Drilling Tools International CorpDTI決算レポート
Nasdaq · 産業 · 石油・ガス田機械及び設備
Drilling Tools International Corp is a leading provider of specialized drilling tools, rental equipment, and related support services for the global oil and gas exploration and production sector. It primarily serves onshore and offshore drilling operators, oilfield service companies, and energy exploration firms across North America and key international energy markets, delivering durable, high-performance solutions that boost drilling efficiency and operational safety.
What changed in Drilling Tools International Corp's 10-K — 2024 vs 2025
Top changes in Drilling Tools International Corp's 2025 10-K
294 paragraphs added · 423 removed · 190 edited across 1 sections
- Item 1C. Cybersecurity+294 / −423 · 190 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
190 edited+104 added−233 removed115 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
190 edited+104 added−233 removed115 unchanged
2024 filing
2025 filing
Foreign currency risk Our customers are primarily located in the United States and Canada, but through the recent acquisitions, this has expanded to include customers located located in countries all across the globe. Therefore, foreign exchange risk exposures arise from transactions denominated in currencies other than the U.S. dollar, which is our functional and reporting currency.
Foreign currency risk Our customers are primarily located in the United States and Canada, but through the recent acquisitions, this has expanded to include customers located in countries all across the globe. Therefore, foreign exchange risk exposures arise from transactions denominated in currencies other than the U.S. dollar, which is our functional and reporting currency.
The acquisition of SDPI has been accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company has been treated as the accounting acquirer. Accordingly, SDPI's tangible and identifiable intangible assets acquired and its liabilities assumed were recorded at their estimated fair values on the SDPI Closing Date.
The acquisition of SDPI has been accounted for as a business combination in accordance with ASC 805, Business Combinations . The Company has been treated as the accounting acquirer. Accordingly, SDPI's tangible and identifiable intangible assets acquired and its liabilities assumed were recorded at their estimated fair values on the closing date.
Although no assurance can be given with respect to the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have, in the opinion of our management, there is no xxxv pending litigation, dispute or claim against us that, if decided adversely, will have a material adverse effect on our results of operations, financial condition or cash flows.
Although no assurance can be given with respect to the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have, in the opinion of our management, there is no pending litigation, dispute or claim against us that, if decided adversely, will have a material adverse effect on our results of operations, financial condition or cash flows.
The methods used to estimate the fair values of intangible assets incorporate significant estimates li and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including, but not limited to, a market participant’s use of the asset as well as forecasts for cash flows, revenue growth, asset lives, customer attrition rates, royalty rates, income tax rates, and discount rates.
The methods used to estimate the fair values of intangible assets incorporate significant estimates and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including, but not limited to, a market participant’s use of the asset as well as forecasts for cash flows, revenue growth, asset lives, customer attrition rates, royalty rates, income tax rates, and discount rates.
Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile. Our tool rental revenues are primarily dependent on drilling activity and our ability to gain or maintain market share with a sustainable pricing model.
Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile. 28 Our tool rental revenues are primarily dependent on drilling activity and our ability to gain or maintain market share with a sustainable pricing model.
Risk Mitigations are tracked to completion through various project updates. The foundation of the Company’s cybersecurity framework is based on written policies that govern different process areas. Risks are identified through various processes that employees perform through their daily operations and are mitigated, managed and/or governed through these established processes.
Risk Mitigations are tracked to completion through various project updates. 23 The foundation of the Company’s cybersecurity framework is based on written policies that govern different process areas. Risks are identified through various processes that employees perform through their daily operations and are mitigated, managed and/or governed through these established processes.
Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated on consolidation. Further, the basis of consolidation incorporates the financial statements of our foreign entity, Casing Technologies Group Limited, which operates under UK Generally Accepted Accounting Principles ("UK GAAP").
Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated on consolidation. Further, the basis of consolidation incorporates the financial statements of our foreign entity, Casing Technologies Group Limited, which operates under UK Generally Accepted Accounting Principles ("UK GAAP").
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the revenue standard. The transaction price is measured as consideration specified in a contract with a customer and excludes any sales incentives and taxes or other amounts collected on behalf of third parties.
A performance 46 obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the revenue standard. The transaction price is measured as consideration specified in a contract with a customer and excludes any sales incentives and taxes or other amounts collected on behalf of third parties.
Goodwill represents the future benefits as a result of the acquisition that will enhance the services available to both new and existing customers and increase the Company’s competitive position. Goodwill will be evaluated for impairment at least annually. 70 Goodwill attributable to the CTG Acquisition is not deductible for tax purposes.
Goodwill represents the future benefits as a result of the acquisition that will enhance the services available to both new and existing customers and increase the Company’s competitive position. Goodwill will be evaluated for impairment at least annually. Goodwill attributable to the CTG Acquisition is not deductible for tax purposes.
At times, the Company may elect to early 60 adopt a new or revised standard. As such, the Company’s financial statements may not be comparable to companies that comply with public company effective dates. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S.
At times, the Company may elect to early adopt a new or revised standard. As such, the Company’s financial statements may not be comparable to companies that comply with public company effective dates. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S.
These intangible assets are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible are realized. 65 Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses.
These intangible assets are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible are realized. Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses.
DTI would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year following the fifth anniversary of the date of the completion of the offering on December 6, 2021; (ii) the last day of the fiscal year in which its total annual gross revenue is equal to or more than $1.235 billion (iii) the date on which it has issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which it is deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. lii Ite m 7A.
DTI would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year following the fifth anniversary of the date of the completion of the offering on December 6, 2021; (ii) the last day of the fiscal year in which its total annual gross revenue is equal to or more than $1.235 billion (iii) the date on which it has issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which it is deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. 35 Ite m 7A.
We recognized operating lease revenue within “Tool rental” on the consolidated statements of income and comprehensive income. Intangibles Intangible assets with finite useful lives include customer relationships, trade name, patents, non-compete agreements and a supply agreement.
We recognized operating lease revenue within “Tool rental” on the consolidated statements of comprehensive income (loss). Intangibles Intangible assets with finite useful lives include customer relationships, trade name, patents, non-compete agreements and a supply agreement.
The Company recognizes lease expense for its operating leases on a straight-line basis over the term of the lease. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from a lease.
The Company recognizes lease expense for its operating leases on a straight-line basis over the term of the lease. 48 ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from a lease.
The CTG Acquisition allows the Company to further expand its geographical presence globally, especially in the Middle East, provides accretive earnings to consolidated results of operations, and expands the Company’s portfolio of intellectual property rights, through the acquisition of over 60 patents.
The CTG Acquisition allows the Company to further expand its geographical presence globally, especially in the Middle East, 52 provides accretive earnings to consolidated results of operations, and expands the Company’s portfolio of intellectual property rights, through the acquisition of over 60 patents.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
The JOBS Act provides that a company can 44 elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
We agree to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. # Indicates management contract or compensatory plan or arrangement.. Item 16. Form 10-K Summary.
We agree to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. # Indicates management contract or compensatory plan or arrangement. 75 Item 16. Form 10-K Summary.
On March 15, 2024 (the “CTG Acquisition Date”), we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Casing Technologies Group Limited (“CTG”), certain shareholders of CTG, and a representative of CTG.
On March 15, 2024 (the “CTG Acquisition Date”), we entered into a Share Purchase Agreement (the “CTG Share Purchase Agreement”) with Casing Technologies Group Limited (“CTG”), certain shareholders of CTG, and a representative of CTG.
The preliminary allocation of the purchase is as follows: Assets Preliminary March 15, 2024 Measurement Period Adjustments As adjusted March 15, 2024 Cash $ 2,674 $ — $ 2,674 Accounts receivable, net 3,781 — 3,781 Inventories, net 4,282 — 4,282 Prepaid expenses and other current assets 189 — 189 Property, plant and equipment , net 1,647 — 1,647 Operating lease ROU asset 315 — 315 Intangible assets, net 8,065 — 8,065 Goodwill 2,618 526 3,144 Total assets acquired $ 23,571 $ 526 $ 24,097 Liabilities Accounts payable 2,656 — 2,656 Accrued expenses and other current liabilities ( 295 ) 526 231 Current portion of operating lease liabilities 95 — 95 Operating lease liabilities, less current portion 180 — 180 Total liabilities assumed $ 2,636 $ 526 $ 3,162 Total consideration transferred $ 20,935 $ — $ 20,935 The excess of the purchase price over the fair values of the net identifiable tangible and intangible assets acquired has been assigned to goodwill.
The allocation of the purchase is as follows: Assets Preliminary March 15, 2024 Measurement Period Adjustments As adjusted March 15, 2024 Cash $ 2,674 $ — $ 2,674 Accounts receivable, net 3,781 — 3,781 Inventories 4,282 — 4,282 Prepaid expenses and other current assets 189 — 189 Property, plant and equipment, net 1,647 — 1,647 Operating lease right-of-use asset 315 — 315 Intangible assets, net 8,065 — 8,065 Goodwill 2,618 526 3,144 Total assets acquired $ 23,571 $ 526 $ 24,097 Liabilities Accounts payable 2,656 — 2,656 Accrued expenses and other current liabilities ( 295 ) 526 231 Current portion of operating lease liabilities 95 — 95 Operating lease liabilities, less current portion 180 — 180 Total liabilities assumed $ 2,636 $ 526 $ 3,162 Total consideration transferred $ 20,935 $ — $ 20,935 The excess of the purchase price over the fair values of the net identifiable tangible and intangible assets acquired has been assigned to goodwill.
The SDPI acquisition allows the company to vertically integrate around our proven and successful Drill-N-Ream® tool, gain global rights to run this tool, continue the Vernal, UT bit repair business supporting major OEMs of PDC drill bits, and leverage their high-spec machine shop. In addition, we acquired over 30 patents and patents pending, the majority of which have been granted.
The SDPI acquisition allows the company to vertically integrate around our proven and successful Drill-N-Ream® tool, gain global rights to run this tool, continue the Vernal, Utah bit repair business supporting major OEMs of PDC drill bits, and leverage their high-spec machine shop. In addition, we acquired over 30 patents and patents pending, the majority of which have been granted.
Nonetheless, we cannot be confident that transit times or input prices will return to the lower levels experienced in prior years. Continued inflation and looming concerns regarding a possible recession weigh on the outlook for oil demand which could in turn negatively impact demand for our goods and services. liii Ite m 8. Financial Statements and Supplementary Data.
Nonetheless, we cannot be confident that transit times or input prices will return to the lower levels experienced in prior years. Continued inflation and looming concerns regarding a possible recession weigh on the outlook for oil demand which could in turn negatively impact demand for our goods and services. 36 Ite m 8. Financial Statements and Supplementary Data.
We perform our annual goodwill assessment as of December 31, or more frequently if indicators of impairment exist. Qualitative factors that indicate impairment could include, but are not limited to, (i) macroeconomic conditions, (ii) industry and market considerations, (iii) cost factors, (iv) overall financial performance of the reporting unit, and (v) other relevant entity-specific events.
We perform our annual goodwill assessment as of October 31, or more frequently if indicators of impairment exist. Qualitative factors that indicate impairment could include, but are not limited to, (i) macroeconomic conditions, (ii) industry and market considerations, (iii) cost factors, (iv) overall financial performance of the reporting unit, and (v) other relevant entity-specific events.
Inflation and Increased Costs We are experiencing the impacts of global inflation, both in increased personnel costs and the prices of goods and services required to operate our rigs and execute capital projects.
Inflation and Increased Costs We are experiencing the impacts of global inflation, both in increased personnel costs and the prices of goods and services required to operate rigs and execute capital projects.
If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group.
If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount for which the carrying amount of the assets exceeds the fair value of the asset or asset group.
The information relating to our equity compensation plans required by Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” is incorporated by reference to such information as set forth in Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” contained herein. It em 6.
The information relating to our equity compensation plans required by Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” is incorporated by reference to such information as set forth in Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” contained herein. It em 6. [Reserved] It em 7.
NOTE 16 – EMPLOYEE BENEFIT PLANS The Company sponsors various defined contribution savings plan, primarily in the U.S., that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. Under specified conditions, the Company will make contributions to the plans and/or match a percentage of the employee contributions up to certain limits.
NOTE 15 – EMPLOYEE BENEFIT PLANS The Company sponsors various defined contribution savings plan, primarily in the U.S., that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. Under specified conditions, the Company will make contributions to the plans and/or match a percentage of the employee contributions up to certain limits.
Market Factors Demand for our services and products depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, the number of wells drilled, the depth and working pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies.
Demand for our services and products depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, the number of wells drilled, the depth and working pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies.
Cost is determined by using the specific identification method, weighted average, or the first-in-first-out ("FIFO") method, depending on the type of inventory. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on assumptions regarding future demand and market conditions.
Cost is determined by using the specific identification method or the first-in-first-out ("FIFO") method, depending on the type of inventory. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on assumptions regarding future demand and market conditions.
GAAP”) as set forth by the Financial Accounting Standards Board ("FASB") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). References to US GAAP issued by the FASB in these notes to the accompanying consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Update (“ASU”).
GAAP”) as set forth by the Financial Accounting Standards Board ("FASB") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). References to US GAAP issued by the FASB in these notes to the accompanying consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”).
Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held and of the money market funds in which these investments are made. 61 Business Combinations The Company applies the acquisition method of accounting for business combinations, which requires us to make use of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets and liabilities acquired.
Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held and of the money market funds in which these investments are made. 45 Business Combinations The Company applies the acquisition method of accounting for business combinations, which requires us to make use of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets acquired and liabilities assumed.
We believe that our existing cash on hand, cash generated from operations and available borrowings under the Credit Facility Agreement will be sufficient for at least the next 12 months to meet working capital requirements and anticipated capital expenditures.
We believe that our existing cash on hand, cash generated from operations and available borrowings under the Credit Facility Agreement will be sufficient for at least the next twelve months to meet working capital requirements and anticipated capital expenditures.
The amount of the impairment loss is the excess of the asset’s carrying amount over its fair value. For the year ended December 31, 2024 and 2023, management determined that there was no impairment with regard to our property, plant, and equipment.
The amount of the impairment loss is the excess of the asset’s carrying amount over its fair value. For the year ended December 31, 2025 and 2024, management determined that there was no impairment with regard to our property, plant, and equipment.
We apply the short-term lease policy election, which allows us to exclude from recognition leases with an original term of 12 months or less. We have not entered into any finance leases as of December 31, 2024.
We apply the short-term lease policy election, which allows us to exclude from recognition leases with an original term of 12 months or less. We have not entered into any finance leases as of December 31, 2025.
Please see the table below for additional information on our properties: Location Type Own/Lease United States: Bakersfield, CA Service Center Lease Broussard, LA Service Center, Manufacturing Facility Lease New Iberia, LA Service Center Lease Shreveport, LA Service Center Lease Williston, ND Service Center Lease Oklahoma City, OK Service Center Lease Charleroi, PA Service Center Lease Houston, TX Service Center, Manufacturing Facility Lease Midland, TX (1) Service Center Lease Odessa, TX (1) Service Center, Manufacturing Facility Lease Carlsbad, NM Service Center Lease Casper, WY Service Center Lease Vernal, UT Service Center Lease Canada: Service Center Lease Nisku, Canada Service Center Lease Middle East: Dubai, UAE Service Center Lease United Kingdom: Aberdeen, Scotland Service Center Lease Europe: Amsterdam, The Netherlands Support Center Lease (1) Consists of two facilities Ite m 3.
Please see the table below for additional information on our properties: Location Type Own/Lease United States: Broussard, LA Service Center, Manufacturing Facility Lease New Iberia, LA Service Center Lease Shreveport, LA Service Center Lease Williston, ND Service Center Lease Oklahoma City, OK Service Center Lease Charleroi, PA Service Center Lease Houston, TX Service Center, Manufacturing Facility Lease Midland, TX (1) Service Center Lease Odessa, TX (1) Service Center, Manufacturing Facility Lease Carlsbad, NM Service Center Lease Casper, WY Service Center Lease Vernal, UT Service Center Lease Canada: Service Center Lease Nisku, Canada Service Center Lease Middle East: Dubai, UAE Service Center Lease United Kingdom: Aberdeen, Scotland (1) Service Center Lease Europe: Amsterdam, The Netherlands Support Center Lease Wietzendorf, Germany Service Center Lease (1) Consists of two facilities Ite m 3.
Costs that are directly attributable to business combinations are expensed as incurred within other expenses, net, on the consolidated statements of income and comprehensive income. The results of operations of acquisitions are included in the consolidated financial statements from the date of acquisition.
Costs that are directly attributable to business combinations are expensed as incurred within other expenses, net, on the consolidated statements of comprehensive income (loss). The results of operations of acquisitions are included in the consolidated financial statements from the date of acquisition.
The fee is based upon a percentage of the Company’s trailing twelve months, earnings before interest, taxes and accumulated depreciation amount, as defined in the management agreement (refer to Note 14 – Related Parties Transactions).
The fee is based upon a percentage of the Company’s trailing twelve months, earnings before interest, taxes and accumulated depreciation amount, as defined in the management agreement (refer to Note 13, Related Parties Transactions ).
If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50 % likely to be realized upon its ultimate settlement. The Company has no uncertain tax positions at December 31, 2024 and 68 2023.
If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50 % likely to be realized upon its ultimate settlement. The Company has no uncertain tax positions at December 31, 2025 and 2024.
Operating Segment Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding resource allocation and assessing performance. The Company’s Chief Executive Officer works as the CODM.
Reportable Segments Reportable segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding resource allocation and assessing performance. The Company’s Chief Executive Officer is the CODM.
Diluted earnings is computed by dividing the diluted net income (loss) by the weighted-average number of common shares outstanding for the period, including potential dilutive common stock.
Diluted earnings per share is computed by dividing the diluted net income (loss) by the weighted-average number of common shares outstanding for the period, including potential dilutive common stock.
Per the agreement, if the 20-day average stock price of DTI falls below $ 3.20 per share, the principal that otherwise would have been due shall be deferred and apportioned over the remaining payment dates under specified in the agreement.
Per the agreement, if the 20-day volume-weighted average price of DTI falls below $ 3.20 per share, the principal that otherwise would have been due shall be deferred and apportioned over the remaining payment dates under specified in the agreement.
Recent Accounting Pronouncements - Accounting Standards Issued Not Yet Effective In December 2023, FASB issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows.
Recent Accounting Pronouncements In December 2023, FASB issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows.
We determine the fair value of stock options granted using the Black-Scholes-Merton option-pricing model (“Black-Scholes model”) and recognizes the cost over the period during which an employee is required to provide service in exchange for the award, generally the vesting period, with forfeitures accounted for as they occur.
The Company determines the fair value of stock options granted using the Black-Scholes- Merton option-pricing model (“Black-Scholes model”) and recognizes the cost over the period during which an employee is required to provide service in exchange for the award, generally the vesting period, with forfeitures accounted for as they occur.
Components of the consolidated statements of income and comprehensive income have been translated at the average rates for the year of the reporting period. Translation gains and losses are recorded in accumulated other comprehensive loss as a component of stockholders’ equity.
Components of the consolidated statements of comprehensive income (loss) have been translated at the average rates during the reporting period. Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity.
Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost. The cost of refurbishments and renewals are capitalized when the value of the property, plant or equipment is enhanced for an extended period.
Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value. The cost of refurbishments and renewals are capitalized when the value of the property, plant or equipment is enhanced for an extended period.
Foreign Currency Translations and Transactions The Company has determined that the functional and reporting currency for its operations across the globe is the functional currency of the Company’s international subsidiaries. Accordingly, all foreign balance sheet accounts have been translated into United States dollars using the rate of exchange at the respective balance sheet date.
Foreign Currency Translations and Transactions The Company has determined that the functional and reporting currency for its operations across the globe is the functional currency of the Company’s international subsidiaries. Accordingly, all foreign balance sheet accounts have been translated into U.S. dollars using the rate of exchange at the respective balance sheet date.
Product Sales Product sales consist of charges for rented tools that are damaged beyond repair, charges for lost-in-hole, and charges for lost-in-transit while in the care, custody or control of the Company’s customers, drill bit manufacturing and refurbishment, and other charges for made to order product sales as well.
Product Sales Product sales consist of charges for rented tools that are damaged beyond repair, charges for lost-in-hole, and charges for lost-in-transit while in the care, custody or control of the Company’s customers, drill bit manufacturing and refurbishment, and other charges for made to order product sales as well. Product sales are accounted for under Topic 606.
Impairment of Long-Lived Assets Long-lived assets with finite lives include property, plant and equipment and acquired intangible assets. The Company evaluates long-lived assets, including acquired intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Impairment of Long-Lived Assets Long-lived assets with finite lives include property, plant and equipment, operating lease right of use assets, and acquired intangible assets. The Company evaluates long-lived assets, including acquired intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The changes in contract assets for the year ended December 31, 2024 were as follows (in thousands): Balance at December 31, 2023 $ 4,157 Revenue recognized from contract assets 55,814 Conversion of contract assets into accounts receivable ( 54,522 ) Balance at December 31, 2024 $ 5,449 Contract liabilities consist of fees invoiced or paid by the Company’s customers for which the associated services have not been performed and revenue has not been recognized based on the Company’s revenue recognition criteria described above.
The changes in contract assets for the year ended December 31, 2025 and 2024 were as follows (in thousands): Balance at December 31, 2023 $ 4,157 Revenue recognized from contract assets 55,814 Conversion of contract assets into accounts receivable ( 54,522 ) Balance at December 31, 2024 $ 5,449 Revenue recognized from contract assets 42,598 Conversion of contract assets into accounts receivable ( 40,851 ) Balance at December 31, 2025 7,196 Contract liabilities consist of fees invoiced or paid by the Company’s customers for which the associated services have not been performed and revenue has not been recognized based on the Company’s revenue recognition criteria described above.
Estimates of future cash flows and fair value are highly subjective and inherently imprecise. These estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period. Investment - Equity Securities Equity securities are stated at fair value.
Estimates of future cash flows and fair value are highly subjective and inherently imprecise. These estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period.
Inventory write-downs are charged to cost of rental revenue and cost of product sale revenue within operating costs section of the consolidated statements of income and comprehensive income and establish a new cost basis for the inventory. Inventory includes raw material and finished goods.
Inventory write-downs are charged to cost of rental revenue and cost of product sale revenue within the operating costs section of the consolidated statements of comprehensive income (loss) and establish a new cost basis for the inventory. Inventory includes raw material, work-in-progress, and finished goods.
However, there were no amounts recognized relating to interest and penalties in the consolidated statements of income and comprehensive income for the year ended December 31, 2024 and 2023.
However, there were no amounts recognized relating to interest and penalties in the consolidated statements of comprehensive income (loss) for the year ended December 31, 2025 and 2024 .
See Note 15, Commitments and Contingencies. It em 4. Mine Safety Disclosures. Not applicable. xxxvi PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The Common Stock is listed on Nasdaq under the symbol “DTI”.
See Note 14, Commitments and Contingencies. It em 4. Mine Safety Disclosures. 25 Not applicable. 26 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The Common Stock is listed on Nasdaq under the symbol “DTI”.
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. It em 13.
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. It em 11. Executive Compensation. The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Management fees paid to the shareholder are included in selling, general and administrative expense in the accompanying consolidated statements of income and comprehensive income. Director fees For the years ended December 31, 2024 and 2023, director fees paid to our Board of Directors were approximately $ 0.6 million and $ 0.2 million, respectively.
Management fees paid to the shareholder are included in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss). Director fees For the years ended December 31, 2025 and 2024, director fees paid to our Board of Directors were approximately $ 0.5 million and $ 0.6 million , respectively.
None. 92 SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . Company Name Date: March 14, 2025 By: /s/ R. Wayne Prejean R.
None. 76 SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . Company Name Date: March 6, 2026 By: /s/ R. Wayne Prejean R.
Pursuant to the terms of the Credit Facility, the Company will be provided a revolving line of credit in a principal amount up to $ 80.0 million and a single draw term loan (the "Term Loan") in 78 a principal amount of $ 25.0 million. The line of credit and the Term Loan mature in March 2029 .
Pursuant to the terms of the Credit Facility, the Company will be provided a revolving line of credit (the "Revolving Line of Credit") in a principal amount up to $ 80.0 million and a single draw term loan (the "Term Loan") in a principal amount of $ 25.0 million.
The Credit Facility amends and restates the Company’s Existing Credit Facility under that certain Amended and Restated Revolving Credit, Term Loan, and Security Agreement, dated as of June 20, 2023, by and among the Company, certain of its subsidiaries, and PNC Bank National Association.
The Revolving Line of Credit and the Term Loan mature in March 2029 . The Credit Facility amends and restates the Company’s Existing Credit Facility under that certain Amended and Restated Revolving Credit, Term Loan, and Security Agreement, dated as of June 20, 2023, by and among the Company, certain of its subsidiaries, and PNC Bank National Association.
Certain Relationships and Related Transactions, and Director Independence. The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. Ite m 14. Principal Accounting Fees and Services. The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. 89 PART IV It em 15.
The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. It em 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item (and only such information) is incorporated by reference to our Proxy Statement. Ite m 14. Principal Accounting Fees and Services.
The preliminary allocation of the purchase is as follows (in thousands): 72 Assets acquired: Cash $ 1,726 Accounts receivable, net 1,239 Related party note receivable, current 1,231 Inventories, net 2,800 Prepaid expenses and other current assets 573 Property, plant and equipment, net 10,213 Related party note receivable, noncurrent 4,193 Operating lease right-of-use asset 2,662 Intangible assets, net 22,850 Deposits and other long-term assets 200 Total assets acquired 47,687 Liabilities assumed: Accounts payable 370 Current portion of operating lease liabilities 147 Accrued expenses and other current liabilities 1,804 Deferred tax liabilities, net 881 Deferred income 675 Operating lease liabilities, less current portion 2,368 Total liabilities assumed 6,245 Total identifiable net assets 41,442 Goodwill 7,718 Total net assets acquired and goodwill $ 49,160 The following table presents a preliminary reconciliation of the fair value of consideration transferred and the fair value of DTI’s investment in SDPI that was acquired and held prior to Closing which is included in the calculation of goodwill (in thousands): Fair value of consideration transferred $ 47,916 Fair value of DTI's investment in SDPI that was acquired and held prior to Closing 1,244 Total fair value consideration transferred and fair value of DTI's investment in SDPI that was acquired and held prior to Closing $ 49,160 The excess of the fair value of the consideration transferred and the fair value of DTI’s previously held investment in SDPI over the fair values of the net identifiable tangible and intangible assets acquired has been assigned to goodwill.
The allocation of the purchase is as follows (in thousands): 53 Assets acquired: Cash $ 1,726 Accounts receivable, net 1,239 Related party note receivable, current 1,231 Inventories 2,800 Prepaid expenses and other current assets 573 Property, plant and equipment, net 10,213 Related party note receivable, noncurrent 4,193 Operating lease right-of-use asset 2,662 Intangible assets, net 22,850 Deposits and other long-term assets 200 Total assets acquired 47,687 Liabilities assumed: Accounts payable 370 Current portion of operating lease liabilities 147 Accrued expenses and other current liabilities 1,804 Deferred tax liabilities, net 881 Deferred income 675 Operating lease liabilities, less current portion 2,368 Total liabilities assumed 6,245 Total identifiable net assets 41,442 Goodwill 7,718 Total net assets acquired and goodwill $ 49,160 The excess of the fair value of the consideration transferred and the fair value of DTI’s previously held investment in SDPI over the fair values of the net identifiable tangible and intangible assets acquired has been assigned to goodwill.
Level 2 – Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the assets or liabilities being measured.
Level 2 – Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the assets or liabilities being measured. Level 3 – Valuation inputs are unobservable and significant to the fair value measurement.
Basis for Opinion These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.
Additionally, we are required to make an annual payment of up to $ 5,000,000 , to be determined based on the Excess Cash Flows generated each fiscal year commencing with the year ended December 31, 2024, as defined in the Credit Facility.
Additionally, the Company is required to make an annual payment of up to $ 5.0 million, to be determined based on the excess cash flows generated each fiscal year commencing with the year ended December 31, 2024, as defined in the Credit Facility.
Gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in the consolidated statements of income and comprehensive income.
Gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in other operating and non-operating expenses, net in the accompanying consolidated statements of comprehensive income (loss).
Wayne Prejean President, CEO, and Director POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints, jointly and severally, R.
Wayne Prejean Interim Chairman, President, Chief Executive Officer and Director POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints, jointly and severally, R.
The CTG Acquisition has been accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). Drilling Tools International, Inc. has been treated as the accounting acquirer. Accordingly, CTG’s tangible and identifiable intangible assets acquired and its liabilities assumed were recorded at their estimated fair values on the CTG Acquisition Date.
The acquisition of CTG has been accounted for as a business combination in accordance with ASC 805, Business Combinations . The Company has been treated as the accounting acquirer. Accordingly, CTG's tangible and identifiable intangible assets acquired and its liabilities assumed were recorded at their estimated fair values on the closing date.
Credit Facility Agreement Reference is made to the disclosure set forth under the heading “Revolving Credit Facility” in Note 8, Revolving Credit Facility , of the notes to the consolidated financial statements included elsewhere in this Report.
Credit Facility Agreement Reference is made to the disclosure set forth under the heading “Revolving Credit Facility” in Note 19, Long-Term Debt , of the notes to the consolidated financial statements included elsewhere in this Report.
This standard is effective for the Company’s annual reporting period beginning January 1, 2027 and interim reporting periods beginning January 1, 2028 and should be applied retrospectively to all comparative periods. Early adoption is permitted. The Company is currently evaluating the effects of adopting this new accounting guidance.
This standard is effective for the Company’s annual reporting period beginning January 1, 2027, and interim reporting periods beginning January 1, 2028. Early adoption is permitted. The Company is currently evaluating the effects of adopting this new accounting guidance.
Purchases of property, plant, and equipment of $22.9 million and cash spent in business acquisitions of $47.3 million were partially offset by proceeds from rental tool recovery sales of $15.3 million and proceeds from sale of equity securities of $1.2 million. Net cash used in investing activities for the year ended December 31, 2023 was $23.9 million.
Net cash used in investing activities for the year ended December 31, 2024 was $53.6 million, resulting from purchases of property, plant, and equipment of $22.9 million and multiple business acquisitions totaling $47.3 million. These outflows were partially offset by proceeds from rental tool recovery sales of $15.3 million and proceeds from the sale of equity securities of $1.2 million.
DRILLING TOOLS INTERNATIONAL CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID Number 410 ) Consolidated Balance Sheets as of December 31, 2024 and 2023 Consolidated Statement of Income and Comprehensive Income for the Years Ended December 31, 2024 and 2023 Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Shareholder's Equity for the Years Ended December 31 2024, and 2023 Consolidated Statement of Cash Flows for the Years Ended December 31, 2024 and 2023 Notes to the Consolidated Financial Statements liv Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Drilling Tools International Corporation Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Drilling Tools International Corporation (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income and comprehensive income, consolidated statements of changes in redeemable convertible preferred stock and shareholders’ equity and consolidated statements of cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
Houston, Texas March 6, 2026 38 Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Drilling Tools International Corporation Opinion on the Consolidated Financial Statements We have audited the consolidated balance sheets of Drilling Tools International Corporation (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income and comprehensive income, changes in redeemable convertible preferred stock and shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
Pursuant to the Sixth Amendment and Restated Promissory Note, Tronco will make payments to the Company of $ 1.3 million annually, commencing on the first anniversary of the Closing Date through the fifth anniversary of the Closing Date.
The face value of the note is $ 6.5 million. Pursuant to the Sixth Amendment and Restated Promissory Note, Tronco will make payments to the Company annually, commencing on the first anniversary of the Closing Date through the fifth anniversary of the Closing Date.
On March 15, 2024, the Company refinanced its revolving credit facility (the “Refinancing”) by entering into a Second Amended and Restated Revolving Credit, Term Loan and Security and Guaranty Agreement (the “Credit Facility”) with certain of the Company’s subsidiaries and PNC Bank, National Association as lender and as agent.
The facility provided for a revolving line of credit with a maximum borrowing amount totaling $ 60.0 million. 59 On March 15, 2024, the Company refinanced its revolving credit facility (the “Refinancing”) by entering into a Second Amended and Restated Revolving Credit, Term Loan and Security and Guaranty Agreement (the “Credit Facility”) with certain of the Company’s subsidiaries and PNC Bank, National Association as lender and as agent.
The performance obligation for made to order product sales is satisfied and revenue is recognized at a point in time when control of the asset transfers to the customer, which typically occurs upon customer pick up.
The performance obligation for made to order product sales is satisfied and revenue is recognized at a point in time when control of the asset transfers to the customer, which typically occurs upon delivery of the product or when the product is made available to the customer for pickup at the Company’s shipping dock.
(incorporated by reference to Exhibit 10.18 to ROC Energy Acquisition Corp.’s Registration Statement on Form S 4 (File No. 333-269763), filed with the Securities and Exchange Commission on February 14, 2023). 10.8# Form of 2023 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to ROC Energy Acquisition Corp.’s Registration Statement on Form S-4 (File No. 333-269763), filed with the Securities and Exchange Commission on February 14, 2023). 10.9 Assignment and Assumption Agreement, dated as of June 20, 2023, between Drilling Tools International Holdings, Inc. and Drilling Tools International Corporation (incorporated by reference to Exhibit 10.13 to Drilling Tools International Corporation’s Registration Statement on Form S-1 (File No. 333-273348), filed with the Securities and Exchange Commission on July 20, 2023). 10.10 Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of March 15, 2024, by and among Drilling Tools International, Inc., certain of its subsidiaries and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on March 15, 2024). 19.1* Drilling Tools International Corporation Insider Trading Policy 91 21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 23.1* Consent of Independent Registered Public Accounting Firm. 24.1 Power of Attorney (included on signature page hereto). 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. 32.1* Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Chief Financial Officer pursuant to Schedule 906 of the Sarbanes-Oxley Act of 2002 . 97.1* DTI Clawback Policy - 8398475 101.INS* Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104* Cover page formatted as Inline XBRL and contained in Exhibit 101 * Filed herewith. Certain exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).
(3) Index to Exhibits The exhibits required to be filed or furnished pursuant to Item 601 of Regulation S-K are set forth below. 74 Exhibit Index Exhibit Number Description 3.1 Second Amended and Restated Certificate of Incorporation of Drilling Tools International Corporation (incorporated by reference to Exhibit 3.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 3.2 Amended and Restated Bylaws of Drilling Tools International Corporation (incorporated by reference to Exhibit 3.2 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 4.1 Form of Specimen Common Stock Certificate of Drilling Tools International Corporation (incorporated by reference to Exhibit 4.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 4.2* Description of the Registrant’s Securities (incorporated by reference to Exhibit 4.2 to Drilling Tools International Corporation’s Annual Report on Form 10-K (File No. 001-41103), filed with the Securities and Exchange Commission on March 14, 2025). 10.6 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 10.8# Form of 2023 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to ROC Energy Acquisition Corp.’s Registration Statement on Form S-4 (File No. 333-269763), filed with the Securities and Exchange Commission on February 14, 2023). 10.10 Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of March 15, 2024, by and among Drilling Tools International, Inc., certain of its subsidiaries and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on March 15, 2024). 19.1* Drilling Tools International Corporation Insider Trading Policy (incorporated by reference to Exhibit 19.1 to Drilling Tools International Corporation’s Annual Report on Form 10-K (File No. 001-41103), filed with the Securities and Exchange Commission on March 14, 2025). 21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to Drilling Tools International Corporation’s Current Report on Form 8-K (File No. 001-41103), filed with the Securities and Exchange Commission on June 27, 2023). 23.1* Consent of Grant Thornton LLP. 23.2* Consent of Weaver and Tidwell, LLP 24.1 Power of Attorney (included on signature page hereto). 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. 32.1* Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Chief Financial Officer pursuant to Schedule 906 of the Sarbanes-Oxley Act of 2002 . 97.1* Clawback Policy (incorporated by reference to Exhibit 97.1 to Drilling Tools International Corporation’s Annual Report on Form 10-K (File No. 001-41103), filed with the Securities and Exchange Commission on March 14, 2025). 101.INS* Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104* Cover page formatted as Inline XBRL and contained in Exhibit 101 * Filed herewith. Certain exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).
(2) Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable or the required information presented in the financial statements or the notes thereto.
Reference is made to the accompanying Index to Consolidated Financial Statements. (2) Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable or the required information presented in the financial statements or the notes thereto.
We believe the estimates and assumptions used in our impairment assessment are reasonable based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated during current or future periods.
We believe the estimates and assumptions used in our impairment assessment are reasonable based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated during current or future periods. 34 Business Combinations We account for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations.
We use the non-GAAP financial measure Adjusted EBITDA, which is defined as net income (loss); excluding: interest income; interest expense; other income (expense), including those that do not reflect our core operating activities, net; income tax benefit (expense); depreciation and amortization; and certain other non-cash items impacting net income (loss) from time to time.
We use the non-GAAP financial measure Adjusted EBITDA, which is defined as net income (loss); excluding interest income; interest expense; other operating and non-operating expense, net, net; income tax benefit (expense); depreciation and amortization; and certain other non-cash or non-recurring items impacting net income (loss) from time to time.
Additionally, we identify and attribute fair values and estimated lives to acquired intangible assets. We identify an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or when it can be separately sold, transferred, licensed, rented, or exchanged.
We identify an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or when it can be separately sold, transferred, licensed, rented, or exchanged.
During the years ended December 31, 2023, 39% of our total revenue was earned from three of our customers. Amounts due from these customers included in accounts receivable at December 31, 2024 and December 31, 2023 were approximately $6.3 million and $11.1 million, respectively.
During the years ended December 31, 2025 and December 31, 2024, 27 % and 28 % , respectively, of our total revenue was earned from two of our customers. Amounts due from these customers included in accounts receivable at December 31, 2025 and December 31, 2024 were approximately $ 6.4 million and $ 6.3 million , respectively.
The Credit Facility is collateralized by substantially all the assets of the Company. As of December 31, 2024 , the Company has drawn $ 27.1 million against the line of credit. As of December 31, 2024 , the term loan has a balance of $ 21.7 million.
The Credit Facility is collateralized by substantially all the assets of the Company. As of December 31, 2025 , the Company has drawn $ 25.0 million against the line of credit. As of December 31, 2025, the term loan has a balance of $ 16.7 million .
As of December 31, 2024, the future maturities of long-term debt consisted of the following (in thousands): 2025 $ 6,995 2026 5,975 2027 6,056 2028 6,143 2029 28,644 Total long term debt $ 53,813 Contingent Interest Embedded Derivative Liability Under the Credit Facility Agreement, the interest rate will reset (the 'Default Rate') upon the event of a default and an additional 2 % will be added to the base rate.
As of December 31, 2025, the future maturities of long-term debt consisted of the following (in thousands): 2026 $ 5,989 2027 6,071 2028 6,159 2029 27,597 Thereafter — Total long term debt $ 45,816 Contingent Interest Embedded Derivative Liability Under the Credit Facility Agreement, the interest rate will reset (the 'Default Rate') upon the event of a default and an additional 2 % will be added to the base rate.
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