision of all
required information to us.
The
following table and related footnotes set forth:
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the
name of each selling stockholder;
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if
different, the name of the natural person(s) who exercise(s) sole/shared voting and/or investment power with respect to the
shares;
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the
number of our shares beneficially owned by such stockholder prior to the offering;
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●
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the
number being offered for the stockholder’s account; and
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●
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the
number to be owned by such stockholder after completion of the offering (assuming the sale of all shares offered by this prospectus).
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Unless
otherwise indicated, none of the selling stockholders is a broker-dealer registered under Section 15 of the Exchange Act, or an
affiliate of a broker-dealer registered under Section 15 of the Exchange Act.
We
prepared the table based on information supplied to us by the selling stockholders. The percentages of shares beneficially owned
and being offered are based on the 25,434,776 shares of common stock that were outstanding as of June 26, 2020, unless otherwise
stated in the footnotes to the table below. Other information about the selling stockholders may also change over time.
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Common Stock Beneficially Owned Prior to Offering
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Number of Shares Which May be Sold in
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Common Stock Beneficially Owned After this Offering(1)
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Selling Stockholder
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Number
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Percent
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This Offering
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Number
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Percent
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G. Troy Meier
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10,366,264
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(2)
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40.8
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%
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4,000,000
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6,366,264
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(2)
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25.1
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%
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Annette Meier
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10,265,948
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(3)
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40.4
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%
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4,000,000
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6,265,948
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(3)
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24.6
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%
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*Less
than one percent.
(1)
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Assumes
that the selling stockholders will sell all of the common stock offered pursuant to this prospectus.
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(2)
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Includes
(i) 5,641,510 shares of common stock indirectly owned through his ownership in Meier Family Holding Company, LLC, and (ii)
3,173,350 shares of common stock indirectly owned through his ownership in Meier Management Company, LLC. Also includes 329,423
shares of vested restricted common stock, 55,640 shares of unvested restricted common stock, and 72,744 shares issuable pursuant
to vested stock options. The unvested restricted stock will vest equally on December 18, 2020 and December 18, 2021.
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(3)
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Includes
(i) 5,641,510 shares of common stock indirectly owned through her ownership in Meier Family Holding Company, LLC, and (ii)
3,173,350 shares of common stock indirectly owned through her ownership in Meier Management Company, LLC. Also includes 250,382
shares of vested restricted common stock, 42,671 shares of unvested restricted common stock, and 64,438 shares issuable pursuant
to vested stock options. The unvested restricted stock will vest equally on December 18, 2020 and December 18, 2021.
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PLAN
OF DISTRIBUTION
The
selling stockholders and any of their partners, pledgees, donees (including charitable organizations), transferees or other successors-in-interest
may, from time to time, sell any or all of their shares of common stock offered by this prospectus on the NYSE American or any
other stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be
at fixed prices, the prevailing market prices or negotiated prices. The selling stockholders may use any one or more of the following
methods when selling such shares:
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block
trades (which may involve crosses) in which the broker-dealer will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
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●
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any
exchange distribution in accordance with the rules of the applicable exchange;
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sales
in the over-the-counter market;
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underwritten
transactions;
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privately
negotiated transactions;
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settlement
of short sales entered into after the effective date of the registration statement of which this prospectus forms a part;
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broker-dealers
may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
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●
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through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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●
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a
combination of any such methods of sale; or
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any
other method permitted pursuant to applicable law.
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The
selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of any agency transaction
not in excess of a customary brokerage commission in compliance with Rule 2121 of the Financial Industry Regulatory Authority,
or FINRA, and, in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.01-0.2.
In
connection with the sale of the common stock or interests therein, the selling stockholders may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course
of hedging the positions they assume. The selling stockholders may also sell common stock short and deliver these securities to
close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities.
The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling stockholders have
been advised that they may not use shares registered on the registration statement of which this prospectus forms a part to cover
short sales of our common stock made prior to the date such registration statement has been declared effective by the Commission.
The
selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock
owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer
and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances in which case the partners, transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The
selling stockholders and any underwriters, broker-dealers or agents that are involved in selling the shares may, under certain
circumstances, be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.
In such event, any commissions received by such underwriters, broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling stockholder
has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person
to distribute the common stock. There is no underwriter or coordinating broker acting in connection with the proposed sale of
the common stock by the selling stockholders.
Because
a selling stockholder may be deemed to be an “underwriter” within the meaning of the Securities Act, it will be subject
to the prospectus delivery requirements of the Securities Act. The selling stockholders will be responsible for complying with
the applicable provisions of the Securities Act, and the rules and regulations thereunder promulgated, as applicable to such selling
stockholders in connection with resales of their respective shares under the registration statement of which this prospectus forms
a part. These provisions and regulations may limit the timing of purchases and sales of common stock by them and the marketability
of such securities.
The
shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Each
selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating
person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to
engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability
of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the
shares of common stock. We will make copies of this prospectus available to the selling stockholders and have informed them of
the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with
Rule 172 under the Securities Act).
We
will pay all expenses of the registration of the shares of common stock including, without limitation, Commission filing fees
and expenses of compliance with state securities or “blue sky” laws; provided, however, that each selling stockholder
will pay all underwriting discounts and selling commissions, if any.
LEGAL
MATTERS
Certain
legal matters in connection with the securities offered hereby will be passed on for us by Snell & Wilmer L.L.P., Salt Lake
City, Utah. Any underwriters will be advised about other issues relating to any offering by their own legal counsel.
EXPERTS
Our
consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2019, have been
audited by Moss Adams LLP, an independent registered public accounting firm, as stated in their report, which is incorporated
herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the various expenses, all of which will be borne by us, in connection with the sale and distribution
of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee.
Securities
and Exchange Commission registration fee
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$
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2,996
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Accounting
fees and expenses
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$
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5,000
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Legal
fees and expenses
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$
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10,000
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Miscellaneous
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$
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2,000
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Total
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$
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19,996
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Item
15. Indemnification of Directors and Officers.
The
Company’s Articles of Incorporation provide that to the fullest extent permitted by the Company’s bylaws (the “Bylaws”)
or the Utah Revised Business Corporation Act (the “Act”), or any other applicable law, as either may be amended, a
director shall have no liability to the Company or its shareholders for monetary damages for conduct, any action taken, or any
failure to take any action as a director. As permitted by the Act, directors will not be personally liable to the Company or the
Company’s shareholders for monetary damages for any action taken or any failure to take action as a director except liability
for (a) the amount of a financial benefit received by a director to which he’s not entitled; (b) an intentional infliction
of harm on the Company or its shareholders; (c) an unlawful distribution in violation of Section 16-10a-842 of the Act; or (d)
an intentional violation of criminal law.
These
limitations of liability do not alter director liability under the federal securities laws and do not affect the availability
of equitable remedies, such as an injunction or rescission.
In
addition, the Bylaws provide that:
●the
Company will indemnify its directors to the fullest extent permitted by the Act, including advancing expenses in connection with
legal proceedings, subject to limited exceptions; and
●the
Company may, to the extent permitted by the Act, by action of its board of directors, agree to indemnify officers, employees and
other agents of the Company and may advance expenses to such persons.
The
Company has entered into indemnification agreements with each of the Company’s executive officers and directors. These agreements
provide that, subject to limited exceptions and among other things, the Company will indemnify each of its executive officers
and directors to the fullest extent permitted by law and advance expenses to each indemnity in connection with any proceeding
in which a right to indemnification is available.
The
Company maintains general liability insurance that covers certain liabilities of its directors and officers arising out of claims
based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act. Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons who control
the Company, the Company has been informed that, in the opinion of the Commission, such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
These
provisions may discourage shareholders from bringing a lawsuit against the Company’s directors for breach of their fiduciary
duty, or may have the practical effect in some cases of eliminating the Company’s shareholders’ ability to collect
monetary damages from its directors and officers. These provisions may also have the effect of reducing the likelihood of derivative
litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and
its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent the Company pays the costs
of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Item
16. Exhibits.
(1)
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We
will file as an exhibit to a current report on Form 8-K (i) any underwriting agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any preferred stock, warrants, subscription rights, purchase contracts or
units, (iii) any additional required opinion of counsel as to the legality of the securities offered hereby, or (iv) any
required opinion of counsel as to certain tax matters relative to securities offered hereby.
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(2)
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Filed
herewith.
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Item
17. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission
by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
If the registrant is relying on Rule 430B:
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of Vernal, State of Utah, on the 1st day of July, 2020.
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SUPERIOR
DRILLING PRODUCTS, INC.
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By:
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/s/
G. Troy Meier
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G.
Troy Meier
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Chief
Executive Officer
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POWER
OF ATTORNEY AND SIGNATURES
We
the undersigned officers and directors of Superior Drilling Products, Inc., hereby, severally constitute and appoint G. Troy Meier
and Annette Meier, each of them singly, our true and lawful attorneys with full power to them and each of them singly, to sign
for us and in our names in the capacities indicated below, the registration statement on Form S-3 filed herewith and any and all
pre-effective and post-effective amendments to said registration statement and any subsequent registration statement for the same
offering which may be filed under Rule 462(b) and generally to do all such things in our names and on our behalf in our capacities
as officers and directors to enable Superior Drilling Products, Inc. to comply with the provisions of the Securities Act of 1933,
and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be
signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto or to any subsequent
registration statement for the same offering which may be filed under Rule 462(b).
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature
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Title
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Date
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/s/
G. Troy Meier
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Chief
Executive Officer
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G.
Troy Meier
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and
Chairman (Principal Executive Officer)
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July
1, 2020
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/s/
Christopher Cashion
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Chief
Financial Officer
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July
1, 2020
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Christopher
Cashion
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(Principal
Financial and Accounting Officer)
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/s/
Annette Meier
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President,
Chief Operating Officer and Director
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July
1, 2020
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Annette
Meier
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/s/
James R. Lines
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Director
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July
1, 2020
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James
R. Lines
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/s/
Michael Ronca
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Director
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July
1, 2020
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Michael
Ronca
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/s/
Robert Iversen
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Director
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July
1, 2020
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Robert
Iversen
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EXHIBIT
INDEX
(1)
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We
will file as an exhibit to a current report on Form 8-K (i) any underwriting agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any preferred stock, warrants, subscription rights, purchase contracts or
units, (iii) any additional required opinion of counsel as to the legality of the securities offered hereby, or (iv) any
required opinion of counsel as to certain tax matters relative to securities offered hereby.
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(2)
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Filed
herewith.
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