Item
1.01. Entry into a Material Definitive Agreement.
Registered
Direct Offering
On October 14, 2021, Superior Drilling Products,
Inc. (the “Company”) entered into a share purchase agreement (the “Purchase Agreement”) which provides
for the sale and issuance by the Company to a certain institutional investor, named therein, of 1,739,131 shares
(the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at an offering
price of $1.15 per share in a registered direct offering (the “Registered Offering”) priced at-the-market under NYSE American
rules for gross proceeds of approximately $2,000,000 before deducting placement agent fees and related offering expenses. The
Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, other obligations of the parties and termination provisions. The Company intends to use the net proceeds
of the offering for working capital and general corporate purposes.
EF Hutton,
division of Benchmark Investments, LLC acted as the sole placement agent (the “Placement Agent”) on a “reasonable best
efforts” basis, in connection with the Registered Offering pursuant to a placement agency agreement (the “Placement Agency
Agreement”), dated and entered as of October 12, 2021, by and between the Company and the Placement Agent. In accordance with the
Placement Agency Agreement, the Placement Agent will be entitled to a cash fee of 7% of the gross proceeds raised in the Registered Offering
and reimbursement of certain out-of-pocket expenses including attorney’s fees.
The
Placement Agency Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Placement Agent, including for liabilities under the Securities Act of 1933, as amended,
other obligations of the parties and termination provisions.
The
Registered Offering is being made pursuant to a Registration Statement (No. 333-239608) on Form S-3, which was filed by the Company with
the Securities and Exchange Commission on July 1, 2020, and declared effective on July 29, 2020. This
Current Report shall not constitute an offer to sell or the solicitation of an offer to buy Shares, nor shall there be any sale of Shares
in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities
laws of any such state.
The closing
of the Registered Offering is expected to occur on or about October 19, 2021 (“Closing Date”), subject to the satisfaction
of customary closing conditions.
The
Placement Agency Agreement and Purchase Agreement are filed as Exhibits 1.1 and 10.1, respectively, to this Current Report on Form 8-K
and are incorporated herein by reference. The above descriptions of the terms of the Placement Agency Agreement and Purchase Agreement
are qualified in their entirety by reference to such exhibits.