0001193125-24-167146 | S-4/A | XBRL Viewer | Drilling Tools International Corp

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INVESTMENTS - EQUITY SECURITIES (Details) - USD ($)	3 Months Ended		12 Months Ended
INVESTMENTS - EQUITY SECURITIES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Unrealized gain loss on equity securities	$ 200	$ 33,000	$ (300)	$ 200

EARNINGS PER SHARE - Summary of Company's Potentially Dilutive Securities Excluded - Time-based Options Outstanding (Details) - shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Time-based Options Outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	4,427,659	140,135	140,135	140,135

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 314,000	$ 1,360,000	$ 3,264,000		$ 7,907,000
Non-cash lease expense	1,111,000	1,140,000	4,515,000		4,139,000
Operating lease liabilities	(1,067,000)	(1,086,000)	(4,415,000)		(4,174,000)
Accounts payable	(2,848,000)	3,208,000	(1,552,000)		(1,432,000)
Proceeds from sale of lost-in-hole equipment	4,904,000	5,819,000	19,684,000		21,116,000
Purchase of property, plant and equipment	$ 6,228,000	7,067,000	$ 43,750,000		24,688,000
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Right-of-use assets obtained in exchange for new operating lease liabilities		2,516,000			9,451,000
Non-cash lease expense		(220,000)		$ 3,800,000	(3,768,000)
Operating lease liabilities		274,000			3,733,000
Inventories of negative		1,400,000			1,000,000
Accounts payable		5,765,000			(981,000)
Proceeds from sale of lost-in-hole equipment		5,315,000			20,319,000
Purchase of property, plant and equipment		$ 10,815,000			23,753,000
Account Payable					$ 1,000

COMMITMENTS AND CONTINGENCIES	3 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 15 – COMMITMENTS AND CONTINGENCIES The Company maintains operating leases for various facilities and vehicles. See Note 13— Leases , for further information. Litigation From time to time, the Company may become involved in various legal proceedings in the ordinary course of its business and may be subject to third-party infringement claims. Such proceedings can be costly, time consuming, and unpredictable, and, therefore, no assurance can be given that the final outcome of such proceedings will not materially impact our consolidated financial condition or results of operations. Estimated losses are accrued for these proceedings when the loss is probably and can be estimated. While we maintain insurance coverage that we believe is adequate to mitigate the risks of such proceedings, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. The current liability for the estimated losses associated with these proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations. In the normal course of business, the Company may agree to indemnify third parties with whom it enters into contractual relationships, including customers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the Company’s products when used for their intended purposes infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim. Management Fee The Company is required to pay a monthly management fee to a shareholder. 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. See Note 12 – Related Party Transactions, for further information.	NOTE 15 – COMMITMENTS AND CONTINGENCIES The Company maintains operating leases for various facilities and vehicles. See Note 13, Leases , for further information. Litigation From time to time, the Company may become involved in various legal proceedings in the ordinary course of its business and may be subject to third-party infringement claims. In the normal course of business, the Company may agree to indemnify third parties with whom it enters into contractual relationships, including customers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the Company’s products when used for their intended purposes infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim.

EMPLOYEE BENEFITS	3 Months Ended	12 Months Ended
EMPLOYEE BENEFITS	Mar. 31, 2024	Dec. 31, 2023
Defined Benefit Plan [Abstract]
EMPLOYEE BENEFITS	NOTE 14 – EMPLOYEE BENEFITS The Company has a defined contribution plan that complies with Section 401(k) of the Internal Revenue Code. All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry date following six months of service. Plan entry dates are the first day of January and July. In March of 2020, the Company suspended any employee contribution match effective immediately and through the end of 2021. The match was reinstated on January 1, 2022. For 2022, the Company matched employee contributions 150% of the first 3% of employee contributions, not to exceed $2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximum contribution allowed under the Internal Revenue Service Regulations. The total expense for the three months ended March 31, 2024 and 2023 was approximately $0.3 million and $0.2 million, respectively.	NOTE 16 – EMPLOYEE BENEFIT PLANS The Company has a defined contribution plan that complies with Section 401(k) of the Internal Revenue Code. All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry date following six months of service. Plan entry dates are the first day of January and July. For 2022, the Company matched employee contributions 150% of the first 3% of employee contributions, not to exceed $2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximu m contribution allowed under the Internal Revenue Service Regulations. The total expense for the years ended December 31, 2023 and 2022 was approximately $0.5 million and $0.4 million, respectively.

STOCK-BASED COMPENSATION

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 10 – STOCK-BASED COMPENSATION

On June 20, 2023, the Company adopted the Drilling Tools International Corporation 2023 Omnibus Incentive Plan (the 2023 Plan). The 2023 Plan became effective on the closing of the Merger, which also occurred on June 20, 2023. The 2023 Plan provides for the issuance of shares of Common Stock up to ten percent (10%) of the shares of outstanding Common Stock as of the closing of the Merger (which equated to 2,976,854 shares as of December 31, 2023) and automatically increases on the first trading day of each calendar year by the number of shares of Common Stock equal to three percent (3%) of the total number of outstanding Common Stock on the last day of the prior calendar year. The 2023 Plan allows for awards to be issued to employees,

non-employee

directors, and consultants in the form of options, stock appreciation rights, restricted shares, restricted stock units, performance based awards, other share-based awards, other cash-based awards, or a combination of the foregoing. As of March 31, 2024, there were 1,269,910 shares of Common Stock available for issuance under the 2023 Plan.

In connection with the Merger, all outstanding options to purchase shares of DTIH common stock were canceled and exchanged for options to purchase shares of DTIC Common Stock (“Company Options”). The number of Company Options issued and the associated exercise prices were adjusted using the Common Exchange Ratio used for the Merger. As a result of the Merger, the Company issued options to purchase a total of 2,361,722 shares of the Company’s Common Stock to former holders of the DTIH stock options. The vesting schedules, remaining term, and provisions (other than the adjusted number of underlying shares and exercise prices) of the Company Options issued, are identical to the vesting schedules, remaining term, and other provisions of the DTIH stock options that were exchanged. Per a post-closing amendment, Company Options currently held by former holders of DTIH stock options are no longer subject to employment considerations.

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model. Expected volatilities are based on comparable public company data. The Company uses future estimated employee termination and forfeiture rates of the options within the valuation model. The expected term of options granted is derived using the “plain vanilla” method due to the lack of history and volume of option activity at the Company. The risk-free rate is based on the approximate U.S. Treasury yield rate in effect at the time of grant. The Company’s calculation of share price involves the use of different valuation techniques, including a combination of an income and market approach. The Company used the quoted market price as of the grant date as an input into the Black-Scholes model.

During the three months ended March 31, 2024, there were 2,600,000 options granted under the 2023 plan. During the three months ended March 31, 2024, there were no exercises or forfeitures.

Non-vested

shares at March 31, 2024 and December 31, 2023 totaled 2,600,000 and nil, respectively, which consists of time based shares, for which the service conditions have not been satisfied at March 31, 2024 and December 31, 2023.

During the three months ended March 31, 2024 and 2023, there was $208 thousand and nil stock-based compensation expense recognized, respectively. As of March 31, 2024 and March 31, 2023, there was

$4.4 million and $1.6 million, respectively, of unrecognized compensation expense. The unrecognized expense as of March 31, 2023 related to previously

non-vested

performance

NOTE 12 – STOCK-BASED COMPENSATION

On June 20, 2023, the Company adopted the Drilling Tools International Corporation 2023 Omnibus Incentive Plan (the “2023 Plan”). The 2023 Plan became effective on the closing of the Merger, which also occurred on June 20, 2023. The 2023 Plan provides for the issuance of shares of Common Stock up to ten percent (10%) of the shares of outstanding Common Stock as of the closing of the Merger (which equates to 0 shares as of December 31, 2023) and automatically increases on the first trading day of each calendar year by the number of shares of Common Stock equal to three percent (3%) of the total number of outstanding Common Stock on the last day of the prior calendar year. The 2023 Plan allows for awards to be issued to employees,

non-employee

directors, and consultants in the form of options, stock appreciation rights, restricted shares, restricted stock units, performance based awards, other share-based awards, other cash-based awards, or a combination of the foregoing. As of December 31, 2023, there were 2,976,854 shares of Common Stock available for issuance under the 2023 Plan.

Merger

). As a result of the Merger, the Company issued options to purchase a total of 2,361,722 shares of the Company’s Common Stock to former holders of the DTIH stock options. The vesting schedules, remaining term, and provisions (other than the adjusted number of underlying shares and exercise prices) of the Company Options issued, are identical to the vesting schedules, remaining term, and other provisions of the DTIH stock options that were exchanged. Per a post-closing amendment, Company Options currently held by former holders of DTIH stock options are no longer subject to employment considerations.

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model. Expected volatilities are based on comparable public company data. The Company uses future estimated employee termination and forfeiture rates of the options within the valuation model. The expected term of options granted is derived using the “plain vanilla” method due to the lack of history and volume of option activity at the Company. The risk-free rate is based on the approximate U.S. Treasury yield rate in effect at the time of grant. The Company’s calculation of share price involves the use of different valuation techniques, including a combination of an income and market approach. For any grants of stock options subsequent to the Company being publicly traded, the Company will use the quoted market price as of the grant date as an input into the Black-Scholes model. Determination of the fair value is a matter of judgment and often involves the use of estimates and assumptions.

In June of 2023 and prior to the closing of the Merger, one holder of DTIH stock options elected to exercise all of such holder’s 580,000 stock options. The holder elected to net exercise, whereby the exercise price is paid in shares and additional shares are withheld for income taxes. The net exercise of the options resulted in 158,444 shares of DTIH common stock being issued prior to the Merger and subsequently canceled and exchanged for a total of 36,163 shares of DTIC Common Stock as of the date of the Merger.

The following table summarizes options outstanding, as well as activity for the year ended December 31, 2023 (prior year amounts have been converted using the conversion ratio of 0.2282 applied in the Merger):


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value
OUTSTANDING, December 31, 2022		2,494,097		$	4.04		3.93	$	11,687
Granted		—			—		—		—
Exercised		(132,375	)		5.04		—		—
Forfeited		—			—		—		—
OUTSTANDING, December 31, 2023		2,361,722			4.02		3.37		—

UNVESTED, December 31, 2023		—			—		—		—

EXERCISABLE, December 31, 2023		2,361,722			4.02		3.37		—

The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of the Company’s common stock as of December 31, 2023 and 2022. Due to the exercise price of the stock options exceeding the current market price of the Company’s common stock as of December 31, 2023, no intrinsic value has been realized from the exercise of stock options during the period.

During the year ended December 31, 2023, the Company recognized $1.7 million of stock-based compensation expense within selling, general, and administrative expense on the consolidated statements of income and comprehensive income related to the accelerated vesting of an executive’s 534,063 performance-based stock options. The performance conditions were satisfied upon completion of the Merger and all 534,063 performance-based stock options vested on June 20, 2023.

During the year ended December 31, 2023, the Company recognized $2.3 million of stock-based compensation expense within other expense, net on the consolidated statements of income and comprehensive income as a result of the issuance of shares in accordance with the TSA with HHLLC (see Note 3 -

Merger

During the year ended December 31, 2022, there was no stock-based compensation expense recognized.

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Income Taxes Reconciliation [Line Items]
Decrease in effective impact of othe rcategory income tax rate percentage			1.20%	10.60%
Decrease in effective impact of othe rcategory income tax rate value			$ 239	$ 2,600
Operating loss carryforwards			4,100	15,100
Income tax expense	$ 937	$ 1,723	$ 5,046	$ 3,698
Effective tax rate	23.10%	23.20%	25.50%	14.50%
Federal Statutory rate	21.00%		21.00%	21.00%
Change to the valuation allowance	$ 0
State and Local Jurisdiction
Schedule Of Income Taxes Reconciliation [Line Items]
Operating loss carryforwards			$ 8,800	$ 9,800

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Summary of Effects of Corrections of Errors (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense	$ 1,111	$ 1,140	$ 4,515		$ 4,139
Provision for excess and obsolete inventory	0	17	75		45
Provision for excess and obsolete property and equipment	66	117	122		510
Inventories, net	2,836	116	(1,716)		(906)
Operating lease liabilities	(1,067)	(1,086)	(4,415)		(4,174)
Accounts payable	(2,848)	3,208	(1,552)		(1,432)
Accrued Expenses	(2,517)	(3,180)	583		4,808
Purchase of property, plant and equipment	(6,228)	(7,067)	(43,750)		(24,688)
Proceeds from sale of lost-in-hole equipment	4,904	5,819	19,684		21,116
ROU assets obtained in exchange for lease liabilities	314	1,360	3,264		7,907
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities	5,018	1,575	601		79
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities	$ 4,482	4,369	$ 1,422		372
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense		(220)		$ 3,800	(3,768)
Provision for excess and obsolete inventory		0			0
Provision for excess and obsolete property and equipment		0			0
Inventories, net		(1,442)			(940)
Operating lease liabilities		274			3,733
Accounts payable		5,765			(981)
Accrued Expenses		207
Purchase of property, plant and equipment		(10,815)			(23,753)
Proceeds from sale of lost-in-hole equipment		5,315			20,319
ROU assets obtained in exchange for lease liabilities		2,516			9,451
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		0			0
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		0			0
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Non-cash lease expense		1,360			7,907
Provision for excess and obsolete inventory		17			45
Provision for excess and obsolete property and equipment		117			510
Inventories, net		1,558			34
Operating lease liabilities		(1,360)			(7,907)
Accounts payable		(2,557)			(451)
Accrued Expenses		(3,387)
Purchase of property, plant and equipment		3,748			(935)
Proceeds from sale of lost-in-hole equipment		504			797
ROU assets obtained in exchange for lease liabilities		(1,156)			(1,544)
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		1,575			79
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		$ 4,369			$ 372

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Accrued expenses:
Accrued compensation and related benefits	$ 3,878	$ 4,999	$ 3,392
Accrued insurance	435	978	525
Accrued transaction advisory fees	1,000	1,000	0
Accrued professional services	72	189	509
Accrued interest	126	58	62
Accrued property taxes	314	60	41
Accrued monitoring fees	373	373
Other	760	147	38
Other current liabilities:
Income tax payable	1,757	1,586	1,780
Sales tax payable	(413)	71	587
Unbilled lost-in-hole revenue	96	76	282
Deferred revenue	44	1,042	83
Total accrued expenses and other current liabilities	$ 8,442	$ 10,579	$ 7,299

EARNINGS PER SHARE - Summary of Company's Potentially Dilutive Securities Excluded - Performance-based Options Outstanding (Details) - shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Performance-based Options Outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	534,063	534,063	0	534,063

LEASES (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
LEASES (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Lessee, Lease, Description [Line Items]
Operating lease description	The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years.		The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years.
Operating lease, existence of option to extend	true		true
Operating lease option to extend	These leases often include options to extend the term of the lease which may be for periods of up to 5 years.		These leases often include options to extend the term of the lease, which may be for periods of up to 5 years.
Operating lease renewl term	5 years		5 years
Tool rental revenue	$ 30.0	$ 32.3	$ 119.2	$ 99.0
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 month		1 month
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	14 years		14 years

REVENUE - (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
REVENUE - (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 36,974	$ 40,799	$ 152,034	$ 129,556
United States
Disaggregation of Revenue [Line Items]
Revenue	$ 32,300	$ 36,600	$ 138,300	$ 118,300
Percentage of revenue	87.00%	90.00%	91.00%	91.00%
Canada and International
Disaggregation of Revenue [Line Items]
Revenue			$ 13,700	$ 11,300
Percentage of revenue			9.00%	9.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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-Name Accounting Standards Codification
-Section S99
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 22
-Subparagraph (b)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 32
-Subparagraph (b)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

BUSINESS COMBINATION - Summary of Identified Intangible Assets, Estimated Useful Lives and Methodologies Used to Determine Fair Values (Details) - Casing Technologies Group Limited $ in Thousands	Mar. 15, 2024 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 8,065
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 819
Intangible assets, useful life	15 years
Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 3,269
Intangible assets, useful life	20 years
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, fair value	$ 3,977
Intangible assets, useful life	20 years

MERGER (Details)				3 Months Ended		12 Months Ended
MERGER (Details)	Jun. 20, 2023 USD ($) $ / shares shares	Jun. 19, 2023 $ / shares shares	Feb. 13, 2023 shares	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) $ / shares	Dec. 31, 2022 USD ($)	Mar. 02, 2023 shares
Business Acquisition [Line Items]
Common stock exchange ratio		0.2282
Common stock shares issued in exchange		36,163
Aggregate gross proceeds \| $						$ 30,000,000
Goodwill \| $	$ 0			$ 2,556,000		0
Other intangible assets \| $	0
Proceeds received from the Merger and PIPE Financing, net of transaction costs \| $	$ 23,200,000
Stock-based compensation expense \| $				$ 208,000	$ 0		$ 0
Other Expense
Business Acquisition [Line Items]
Stock-based compensation expense \| $						2,300,000
Hicks Holdings Operating LLC
Business Acquisition [Line Items]
Percentage on transaction amount as services agreement transaction fee			1.50%
Stock-based compensation expense \| $						(2,339,000)	$ 0
Exchange Agreements
Business Acquisition [Line Items]
Issuance of shares after conversion of stock	2,042,181
Cash consideration in exchange for cancellation \| $	$ 200,000
Common Stock \| Hicks Holdings Operating LLC
Business Acquisition [Line Items]
Number of common stock authorized to issue								1,149,830
Common Stock \| Affiliated with HHLLC
Business Acquisition [Line Items]
Number of common stock authorized to issue								328,611
Common Stock \| Exchange Agreements
Business Acquisition [Line Items]
Cash consideration related to merger \| $	$ 11,000,000
DTIH \| Employee Stock Option
Business Acquisition [Line Items]
Common stock cancelled due to exercise \| $ / shares		$ 158,444
DTIH \| Redeemable Convertible Preferred Stock
Business Acquisition [Line Items]
Stock issued and outstanding	20,370,377
DTIH \| Common Stock
Business Acquisition [Line Items]
Stock issued and outstanding	52,363,876		337,429
DTIC
Business Acquisition [Line Items]
Common stock conversion basis	ten-for-one basis
Stock-based compensation expense \| $						$ 2,300,000
Quoted market price \| $ / shares						$ 6.95
DTIC \| PIPE Financing
Business Acquisition [Line Items]
Aggregate gross proceeds \| $	$ 4,100,000
Amount received in cash in PIPE Financing \| $	$ 25,900,000
DTIC \| Employee Stock Option
Business Acquisition [Line Items]
Common stock exchange ratio		0.2282
Common stock shares issued in exchange		36,163
DTIC \| Public Rights
Business Acquisition [Line Items]
Right outstanding	2,070,000
DTIC \| Private Rights
Business Acquisition [Line Items]
Right outstanding	79,600
DTIC \| Redeemable Convertible Preferred Stock
Business Acquisition [Line Items]
Stock issued and outstanding	6,719,641
Preferred exchange ratio	0.3299
DTIC \| Non-redeemable Share
Business Acquisition [Line Items]
Common stock conversion basis	one-for-one basis
DTIC \| Common Stock
Business Acquisition [Line Items]
Stock issued and outstanding			337,429
Common stock exchange ratio	0.2282
Issuance of shares after conversion of stock	11,951,137
Common stock conversion basis	one-for-one basis
DTIC \| Common Stock \| PIPE Financing
Business Acquisition [Line Items]
Stock issued	2,970,296
Aggregate gross proceeds \| $	$ 30,000,000
Stock issued, shares price per share \| $ / shares	$ 10.1
ROC \| Public Rights
Business Acquisition [Line Items]
Right outstanding	20,700,000
ROC \| Private Rights
Business Acquisition [Line Items]
Right outstanding	796,000
ROC \| Non-redeemable Share
Business Acquisition [Line Items]
Stock issued and outstanding	3,403,500
ROC \| Common Stock
Business Acquisition [Line Items]
Redeemable convertible preferred stock issued and outstanding	158,621

EARNINGS PER SHARE

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 15 – EARNINGS PER SHARE

Basic earnings per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding for the period plus dilutive potential common shares, including performance share awards, using the treasury stock method. Performance share awards are included based on the number of shares that would be issued as if the end of the reporting period was the end of the performance period and the result was dilutive.

The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands except share and per share data):


	Three months ended March 31,
	2024		2023
Numerator:
Net income	$	3,126	$	5,701
Less: Redeemable Convertible Preferred Stock dividends		—		(314	)

Net income attributable to common shareholders — basic	$	3,126	$	5,387

Add: Redeemable Convertible Preferred Stock dividends		—		314

Net income attributable to common shareholders — diluted	$	3,126	$	5,701

Denominator
Weighted-average common shares used in computing earnings per share — basic		29,768,568		11,951,137
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive time-based stock options		—		1,006,729
Effect of potentially dilutive performance-based stock options		—		—
Effect of potentially dilutive redeemable convertible preferred stock		—		6,719,641

Weighted-average common shares outstanding — diluted		29,768,568		19,677,507

Earnings per share — basic	$	0.11	$	0.45

Earnings per share — diluted	$	0.11	$	0.29

As of March 31, 2024, the Company’s potentially dilutive securities consisted of options to purchase common stock. As of March 31, 2023, the Company’s potentially dilutive securities consisted of redeemable convertible preferred stock and options to purchase common stock. Based on the amounts outstanding as of the three months ended March 31, 2024 and 2023, the Company excluded the following potential common shares from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. The options excluded from the diluted earnings per share calculations were as follows:


	Three months ended March 31,
	2024		2023
Time-based options outstanding		4,427,659		140,135

Total		4,427,659		140,135

Our performance-based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-

based stock options were excluded from the diluted earnings per share calculations for the three months ended March 31, 2024 because including them would have had an anti-dilutive effect. Our performance-based stock options were also excluded from the diluted earnings per share calculations for the three months ended March 31, 2023 because all necessary performance conditions were not satisfied by March 31, 2023. The options excluded from the diluted earnings per share calculations were as follows:


	Three months ended March 31,
	2024		2023
Performance-based options outstanding		534,063		534,063

Total		534,063		534,063

NOTE 17 – EARNINGS PER SHARE

The following table sets forth the computation of the Company’s basic and diluted net earnings per share for the years ended December 31, 2023 and 2022 (in thousands, except share and per share data):


	Year Ended December 31,
	2023			2022
Numerator:
Net income	$	14,748		$	21,080
Less: Redeemable convertible preferred stock dividends		(314	)		(1,189	)

Net income attributable to common shareholders — basic	$	14,434		$	19,891
Add: Redeemable convertible preferred stock dividends		314			1,189

Net income attributable to common shareholders — diluted	$	14,748		$	21,080

Denominator
Weighted-average common shares used in computing earnings per share — basic		21,421,610			11,951,137
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive time-based stock options		488,997			1,006,729
Effect of potentially dilutive performance-based stock options		45,202			—
Effect of potentially dilutive redeemable convertible preferred stock		3,175,215			6,719,641

Weighted-average common shares outstanding — diluted		25,131,024			19,677,507

Earnings per share — basic	$	0.67		$	1.66

Earnings per share — diluted	$	0.59		$	1.07

As of December 31, 2023, the Company’s potentially dilutive securities consisted of options to purchase common stock. As of December 31, 2022, the Company’s potentially dilutive securities consisted of redeemable convertible preferred stock and options to purchase common stock. The Company excluded the following

potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income per share for the periods presented because including them would have had an anti-dilutive effect:


	Year Ended December 31,
	2023		2022
Time-based options outstanding		140,135		140,135

Total		140,135		140,135

Our performance-based stock options were excluded from the diluted earnings per share calculations for the years ended December 31, 2022 because all necessary performance conditions were not satisfied by December 31, 2022. Our performance-based stock options excluded from diluted earnings per share for the year ended December 31, 2022 were as follows:


	Year Ended December 31,
	2023		2022
Performance-based options outstanding		—		534,063

Total		—		534,063

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Prior Period Adjustment [Abstract]

Summary of Effects of Corrections of Errors

The Company evaluated the errors described above (and quantified in the table below), both

qualitatively

and

quantitatively

, in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the previously issued financial statements taken as a whole. The

unaudited consolidated financial statements presented herein as of and for the three months ended March 31, 2023 have been revised to correct the errors described above in accordance with SEC SAB Topic 1.M, as codified in ASC 250.


	For the three months ended March 31, 2023
Unaudited Condensed Consolidated Statement of Cash Flows	As Previously Reported			Adjustment			As Revised
Non-cash lease expense	$	(220	)	$	1,360		$	1,140
Provision for excess and obsolete inventory		—			17			17
Provision for excess and obsolete property and equipment		—			117			117
Inventories, net		(1,442	)		1,558			116
Operating lease liabilities		274			(1,360	)		(1,086	)
Accounts payable		5,765			(2,557	)		3,208
Accrued Expenses		207			(3,387	)		(3,180	)
Purchase of property, plant and equipment		(10,815	)		3,748			(7,067	)
Proceeds from sale of lost-in-hole equipment		5,315			504			5,819
ROU assets obtained in exchange for lease liabilities		2,516			(1,156	)		1,360
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		—			1,575			1,575
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		—			4,369			4,369

The following table presents (in thousands) the effects of the corrections of the errors described above:


	For the year ended December 31, 2022
Consolidated Statement of Cash Flows	As Previously Reported			Adjustment			As Revised
Non-cash lease expense	$	(3,768	)	$	7,907		$	4,139
Provision for excess and obsolete inventory		—			45			45
Provision for excess and obsolete property and equipment		—			510			510
Inventories, net		(940	)		34			(906	)
Operating lease liabilities		3,733			(7,907	)		(4,174	)
Accounts payable		(981	)		(451	)		(1,432	)
Purchase of property, plant and equipment		(23,753	)		(935	)		(24,688	)
Proceeds from sale of lost-in-hole equipment		20,319			797			21,116
ROU assets obtained in exchange for lease liabilities		9,451			(1,544	)		7,907
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		—			79			79
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		—			372			372

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Options Outstanding


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value
OUTSTANDING, December 31, 2022		2,494,097		$	4.04		3.93	$	11,687
Granted		—			—		—		—
Exercised		(132,375	)		5.04		—		—
Forfeited		—			—		—		—
OUTSTANDING, December 31, 2023		2,361,722			4.02		3.37		—

UNVESTED, December 31, 2023		—			—		—		—

EXERCISABLE, December 31, 2023		2,361,722			4.02		3.37		—

INCOME TAXES - Summary of Income Tax Expense Attributable to Income From Continuing Operations (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Current provision for income taxes:
Federal			$ 162	$ 702
Foreign			656	1,444
State			785	472
Total current			1,603	2,618
Deferred tax expense (benefit):
Federal			3,826	574
Foreign			34	488
State			(417)	18
Total deferred tax expense:	$ 266	$ 1,116	3,443	1,080
Total provision for income taxes	$ 937	$ 1,723	$ 5,046	$ 3,698

OTHER EXPENSES, NET - Summary of Components of Other Expenses, Net (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Other Expenses [Line Items]
Stock-based compensation	$ 208,000	$ 0		$ 0
Transaction Fees	(889,000)	0	$ (3,640,000)	0
Other, net	(247,000)	(7,000)	(428,000)	(436,000)
Interest income	11,000	47,000	48,000	52,000
Other expense, net	$ (1,125,000)	$ 40,000	(6,359,000)	(384,000)
Hicks Holdings Operating LLC
Schedule Of Other Expenses [Line Items]
Stock-based compensation			$ (2,339,000)	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Series A redeemable convertible preferred stock, par value		$ 0.01	$ 0.01
Series A redeemable convertible preferred stock, shares authorized		0	30,000,000
Series A redeemable convertible preferred stock, shares issued		0	6,719,641
Series A redeemable convertible preferred stock, shares outstanding		0	6,719,641
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000	65,000,000
Common stock, shares issued	29,768,568	29,768,568
Common stock, shares outstanding	29,768,568	29,768,568	11,951,137
Preferred stock, par value		$ 0.0001	$ 0.0001
Preferred stock, shares authorized		10,000,000	0
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding		0	0
Treasury stock, shares		0	0

INTANGIBLE ASSETS, NET - Summary of Components of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 9,423	$ 1,550	$ 1,550
Less: accumulated amortization	(1,365)	(1,334)	(1,287)
Intangible assets, net	8,058	216	263
Trade Name
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 2,079	$ 1,280	1,280
Trade Name \| Maximum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	15 years	13 years
Trade Name \| Minimum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	10 years	10 years
Technology
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets		$ 270	$ 270
Useful lives (in years)		13 years
Developed Technology
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 3,462	$ 270
Developed Technology \| Maximum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	20 years
Developed Technology \| Minimum
Indefinite-Lived Intangible Assets [Line Items]
Useful lives (in years)	13 years
Customer Relationships
Indefinite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 3,882	$ 0
Useful lives (in years)	20 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Allowance For Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	$ (1,498)	$ (1,222)
Addition during the period	(117)	(336)
Utilization of allowance for credit losses	157	60
Ending balance	$ (1,458)	(1,498)
Cumulative effect adjustment upon adoption of ASU 2016-13
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance		$ 0

REVENUE

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 10 – REVENUE

Revenue generated was concentrated within the United States. For the year ended December 31, 2023 and 2022, the revenue generated within the United States was $138.3 million and $118.3 million, respectively, or 91% and 91% of total revenues, respectively. For the year ended December 31, 2023 and 2022, the revenue generated outside of the United States, in Canada and International, was $13.7 million and $11.3 million, respectively, or 9% and 9% of total revenues, respectively. The Company derives its revenue from two revenue types, tool rental services and product sales. The following table represents our revenues disaggregated by category:


	Year Ended December 31, 2023		Year Ended December 31, 2022
Tool Rental Services	$	119,239	$	99,018
Product Sales		32,795		30,538

Total Revenue	$	152,034	$	129,556

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

REVENUE (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Summary of Disaggregation of Revenues by Category

The following table represents our revenues disaggregated by category:


	Year Ended December 31, 2023		Year Ended December 31, 2022
Tool Rental Services	$	119,239	$	99,018
Product Sales		32,795		30,538

Total Revenue	$	152,034	$	129,556

INVESTMENTS - EQUITY SECURITIES - Summary of Cost and Fair Value of Investments in Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Net Investment Income [Line Items]
Cost	$ 999	$ 999	$ 999
Unrealized gain (Loss)	138	(111)	144
Fair value	$ 1,137	$ 888	$ 1,143

OTHER EXPENSES, NET

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Other Income and Expenses [Abstract]

OTHER EXPENSES, NET

NOTE 11 – OTHER EXPENSES, NET

The following table shows the components of other expenses, net for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
Transaction fees	$	(889	)	$	—
Other, net		(247	)		(7	)
Interest income		11			47

Other expense, net	$	(1,125	)	$	40

NOTE 13 – OTHER EXPENSE, NET

The following table shows the components of other expenses, net for the years ended December 31, 2023, and 2022 (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
HHLLC stock-based compensation	$	(2,339	)	$	—
Transaction fees		(3,640	)		—
Other, net		(428	)		(436	)
Interest income		48			52

Other expense, net	$	(6,359	)	$	(384	)

INCOME TAXES

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 – INCOME TAXES

The Company recorded income tax expense on the unaudited condensed consolidated statements of income and comprehensive income of $0.9 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively.

The income tax expense for the three months ended March 31, 2024 was calculated using a discrete approach. This methodology was used because changes in the Company’s results of operations and acquisitions can materially impact the estimated annual effective tax rate. The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 were provisions of 23.1% and 23.2%, respectively. Such rates differed from the Federal Statutory rate of 21.0% primarily due to the state taxes, foreign income taxes on the Company’s international operations, and permanent differences.

The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating loss and tax credit carryovers. A valuation allowance is recorded to bring the net deferred

tax assets to a level that is more likely than not to be realized in the foreseeable future. This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be realized, for tax purposes, in the foreseeable future. There was no significant change to the valuation allowance during the three months ended March 31, 2024 and 2023.

The Company is still evaluating the tax impact of the CTG Acquisition, including the impact of the transaction costs. Additionally, the Company continues to evaluate the deferred tax assets and liabilities and corresponding valuation allowance in connection with the CTG Acquisition.

NOTE 11 – INCOME TAXES

For the years ended December 31, 2023, and 2022, income from continuing operations before taxes consisted of amounts related to U.S. operations and income associated with the Company’s foreign operations predominantly in Canada. The geographical breakdown of the Company’s income before provision for income taxes was as follows (in thousands):


	Year Ended December 31,
	2023		2022
Domestic	$	17,352	$	19,094
International		2,442		5,683

Profits before provision for income taxes	$	19,794	$	24,777

Income tax expense attributable to income from continuing operations consists of (in thousands):


	Year Ended December 31,
	2023			2022
Current provision for income taxes:
Federal	$	162		$	702
Foreign		656			1,444
State		785			472

Total current		1,603			2,618
Deferred tax expense (benefit):
Federal		3,826			574
Foreign		34			488
State		(417	)		18

Total deferred tax expense:		3,443			1,080

Total provision for income taxes	$	5,046		$	3,698

Tax rate reconciliation

The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate:


	Year Ended December 31,
	2023			2022
U.S. federal tax benefit at statutory rate		21.0	%		21.0	%
State taxes, net of federal benefit		1.9	%		2.1	%
Permanent differences		3.6	%		2.0	%
Foreign rate differential		0.2	%		0.5	%
Valuation allowance		0.0	%		-2.1	%
Other		-1.2	%		-9.0	%

Effective tax rate		25.5	%		14.5	%

The effective tax rate impact of other category for the year ended December 31, 2023 is primarily made up of prior year

true-ups

resulting in a decrease of 1.2% or $239 thousand. The effective tax rate impact of the other category for the year ended December 31, 2022, is primarily made up of tax basis balance sheet adjustments resulting in a decrease of 10.6% or $2.6 million. The offsetting impacts to the tax rate were individually immaterial.

Significant components of deferred taxes

The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2023 and 2022 are presented below (in thousands):


	Year Ended December 31,
	2023			2022
Deferred tax assets
Net operating loss carryforward	$	1,544		$	3,378
Allowance for doubtful accounts		333			323
Share-based compensation		1,451			941
Bonus accrual		440			599
Inventory		130			53
Intangible assets		1,129			1,152
Other		—			140

Gross deferred tax assets		5,028			6,587
Valuation allowance		—			—

Net deferred tax assets		5,028			6,587
Deferred tax liabilities
Depreciation on property, plant, and equipment		(11,391	)		(8,958	)
Withholding tax on unremitted earnings		(264	)		(72	)
Other		—			(742	)

Deferred tax liabilities		(11,655	)		(9,772	)

Net deferred liabilities	$	(6,627	)	$	(3,185	)

At December 31, 2023 and 2022, the Company had federal net operating loss carryforward of approximately $4.1 million and $15.1 million, respectively, which may be carried forward indefinitely and state and local net operating loss carryforward of approximately $8.8 million and $9.8 million, respectively, which expire at various dates.

The utilization of the Company’s net operating losses may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and similar state and foreign provisions. Such limitations may result in the expiration of the net operating loss carryforwards before their utilization.

The Company is subject to income taxes in the U.S. federal jurisdiction, various state jurisdictions as well as Canada. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination by all tax authorities since inception and carryover attributes remain open to adjustment by the U.S. and state authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 3,126	$ 5,701	$ 14,748	$ 21,080
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	5,365	5,015	20,352	19,709
Amortization of deferred financing costs	56	19	139	94
Amortization of debt discount			0	58
Non-cash lease expense	1,111	1,140	4,515	4,139
Provision for excess and obsolete inventory	0	17	75	45
Provision for excess and obsolete property and equipment	66	117	122	510
Provision for Credit Losses	(135)	334	117	307
Deferred tax expense	266	1,116	3,443	1,080
Gain on sale of property	0	69	(101)	(127)
Loss on asset disposal	9	0	489	0
Unrealized loss (gain) on equity securities	(249)	33	255	(234)
Unrealized loss on interest rate swap	0	105	0	(1,423)
Gross profit from sale of lost-in-hole equipment	(2,799)	(4,535)	(16,686)	(16,813)
Stock-based compensation expense	208	0	3,986	0
Realized loss on interest rate swap			4	0
Changes in operating assets and liabilities:
Accounts receivable, net	(1,839)	(1,675)	(1,048)	(9,268)
Prepaid expenses and other current assets	1,723	713	519	(3,476)
Inventories, net	2,836	116	(1,716)	(906)
Deposits and other long-term assets			(496)	17
Operating lease liabilities	(1,067)	(1,086)	(4,415)	(4,174)
Accounts payable	(2,848)	3,208	(1,552)	(1,432)
Accrued expenses and other current liabilities	(2,517)	(3,180)	583	4,808
Net cash flows from operating activities	3,312	7,089	23,334	13,994
Cash flows from investing activities:
Acquisition of a business, net of cash acquired	(18,261)	0
Proceeds from sale of property and equipment	0	80	202	1,042
Purchase of property, plant and equipment	(6,228)	(7,067)	(43,750)	(24,688)
Proceeds from sale of lost-in-hole equipment	4,904	5,819	19,684	21,116
Net cash from investing activities	(19,585)	(1,168)	(23,864)	(2,530)
Cash flows from financing activities:
Payment of deferred financing costs	(389)	0	(324)	(251)
Proceeds from revolving line of credit			73,050	108,594
Proceeds from Merger and PIPE Financing, net of transaction costs			23,162	0
Payments on long-term debt			0	(1,000)
Payments on finance leases			0	(10)
Payments to holders of DTIH redeemable convertible preferred stock in connection with retiring their DTI stock upon the Merger			(194)	0
Proceeds from revolving line of credit	0	34,043
Payments on revolving line of credit	0	(41,496)	(91,399)	(116,670)
Proceeds from Term Loan	25,000	0
Net cash from financing activities	24,611	(7,453)	4,295	(9,337)
Effect of changes in foreign exchange rates	(291)	0	(114)	173
Net change in cash	8,047	(1,532)	3,651	2,300
Cash at beginning of period	6,003	2,352	2,352	52
Cash at end of period	14,050	820	6,003	2,352
Supplemental cash flow information:
Cash paid for interest	58	444	1,174	340
Cash paid for income taxes	153	0	3,006	723
Non-cash investing and financing activities:
ROU assets obtained in exchange for lease liabilities	314	1,360	3,264	7,907
Fair value of CTG liabilities assumed in CTG Acquistion	2,636	0
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities	5,018	1,575	601	79
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities	4,482	4,369	1,422	372
Undeclared dividends	0	314
Non-cash directors and officers insurance	327	0	695	0
Non-cash Merger financing			2,000	0
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock in connection with Merger			7,193	0
Issuance of DTIC common stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements			10,805	0
Deferred financing fees included in accounts payable	$ 122	$ 0
Accretion of redeemable convertible preferred stock to redemption value			$ 314	$ 1,189

BUSINESS COMBINATION (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Business Combinations [Abstract]

Summary of Assets Acquired and Liabilities Assumed in Connection with Acquisition

The assets acquired and liabilities assumed in connection with the CTG Acquisition were recorded at their fair values on the CTG Acquisition Date as follows (in thousands):


Assets
Cash	$	2,674
Accounts receivable, net		3,781
Inventories, net		4,282
Prepaid expenses and other current assets		189
Property, plant and equipment , net		1,647
Operating lease ROU asset		315
Intangible assets, net		8,065
Goodwill		2,618

Total assets acquired	$	23,571

Liabilities
Accounts payable		2,656
Accrued expenses and other current liabilities		(295	)
Current portion of operating lease liabilities		95
Operating lease liabilities, less current portion		180

Total liabilities assumed	$	2,636

Total consideration transferred	$	20,935

Summary of Identified Intangible Assets, Estimated Useful Lives and Methodologies Used to Determine Fair Values

The following table sets forth the amounts allocated to the identified intangible assets, the estimated useful lives of those intangible assets as of the CTG Acquisition Date, and the methodologies used to determine the fair values of those intangible assets ($ in thousands):


	Fair value		Useful life (in years)		Fair value methodology
Intangible assets
Trade names	$	819		15	Relief from royalty method
Developed Technology		3,269		20	Relief from royalty method
Customer relationships		3,977		20	Multi-period excess earnings method of the income approach

Total intangible assets	$	8,065

Summary of Unaudited Supplemental Pro Forma Financial Information

The unaudited supplemental pro forma financial results below for the three months ended March 31, 2024 and 2023, combine the consolidated results of the Company and CTG, giving effect to the CTG Acquisition as if it had been completed on January 1, 2023. This unaudited supplemental pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2023, or any other date.


	Three months ended March 31,
(in thousands)	2024		2023
Pro forma revenue	$	40,333	$	45,308
Pro forma net income	$	2,420	$	6,287

Summary of Common Stock Outstanding Immediately after Merger

The following table presents the total DTIC Common Stock outstanding immediately after the closing of the Merger:


Exchange of ROC common stock not subject to possible redemption for DTIC Common Stock upon Merger			3,403,500
Conversion of ROC Public Rights into shares of DTIC Common Stock			2,070,000
Conversion of ROC Private Rights into shares of DTIC Common Stock			79,600
Exchange of ROC common stock subject to possible redemption that was not redeemed for DTIC Common Stock			158,621

Subtotal - Merger, net of redemptions			5,711,721

Issuance of DTIC Common Stock in connection with PIPE Financing			2,970,296

Exchange of DTIH common stock outstanding as of December 31, 2022 for DTIC Common Stock			11,951,137

Exchange of DTIH redeemable convertible preferred stock outstanding as of December 31, 2022 for DTIC Common Stock			6,719,641

Issuance of shares as stock-based compensation to former DTIH stockholders as part of transaction services agreement upon the Merger			337,429

Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements			2,042,181

Net exercise of stock options by DTIH stockholder			36,163

Total - DTIC Common Stock outstanding as a result of Merger, PIPE Financing, DTIH for DTIC share exchanges, transaction services agreement, Exchange Agreements, and exercise of stock options			29,768,568

LEASES - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term (in years)	6 years 5 months 12 days	6 years 6 months 18 days	7 years 6 months 10 days
Weighted average discount rate	5.86%	5.80%	5.34%
Cash paid for amounts included in the measurement of lease liabilities	$ 1,350	$ 5,538	$ 5,003

LEASES - Summary of Future Undiscounted Cash Flows (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
2024	$ 3,759
2025	4,244	$ 4,923
2026	3,719	4,089
2027	2,540	3,522
2028	1,978	2,439
2028		1,939
Thereafter	5,677
Thereafter		5,605
Total lease payments	21,917	22,517
Less: imputed interest	(3,550)	(3,666)
Present value of lease liabilities	$ 18,367	$ 18,851

EMPLOYEE BENEFITS (Details) - USD ($)	3 Months Ended		12 Months Ended
EMPLOYEE BENEFITS (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Defined Benefit Plan [Abstract]
Maximum annual contributions per employee, percent				3.00%
Employer matching contribution, percent of match				150.00%
Defined contribution per employee				$ 2,000
Total expense	$ 300,000	$ 200,000	$ 500,000	$ 400,000
Defined contribution plan nature and effect of change, description	All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry date following six months of service. Plan entry dates are the first day of January and July. In March of 2020, the Company suspended any employee contribution match effective immediately and through the end of 2021. The match was reinstated on January 1, 2022. For 2022, the Company matched employee contributions 150% of the first 3% of employee contributions, not to exceed $2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximum contribution allowed under the Internal Revenue Service Regulations.		The Company has a defined contribution plan that complies with Section 401(k) of the Internal Revenue Code. All employees are auto enrolled at a 3% contribution, unless they opt out, beginning on the first plan entry datefollowing six months of service. Plan entry dates are the first day of January and July. For 2022, the Company matched employee contributions 150% of the first 3% of employee contributions, not to exceed $2 thousand per participant per calendar year. Employees vest in employer contributions over six years. The contribution is limited to the maximum contribution allowed under the Internal Revenue Service Regulations.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	As Previously Reported	Redeemable Convertible Preferred Stock	Redeemable Convertible Preferred Stock As Previously Reported	Redeemable Convertible Preferred Stock Revision of Prior Period, Adjustment	Common Stock	Common Stock As Previously Reported	Common Stock Revision of Prior Period, Adjustment	Treasury Stock	Treasury Stock As Previously Reported	Treasury Stock Revision of Prior Period, Adjustment	Additional Paid-In Capital	Additional Paid-In Capital As Previously Reported	Additional Paid-In Capital Revision of Prior Period, Adjustment	Accumulated Deficit	Accumulated Deficit As Previously Reported	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss As Previously Reported
Temporary equity, beginning balance at Dec. 31, 2021			$ 16,689	$ 16,689
Temporary equity, beginning balance, shares at Dec. 31, 2021			6,719,641	20,370,377	(13,650,736)
Beginning balance at Dec. 31, 2021	$ 11,160	$ 11,160				$ 1	$ 532	$ (531)		$ (933)	$ 933	$ 53,577	$ 53,979	$ (402)	$ (42,134)	$ (42,134)	$ (284)	$ (284)
Beginning balance, shares at Dec. 31, 2021						11,951,137	53,175,028	(41,223,891)		(811,156)	811,156
Accretion of redeemable convertible preferred stock to redemption value			$ 1,189
Accretion of redeemable convertible preferred stock to redemption value	(1,189)											(1,189)
Foreign currency translation adjustment, net of tax	173																173
Net income	$ 21,080														21,080
Temporary equity, ending balance at Dec. 31, 2022			$ 17,878	$ 17,878
Temporary equity, ending balance, shares at Dec. 31, 2022	6,719,641		6,719,641	20,370,377	(13,650,736)
Ending balance at Dec. 31, 2022	$ 31,224	31,224				$ 1	$ 532	$ (531)		$ (933)	$ 933	52,388	52,790	(402)	(21,054)	(21,054)	(111)	(111)
Ending balance, shares at Dec. 31, 2022						11,951,137	53,175,028	(41,223,891)		(811,156)	811,156
Accretion of redeemable convertible preferred stock to redemption value			$ 314
Accretion of redeemable convertible preferred stock to redemption value	(314)											(314)
Net income	5,701														5,701
Temporary equity, ending balance at Mar. 31, 2023			$ 6,719,641
Temporary equity, ending balance, shares at Mar. 31, 2023			18,192
Ending balance at Mar. 31, 2023	$ 36,611					$ 1			$ 0			52,074			(15,353)		(111)
Ending balance, shares at Mar. 31, 2023						11,951,137			0
Temporary equity, beginning balance at Dec. 31, 2022			$ 17,878	$ 17,878
Temporary equity, beginning balance, shares at Dec. 31, 2022	6,719,641		6,719,641	20,370,377	(13,650,736)
Beginning balance at Dec. 31, 2022	$ 31,224	31,224				$ 1	$ 532	$ (531)		$ (933)	$ 933	52,388	52,790	$ (402)	(21,054)	(21,054)	(111)	(111)
Beginning balance, shares at Dec. 31, 2022						11,951,137	53,175,028	(41,223,891)		(811,156)	811,156
Accretion of redeemable convertible preferred stock to redemption value			$ 314
Accretion of redeemable convertible preferred stock to redemption value	$ (314)											(314)
Net exercise of stock options by DTIH stockholder, shares	132,375					36,163
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock			$ (18,192)
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock, shares			(6,719,641)
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock	$ 7,193					$ 1						7,192
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock, shares						6,719,641
Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements	10,805											10,805
Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements, shares						2,042,181
Merger, net of redemptions and transaction costs	(8,838)					$ 1						(8,839)
Merger, net of redemptions and transaction costs, shares						5,711,721
Issuance of DTIC Common Stock in connection with the consummation of the PIPE Financing	30,000											30,000
Issuance of DTIC Common Stock in connection with the consummation of the PIPE Financing, shares						2,970,296
Stock-based compensation	3,986											3,986
Stock-based compensation						337,429
Foreign currency translation adjustment, net of tax	(114)																(114)
Net income	$ 14,748														14,748
Temporary equity, ending balance, shares at Dec. 31, 2023	0
Ending balance at Dec. 31, 2023	$ 88,690	$ 88,690				$ 3						95,218	$ 95,218		(6,306)	$ (6,306)	(225)	$ (225)
Ending balance, shares at Dec. 31, 2023						29,768,568	29,768,568
Stock-based compensation	208											208
Foreign currency translation adjustment, net of tax	(511)																(511)
Net income	3,126														3,126
Ending balance at Mar. 31, 2024	$ 91,513											$ 95,426			$ (3,180)		$ (736)
Ending balance, shares at Mar. 31, 2024						29,768,568

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Prepaid expenses:
ERC benefits receivable		$ 0	$ 2,117
Deposits on inventory	$ 1,437	2,146	680
Prepaid income tax	362	362	0
Prepaid insurance	530	1,110	358
Prepaid rent	399	372	381
Prepaid equipment	331	331	179
Prepaid other	172	214	173
Other current assets:
Interest rate swap asset		0	476
Other	0	18	17
Total	$ 3,231	$ 4,553	$ 4,381

EARNINGS PER SHARE (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Earnings Per Share [Abstract]

Summary of Computation of The Company's Basic and Diluted Earnings Per Share


	Three months ended March 31,
	2024		2023
Numerator:
Net income	$	3,126	$	5,701
Less: Redeemable Convertible Preferred Stock dividends		—		(314	)

Net income attributable to common shareholders — basic	$	3,126	$	5,387

Add: Redeemable Convertible Preferred Stock dividends		—		314

Net income attributable to common shareholders — diluted	$	3,126	$	5,701

Denominator
Weighted-average common shares used in computing earnings per share — basic		29,768,568		11,951,137
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive time-based stock options		—		1,006,729
Effect of potentially dilutive performance-based stock options		—		—
Effect of potentially dilutive redeemable convertible preferred stock		—		6,719,641

Weighted-average common shares outstanding — diluted		29,768,568		19,677,507

Earnings per share — basic	$	0.11	$	0.45

Earnings per share — diluted	$	0.11	$	0.29


	Year Ended December 31,
	2023			2022
Numerator:
Net income	$	14,748		$	21,080
Less: Redeemable convertible preferred stock dividends		(314	)		(1,189	)

Net income attributable to common shareholders — basic	$	14,434		$	19,891
Add: Redeemable convertible preferred stock dividends		314			1,189

Net income attributable to common shareholders — diluted	$	14,748		$	21,080

Denominator
Weighted-average common shares used in computing earnings per share — basic		21,421,610			11,951,137
Weighted-average effect of potentially dilutive securities:
Effect of potentially dilutive time-based stock options		488,997			1,006,729
Effect of potentially dilutive performance-based stock options		45,202			—
Effect of potentially dilutive redeemable convertible preferred stock		3,175,215			6,719,641

Weighted-average common shares outstanding — diluted		25,131,024			19,677,507

Earnings per share — basic	$	0.67		$	1.66

Earnings per share — diluted	$	0.59		$	1.07

Summary of Company's Potentially Dilutive Securities Excluded


	Three months ended March 31,
	2024		2023
Time-based options outstanding		4,427,659		140,135

Total		4,427,659		140,135


	Three months ended March 31,
	2024		2023
Performance-based options outstanding		534,063		534,063

Total		534,063		534,063


	Year Ended December 31,
	2023		2022
Time-based options outstanding		140,135		140,135

Total		140,135		140,135


	Year Ended December 31,
	2023		2022
Performance-based options outstanding		—		534,063

Total		—		534,063

LEASES (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Leases [Abstract]

Summary of Components of Lease Expense

For the three months ended March 31, 2024, the components of the Company’s lease expense were as follows (in thousands):


	Three months ended March 31, 2024		Three months ended March 31, 2023
Operating Lease Cost	$	1,482	$	1,518
Short-term Lease Cost		35		30
Variable Lease Cost		88		84
Sublease Income		—		(46	)

Total Lease Cost	$	1,605	$	1,586

For the year ended December 31, 2023 and 2022, the components of the Company’s lease expense were as follows (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
Operating Lease Cost	$	6,077		$	5,722
Short-term Lease Cost		130			143
Variable Lease Cost		320			319
Sublease Income		(76	)		(183	)

Total Lease Cost	$	6,451		$	6,001

Summary of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases was as follows (in thousands):


	Three months ended March 31, 2024
Weighted-average remaining lease term (in years)		6.45
Weighted average discount rate		5.86	%


	Three months ended March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities		1,350

Supplemental balance sheet information related to leases was as follows (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
Weighted-average remaining lease term (in years)		6.55			7.53
Weighted average discount rate		5.80	%		5.34	%


	Year Ended December 31, 2023		Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities		5,538		5,003

Summary of Future Undiscounted Cash Flows

Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2024 were as follows (in thousands):


2024	$	3,759
2025		4,244
2026		3,719
2027		2,540
2028		1,978
Thereafter		5,677

Total lease payments	$	21,917
Less: imputed interest		(3,550	)

Present value of lease liabilities	$	18,367

Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the consolidated balance sheet as of December 31, 2023 were as follows (in thousands):


2024	$	4,923
2025		4,089
2026		3,522
2027		2,439
2028		1,939
Thereafter		5,605

Total lease payments	$	22,517
Less: imputed interest		(3,666	)

Present value of lease liabilities	$	18,851

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Summary of Component of Property, Plant and Equipment, Net

The following table shows the component of property, plant and equipment, net (in thousands):


	Estimated Useful Lives (in Years)		March 31, 2024			December 31, 2023
Rental tools and equipment		5-10		195,460			188,949
Buildings and improvements		5-40		6,686			6,672
Office furniture, fixtures and equipment		3-5		2,269			2,389
Transportation and equipment		3-5		783			793

Total property, plant and equipment				205,198			198,803
Less: accumulated deprecation				(134,602	)		(133,003	)

Property, plant and equipment, net (excluding construction in progress)				70,596			65,800
Construction in progress				—			—

Property, plant and equipment, net			$	70,596		$	65,800

The following table shows the component of property, plant and equipment, net (in thousands):


	Estimated Useful Lives (in Years)		December 31, 2023			December 31, 2022
Rental tools and equipment		5-10		188,949			160,973
Buildings and improvements		5-40		6,672			5,781
Office furniture, fixtures and equipment		3-5		2,389			2,101
Transportation and equipment		3-5		793			827

Total property, plant and equipment				198,803			169,682
Less: accumulated depreciation				(133,003	)		(125,537	)

Property, plant and equipment, net (excluding construction in progress)				65,800			44,145
Construction in progress				—			9

Property, plant and equipment, net			$	65,800		$	44,154

INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Indefinite-Lived Intangible Assets [Line Items]
Amortization expense	$ 31	$ 12	$ 47	$ 100

INCOME TAXES - Schedule of Income (Loss) Before Provision for (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Domestic			$ 17,352	$ 19,094
International			2,442	5,683
Profits before provision for income taxes	$ 4,063	$ 7,424	$ 19,794	$ 24,777

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

PROPERTY, PLANT AND EQUIPMENT, NET

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

The following table shows the component of property, plant and equipment, net (in thousands):


	Estimated Useful Lives (in Years)		March 31, 2024			December 31, 2023
Rental tools and equipment		5-10		195,460			188,949
Buildings and improvements		5-40		6,686			6,672
Office furniture, fixtures and equipment		3-5		2,269			2,389
Transportation and equipment		3-5		783			793

Total property, plant and equipment				205,198			198,803
Less: accumulated deprecation				(134,602	)		(133,003	)

Property, plant and equipment, net (excluding construction in progress)				70,596			65,800
Construction in progress				—			—

Property, plant and equipment, net			$	70,596		$	65,800

Total depreciation expense for the three months ended March 31, 2024 and 2023 was approximately $5.3 million and $5.0 million, respectively. The Company has not acquired any property, plant and equipment under financing leases.

Property, plant and equipment, net, is concentrated within the United States. As of March 31, 2024 and December 31, 2023, property, plant and equipment, net held within the United States was $65.9 million and $63.0 million, respectively, or 93% and 96% of total property, plant and equipment, net. As of March 31, 2024 and December 31, 2023, property, plant and equipment, net held outside of the United States, in Canada and Internationally, was $4.7 million and $2.8 million, respectively, or 7% and 4% of total property, plant and equipment, net.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

The following table shows the component of property, plant and equipment, net (in thousands):


	Estimated Useful Lives (in Years)		December 31, 2023			December 31, 2022
Rental tools and equipment		5-10		188,949			160,973
Buildings and improvements		5-40		6,672			5,781
Office furniture, fixtures and equipment		3-5		2,389			2,101
Transportation and equipment		3-5		793			827

Total property, plant and equipment				198,803			169,682
Less: accumulated depreciation				(133,003	)		(125,537	)

Property, plant and equipment, net (excluding construction in progress)				65,800			44,145
Construction in progress				—			9

Property, plant and equipment, net			$	65,800		$	44,154

Total depreciation expense for the year ended December 31, 2023 and 2022 was approximately $20.3 million and $19.7 million, respectively. The Company has not acquired any property, plant and equipment under capital leases.

Property, plant and equipment, net, were concentrated within the United States. As of December 31, 2023 and 2022, property, plant and equipment, net held within the United States was $63.0 million and $41.8 million, respectively, or 96% and 95% of total property, plant and equipment, net, respectively. As of December 31, 2023 and 2022, property, plant and equipment, net held outside of the United States, in Canada, was $2.8 million and $2.3 million, or 4% and 5% of total property, plant and equipment net for both periods.

PROPERTY, PLANT AND EQUIPMENT, NET - Summary of Component of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 205,198	$ 198,803	$ 169,682
Less: accumulated deprecation	(134,602)	(133,003)	(125,537)
Property, plant and equipment, net (excluding construction in progress)	70,596	65,800	44,145
Construction in progress	0	0	9
Property, plant and equipment, net	70,596	65,800	44,154
Rental Tools and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 195,460	$ 188,949	160,973
Rental Tools and Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years	5 years
Rental Tools and Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	10 years	10 years
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 6,686	$ 6,672	5,781
Buildings and Improvements \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years	5 years
Buildings and Improvements \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	40 years	40 years
Office Furniture, Fixtures and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 2,269	$ 2,389	2,101
Office Furniture, Fixtures and Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years	3 years
Office Furniture, Fixtures and Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years	5 years
Transportation and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 783	$ 793	$ 827
Transportation and Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	3 years	3 years
Transportation and Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives (in years)	5 years	5 years

SUBSEQUENT EVENTS (Details) - USD ($)				1 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($)	Mar. 15, 2024	Mar. 06, 2024	Feb. 14, 2024	Mar. 31, 2024	Mar. 18, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 06, 2022	Dec. 31, 2015
Subsequent Event [Line Items]
Common stock, shares issued				29,768,568		29,768,568		11,951,137
Credit Facility
Subsequent Event [Line Items]
Revolving line of credit	$ 80,000,000					$ 60,000,000	$ 60,000,000		$ 60,000,000
Line of credit	25,000,000
Date the credit facility matures				Mar. 31, 2029
Subsequent Event \| Credit Facility
Subsequent Event [Line Items]
Revolving line of credit	80,000,000
Line of credit	$ 25,000,000
Date the credit facility matures	Mar. 31, 2029
Subsequent Event \| Prejean 2024 Stock Options
Subsequent Event [Line Items]
Common stock, shares issued			1,000,000
Subsequent Event \| Johnson 2024 Stock Options
Subsequent Event [Line Items]
Common stock, shares issued			380,000
Subsequent Event \| Domino 2024 Stock Options
Subsequent Event [Line Items]
Common stock, shares issued			300,000
Subsequent Event \| 2024 Stock Options
Subsequent Event [Line Items]
Option vest			3 years
Exercisable price per share			$ 3.02
Casing Technology Group Limited \| CTG Purchase Agreement
Subsequent Event [Line Items]
Percentage acquired	100.00%
Casing Technology Group Limited \| Subsequent Event \| CTG Purchase Agreement
Subsequent Event [Line Items]
Percentage acquired					100.00%
Superior Drilling Products, Inc \| Subsequent Event
Subsequent Event [Line Items]
Date of Acquisition		Mar. 06, 2024

BUSINESS COMBINATION - Summary of Assets Acquired and Liabilities Assumed in Connection with Acquisition (Details) - USD ($)	Mar. 31, 2024	Mar. 15, 2024	Dec. 31, 2023	Jun. 20, 2023
Business Acquisition [Line Items]
Goodwill	$ 2,556,000		$ 0	$ 0
Casing Technologies Group Limited
Business Acquisition [Line Items]
Cash		$ 2,674,000
Accounts receivable, net		3,781,000
Inventories, net		4,282,000
Prepaid expenses and other current assets		189,000
Property, plant and equipment , net		1,647,000
Operating lease ROU asset		315,000
Intangible assets, net		8,065,000
Goodwill		2,618,000
Total assets acquired		23,571,000
Accounts payable		2,656,000
Accrued expenses and other current liabilities		(295,000)
Current portion of operating lease liabilities		95,000
Operating lease liabilities, less current portion		180,000
Total liabilities assumed		2,636,000
Total consideration transferred		$ 20,935,000

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Assets, Current [Abstract]
Cash	$ 14,050,000	$ 6,003,000	$ 2,352,000
Accounts receivable, net	35,730,000	29,929,000	28,998,000
Inventories, net	11,441,000	5,034,000	3,281,000
Prepaid expenses and other current assets	3,231,000	4,553,000	4,381,000
Investments - equity securities, at fair value	1,137,000	888,000	1,143,000
Total current assets	65,589,000	46,408,000	40,155,000
Property, plant and equipment, net	70,596,000	65,800,000	44,154,000
Operating lease right-of-use asset	18,296,000	18,786,000	20,037,000
Goodwill	2,556,000	0
Intangible assets, net	8,058,000	216,000	263,000
Deferred financing costs, net	864,000	409,000	226,000
Deposits and other long-term assets	992,000	879,000	383,000
Total assets	166,951,000	132,498,000	105,218,000
Current liabilities
Accounts payable	16,736,000	7,751,000	7,281,000
Accrued expenses and other current liabilities	8,442,000	10,579,000	7,299,000
Current portion of operating lease liabilities	3,965,000	3,958,000	3,311,000
Current maturities of long-term debt	5,000,000	0
Revolving line of credit		0	18,349,000
Total current liabilities	34,143,000	22,289,000	36,240,000
Operating lease liabilities, less current portion	14,402,000	14,893,000	16,691,000
Long-term debt	20,000,000	0
Deferred tax liabilities, net	6,893,000	6,627,000	3,185,000
Total liabilities	75,438,000	43,809,000	56,116,000
Commitments and contingencies (See Note 15)
Redeemable convertible preferred stock
Series A redeemable convertible preferred stock*, par value $0.01; nil shares and 30,000,000 shares authorized at December 31, 2023 and December 31, 2022, respectively; nil shares and 6,719,641 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively		0	17,878,000
Shareholders' equity
Common stock, $0.0001 par value, shares authorized 500,000,000 as of March 31, 2024 and December 31, 2023, 29,768,568 issued and outstanding as of March 31, 2024 and December 31, 2023	3,000	3,000	1,000
Preferred stock, par value $0.0001; 10,000,000 and nil shares authorized at December 31, 2023 and December 31, 2022, respectively; nil shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively		0	0
Additional paid-in-capital	95,426,000	95,218,000	52,388,000
Accumulated deficit	(3,180,000)	(6,306,000)	(21,054,000)
Less treasury stock, at cost; nil shares at December 31, 2023 and December 31, 2022		0	0
Accumulated other comprehensive loss	(736,000)	(225,000)	(111,000)
Total shareholders' equity	91,513,000	88,690,000	31,224,000
Total liabilities and shareholders' equity	$ 166,951,000	$ 132,498,000	$ 105,218,000

INCOME TAXES - Schedule of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets
Net operating loss carryforward	$ 1,544	$ 3,378
Allowance for doubtful accounts	333	323
Share-based compensation	1,451	941
Bonus accrual	440	599
Inventory	130	53
Intangible assets	1,129	1,152
Other	0	140
Gross deferred tax assets	5,028	6,587
Valuation allowance	0	0
Net deferred tax assets	5,028	6,587
Deferred tax liabilities
Depreciation on property, plant, and equipment	(11,391)	(8,958)
Withholding tax on unremitted earnings	(264)	(72)
Other	0	(742)
Deferred tax liabilities	(11,655)	(9,772)
Net deferred liabilities	$ (6,627)	$ (3,185)

INVESTMENTS - EQUITY SECURITIES

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS - EQUITY SECURITIES

NOTE 4 – INVESTMENTS – EQUITY SECURITIES

The following table shows the cost and fair value of the Company’s investments in equity securities (in thousands):


	Cost		Unrealized Gain			Fair Value
March 31, 2024	$	999	$	138		$	1,137


	Cost		Unrealized Loss			Fair Value
December 31, 2023	$	999	$	(111	)	$	888

Unrealized holding gains on equity securities for the three months ended March 31, 2024 were approximately $0.2 million. Unrealized holding losses on equity securities for the three months ended March 31, 2023 were approximately $33 thousand.

NOTE 4 - INVESTMENTS – EQUITY SECURITIES

The following table shows the cost and fair value of the Company’s investments in equity securities

(in

housands


	Cost		Unrealized Loss			Fair Value
December 31, 2023	$	999	$	(111	)	$	888


	Cost		Unrealized Gain		Fair Value
December 31, 2022	$	999	$	144	$	1,143

Unrealized holding losses on equity securities for the year ended December 31, 2023 were $0.3 million

where

unrealized holding gains on equity securities for the year ended December 31, 2022 were $0.2 million.

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Inventories, Net

The following table shows the components of inventory (in thousands):


	March 31, 2024			December 31, 2023
Raw materials	$	8,823		$	5,022
Finished goods		2,673			16
Total inventories		11,496			5,038

Allowance for obsolete inventory		(55	)		(4	)

Inventories, net	$	11,441		$	5,034

Inventories, net

The following table shows the components of inventory (in thousands):


	December 31, 2023			December 31, 2022
Raw materials	$	5,022		$	3,377
Finished goods		16			115

Total inventories		5,038			3,492

Allowance for obsolete inventory		(4	)		(211	)

Inventories, net		5,034			3,281

Summary of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets

The following table shows the components of prepaid e

enses and other current assets (in thousands):


	March 31, 2024		December 31, 2023
Prepaid expenses:
Deposits on inventory	$	1,437	$	2,146
Prepaid income tax		362		362
Prepaid insurance		530		1,110
Prepaid rent		399		372
Prepaid equipment		331		331
Prepaid other		172		214
Other current assets:
Other	$	—	$	18

Total	$	3,231	$	4,553

Prepaid expenses and other current assets

The following table shows the components of prepaid expenses and other current assets (in thousands):


	December 31, 2023		December 31, 2022
Prepaid expenses:
ERC benefits receivable	$	—	$	2,117
Deposits on inventory		2,146		680
Prepaid income tax		362		—
Prepaid insurance		1,110		358
Prepaid rent		372		381
Prepaid equipment		331		179
Prepaid other		214		173
Other current assets:
Interest rate swap asset	$	—	$	476
Other		18		17

Total	$	4,553	$	4,381

Summary of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):


	March 31, 2024			December 31, 2023
Accrued expenses:
Accrued compensation and related benefits	$	3,878		$	4,999
Accrued insurance		435			978
Accrued transaction advisory fees		1,000			1,000
Accrued professional services		72			189
Accrued interest		126			58
Accrued property taxes		314			60
Accrued monitoring fees		373			373
Other		760			147
Other current liabilities:
Income tax payable	$	1,757		$	1,586
Sales tax payable		(413	)		71
Unbilled lost-in-hole revenue		96			76
Deferred revenue		44			1,042

Total accrued expenses and other current liabilities	$	8,442		$	10,579

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):


	December 31, 2023		December 31, 2022
Accrued expenses:
Accrued compensation and related benefits	$	4,999	$	3,392
Accrued insurance		978		525
Accrued transaction advisory fees		1,000		—
Accrued professional services		189		509
Accrued interest		58		62
Accrued property taxes		60		41
Accrued monitoring fee		373
Other		147		38
Other current liabilities:
Income tax payable	$	1,586	$	1,780
Sales tax payable		71		587
Unbilled lost-in-hole revenue		76		282
Deferred revenue		1,042		83
Total accrued expenses and other current liabilities	$	10,579	$	7,299

OTHER EXPENSES, NET (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Other Income and Expenses [Abstract]

Summary of Components of Other Expenses, Net

The following table shows the components of other expenses, net for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
Transaction fees	$	(889	)	$	—
Other, net		(247	)		(7	)
Interest income		11			47

Other expense, net	$	(1,125	)	$	40

The following table shows the components of other expenses, net for the years ended December 31, 2023, and 2022 (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
HHLLC stock-based compensation	$	(2,339	)	$	—
Transaction fees		(3,640	)		—
Other, net		(428	)		(436	)
Interest income		48			52

Other expense, net	$	(6,359	)	$	(384	)

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Prior Period Adjustment [Abstract]

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 2 – Revision of Previously Issued Financial Statements

During the preparation of its unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, the Company identified certain errors in its previously issued unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023. The errors identified had no impact on the unaudited condensed consolidated balance sheets, statements of income and comprehensive income, and statements of changes in redeemable convertible preferred stock and shareholders’ equity. As described further below, the Company has revised its previously issued unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 within this Quarterly Report on Form

10-Q

as of and for the three months ended March 31, 2024. The following paragraphs describe the errors in the previously issued unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023, and the table following these paragraphs presents the quantitative impact of the errors described in the paragraphs below.

Statement of cash flow errors related to leases

The Company determined that the previously reported amount of $2.5 million in ROU assets obtained in exchange for lease liabilities disclosed within the

non-cash

investing and financing activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included amounts for Canadian leases that were excluded from the consolidated balance sheet due to their being immaterial. In addition, the calculation incorrectly included amounts for ROU assets obtained in exchange for lease liabilities whereby the leases had terminated.

Also, with respect to leases, the Company determined that the previously reported amount of

non-cash

lease expense of negative $0.2 million within the operating activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The previously reported amount was calculated as solely the change in ROU assets from December 31, 2022 to March 31, 2023 without taking into account the fact that the change in ROU assets is also impacted by the

non-cash

ROU assets obtained in exchange for lease liabilities.

In addition, the Company determined that the previously reported amount of $0.3 million for operating lease liabilities within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows was calculated incorrectly. The previously reported amount was calculated as solely the change in the operating lease liability from December 31, 2022 to March 31, 2023 without taking into account

the fact that the change in the operating lease liability is also impacted by the

non-cash

ROU assets obtained in exchange for lease liabilities described above.

Statement of cash flow errors related to inventory and property, plant, and equipment

The Company determined that the previously reported amount of inventories of negative $1.4 million within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included the

non-cash

amounts expensed on the income statement for the provision for excess and obsolete inventory. The provision for excess and obsolete inventory should have been presented separately within the reconciliation of net income to net cash flows from operating activities in the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023.

In addition, the Company determined that the previously reported amount of inventories of negative $1.4 million and accounts payable of positive $5.8 million within the changes in operating assets and liabilities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 were not adjusted for the impact of the amount of purchases of inventory that were not paid in cash during the three months ended March 31, 2023. The previously reported amounts were calculated as solely the changes in inventories and accounts payable from December 31, 2022 to March 31, 2023 without taking into account the fact that the changes in both inventories and accounts payable are also impacted by the amount of inventory that has not yet been paid in cash at period end.

The Company determined that the previously reported amount of proceeds from sale of

lost-in-hole

equipment of $5.3 million within the investing activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was calculated incorrectly. The calculation of the amount previously reported in the unaudited condensed consolidated statement of cash flows incorrectly included the

non-cash

amounts expensed on the income statement for the provision for excess and obsolete property, plant and equipment. The amount for the provision for excess and obsolete property, plant and equipment should have been presented within the reconciliation of net income to net cash flows from operating activities on the unaudited condensed consolidated statement of cash flows for the March 31, 2023.

Furthermore, the Company determined that the previously reported amount of purchases of property, plant and equipment of negative $10.8 million within the investing activities section of the unaudited condensed consolidated statement of cash flows for the March 31, 2023 was calculated incorrectly. The Company determined that the previously reported amount of purchases of property, plant and equipment was calculated using an incorrect amount for the additions to property, plant and equipment that were not paid for in cash during the March 31, 2023.

Additionally, the Company determined that the previously reported amount of accounts payable of positive $5.8 million within the operating activities section of the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2023 was not adjusted for the impact of the purchases of property, plant and equipment that were not paid for in cash during the three months ended March 31, 2023.

Also, with respect to inventory and property, plant and equipment, the Company determined that the previously disclosed

non-cash

investing and financing activities section incorrectly failed to disclose the amounts of purchases of inventory and property, plant and equipment remaining in accounts payable as of March 31, 2023.

The Company evaluated the errors described above (and quantified in the table below), both

qualitatively

and

quantitatively


	For the three months ended March 31, 2023
Unaudited Condensed Consolidated Statement of Cash Flows	As Previously Reported			Adjustment			As Revised
Non-cash lease expense	$	(220	)	$	1,360		$	1,140
Provision for excess and obsolete inventory		—			17			17
Provision for excess and obsolete property and equipment		—			117			117
Inventories, net		(1,442	)		1,558			116
Operating lease liabilities		274			(1,360	)		(1,086	)
Accounts payable		5,765			(2,557	)		3,208
Accrued Expenses		207			(3,387	)		(3,180	)
Purchase of property, plant and equipment		(10,815	)		3,748			(7,067	)
Proceeds from sale of lost-in-hole equipment		5,315			504			5,819
ROU assets obtained in exchange for lease liabilities		2,516			(1,156	)		1,360
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		—			1,575			1,575
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		—			4,369			4,369

NOTE 2 - REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

During the preparation of its consolidated financial statements as of and for the year ended December 31, 2023, the Company identified certain errors in its previously issued consolidated statements of cash flows for the year ended December 31, 2022 and the three months ended March 31, 2023. The errors identified had no impact on the consolidated balance sheets, statements of operations/income and comprehensive income (loss), and statements of changes in redeemable convertible preferred stock and shareholders’ equity for the year ended December 31, 2022 and the three months ended March 31, 2023. As described further below, the Company has revised its previously issued consolidated statement of cash flows for the year ended December 31, 2022 within this Annual Report on Form

10-K.

The Company will revise its consolidated statement of cash flows for the three

months ended March 31, 2023 in its future filing of its Quarterly Report on Form

10-Q

as of and for the three months ended March 31, 2024. The following paragraphs describe the errors in the previously issued consolidated statements of cash flows for the year ended December 31, 2022 and the table following these paragraphs presents the quantitative impact of the errors described in the paragraphs below.

Statement of cash flow errors related to leases

The Company determined that the previously reported amount of $9.5 million in ROU assets obtained in exchange for lease liabilities disclosed within the

non-cash

investing and financing activities section of the consolidated statement of cash flows for the year ended December 31, 2022 was calculated incorrectly. The calculation of the amount previously reported in the consolidated statement of cash flows incorrectly included amounts for Canadian leases that were excluded from the consolidated balance sheet due to their being immaterial. In addition, the calculation incorrectly included amounts for ROU assets obtained in exchange for lease liabilities whereby the leases had terminated.

Also, with respect to leases, the Company determined that the previously reported amount of

non-cash

lease expense of negative $3.8 million within the operating activities section of the consolidated statement of cash flows for the year ended December 31, 2022 was calculated incorrectly. The previously reported amount was calculated as solely the change in ROU assets from December 31, 2021 to December 31, 2022 without taking into account the fact that the change in ROU assets is also impacted by the

non-cash

ROU assets obtained in exchange for lease liabilities.

In addition, the Company determined that the previously reported amount of $3.7 million for operating lease liabilities within the changes in operating assets and liabilities section of the consolidated statement of cash flows was calculated incorrectly. The previously reported amount was calculated as solely the change in the operating lease liability from December 31, 2021 to December 31, 2022 without taking into account the fact that the change in the operating lease liability is also impacted by the

non-cash

ROU assets obtained in exchange for lease liabilities described above.

Statement of cash flow errors related to inventory and property, plant, and equipment

The Company determined that the previously reported amount of inventories of negative $1.0 million within the changes in operating assets and liabilities section of the consolidated statement of cash flows for the year ended December 31, 2022 was calculated incorrectly. The calculation of the amount previously reported in the consolidated statement of cash flows incorrectly included the

non-cash

amounts expensed on the income statement for the provision for excess and obsolete inventory. The provision for excess and obsolete inventory should have been presented separately within the reconciliation of net income to net cash flows from operating activities in the consolidated statement of cash flows for the year ended December 31, 2022.

In addition, the Company determined that the previously reported amount of inventories of negative $1.0 million and accounts payable of negative $1.0 million within the changes in operating assets and liabilities section of the consolidated statement of cash flows for the year ended December 31, 2022 were not adjusted for the impact of the amount of purchases of inventory that were not paid in cash during the year ended December 31, 2022. The previously reported amounts were calculated as solely the changes in inventories and accounts payable from December 31, 2021 to December 31, 2022 without taking into account the fact that the changes in both inventories and accounts payable are also impacted by the amount of inventory that has not yet been paid in cash at period end.

The Company determined that the previously reported amount of proceeds from sale of

lost-in-hole

equipment of $20.3 million within the investing activities section of the consolidated statement of cash flows for the year ended December 31, 2022 was calculated incorrectly. The calculation of the amount previously reported in the consolidated statement of cash flows incorrectly included the

non-cash

amounts expensed on the income statement for the provision for excess and obsolete property, plant and equipment. The amount for the provision

for excess and obsolete property, plant and equipment should have been presented within the reconciliation of net income to net cash flows from operating activities on the consolidated statement of cash flows for the year ended December 31, 2022.

Furthermore, the Company determined that the previously reported amount of purchases of property, plant and equipment of negative $23.8 million within the investing activities section of the consolidated statement of cash flows for the year ended December 31, 2022 was calculated incorrectly. The Company determined that the previously reported amount of purchases of property, plant and equipment was calculated using an incorrect amount for the additions to property, plant and equipment that were not paid for in cash during the year ended December 31, 2022.

Additionally, the Company determined that the previously reported amount of accounts payable of negative $1.0 million within the operating activities section of the consolidated statement of cash flows for the year ended December 31, 2022 was not adjusted for the impact of the purchases of property, plant and equipment that were not paid for in cash during the year ended December 31, 2022.

Also, with respect to inventory and property, plant and equipment, the Company determined that the previously disclosed

non-cash

investing and financing activities section incorrectly failed to disclose the amounts of purchases of inventory and property, plant and equipment remaining in accounts payable as of December 31, 2022.

The Company evaluated the errors described above (and quantified in the table below), both qualitatively and quantitatively, in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the previously issued financial statements taken as a whole. The consolidated financial statements presented herein as of and for the years ended December 31, 2023 and 2022 have been revised to correct the errors described above in accordance with SEC SAB Topic 1.M, as codified in ASC 250.

The following table presents (in thousands) the effects of the corrections of the errors described above:


	For the year ended December 31, 2022
Consolidated Statement of Cash Flows	As Previously Reported			Adjustment			As Revised
Non-cash lease expense	$	(3,768	)	$	7,907		$	4,139
Provision for excess and obsolete inventory		—			45			45
Provision for excess and obsolete property and equipment		—			510			510
Inventories, net		(940	)		34			(906	)
Operating lease liabilities		3,733			(7,907	)		(4,174	)
Accounts payable		(981	)		(451	)		(1,432	)
Purchase of property, plant and equipment		(23,753	)		(935	)		(24,688	)
Proceeds from sale of lost-in-hole equipment		20,319			797			21,116
ROU assets obtained in exchange for lease liabilities		9,451			(1,544	)		7,907
Purchases of inventory included in accounts payable and accrued expenses and other current liabilities		—			79			79
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities		—			372			372

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Allowance For Credit Losses

The beginning accounts receivable balance as of January 1, 2022 was $20.0 million. The changes in the allowance for credit losses for the year ended December 31, 2023 were as follows (in thousands):

Allowance for credit losses


Balance at December 31, 2021	$	(1,222	)
Cumulative effect adjustments upon adoption of ASU 2016-13		—
Additions during 2022		(336	)
Utilization of allowance for credit losses		60

Balance at December 31, 2022		(1,498	)

Additions during 2023		(117	)
Utilization of allowance for credit losses		157

Balance at December 31, 2023		(1,458	)

Summary of Asset and Liabilities Measured at Fair Value

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,137	$	—	$	—	$	1,137

Total assets at fair value	$	1,137	$	—	$	—	$	1,137


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888


	Assets at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,143	$	—	$	—	$	1,143
Interest rate swap		—		476		—		476

Total assets at fair value	$	1,143	$	476	$	—	$	1,619

REVOLVING CREDIT FACILITY AND TERM LOAN	3 Months Ended	12 Months Ended
REVOLVING CREDIT FACILITY AND TERM LOAN	Mar. 31, 2024	Dec. 31, 2023
Line of Credit Facility [Abstract]
REVOLVING CREDIT FACILITY AND TERM LOAN	NOTE 8 – REVOLVING CREDIT FACILITY AND TERM LOAN In December 2015, the Company entered into a credit facility with PNC Bank, National Association (the “Credit Facility”). The facility provided for a revolving line of credit with a maximum borrowing amount totaling $60.0 million. 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. 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 a principal amount of $25.0 million. The Credit Facility and the Term Loan matures 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 Assoication. For the three months ended March 31, 2024, the interest on the term loan was based on SOFR or the bank’s base lending rate plus applicable margin (approximately 9.28% at March 31, 2024). The Credit Facility is collateralized by substantially all the assets of the Company and matures March 15, 2029. As of March 31, 2024, there were no amounts drawn against the line of credit. The Company is subject to various restrictive covenants associated with these borrowings including, but not limited to, a leverage ratio and a fixed charge ratio. As of March 31, 2024, the Company was in compliance with all restrictive covenants. 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. The Company analyzed the Default Rate feature of the Credit Facility for derivative accounting consideration under ASC 815, Derivatives and Hedging , and determined the Default Rate met the definition of a derivative as it is a contingent interest feature. The Company also noted that the Default Rate feature (the ‘Default Rate Derivative’) required bifurcation from the host contract and was to be accounted for at fair value. In accordance with ASC 815-15, the Company bifurcated the Default Rate feature of the note and determined the derivative is liability classified. The Default Rate Derivative is treated as a liability, initially measured at fair value with subsequent changes in fair value recorded in earnings. Management has assessed the probability of occurrence for a non-credit default event and determined the likelihood of a referenced event to be remote. Therefore, the estimated fair value of the Default Rate Derivative was negligible as of March 31, 2024 and December 31, 2023 and therefore no amounts were recorded as of March 31, 2024 or December 31, 2023.	NOTE 9 – REVOLVING CREDIT FACILITY In December 2015, the Company entered into a credit facility with PNC Bank, National Association (the “Credit Facility”). The facility provides for a revolving line of credit with a maximum borrowing amount totaling $60.0 million, as of December 31, 2023 and 2022. On June 20, 2023, the Company entered into the Amended and Restated Revolving Credit, Security and Guaranty Agreement among Drilling Tools International, Inc., certain of its subsidiaries, Drilling Tools International Corporation and PNC Bank, National Association (the “Credit Facility Agreement”) that modified the terms of its previous agreement and related amendments. This amended agreement modified certain defined terms in the previous agreement, removed the $20.0 million unfunded capital expenditures requirement, removed the $9.0 million sublimit to the Company’s Canadian entity and changed the legal debtor from DTIH to DTIC. See Note 3, Merger for further discussion of the Merger. For the year ended December 31, 2023, the interest on the amount drawn was based on SOFR or the bank’s base lending rate plus applicable margin (approximately 8.4% at December 31, 2023). The Credit Facility is collateralized by substantially all the assets of the Company and matures December 31, 2025. As of December 31, 2023, there were no amounts drawn against the line of credit. The Company is subject to various restrictive covenants associated with these borrowings including, but not limited to, a fixed charge ratio, and a minimum amount of undrawn availability. As of December 31, 2023, the Company was in compliance with all restrictive covenants. 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. The Company analyzed the Default Rate feature of the Credit Facility for derivative accounting consideration under ASC 815, Derivatives and Hedging , and determined the Default Rate met the definition of a derivative as it is a contingent interest feature. The Company also noted that the Default Rate feature (the ‘Default Rate Derivative’) required bifurcation from the host contract and was to be accounted for at fair value. In accordance with ASC 815-15, the Company bifurcated the Default Rate feature of the note and determined the derivative is liability classified. The Default Rate Derivative is treated as a liability, initially measured at fair value with subsequent changes in fair value recorded in earnings. Management has assessed the probability of occurrence for a non-credit default event and determined the likelihood of a referenced event to be remote. Therefore, the estimated fair value of the Default Rate Derivative was negligible as of December 31, 2023 and 2022 and, therefore , no amounts were recorded as of December 31, 2023 and 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

STOCK-BASED COMPENSATION - Summary of Options Outstanding (Details) - USD ($)		3 Months Ended	12 Months Ended
	Jun. 19, 2023	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
OUTSTANDING, December 31, 2022		2,361,722		2,494,097
Number of shares granted			0
Number of shares exercised	(580,000)		(132,375)
Number of shares forfeited			0
OUTSTANDING, December 31, 2023		2,361,722	2,361,722
UNVESTED, December 31, 2023			0
EXERCISABLE, December 31, 2023			2,361,722
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price, beginning balance		$ 4.02		$ 4.04
Weighted average exercise price, Granted			$ 0
Weighted average exercise price, Exercised			5.04
Weighted average exercise price, Forfeited			0
Weighted average exercise price, ending balance			4.02
Weighted average exercise price, Unvested			0
Weighted average exercise price, Exercisable			$ 4.02
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract]
Weighted Average Remaining Contractual Life (in Years)			3 years 4 months 13 days	3 years 11 months 4 days
Weighted average remaining contractual life (in years), exercisable			3 years 4 months 13 days
Aggregate Intrinsic Value			$ 0	$ 11,687
Aggregate intrinsic value, exercisable			$ 0

STOCK-BASED COMPENSATION (Details)			3 Months Ended		12 Months Ended
STOCK-BASED COMPENSATION (Details)	Jun. 20, 2023	Jun. 19, 2023 shares	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options exercised		580,000			132,375
Common stock canceled in exchange for options		158,444
Common stock exchange ratio		0.2282
Intrinsic value \| $					$ 0
Common stock shares issued in exchange		36,163
Share-Based Payment Arrangement, Expense \| $			$ 208,000	$ 0		$ 0
Share-based compensation arrangement by share-based payment award, options, outstanding, number			2,361,722		2,361,722		2,494,097
Stock options granted					0
Number of options forfeited					0
Non-vested shares					0
Unrecognized compensation expense \| $			$ 4,400,000	$ 1,600,000
Selling, General, and Administrative Expenses
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Payment Arrangement, Expense \| $					$ 1,700,000
Other Expense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Payment Arrangement, Expense \| $					$ 2,300,000
Performance-based Stock Options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of accelerated vesting stock options					534,063
Number of stock options vested					534,063
Time Based Shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non-vested shares			2,600,000			0
2023 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Maximum percentage of common stock issuable in accordance with outstanding Common stock	10.00%
Annual increase in percentage of common stock issuable in accordance with outstanding common stock	3.00%
Issued options to purchase shares of the common stock					2,976,854
Shares of common stock available for issuance			1,269,910		2,976,854
Stock options granted			2,600,000
Number of options forfeited			0
Share based payment award shares issued in period					0

LEASES

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Leases [Abstract]

LEASES

NOTE 13 – LEASES

The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years. These leases often include options to extend the term of the lease which may be for periods of up to 5 years. When it is reasonably certain that the option will be exercised, the impact of the renewal term is included in the lease term for purposes of determining total future lease payments and measuring the ROU asset and lease liability. 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 March 31, 2024.

For the three months ended March 31, 2024, the components of the Company’s lease expense were as follows (in thousands):


	Three months ended March 31, 2024		Three months ended March 31, 2023
Operating Lease Cost	$	1,482	$	1,518
Short-term Lease Cost		35		30
Variable Lease Cost		88		84
Sublease Income		—		(46	)

Total Lease Cost	$	1,605	$	1,586

Supplemental balance sheet information related to leases was as follows (in thousands):


	Three months ended March 31, 2024
Weighted-average remaining lease term (in years)		6.45
Weighted average discount rate		5.86	%


	Three months ended March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities		1,350


2024	$	3,759
2025		4,244
2026		3,719
2027		2,540
2028		1,978
Thereafter		5,677

Total lease payments	$	21,917
Less: imputed interest		(3,550	)

Present value of lease liabilities	$	18,367

The Company leases downhole drilling tools to companies in the oil and natural gas industry. Such leases are accounted for in accordance with ASC 842. For the three months ended March 31, 2024 and 2023, tool rental revenue for leases of downhole drilling tools was approximately $30.0 million and $32.3 million, respectively. Our lease contract periods are short-term in nature and are typically daily, monthly, per well, or footage based. Due to the short-term nature of the contracts, no maturity table is presented.

NOTE 8 – LEASES

The Company leases various facilities and vehicles under noncancelable operating lease agreements. The remaining lease terms for our leases range from 1 month to 14 years. These leases often include options to extend the term of the lease, which may be for periods of up to 5 years. When it is reasonably certain that the option will be exercised, the impact of the renewal term is included in the lease term for purposes of determining total future lease payments and measuring the ROU asset and lease liability. 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, 2023.

For the year ended December 31, 2023 and 2022, the components of the Company’s lease expense were as follows (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
Operating Lease Cost	$	6,077		$	5,722
Short-term Lease Cost		130			143
Variable Lease Cost		320			319
Sublease Income		(76	)		(183	)

Total Lease Cost	$	6,451		$	6,001

Supplemental balance sheet information related to leases was as follows (in thousands):


	Year Ended December 31, 2023			Year Ended December 31, 2022
Weighted-average remaining lease term (in years)		6.55			7.53
Weighted average discount rate		5.80	%		5.34	%


	Year Ended December 31, 2023		Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities		5,538		5,003


2024	$	4,923
2025		4,089
2026		3,522
2027		2,439
2028		1,939
Thereafter		5,605

Total lease payments	$	22,517
Less: imputed interest		(3,666	)

Present value of lease liabilities	$	18,851

The Company leases downhole drilling tools to companies in the oil and natural gas industry. Such leases are accounted for in accordance with ASC 842. For the year ended December 31, 2023 and 2022, tool rental revenue was approximately $119.2 million and $99.0 million, respectively. Our lease contract periods are short-term in nature and are typically daily, monthly, per well, or footage based. Due to the short-term nature of the contracts, no maturity table is presented.

PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 5,300	$ 5,000	$ 20,300	$ 19,700
Property, plant and equipment, net	70,596		65,800	44,154
United States
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 65,900		$ 63,000	$ 41,800
Property, plant and equipment net, Percentage	93.00%		96.00%	95.00%
Canada
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net			$ 2,800	$ 2,300
Property, plant and equipment net, Percentage			4.00%	5.00%
Canada and Internationally
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 4,700		$ 2,800
Property, plant and equipment net, Percentage	7.00%		4.00%

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
	Jun. 20, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Mar. 02, 2023	Dec. 06, 2022
Related Party Transaction [Line Items]
Working capital loan amount	$ 400
PIPE Financing
Related Party Transaction [Line Items]
Payoff convertible promissory notes issued						$ 2,100	$ 2,100
Board of Directors
Related Party Transaction [Line Items]
Director fees paid		$ 85	$ 45	$ 200	$ 100
Hicks Holdings Operating LLC
Related Party Transaction [Line Items]
Management fees paid to shareholder		200	200	1,100	400
Cree Investments, LLC
Related Party Transaction [Line Items]
Rent expense paid to shareholder		$ 13	$ 13	$ 51	51
Heath Woodrum
Related Party Transaction [Line Items]
Payments for tools					$ 4

LEASES - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Lease, Cost [Abstract]
Operating Lease Cost	$ 1,482	$ 1,518	$ 6,077	$ 5,722
Short-term Lease Cost	35	30	130	143
Variable Lease Cost	88	84	320	319
Sublease Income	0	(46)	(76)	(183)
Total Lease Cost	$ 1,605	$ 1,586	$ 6,451	$ 6,001

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

Drilling Tools International Corporation, a Delaware corporation (“DTIC” or the “Company”), is a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle.

On June 20, 2023 (the “Closing Date”), a merger transaction between Drilling Tools International Holdings, Inc. (“DTIH”), ROC Energy Acquisition Corp (“ROC”), and ROC Merger Sub, Inc., a directly, wholly owned subsidiary of ROC (“Merger Sub”), was completed (the “Merger”) pursuant to the initial merger agreement dated February 13, 2023 and subsequent amendment to the merger agreement dated June 5, 2023 collectively, (the “Merger Agreement”). In connection with the closing of the Merger, ROC changed its name to Drilling Tools International Corporation. The common stock of DTIC (“DTIC Common Stock” or the “Company’s Common Stock”) commenced trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DTI” on June 21, 2023.

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. Pursuant to the terms of the Share Purchase Agreement, the Company acquired one hundred percent (100%) of the shares of CTG (the “CTG Acquisition”), which wholly owns Deep Casing Tools Limited (“Deep Casing”), an energy technology development company, for approximately £16.2 million, or $20.9 million, based on the British pound sterling to United States dollar exchange rate on the CTG Acquisition Date. For further details regarding the acquisition, refer to Note 3, “Business Combinations.”

The Company’s United States (“U.S.”) operations have locations in Texas, California, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming. The Company’s international operations are located in Canada, Scotland, Germany, Ukraine, UAE, and Saudi Arabia. Operations outside the U.S. are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws and possible limitations on foreign investment. The Company does not engage in hedging activities to mitigate its exposure to fluctuations in foreign currency exchange rates.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. 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 unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Update (“ASUs”).

Unaudited Interim Financial Information

The accompanying interim unaudited condensed consolidated financial statements included in this quarterly report have been prepared in accordance with U.S. GAAP and, in the opinion of the Company, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2024, and its results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The condensed consolidated balance sheet at December 31, 2023, was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. 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 Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time the Company is no longer considered to be an emerging growth company. 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 unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes as of the date of the unaudited condensed consolidated financial statements. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. In the current macroeconomic and business environment affected by the Russia-Ukraine and Israel-Hamas conflicts and inflationary pressures, these estimates require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.

Principles of Consolidation

The accompanying unaudited condensed 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”). Those financial statements are translated into US GAAP for consolidation purposes. The translation process adheres to established accounting standards and guidelines to ensure consistency and comparability across our consolidated financial statements. This approach enables us to accurately reflect the financial position, results of operations, and cash flows of our consolidated operations.

Foreign Currency Translation and Transactions

For the three months ended March 31, 2024 and 2023, the unrealized foreign currency fluctuation impacts on transactions included in the unaudited condensed consolidated statements of income and comprehensive income totaled approximately $28 thousand of gains and nil in losses, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with Topic 842 (which addresses lease accounting) and Topic 606 (which addresses revenue from contracts with customers). The Company derives its revenue from two revenue types, tool rental services and product sales.

Tool Rental Services

Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842.

Owned tool rentals represent the most significant revenue type and are governed by the Company’s standard rental contract. The Company accounts for such rentals as operating leases. The lease terms are included in the contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. The Company’s lease revenues do not include material amounts of variable payments. Owned tool rentals represent revenue from renting tools that the Company owns. The Company does not generally provide an option for the lessee to purchase the rented equipment at the end of the lease.

The Company recognizes revenues from renting tools on a straight-line basis. The Company’s rental contract periods are daily, monthly, or per well. As part of this straight-line methodology, when the equipment is returned, the Company recognizes as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the drilling tool was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, the Company will have customers return the drilling tool and be contractually required to pay the Company more than the cumulative amount of revenue recognized to date under the straight-line methodology. Additionally, the Company has rental contracts that are based on usage, either on a per footage or per well basis. As these types of rental contracts primarily consist of variable lease payments, which are unknown at commencement, revenue is recognized when the changes in the factor on which the contingent lease payments are based occur. When the customer returns the rental equipment and the footage or usage becomes known, the Company recognizes revenue.

The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its unaudited condensed consolidated balance sheet.

As noted above, the Company is unsure of when the customer will return rented drilling tools. As such, the Company cannot provide a maturity analysis of future lease payments as it is unknown when the tool will be returned and what the customer will owe upon return of the tool. The Company’s drilling tools are generally rented for short periods of time (significantly less than a year). Lessees do not provide residual value guarantees on rented equipment.

The Company expects to derive significant future benefits from its drilling tools following the end of the rental term. The Company’s rentals are generally short-term in nature, and its tools are typically rented for the majority of the time that the Company owns them.

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, and other charges for made to order product sales. Product sales are accounted for under Topic 606.

Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. 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. As each of the Company’s contracts with customers contain a single performance obligation to provide a product sale, the Company does not have any performance obligations requiring allocation of transaction prices.

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. Additionally, pursuant to the contractual terms with the Company’s customers, the customer must notify the Company of, and purchase from the Company, any rented tools that are damaged beyond repair,

lost-in-hole,

lost-in-transit

while in the care, custody or control of the Company’s customers. Revenue is recognized for these products at a point in time upon the customer’s notification to the Company of the occurrence of one of these noted events.

The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods.

Revenue per geographic location

Revenue generated was concentrated within the United States. For the three months ended March 31, 2024 and 2023, the revenue generated within the United States was $32.3 million and $36.6 million, respectively, or 87% and 90% of total revenue. For the three months ended March 31, 2024 and 2023, the revenue generated outside of the United States, in Canada and International, was $4.7 million and $4.2 million, respectively, or 13% and 10% of total revenue.

Contract Assets and Contract Liabilities

Contract assets represent the Company’s rights to consideration for work completed but not billed. As of March 31, 2024 and December 31, 2023, the Company had contract assets of $4.6 million and $4.2 million, respectively. Contract assets were recorded in accounts receivable, net in the accompanying unaudited condensed consolidated balance sheets.

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. As of March 31, 2024 and December 31, 2023, the Company did not have any material contract liabilities. All deferred revenues are expected to be recognized during the following 12 months, and they were recorded in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2024 and December 31, 2023.

Accounts Receivable, net

The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within 30 to 60 days of the period in which the corresponding sales or rentals occur and do not bear interest. They are recorded at net realizable value less an allowance for doubtful accounts and are classified as accounts receivable, net on the unaudited condensed consolidated balance sheets.

Allowance for Credit Losses

The Company considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In our determination of the allowance for credit losses, we pool receivables by days outstanding and apply an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses.

As of March 31, 2024 and December 31, 2023, the allowance for credit losses totaled $1.4 million and $1.5 million, respectively.

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. We account for contingent assets and liabilities at fair value on the acquisition date, and record changes to fair value associated with these assets and liabilities as a period cost as incurred. We use established valuation techniques and engage reputable valuation specialists to assist us with these valuations. We use a reasonable measurement period to record any adjustment related to the opening balance sheet (generally, less than one year). After the measurement period, changes to the opening balance sheet can result in the recognition of income or expense as period costs. To the extent these items stem from contingencies that existed at the balance sheet date, but are contingent upon the realization of future events, the cost is charged to expense at the time the future event becomes known.

Inventories, net

Inventories are stated at the lower of cost or net realizable value. 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. Inventory write-downs are charged to cost of rental revenue and cost of product sale revenue within operating costs section of the unaudited condensed consolidated statements of income and comprehensive income and establish a new cost basis for the inventory. Inventory includes raw material and finished goods.

Property, Plant and Equipment, net

Property, plant and equipment purchased by the Company are recorded at cost less accumulated depreciation. Depreciation is recorded using the straight-line method based on the estimated useful lives of the depreciable property or, for leasehold improvements, the remaining term of the lease, whichever is shorter. Assets not yet placed in use are not depreciated.

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. Expenditures to maintain and repair property, plant and equipment, which do not improve or extend the life of the related assets, are charged to operations when incurred. When property, plant and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in operations.

Leases

The Company adopted ASC 842,

Leases

(“ASC 842”) as of January 1, 2022 using the modified retrospective transition approach, with no restatement of prior periods or cumulative adjustments to retained earnings. Upon adoption, the Company elected the package of transition practical expedients, which allowed it to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The Company elected the

use-of-hindsight

to reassess lease term. The Company elected not to recognize leases with an initial term of 12 months or less within the unaudited condensed consolidated balance sheets and to recognize those lease payments on a straight-line basis in the unaudited condensed consolidated statements of income and comprehensive income over the lease term. The new lease accounting standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the practical expedient to not separate lease and

non-lease

components for all leases.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease

right-of-use

(“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the unaudited condensed consolidated balance sheets. 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. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of the future minimum lease payments over the lease term. Operating lease ROU assets also include the impact of any lease incentives. An amendment to a lease is assessed to determine if it represents a lease modification or a separate contract. Lease modifications are reassessed as of the effective date of the modification using an incremental borrowing rate based on the information available at the commencement date. For modified leases the Company also reassess the lease classification as of the effective date of the modification.

The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.

The Company’s lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option in the measurement of its ROU assets and liabilities. The Company considers contractual-based factors such as the nature and terms of the renewal or termination, asset-based factors such as physical location of the asset and entity-based factors such as the importance of the leased asset to the Company’s operations to determine the lease term. The Company generally uses the base, noncancelable, lease term when determining the ROU assets and lease liabilities. The

right-of-use

asset is tested for impairment in accordance with Accounting Standards Codification Topic 360,

Property, Plant, and Equipment.

Lessor Accounting

Our leased equipment primarily consists of rental tools and equipment. Our agreements with our customers for rental equipment contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (iii) the customer directs the use of the identified assets throughout the period of use.

Our lease contract periods are daily, monthly, per well or based on footage. Lease revenue is recognized on a straight-line basis based on these rates. We do not provide an option for the lessee to purchase the rented tools at the end of the lease and the lessees do not provide residual value guarantees on the rented assets.

We recognized operating lease revenue within “Tool rental” on the unaudited condensed consolidated statements of income and comprehensive income.

Intangible Assets

Intangible assets with finite useful lives include customer relationships, trade name, patents,

non-compete

agreements and a supply agreement. 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. We evaluate Goodwill at least annually for impairment. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds its estimated fair value. We conduct our annual assessment of the recoverability of goodwill as of December 31 of each year. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or we elect not to perform a qualitative assessment, the quantitative assessment of goodwill test is performed. The goodwill impairment test is also performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, we will utilize a discounted cash flow analysis using management’s projections that are subject to various risks and uncertainties of revenues, expenses and cash flows as well as assumptions regarding discount rates, terminal value and control premiums. 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.

Accounting for 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. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by 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 by which the carrying amount of the assets exceeds the fair value of the asset or asset group.

For the three months ended March 31, 2024 and 2023, management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets.

Investments - Equity Securities

Equity securities are stated at fair value. Unrealized gains and losses are reflected in the unaudited condensed consolidated statements of income and comprehensive income. The Company periodically reviews the securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of March 31, 2024 and December 31, 2023, the Company believes the cost of the securities was recoverable in all material respects.

Redeemable Convertible Preferred Stock

Prior to the closing of the Merger, there were outstanding shares of DTIH Series A redeemable convertible preferred stock (the “Redeemable Convertible Preferred Stock”), which was classified outside of permanent equity in mezzanine equity on the unaudited condensed consolidated balance sheets as it was redeemable on a fixed date.

Upon the closing of the Merger, all of the Redeemable Convertible Preferred Stock was canceled in exchange for DTIC common stock and the right to receive cash. Accordingly, there was no Redeemable Convertible Preferred Stock outstanding as of March 31, 2024 or December 31, 2023.

Preferred Stock

As of the closing of the Merger, the Board of Directors have expressly granted authority to issue shares of preferred stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series and as may be permitted by the Delaware General Corporation Law. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the preferred stock, or any series thereof, unless a vote of any such holders is required pursuant to any preferred stock designation.

The Board of Directors of the Company has not issued any shares of any classes or series of preferred stock as of March 31, 2024, and through the date these financial statements were available to be issued.

Cost of Revenue

The Company recorded all operating costs associated with its product sales and tool rental revenue streams in cost of product sale revenue and cost of tool rental revenue, respectively, in the unaudited condensed consolidated statements of income and comprehensive income. All indirect operating costs, including labor, freight, contract labor and others, are included in selling, general, and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income.

Stock-Based Compensation

The Company recognizes stock-based compensation expenses over the requisite service period. The Company historically granted stock-based compensation awards with performance based vesting conditions. These options all vested upon the closing of the merger with ROC. Subsequent to the closing of the merger with ROC, the Company’s stock-based compensation awards are subject only to service based vesting conditions. Pursuant to ASC

718-10-35-8,

the Company recognizes compensation cost for stock awards with only service conditions that have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion

of the award as if the award was,

in-substance,

multiple awards. ASC 718 requires that the cost of awards of equity instruments offered in exchange for employee services, including employee stock options and restricted stock awards, be measured based on the grant-date fair value of the award. 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, net of estimated forfeitures. The Board of Directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved. The factors considered include, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as the sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares.

Earnings Per Share

Basic earnings per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted earnings is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. 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. For the purposes of this calculation, outstanding stock options and Redeemable Convertible Preferred Stock are considered potential dilutive common stock and are excluded from the computation of net loss per share if their effect is anti-dilutive.

The Redeemable Convertible Preferred Stock did not contractually entitle its holders to participate in profits or losses. As such, it was not treated as a participating security in periods of net income or net loss.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the unaudited condensed consolidated financial statements and consist of taxes currently due plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and liabilities.

The Company is subject to state income taxes in various jurisdictions.

The Company follows guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the unaudited condensed consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a

two-step

process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits and upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the unaudited condensed 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 March 31, 2024 and December 31, 2023. The

Company believes there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date.

The Company records income tax related interest and penalties, if applicable, as a component of the provision for income tax expense. However, there were no amounts recognized relating to interest and penalties in the unaudited condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2024 and 2023.

Derivative Financial Instruments

From time to time, the Company may enter into derivative instruments to manage exposure to interest rate fluctuations. During 2016, the Company entered into an interest swap agreement with respect to amounts outstanding under its revolving line of credit.

The Company’s interest rate swap is a

pay-fixed,

receive-variable interest rate swap based on SOFR swap rate. The SOFR swap rate is observable at commonly quoted intervals for the full term of the swap and therefore is considered a Level 2 item. For interest rate swaps in an asset position, the credit standing of the counterparty is analyzed and factored into the fair value measurement of the asset. The impact of the Company’s creditworthiness has also been factored into the fair value measurement of the interest rate swap in a liability position. For the three months ended March 31, 2023, the application of valuation techniques applied to similar assets and liabilities has been consistent.

This arrangement was designed to manage exposure to interest rate fluctuations by effectively exchanging existing obligations to pay interest based on floating rates for obligations to pay interest based on a fixed rate. These derivatives are

marked-to-market

at the end of each quarter and the realized/unrealized gain or loss is recorded as interest expense.

For the three months ended March 31, 2023, the Company recognized an unrealized gain due to the change in fair value of its interest rate swap of approximately $0.1 million. The interest swap agreement was settled on July 10, 2023. No new interest swaps were entered into subsequently or during the three months ended March 31, 2024.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels:

Level

– Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

Level

– 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

– Valuation inputs are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,137	$	—	$	—	$	1,137

Total assets at fair value	$	1,137	$	—	$	—	$	1,137


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888

As of March 31, 2024 and December 31, 2023, the Company did not have any Level 2 or 3 assets or liabilities.

Fair value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, and accounts payable. The carrying amount of such instruments approximates fair value due to their short-term nature.

Concentration of Credit Risk and Other Risks and Uncertainties

The Company’s customer concentration may impact its overall credit risk, either positively or negatively, in that these entities may be similarly affected by changes in economic or other conditions affecting the oil and gas industry.

During the three months ended March 31, 2024 and 2023, the Company generated approximately 30.0% and 31.0%, respectively, of its revenue from 2 customers. Amounts due from these customers included in accounts receivable at March 31, 2024 and December 31, 2023 were approximately $6.6 million and $9.3 million, respectively.

During the three months ended March 31, 2024, the Company had 2 vendor that represented approximately 30% of its vendor purchases. During the three months ended March 31, 2023, the Company had 1 vendor that represented approximately 11% of its vendor purchases. Amounts due to these vendors included in accounts payable at March 31, 2024 and December 31, 2023 were approximately $3.7 million and $3.4 million, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company maintains accounts in federally insured financial institutions in excess of federally insured limits. 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.

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 is the CODM. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operations decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates in one operating and reportable segment.

Accounting Standards Issued But 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. This standard is effective for the Company beginning January 1, 2025 with early adoption permitted. The Company is evaluating the effects of adopting this new accounting guidance on its disclosures but does not currently expect adoption will have a material impact on the Company’s consolidated financial statements. The Company does not intend to early adopt this ASU.

In November 2023, FASB issued ASU

2023-07,

Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which includes requirements for more robust disclosures of significant segment expenses and measures of a segment’s profit and loss used in assessing performance. This standard is effective for the Company’s annual period beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption permitted. The Company is still evaluating the effects of adopting this new accounting guidance on its disclosures.

NOTE 1 – SUMMARY OF SIFNICIANT ACCOUNTING POLICIES

Organization and Structure

Drilling Tools International Corporation, a Delaware corporation (“DTIC” or the “Company”), manufactures, rents, inspects, and refurbishes downhole drilling tools primarily to companies in the oil and natural gas industry for bottom hole assemblies used in onshore and offshore horizontal and directional drilling.

Merger

) pursuant to the initial merger agreement dated February 13, 2023 and subsequent amendment to the merger agreement dated June 5, 2023 collectively, (the “Merger Agreement”). In connection with the closing of the Merger, ROC changed its name to Drilling Tools International Corporation. The common stock of DTIC (“DTIC Common Stock” or the “Company’s Common Stock”) commenced trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DTI” on June 21, 2023. See Note 3,

Merger

for further discussion.

The Company’s United States (“U.S.”) operations have locations in Texas, California, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming. The Company’s international operations are located in Canada with additional stocking points in Europe and the Middle East. Operations outside the U.S. are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws and possible limitations on foreign investment. The Company does not engage in hedging activities to mitigate its exposure to fluctuations in foreign currency exchange rates.

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. 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”).

COVID-19

Related Credits and Relief

As a response to the

COVID-19

outbreak, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and provided an Employee Retention Credit (“ERC”) which is a refundable tax credit against certain employment taxes equal to 50% of qualified wages paid, up to $10 thousand per employee annually for wages paid. Additional relief provisions were passed by the United States government, which extended and expanded the qualified wage caps on these credits to 70% of qualified wages paid, up to $10 thousand per employee per quarter, through December 31, 2021. In November 2021, the Infrastructure Investment and Jobs Act was signed into law and ended the employee retention credit early, making wages paid after December 31, 2021, ineligible for the credit.

ERC benefits of nil and $4.3 million were included in selling, general, and administrative expense as an offset to the related compensation expenses in the consolidated statements of income and comprehensive income for the year ended December 31, 2023 and 2022, respectively. ERC benefits receivable of nil and $2.1 million were included in prepaid expenses and other current assets in the accompanying consolidated balance sheet as of December 31, 2023, and 2022, respectively. The Company received all ERC benefits receivables in January 2023, resulting in the ERC benefits receivable balance to be nil as December 31, 2023.

Laws and regulations concerning government programs, including the ERC, are complex and subject to varying interpretations. Claims made under these programs may also be subject to retroactive audit and review. While the

Company does not believe there is a basis for estimation of an audit or recapture risk at this time, there can be no assurance that regulatory authorities will not challenge the Company’s claim to the ERC in a future period.

Emerging Growth Company

non-emerging

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes as of the date of the consolidated financial statements. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. In the current macroeconomic and business environment affected by the Russia-Ukraine and Israel-Hamas conflicts and inflationary pressures, these estimates require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.

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.

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. 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. 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. For the year ended December 31, 2023, the aggregate foreign currency exchange rate fluctuations on transactions included in the consolidated statements of income and comprehensive income totaled approximately $0.1 million in losses. For the year ended December 31, 2022, the aggregate foreign currency exchange rate fluctuations on transactions included in the consolidated statements of income and comprehensive income totaled $0.2 million in gains, respectively.

Concentration of Credit Risk

For the year ended December 31, 2023, the Company generated approximately 39% of its revenue from three customers. For the year ended December 31, 2022, the Company generated approximately 28% of its revenue from two customers. Amounts due from these customers included in accounts receivable at December 31, 2023 and 2022, were approximately $11.1 million and $8.6 million, respectively.

For the year ended December 31, 2023, the Company had two vendors that represented approximately 23% of its vendor purchases. For the year ended December 31, 2022, the Company had one vendor that represented approximately 12% of its vendor purchases. Amounts due to these vendors included in accounts payable at December 31, 2023 and 2022 were approximately $0.3 million and $0.9 million, respectively.

Revenue Recognition

Tool Rental Services

Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842.

Owned tool rentals represent the most significant revenue type and are governed by the Company’s standard rental contract. The Company accounts for such rentals as operating leases. The lease terms are included in the contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. Owned tool rentals represent revenue from renting tools that the Company owns. The Company does not generally provide an option for the lessee to purchase the rented equipment at the end of the lease.

The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its consolidated balance sheet.

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, and other charges for made to order product sales. Product sales are accounted for under Topic 606.

lost-in-hole,

lost-in-transit

Contract Assets and Liabilities

Contract assets represent the Company’s rights to consideration for work completed but not billed. As of December 31, 2023 and 2022, the Company had contract assets of $4.2 million and $4.8 million, respectively. Contract assets were recorded in accounts receivable, net in the accompanying consolidated balance sheets.

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. As of December 31, 2023 and 2022, the Company did not have any material contract liabilities. All deferred revenue were expected to be recognized during the following 12 months, and they were recorded in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

Cash and Cash Equivalents

Accounts Receivable and Allowance for Credit Losses

The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within 30 to 60 days of the period in which the corresponding sales or rentals occur and do not bear interest. They are recorded at net realizable value less an allowance for credit losses and are classified as account receivable, net on the consolidated balance sheets.

The Company adopted ASU

2016-13,

Financial Instruments - Credit Losses

, on December 31, 2022, which was retroactively applied as of the first day of fiscal year 2022. This accounting standard requires companies to measure expected credit losses on financial instruments based on the total estimated amount to be collected over the lifetime of the instrument. Prior to the adoption of this accounting standard, the Company recorded incurred loss reserves against receivable balances based on current and historical information.

DTI considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In our determination of the allowance for credit losses, we pool receivables by days outstanding and apply an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses.

The Company is not party to any

off-balance

sheet arrangements that would require an allowance for credit losses in accordance with this accounting standard.

The beginning accounts receivable balance as of January 1, 2022 was $20.0 million. The changes in the allowance for credit losses for the year ended December 31, 2023 were as follows (in thousands):

Allowance for credit losses


Balance at December 31, 2021	$	(1,222	)
Cumulative effect adjustments upon adoption of ASU 2016-13		—
Additions during 2022		(336	)
Utilization of allowance for credit losses		60

Balance at December 31, 2022		(1,498	)

Additions during 2023		(117	)
Utilization of allowance for credit losses		157

Balance at December 31, 2023		(1,458	)

Inventories, net

Inventories are stated at the lower of cost or net realizable value. Cost is determined by using the specific identification method. 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. Inventory write-downs are charged to operating costs and establish a new cost basis for the inventory. Inventory includes raw material and finished goods.

Property, Plant and Equipment

Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost.

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. The recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by 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 by which the carrying amount of the assets exceeds the fair value of the asset or asset group.

For the year ended December 31, 2023 and 2022, management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets.

Leases

The Company adopted ASC 842,

Leases

use-of-hindsight

to reassess lease term. The Company elected not to recognize leases with an initial term of 12 months or less within the consolidated balance sheets and to recognize those lease payments on a straight-line basis in the consolidated statements of income and comprehensive income over the lease term. The new lease accounting standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the practical expedient to not separate lease and

non-lease

components for all leases.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease

right-of-use

(“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the consolidated balance sheets. The Company recognizes lease expense for its operating leases on a straight-line basis over the term of the lease.

right-of-use

asset is tested for impairment in accordance with ASC Topic 360,

Property, Plant, and Equipment.

Lessor Accounting

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

Investment - Equity Securities

Equity securities are stated at fair value. Unrealized gains and losses are reflected in the consolidated statements of income and comprehensive income. The Company periodically reviews the securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For the year ended December 31, 2023 and 2022, the Company believes the cost of the securities was recoverable in all material respects.

Derivative Financial Instruments

The Company’s interest rate swap is a

pay-fixed,

receive-variable interest rate swap based on SOFR swap rate. The SOFR swap rate is observable at commonly quoted intervals for the full term of the swap and therefore is considered a Level 2 item. For interest rate swaps in an asset position, the credit standing of the counterparty is analyzed and factored into the fair value measurement of the asset. The impact of the Company’s creditworthiness has also been factored into the fair value measurement of the interest rate swap in a liability position. For the years ended December 31, 2023 and 2022, the application of valuation techniques applied to similar assets and liabilities has been consistent.

marked-to-market

at the end of each quarter and the realized/unrealized gain or loss is recorded as interest expense.

For the year ended December 31, 2022, the Company recognized an unrealized gain due to the change in fair value of its interest rate swap of $1.4 million. The interest swap agreement was settled on July 10, 2023. Upon settlement, the swap had a fair value of $0.4 million. For the year ended December 31, 2023, the settlement resulted in a realized loss of $4 thousand. The realized losses are included in other expense, net in the consolidated statements of income and comprehensive income.

Fair Value Measurements

Level

– Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

Level

– Valuation inputs are unobservable and significant to the fair value measurement.

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888


	Assets at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,143	$	—	$	—	$	1,143
Interest rate swap		—		476		—		476

Total assets at fair value	$	1,143	$	476	$	—	$	1,619

As of December 31, 2023 and 2022, the Company did not have any Level 3 assets or liabilities.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, accounts receivable, and accounts payable. The carrying amount of such instruments approximates fair value due to their short-term nature.

Redeemable Convertible Preferred Stock

Prior to the closing of the Merger, there were outstanding shares of DTIH Series A redeemable convertible preferred stock (the “redeemable convertible preferred stock”), which was classified outside of permanent equity in mezzanine equity on the consolidated balance sheets as it was redeemable on a fixed date.

Upon the closing of the Merger, all of the redeemable convertible preferred stock was canceled in exchange for DTIC Common Stock and the right to receive cash. Accordingly, there was no redeemable convertible preferred stock outstanding as of December 31, 2023. As of December 31, 2022, the carrying value of the redeemable convertible preferred stock outstanding was $17.9 million.

Preferred Stock

As of the closing of the Merger, the Board have expressly granted authority to issue shares of preferred stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board providing for the issue of such series and as may be permitted by the Delaware General Corporation Law. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the preferred stock, or any series thereof, unless a vote of any such holders is required pursuant to any preferred stock designation.

The Board of the Company has not issued any shares of any classes or series of preferred stock as of December 31, 2023, and through the date these financial statements were available to be issued.

Cost of Revenue

income and comprehensive income. All indirect operating costs, including labor, freight, contract labor and others, are included in selling, general, and administrative expense in the consolidated statements of income and comprehensive income.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires that the cost of awards of equity instruments offered in exchange for employee services, including employee stock options and restricted stock awards, be measured based on the grant- date fair value of the award. 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. For any stock options granted prior to the Company’s common stock being publicly traded on June 21, 2023, the Company estimated the fair value of its common stock as of the grant date and used these estimates as inputs into the Black-Scholes model. The Board considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved. The factors considered include, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares. For the year ended December 31, 2023, the Company did not grant any stock options. For any grants of stock options subsequent to the Company being publicly traded, the Company will use the quoted market price as of the grant date as an input into the Black-Scholes model.

Earnings Per Share

Basic earnings per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted earnings is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. 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. For the purposes of this calculation, outstanding stock options and redeemable convertible preferred stock are considered potential dilutive common stock and are excluded from the computation of net loss per share if their effect is anti-dilutive.

The redeemable convertible preferred stock did not contractually entitle its holders to participate in profits or losses. As such, it was not treated as a participating security in periods of net income or net loss.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The Company is subject to state income taxes in various jurisdictions.

The Company follows guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a

two-step

process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits and upon examination by the taxing authorities. 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, 2023 and 2022. The Company believes there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date.

The Company records income tax related interest and penalties, if applicable, as a component of the provision for income tax expense. 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, 2023 and 2022.

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. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operations decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates in one operating and reportable segment.

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. This standard is effective for the Company beginning January 1, 2025 with early adoption permitted. The Company is evaluating the effects of adopting this new accounting guidance on its disclosures but does not currently expect adoption will have a material impact on the Company’s consolidated financial statements. The Company does not intend to early adopt this ASU.

In November 2023, FASB issued ASU

2023-07,

Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures, which includes requirements for more robust disclosures of significant segment expenses and measures of a segment’s profit and loss used in assessing performance. This standard is effective for the Company’s annual period beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption permitted. The Company is still evaluating the effects of adopting this new accounting guidance on its disclosures.

BUSINESS COMBINATION

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Business Combinations [Abstract]

BUSINESS COMBINATION

NOTE 3 – BUSINESS COMBINATION

On the CTG Acquisition Date, the Company’s wholly owned subsidiary, Drilling Tools International, Inc., entered into

and

consummated the Share Purchase Agreement with CTG, the shareholders of CTG, and a representative of CTG, to acquire 100% of the shares of CTG for a gross cash purchase consideration of £16.2 million, or approximately $20.9 million, based on the British pound sterling to United States dollar exchange rate on the CTG Acquisition Date. CTG is incorporated in the United Kingdom and is the holding company of its wholly owned subsidiary, Deep Casing. Deep Casing specializes in the design, engineering, and manufacturing of a range of patented and innovative products for well construction, well completion, and casing installation processes for the global oil and gas sector. 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 £16.2 million, or approximately $20.9 million, gross cash purchase consideration was used on the CTG Acquisition Date to (i) settle Deep Casing’s outstanding debt of £15.3 million, or approximately $19.8 million; (ii) pay Deep Casing’s legacy shareholders £0.3 million, or approximately $0.3 million, in accordance with the Share Purchase Agreement; and (iii) pay Deep Casing’s acquisition-related costs of £0.6 million, or approximately $0.8 million.

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 assets acquired and liabilities assumed in connection with the CTG Acquisition were recorded at their fair values on the CTG Acquisition Date as follows (in thousands):


Assets
Cash	$	2,674
Accounts receivable, net		3,781
Inventories, net		4,282
Prepaid expenses and other current assets		189
Property, plant and equipment , net		1,647
Operating lease ROU asset		315
Intangible assets, net		8,065
Goodwill		2,618

Total assets acquired	$	23,571

Liabilities
Accounts payable		2,656
Accrued expenses and other current liabilities		(295	)
Current portion of operating lease liabilities		95
Operating lease liabilities, less current portion		180

Total liabilities assumed	$	2,636

Total consideration transferred	$	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. 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.


	Fair value		Useful life (in years)		Fair value methodology
Intangible assets
Trade names	$	819		15	Relief from royalty method
Developed Technology		3,269		20	Relief from royalty method
Customer relationships		3,977		20	Multi-period excess earnings method of the income approach

Total intangible assets	$	8,065

The intangible assets acquired are expected to be amortized over their useful lives on a straight-line basis.

The Company incurred acquisition-related costs of $0.3 million during the three months ended March 31, 2024, which are included in other income (expense), net in the condensed consolidated statement of income and comprehensive income.

The Company’s condensed consolidated statement of income and comprehensive income for the three months ended March 31, 2024 includes CTG’s revenues of $0.8 million and net income of $0.2 from the CTG Acquisition Date through March 31, 2024.

Supplemental Pro Forma Information


	Three months ended March 31,
(in thousands)	2024		2023
Pro forma revenue	$	40,333	$	45,308
Pro forma net income	$	2,420	$	6,287

The unaudited supplemental pro forma financial information in the table above contains material nonrecurring pro forma adjustments to remove interest expense on CTG’s debt as it is assumed that the business combination occurred and the debt was paid off on January 1, 2023.

NOTE 3 – MERGER

As discussed in Note 1 - S

ummary of significant accounting Policies

, on June 20, 2023, the Company completed the Merger. Upon the closing of the Merger, the following occurred:

•

Each share of DTIH common stock issued and outstanding immediately prior to the closing of the Merger, which totaled 52,363,876 shares (other than the shares described for the net exercise of the option and as compensation pursuant to the TSA), was exchanged for the right to receive 0.2282 shares of DTIC Common Stock (the “Common Exchange Ratio”) resulting in the issuance of 11,951,137 shares of DTIC Common Stock.

•

Each share of DTIH redeemable convertible preferred stock issued and outstanding immediately prior to the closing of the Merger, which totaled 20,370,377 shares, was exchanged for the right to receive 0.3299 shares of DTIC Common Stock (the “Preferred Exchange Ratio”) resulting in the issuance of 6,719,641 shares of DTIC Common Stock.

•

Each

non-redeemable

share of ROC common stock issued and outstanding immediately prior to the closing of the Merger, which totaled 3,403,500 shares, was exchanged for, on a

one-for-one

basis, shares of DTIC Common Stock.

•

Each share of ROC common stock subject to possible redemption that was not redeemed prior to the closing of the Merger, which totaled 158,621 shares, was exchanged for, on a

one-for-one

basis, shares of DTIC Common Stock.

•

Each of ROC’s public rights and private rights outstanding immediately prior to the closing of the Merger, which totaled 20,700,000 and 796,000, respectively, were exchanged for, on a

ten-for-one

basis, 2,070,000 and 79,600 shares of DTIC Common Stock, respectively.

•

Prior to the closing of the Merger, one DTIH stock option holder elected to net exercise all of such holder’s options, resulting in the issuance of 158,444 shares of DTIH common stock, which upon the closing of the Merger, were canceled and exchanged for the right to receive 0.2282 shares of DTIC Common Stock per share of DTIH common stock, which resulted in the issuance of 36,163 shares of DTIC Common Stock.

•

DTIH entered into a transaction services agreement (the “TSA”) with Hicks Holdings Operating LLC (“HHLLC”) on January 27, 2012, as amended February 13, 2023, pursuant to which DTIH must pay HHLLC a transaction fee equal to 1.5% of any subsequent transaction, as defined in the TSA. The Merger constitutes a subsequent transaction per the TSA and, therefore, the Board authorized DTIH to issue 1,149,830 shares of DTIH common stock to HHLLC and 328,611 shares of DTIH common stock to a stockholder of DTIH who is affiliated with HHLLC, immediately prior to the closing of the Merger. The DTIH common stock was issued immediately prior to the closing of the Merger and the issuance resulted in the recognition of $2.3 million of stock-based compensation expense within other expense on the consolidated statements of income and comprehensive income for the year ended December 31, 2023. The shares of DTIH common stock issued were exchanged for 337,429 shares of DTIC Common Stock as of the date of the closing of the Merger in accordance with the Common Exchange Ratio. The $2.3 million of stock-based compensation was recorded by taking the $6.95 quoted market price of the Company’s common stock as of the date and time of the closing of the Merger and multiplying this price by the 337,429 shares of DTIC Common Stock Issued.

•

In connection with the Merger, certain holders of DTIH redeemable convertible preferred stockholders entered into exchange agreements (the “Exchange Agreements”) wherein the DTIH redeemable convertible preferred stockholders exchanged their rights to receive a portion of the $11.0 million Aggregate Company Cash Consideration (as defined within the Merger Agreement) for the rights to receive shares of DTIC Common Stock. Immediately following the effectiveness of the Exchange Agreements, which became effective as of the closing of the Merger, the holders of DTIH redeemable convertible preferred stock that participated in the Exchange Agreements held 2,042,181 shares of

DTIC Common Stock as a result of their participation in the Exchange Agreements. In addition, the holders of DTIH redeemable convertible preferred stock that did not participate in the Exchange Agreements were paid $0.2 million from the Aggregate Company Cash Consideration in exchange for the cancellation of their DTIH redeemable convertible preferred stock in connection with the closing of the Merger.

•

In connection with the Merger, ROC entered into subscription agreements (the “Subscription Agreements”) with certain accredited investors (which were related parties of ROC due to their affiliation with ROC Energy Holdings, LLC, which is ROC’s sponsor (“Sponsor” or “ROC Sponsor”)) (the “PIPE Investors”) for an aggregate of 2,970,296 shares of DTIC Common Stock at a price of $10.10 per share, for a total of $30.0 million (the “PIPE Financing”). Upon the closing of the PIPE Financing (which closed in connection with the closing of the Merger), the Company received $25.9 million in cash and $4.1 million worth of shares from the PIPE Financing were used to settle related party promissory notes issued by ROC to the ROC Sponsor and an affiliate of ROC Sponsor.

The proceeds received by the Company from the Merger and PIPE Financing, net of transaction costs, totaled $23.2 million.

The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, ROC was treated as the acquired company for financial reporting purposes (see Note 1,

Summary of Significant Accounting Policies

for further details. Accordingly, for accounting purposes, the Merger was treated as the equivalent of the Company issuing shares for the net assets of ROC, accompanied by a recapitalization. The net assets of ROC were stated at historical cost with no goodwill or other intangible assets recorded.

The following table presents the total DTIC Common Stock outstanding immediately after the closing of the Merger:


Exchange of ROC common stock not subject to possible redemption for DTIC Common Stock upon Merger			3,403,500
Conversion of ROC Public Rights into shares of DTIC Common Stock			2,070,000
Conversion of ROC Private Rights into shares of DTIC Common Stock			79,600
Exchange of ROC common stock subject to possible redemption that was not redeemed for DTIC Common Stock			158,621

Subtotal - Merger, net of redemptions			5,711,721

Issuance of DTIC Common Stock in connection with PIPE Financing			2,970,296

Exchange of DTIH common stock outstanding as of December 31, 2022 for DTIC Common Stock			11,951,137

Exchange of DTIH redeemable convertible preferred stock outstanding as of December 31, 2022 for DTIC Common Stock			6,719,641

Issuance of shares as stock-based compensation to former DTIH stockholders as part of transaction services agreement upon the Merger			337,429

Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements			2,042,181

Net exercise of stock options by DTIH stockholder			36,163

Total - DTIC Common Stock outstanding as a result of Merger, PIPE Financing, DTIH for DTIC share exchanges, transaction services agreement, Exchange Agreements, and exercise of stock options			29,768,568

INTANGIBLE ASSETS, NET (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Components of Intangible Assets, Net

The following table shows the components of intangible assets, net (in thousands):


	Useful Lives (in Years)		March 31, 2024			December 31, 2023
Trade name		10-15	$	2,079		$	1,280
Developed Technology		13-20		3,462			270
Customer Relationships		20		3,882			—

Total intangible assets				9,423			1,550
Less: accumulated amortization				(1,365	)		(1,334	)

Intangible assets, net			$	8,058		$	216

The following table shows the components of intangible assets, net (in thousands):


	Useful Lives (in Years)		December 31, 2023			December 31, 2022
Trade name		10-13	$	1,280		$	1,280
Technology		13		270			270

Total intangible assets				1,550			1,550
Less: accumulated amortization				(1,334	)		(1,287	)

Intangible assets, net			$	216		$	263

BUSINESS COMBINATION - Summary of Unaudited Supplemental Pro Forma Financial Information (Details) - Casing Technologies Group Limited - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Business Acquisition [Line Items]
Pro forma revenue	$ 40,333	$ 45,308
Pro forma net income	$ 2,420	$ 6,287

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES - Summary of Inventories, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Inventory, Net [Abstract]
Raw materials	$ 8,823	$ 5,022	$ 3,377
Finished goods	2,673	16	115
Total inventories	11,496	5,038	3,492
Allowance for obsolete inventory	(55)	(4)	(211)
Inventories, net	$ 11,441	$ 5,034	$ 3,281

BUSINESS COMBINATION - Summary of Common Stock Outstanding Immediately after Merger (Details) - shares	Mar. 31, 2024	Dec. 31, 2023	Jun. 20, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Total - DTIC Common Stock outstanding as a result of Merger, PIPE Financing, DTIH for DTIC share exchanges, transaction services agreement, Exchange Agreements, and exercise of stock options	29,768,568	29,768,568		11,951,137
Merger Agreement
Business Acquisition [Line Items]
Exchange of ROC common stock not subject to possible redemption for DTIC Common Stock upon Merger			3,403,500
Conversion of ROC Public Rights into shares of DTIC Common Stock			2,070,000
Conversion of ROC Private Rights into shares of DTIC Common Stock			79,600
Exchange of ROC common stock subject to possible redemption that was not redeemed for DTIC Common Stock			158,621
Subtotal - Merger, net of redemptions			5,711,721
Issuance of DTIC Common Stock in connection with PIPE Financing			2,970,296
Exchange of DTIH common stock outstanding as of December 31, 2022 for DTIC Common Stock				11,951,137
Exchange of DTIH redeemable convertible preferred stock outstanding as of December 31, 2022 for DTIC Common Stock				6,719,641
Issuance of shares as stock-based compensation to former DTIH stockholders as part of transaction services agreement upon the Merger			337,429
Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible preferred stock in connection with Exchange Agreements			2,042,181
Net exercise of stock options by DTIH stockholder			36,163
Total - DTIC Common Stock outstanding as a result of Merger, PIPE Financing, DTIH for DTIC share exchanges, transaction services agreement, Exchange Agreements, and exercise of stock options			29,768,568

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) £ in Millions	1 Months Ended		3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($) shares	Mar. 31, 2024 GBP (£)	Mar. 31, 2024 USD ($) Segment shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($) shares	Mar. 15, 2024	Dec. 31, 2021 USD ($)
Accounting Policies [Line Items]
Percentage of refundable tax credit against certain employment taxes equal to qualified wages paid					50.00%
Maximum wages per employee annually paid under employee retention credit					$ 10,000
Percentage of refundable tax credit against certain employment taxes extended and expanded qualified wage caps to qualified wages paid					70.00%
Maximum wages per employee per quarterly paid under employee retention credit					$ 10,000
Foreign currency translation adjustment, net of tax			$ (511,000)	$ 0	(114,000)	$ 173,000
Cash equivalents	$ 0		0		0	0
Contract assets	4,600,000		4,600,000		4,200,000	4,800,000
Accounts receivable	35,730,000		35,730,000		29,929,000	$ 28,998,000		$ 20,000,000
Allowance for credit losses	$ 1,400,000		$ 1,400,000		$ 1,500,000
Redeemable convertible preferred stock, shares outstanding \| shares					0	6,719,641
Carrying value of redeemable convertible preferred stock outstanding					$ 0	$ 17,878,000
Preferred stock, shares issued \| shares	0		0		0	0
Number of operating segment \| Segment			1
Number of reportable segment \| Segment			1
Minimum percentage of unrecognized tax benefits that would impact effective tax rate			50.00%		50.00%
Unrecognized tax benefits	$ 0		$ 0		$ 0	$ 0
Unrecognized tax benefits accrued for interest and penalties	0		0		0	0
Realized loss on settlement of interest swap					4,000	0
Assets fair value	1,137,000		1,137,000		888,000	1,619,000
Liabilities fair value	0		0		0
Unrealized foreign currency gain loss			28,000	0
Revenue			$ 36,974,000	$ 40,799,000	$ 152,034,000	$ 129,556,000
CTG
Accounting Policies [Line Items]
Business acquisition percentage							100.00%
Casing Technologies Group Limited
Accounting Policies [Line Items]
Revenue	800,000
Casing Technologies Group Limited \| Deep Casing Tools Limited
Accounting Policies [Line Items]
Purchase consideration	20,900,000	£ 16.2
Redeemable Convertible Preferred Stock
Accounting Policies [Line Items]
Redeemable convertible preferred stock, shares outstanding \| shares					0
Customer Concentration Risk \| Sales Revenue \| Two Customers
Accounting Policies [Line Items]
Concentration risk percentage			30.00%	31.00%		28.00%
Customer Concentration Risk \| Sales Revenue \| Three Customers
Accounting Policies [Line Items]
Concentration risk percentage					39.00%
Customer Concentration Risk \| Vendor Purchases \| One Vendor
Accounting Policies [Line Items]
Concentration risk percentage				11.00%		12.00%
Customer Concentration Risk \| Vendor Purchases \| Two Vendors
Accounting Policies [Line Items]
Concentration risk percentage			30.00%		23.00%
Customer Concentration Risk \| Accounts Receivable
Accounting Policies [Line Items]
Receivables from customers					$ 11,100,000	$ 8,600,000
Customer Concentration Risk \| Accounts Receivable \| One Vendor
Accounting Policies [Line Items]
Receivables from customers	6,600,000		$ 6,600,000		9,300,000
Customer Concentration Risk \| Accounts Payable
Accounting Policies [Line Items]
Amounts due to vendors					300,000	900,000
Customer Concentration Risk \| Accounts Payable \| One Vendor
Accounting Policies [Line Items]
Amounts due to vendors	3,700,000		$ 3,700,000		3,400,000
Interest Rate Swap
Accounting Policies [Line Items]
Unrealized gain (loss) due to change in fair value				$ 100,000	$ 400,000	1,400,000
Interest swap agreement settlement date			Jul. 10, 2023		Jul. 10, 2023
Realized loss on settlement of interest swap					$ (4,000)
Level 3
Accounting Policies [Line Items]
Assets fair value	$ 0		$ 0		0	0
Liabilities fair value					0	0
Prepaid Expenses and Other Current Assets
Accounting Policies [Line Items]
Employee retention credit benefits receivables					0	2,100,000
Selling, General, and Administrative Expenses
Accounting Policies [Line Items]
Employee retention credit benefits					0	4,300,000
United States
Accounting Policies [Line Items]
Revenue			$ 32,300,000	$ 36,600,000	$ 138,300,000	$ 118,300,000
Percentage of revenue			87.00%	90.00%	91.00%	91.00%
Canada
Accounting Policies [Line Items]
Revenue			$ 4,700,000
International
Accounting Policies [Line Items]
Revenue				$ 4,200,000
Percentage of revenue			13.00%	10.00%

EARNINGS PER SHARE - Summary of Computation of Company's Basic and Diluted Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2023

Dec. 31, 2022

Numerator:

Net income

$ 3,126

$ 5,701

$ 14,748

$ 21,080

Less: Redeemable Convertible Preferred Stock dividends

(314)

(1,189)

Net income attributable to common shareholders - basic

3,126

5,387

14,434

19,891

Add: Redeemable Convertible Preferred Stock dividends

314

1,189

Net income attributable to common shareholders - diluted

$ 3,126

$ 5,701

$ 14,748

$ 21,080

Denominator

Weighted-average common shares used in computing earnings per share - basic

^[1]

29,768,568

11,951,137

21,421,610

11,951,137

Weighted-average effect of potentially dilutive securities:

Effect of potentially dilutive redeemable convertible preferred stock

6,719,641

3,175,215

6,719,641

Weighted-average common shares outstanding - diluted

^[1]

29,768,568

19,677,507

25,131,024

19,677,507

Earnings per share - basic

$ 0.11

$ 0.45

$ 0.67

$ 1.66

Earnings per share - diluted

$ 0.11

$ 0.29

$ 0.59

$ 1.07

Time-based Stock Options

Weighted-average effect of potentially dilutive securities:

Effect of potentially dilutive stock options

1,006,729

488,997

1,006,729

Performance-based Stock Options

Weighted-average effect of potentially dilutive securities:

Effect of potentially dilutive stock options

45,202

[1]	Shares of legacy redeemable convertible preferred stock and legacy common stock have been retroactively restated to give effect to the Merger.

SUBSEQUENT EVENTS	3 Months Ended	12 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2024	Dec. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated all events occurring through the date on which the unaudited condensed consolidated financial statements were issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.	NOTE 18 – SUBSEQUENT EVENTS Acquisition of Casing Technologies Group Limited On March 18, 2024, the Company announced its entry into a share purchase agreement (the “CTG Purchase Agreement”) to acquire one hundred percent (100%) of the shares of Casing Technologies Group Limited, a Scottish limited company (“CTG”). CTG wholly owns Deep Casing Tools Limited, an energy technology development company. The initial accounting for this business combination is in process which includes conducting a valuation analysis to value the assets and liabilities assumed as a result of the transaction. As such, the impact on the consolidated financial statements cannot be estimated at this time. Issuance of Stock Options On February 14, 2024, the Company issued stock options to members of the Company’s management team, including: (i) 1,000,000 stock options to Robert Prejean, President and Chief Executive Officer (the “Prejean 2024 Stock Options”), (ii) 380,000 stock options to David Johnson, Chief Financial Officer (the “Johnson 2024 Stock Options”), and (iii) 300,000 stock options to Michael Domino, President of the Directional tool Rentals Division (the “Domino 2024 Stock Options,” and together with the Prejean 2024 Stock Options and the Johnson 2024 Stock Options, the “2024 Stock Options”). Each of the 2024 Stock Options vest in substantially equal installments on each of the first three (3) anniversaries of the grant date. The 2024 Stock Options are exercisable at a price of $3.02 per share. Credit Agreement On March 15, 2024, the Company refinanced its revolving credit facility by entering into a second amended and restated revolving credit and term loan facility with PNC Bank, National Association (the “Credit Facility”). The Credit Facility provides for a revolving line of credit in a principal amount of up to $80,000,000 and a single draw term loan in a principal amount of $25,000,000 and matures in March 2029 (the “Refinancing”). Acquisition of Superior Drilling Products, Inc. On March 6, 2024, the Company announced its entry into an Agreement and Plan of Merger (the “SDPI Merger Agreement”) with Superior Drilling Products, Inc. (“SDPI”), DTI Merger Sub I, Inc. (“Merger Sub I”), and DTI Merger Sub II, LLC (“Merger Sub II”), pursuant to which, among other things, on the terms and subject to the conditions set forth in the SDPI Merger Agreement, (i) Merger Sub I will be merged with and into SDPI (the “First Event”), with SDPI continuing as the surviving corporation (the “Initial Surviving Corporation”), (ii) the Initial Surviving Corporation will be merged with Merger Sub II (the “Second Event,” and together with the First Event, the “SDPI Merger”), with Merger Sub II continuing as the surviving limited liability company (the “Surviving Company”), and (iii) following the consummation of the SDPI Merger, all of the property, rights, powers, privileges, and franchises of SDPI, the Initial Surviving Company, and the Surviving Company shall be vested in the Surviving Company as a wholly owned subsidiary of the Company. The consummation of the SDPI Merger is subject to certain customary mutual conditions, including the approval of SDPI’s shareholders holding at least a majority of the outstanding shares of SDPI common stock entitled to vote on the adoption of the SDPI Merger Agreement. The initial accounting for this business combination is in process which includes conducting a valuation analysis to value the assets and liabilities assumed as a result of the transaction. As such, the impact on the consolidated financial statements cannot be estimated at this time.

Cover Page	12 Months Ended
Cover Page	Dec. 31, 2023
Document Information [Line Items]
Document Type	S-4/A
Entity Registrant Name	DRILLING TOOLS INTERNATIONAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-2488708
Entity Address, Address Line One	3701 Briarpark Drive
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77042
City Area Code	832
Local Phone Number	742-8500
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001884516
Amendment Flag	true
Entity Primary SIC Number	1389
Amendment Description	Amendment No. 1
Business Contact [Member]
Document Information [Line Items]
Entity Address, Address Line One	3701 Briarpark Drive
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77042
City Area Code	832
Local Phone Number	742-8500
Contact Personnel Name	R. Wayne Prejean

BUSINESS COMBINATION (Details) $ in Thousands, £ in Millions			1 Months Ended		3 Months Ended		12 Months Ended
	Mar. 15, 2024 USD ($) Patent	Mar. 15, 2024 GBP (£) Patent	Mar. 31, 2024 USD ($)	Mar. 31, 2024 GBP (£)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Acquisition-related costs					$ 300
Revenue					36,974	$ 40,799	$ 152,034	$ 129,556
Net income					$ 3,126	$ 5,701	$ 14,748	$ 21,080
Casing Technologies Group Limited
Business Acquisition [Line Items]
Revenue			$ 800
Net income			200
Casing Technologies Group Limited \| CTG Purchase Agreement
Business Acquisition [Line Items]
Business acquisition percentage	100.00%	100.00%
Gross cash purchase consideration	$ 20,900	£ 16.2
Number of intellectual property rights patent \| Patent	60	60
Casing Technologies Group Limited \| Deep Casing
Business Acquisition [Line Items]
Gross cash purchase consideration			$ 20,900	£ 16.2
Settlement of outstanding debt	$ (19,800)	£ (15.3)
Payment to legacy shareholders	300	0.3
Acquisition-related costs	$ 800	£ 0.6

INCOME TAXES - Schedule of Reconciliation of Federal Statutory Rate to Company's Effective Tax Rate (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
U.S. federal tax benefit at statutory rate	21.00%		21.00%	21.00%
State taxes, net of federal benefit			1.90%	2.10%
Permanent differences			3.60%	2.00%
Foreign rate differential			0.20%	0.50%
Valuation allowance			0.00%	(2.10%)
Other			(1.20%)	(9.00%)
Effective tax rate	23.10%	23.20%	25.50%	14.50%

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES

NOTE 5 – BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES

Inventories, net

The following table shows the components of inventory (in thousands):


	March 31, 2024			December 31, 2023
Raw materials	$	8,823		$	5,022
Finished goods		2,673			16
Total inventories		11,496			5,038

Allowance for obsolete inventory		(55	)		(4	)

Inventories, net	$	11,441		$	5,034

Prepaid expenses and other current assets

The following table shows the components of prepaid e

enses and other current assets (in thousands):


	March 31, 2024		December 31, 2023
Prepaid expenses:
Deposits on inventory	$	1,437	$	2,146
Prepaid income tax		362		362
Prepaid insurance		530		1,110
Prepaid rent		399		372
Prepaid equipment		331		331
Prepaid other		172		214
Other current assets:
Other	$	—	$	18

Total	$	3,231	$	4,553

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):


	March 31, 2024			December 31, 2023
Accrued expenses:
Accrued compensation and related benefits	$	3,878		$	4,999
Accrued insurance		435			978
Accrued transaction advisory fees		1,000			1,000
Accrued professional services		72			189
Accrued interest		126			58
Accrued property taxes		314			60
Accrued monitoring fees		373			373
Other		760			147
Other current liabilities:
Income tax payable	$	1,757		$	1,586
Sales tax payable		(413	)		71
Unbilled lost-in-hole revenue		96			76
Deferred revenue		44			1,042

Total accrued expenses and other current liabilities	$	8,442		$	10,579

NOTE 5 – BALANCE SHEET DETAILS - CURRENT ASSETS AND CURRENT LIABILITIES

Inventories, net

The following table shows the components of inventory (in thousands):


	December 31, 2023			December 31, 2022
Raw materials	$	5,022		$	3,377
Finished goods		16			115

Total inventories		5,038			3,492

Allowance for obsolete inventory		(4	)		(211	)

Inventories, net		5,034			3,281

Prepaid expenses and other current assets

The following table shows the components of prepaid expenses and other current assets (in thousands):


	December 31, 2023		December 31, 2022
Prepaid expenses:
ERC benefits receivable	$	—	$	2,117
Deposits on inventory		2,146		680
Prepaid income tax		362		—
Prepaid insurance		1,110		358
Prepaid rent		372		381
Prepaid equipment		331		179
Prepaid other		214		173
Other current assets:
Interest rate swap asset	$	—	$	476
Other		18		17

Total	$	4,553	$	4,381

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):


	December 31, 2023		December 31, 2022
Accrued expenses:
Accrued compensation and related benefits	$	4,999	$	3,392
Accrued insurance		978		525
Accrued transaction advisory fees		1,000		—
Accrued professional services		189		509
Accrued interest		58		62
Accrued property taxes		60		41
Accrued monitoring fee		373
Other		147		38
Other current liabilities:
Income tax payable	$	1,586	$	1,780
Sales tax payable		71		587
Unbilled lost-in-hole revenue		76		282
Deferred revenue		1,042		83
Total accrued expenses and other current liabilities	$	10,579	$	7,299

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Asset and Liabilities Measured at Fair Value (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	$ 1,137,000	$ 888,000	$ 1,143,000
Total assets at fair value	1,137,000	888,000	1,619,000
Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap			476,000
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	1,137,000	888,000	1,143,000
Total assets at fair value	1,137,000	888,000	1,143,000
Level 1 \| Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap			0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	0	0	0
Total assets at fair value	0	0	476,000
Level 2 \| Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap			476,000
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, equity securities	0	0	0
Total assets at fair value	$ 0	$ 0	0
Level 3 \| Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap			$ 0

- Definition

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480524/946-210-50-12

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Paragraph 6
-Subparagraph (e)
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-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
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-Section 55
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147480493/946-210-55-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Subparagraph (a)(1)
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-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-URI https://asc.fasb.org//1943274/2147480524/946-210-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Subparagraph (f)
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-10

+ Details

REVOLVING CREDIT FACILITY AND TERM LOAN (Details) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Dec. 31, 2023	Mar. 15, 2024	Jun. 20, 2023	Dec. 31, 2022	Dec. 31, 2015
Line of Credit Facility [Line Items]
Line of credit			$ 0			$ 18,349,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Revolving line of credit			$ 60,000,000	$ 80,000,000		$ 60,000,000	$ 60,000,000
Unfunded capital expenditures requirement removed					$ 20,000,000
Sublimit removed					$ 9,000,000
Credit Facility, collateral		The Credit Facility is collateralized by substantially all the assets of the Company and matures March 15, 2029.	The Credit Facility is collateralized by substantially all the assets of the Company and matures December 31, 2025.
Line of credit	$ 0	$ 0	$ 0
Line of credit				$ 25,000,000
Date the credit facility matures	Mar. 31, 2029
Revolving Credit Facility \| SOFR
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)		9.28%	8.40%
Revolving Credit Facility \| Base Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)		2.00%	2.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Accounting Policies [Abstract]

Organization and Nature of Operations

Organization and Structure

Merger

for further discussion.

The Company’s United States (“U.S.”) operations have locations in Texas, California, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming. The Company’s international operations are located in Canada with additional stocking points in Europe and the Middle East. Operations outside the U.S. are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws and possible limitations on foreign investment. The Company does not engage in hedging activities to mitigate its exposure to fluctuations in foreign currency exchange rates.

Basis of Presentation

Unaudited Interim Financial Information

COVID-19 Related Credits and Relief

COVID-19

Related Credits and Relief

As a response to the

COVID-19

Emerging Growth Company

non-emerging

Emerging Growth Company

non-emerging

Use of Estimates

Principles of Consolidation

Foreign Currency Translation and Transactions

Foreign Currency Translations and Transactions

Revenue Recognition

Tool Rental Services

Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842.

The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its unaudited condensed consolidated balance sheet.

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, and other charges for made to order product sales. Product sales are accounted for under Topic 606.

lost-in-hole,

lost-in-transit

Revenue per geographic location

Revenue Recognition

Tool Rental Services

Tool rental services consist of rental services, inspection services, and repair services. Tool rental services are accounted for under Topic 842.

Owned tool rentals represent the most significant revenue type and are governed by the Company’s standard rental contract. The Company accounts for such rentals as operating leases. The lease terms are included in the contracts, and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. Owned tool rentals represent revenue from renting tools that the Company owns. The Company does not generally provide an option for the lessee to purchase the rented equipment at the end of the lease.

The Company records the amounts billed to customers in excess of recognizable revenue as deferred revenue on its consolidated balance sheet.

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, and other charges for made to order product sales. Product sales are accounted for under Topic 606.

lost-in-hole,

lost-in-transit

Contract Assets and Liabilities

Contract Assets and Contract Liabilities

Contract Assets and Liabilities

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. As of December 31, 2023 and 2022, the Company did not have any material contract liabilities. All deferred revenue were expected to be recognized during the following 12 months, and they were recorded in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

Cash and Cash Equivalents

Accounts Receivable, net

Allowance for Credit Losses

As of March 31, 2024 and December 31, 2023, the allowance for credit losses totaled $1.4 million and $1.5 million, respectively.

Accounts Receivable and Allowance for Credit Losses

The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within 30 to 60 days of the period in which the corresponding sales or rentals occur and do not bear interest. They are recorded at net realizable value less an allowance for credit losses and are classified as account receivable, net on the consolidated balance sheets.

The Company adopted ASU

2016-13,

Financial Instruments - Credit Losses

The Company is not party to any

off-balance

sheet arrangements that would require an allowance for credit losses in accordance with this accounting standard.

The beginning accounts receivable balance as of January 1, 2022 was $20.0 million. The changes in the allowance for credit losses for the year ended December 31, 2023 were as follows (in thousands):

Allowance for credit losses


Balance at December 31, 2021	$	(1,222	)
Cumulative effect adjustments upon adoption of ASU 2016-13		—
Additions during 2022		(336	)
Utilization of allowance for credit losses		60

Balance at December 31, 2022		(1,498	)

Additions during 2023		(117	)
Utilization of allowance for credit losses		157

Balance at December 31, 2023		(1,458	)

Business Combinations

Inventories, net

Inventories are stated at the lower of cost or net realizable value. Cost is determined by using the specific identification method or the

first-in-first-out

Inventories, net

Property, Plant and Equipment, net

Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost.

Property, Plant and Equipment

Property, plant and equipment acquired as part of a business acquisition is recorded at acquisition date fair value with subsequent additions at cost.

Leases

The Company adopted ASC 842,

Leases

use-of-hindsight

non-lease

components for all leases.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease

right-of-use

asset is tested for impairment in accordance with Accounting Standards Codification Topic 360,

Property, Plant, and Equipment.

Lessor Accounting

We recognized operating lease revenue within “Tool rental” on the unaudited condensed consolidated statements of income and comprehensive income.

Leases

The Company adopted ASC 842,

Leases

use-of-hindsight

non-lease

components for all leases.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease

right-of-use

asset is tested for impairment in accordance with ASC Topic 360,

Property, Plant, and Equipment.

Lessor Accounting

We recognized operating lease revenue within “Tool rental” on the consolidated statements of income and comprehensive income.

Intangible Assets

Intangible assets with finite useful lives include customer relationships, trade name, patents,

non-compete

Intangibles

Intangible assets with finite useful lives include customer relationships, trade name, patents,

non-compete

Goodwill

Accounting for Impairment of Long-lived Assets

For the three months ended March 31, 2024 and 2023, management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets.

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. The recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by 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 by which the carrying amount of the assets exceeds the fair value of the asset or asset group.

For the year ended December 31, 2023 and 2022, management determined that there were no triggering events necessitating impairment testing of property, plant, and equipment or intangible assets.

Investments - Equity Securities

Investment - Equity Securities

Redeemable Convertible Preferred Stock

Preferred Stock

The Board of the Company has not issued any shares of any classes or series of preferred stock as of December 31, 2023, and through the date these financial statements were available to be issued.

Cost of Revenue

Stock-Based Compensation

718-10-35-8,

of the award as if the award was,

in-substance,

Stock-Based Compensation

Earnings Per Share

Basic earnings per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted earnings is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. 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. For the purposes of this calculation, outstanding stock options and redeemable convertible preferred stock are considered potential dilutive common stock and are excluded from the computation of net loss per share if their effect is anti-dilutive.

Income Taxes

The Company is subject to state income taxes in various jurisdictions.

two-step

Company believes there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date.

Income Taxes

The Company is subject to state income taxes in various jurisdictions.

The Company follows guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a

two-step

process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits and upon examination by the taxing authorities. 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, 2023 and 2022. The Company believes there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date.

The Company records income tax related interest and penalties, if applicable, as a component of the provision for income tax expense. 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, 2023 and 2022.

Derivative Financial Instruments

The Company’s interest rate swap is a

pay-fixed,

marked-to-market

at the end of each quarter and the realized/unrealized gain or loss is recorded as interest expense.

Derivative Financial Instruments

The Company’s interest rate swap is a

pay-fixed,

receive-variable interest rate swap based on SOFR swap rate. The SOFR swap rate is observable at commonly quoted intervals for the full term of the swap and therefore is considered a Level 2 item. For interest rate swaps in an asset position, the credit standing of the counterparty is analyzed and factored into the fair value measurement of the asset. The impact of the Company’s creditworthiness has also been factored into the fair value measurement of the interest rate swap in a liability position. For the years ended December 31, 2023 and 2022, the application of valuation techniques applied to similar assets and liabilities has been consistent.

marked-to-market

at the end of each quarter and the realized/unrealized gain or loss is recorded as interest expense.

Fair Value Measurements

Level

– Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

Level

– Valuation inputs are unobservable and significant to the fair value measurement.

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,137	$	—	$	—	$	1,137

Total assets at fair value	$	1,137	$	—	$	—	$	1,137


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888

As of March 31, 2024 and December 31, 2023, the Company did not have any Level 2 or 3 assets or liabilities.

Fair Value Measurements

Level

– Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

Level

– Valuation inputs are unobservable and significant to the fair value measurement.

Asset and liabilities measured at fair value are summarized as follows (in thousands):


	Assets at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	888	$	—	$	—	$	888

Total assets at fair value	$	888	$	—	$	—	$	888


	Assets at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Investments, equity securities	$	1,143	$	—	$	—	$	1,143
Interest rate swap		—		476		—		476

Total assets at fair value	$	1,143	$	476	$	—	$	1,619

As of December 31, 2023 and 2022, the Company did not have any Level 3 assets or liabilities.

Fair value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, and accounts payable. The carrying amount of such instruments approximates fair value due to their short-term nature.

Fair Value of Financial Instruments

Concentration of Credit Risk and Other Risks and Uncertainties

Concentration of Credit Risk

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. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operations decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates in one operating and reportable segment.

Accounting Standards Issued But Not Yet Effective

In December 2023, FASB issued Accounting Standard Update (“ASU”)

2023-09,

In November 2023, FASB issued ASU

2023-07,

Accounting Standards Issued Not Yet Effective

In December 2023, FASB issued Accounting Standard Update (“ASU”)

2023-09,

In November 2023, FASB issued ASU

2023-07,

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2023

Dec. 31, 2022

Revenue, net:

Revenue, net

$ 36,974

$ 40,799

$ 152,034

$ 129,556

Operating costs and expenses:

Selling, general, and administrative expense

17,942

18,423

68,264

51,566

Depreciation and amortization expense

5,365

5,015

20,352

19,709

Total operating costs and expenses

31,844

32,878

124,135

104,279

Income (loss) from operations

5,130

7,921

27,899

25,277

Other expense, net:

Interest expense, net

(182)

(573)

(1,103)

(477)

Gain (loss) on sale of property

101

127

Loss on asset disposal

(9)

(489)

Unrealized gain (loss) on equity securities

249

(33)

(255)

234

Other expense, net

(6,359)

(384)

Other income (expense), net

(1,125)

Total other expense, net

(1,067)

(497)

(8,105)

(500)

Income before income tax expense

4,063

7,424

19,794

24,777

Income tax expense

(937)

(1,723)

(5,046)

(3,698)

Net income

3,126

5,701

14,748

21,080

Accumulated dividends on redeemable convertible preferred stock

314

1,189

Net income available to common shareholders

$ 3,126

$ 5,387

$ 14,434

$ 19,891

Basic earnings per share

$ 0.11

$ 0.45

$ 0.67

$ 1.66

Diluted earnings per share

$ 0.11

$ 0.29

$ 0.59

$ 1.07

Basic weighted-average common shares outstanding

^[1]

29,768,568

11,951,137

21,421,610

11,951,137

Diluted weighted-average common shares outstanding

^[1]

29,768,568

19,677,507

25,131,024

19,677,507

Comprehensive income:

Net income

$ 3,126

$ 5,701

$ 14,748

$ 21,080

Foreign currency translation adjustment, net of tax

(511)

(114)

173

Net comprehensive income

2,615

5,701

14,634

21,253

Tool Rental

Revenue, net:

Revenue, net

29,966

32,276

119,239

99,018

Operating costs and expenses:

Operating costs and expenses

7,001

8,137

30,960

27,581

Product Sale

Revenue, net:

Revenue, net

7,008

8,523

32,795

30,538

Operating costs and expenses:

Operating costs and expenses

$ 1,536

$ 1,303

$ 4,559

$ 5,423

[1]	Shares of legacy redeemable convertible preferred stock and legacy common stock have been retroactively restated to give effect to the Merger.

INVESTMENTS - EQUITY SECURITIES (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Cost and Fair Value of Investments in Equity Securities

The following table shows the cost and fair value of the Company’s investments in equity securities (in thousands):


	Cost		Unrealized Gain			Fair Value
March 31, 2024	$	999	$	138		$	1,137


	Cost		Unrealized Loss			Fair Value
December 31, 2023	$	999	$	(111	)	$	888

The following table shows the cost and fair value of the Company’s investments in equity securities

(in

housands


	Cost		Unrealized Loss			Fair Value
December 31, 2023	$	999	$	(111	)	$	888


	Cost		Unrealized Gain		Fair Value
December 31, 2022	$	999	$	144	$	1,143

REVENUE - Summary of Disaggregation of Revenues by Category (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 36,974	$ 40,799	$ 152,034	$ 129,556
Tool Rental Services
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	29,966	32,276	119,239	99,018
Product Sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 7,008	$ 8,523	$ 32,795	$ 30,538

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

RELATED PARTY TRANSACTIONS	3 Months Ended	12 Months Ended
RELATED PARTY TRANSACTIONS	Mar. 31, 2024	Dec. 31, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 12 – RELATED PARTY TRANSACTIONS Management fees For the three months ended March 31, 2024 and 2023, management fees paid to Hicks Holdings Operating LLC, a shareholder of the Company, were approximately $0.2 million and $0.2 million, respectively. Management fees paid to a shareholder are included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income. Director fees For the three months ended March 31, 2024 and 2023, director fees paid to Board of Directors were approximately $85 thousand and $45 thousand , respectively. Management fees paid to a shareholder are included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income. Leases For the three months ended March 31, 2024 and 2023, the Company paid rent expense to Cree Investments, LLC, a shareholder of the Company, of approximately $13 thousand and $13 thousand, respectively, relating to the lease of a building. Future minimum lease payments related to this lease are included in the future minimum lease schedule in Note 13 - Leases .	NOTE 14 – RELATED PARTY TRANSACTIONS Management fees For the years ended December 31, 2023 and 2022, management fees paid to Hicks Holdings Operating LLC, a shareholder of the Company, were approximately $1.1 million and $0.4 million, respectively. 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, 2023 and 2022, director fees paid to our Board of Directors were approximately $0.2 million and $0.1 million, respectively. Director fees are included in selling, general and administrative expense in the accompanying consolidated statements of income and comprehensive income. Leases For the years ended December 31, 2023 and 2022, the Company paid rent expense to Cree Investments, LLC, a shareholder of the Company, of approximately $51 thousand and $51 thousand, respectively, relating to the lease of a building. Future minimum lease payments related to this lease are included in the future minimum lease schedule in Note 7, Leases . Tools For the years ended December 31, 2022, the Company paid $4 thousand to Heath Woodrum, a shareholder of the Company, for tools. Promissory Notes Upon consummation of the Merger on June 20, 2023, the Company issued shares of DTIC Common Stock in connection with the PIPE Financing to payoff convertible promissory notes which were issued to an affiliate of the ROC Sponsor on December 6, 2022 and March 2, 2023, respectively. The notes did not bear interest and were in the amounts of $2.1 million and $2.1 million, respectively. Working Capital Loan Prior to the Merger on June 20, 2023, ROC paid the remaining outstanding principal amount owed to an affiliate of the ROC Sponsor in the amount of $0.4 million for a loan to fund working capital deficiencies and finance transaction costs in connection with the Merger. The loan did not bear interest.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

INTANGIBLE ASSETS, NET

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

NOTE 7 – INTANGIBLE ASSETS, NET

The following table shows the components of intangible assets, net (in thousands):


	Useful Lives (in Years)		March 31, 2024			December 31, 2023
Trade name		10-15	$	2,079		$	1,280
Developed Technology		13-20		3,462			270
Customer Relationships		20		3,882			—

Total intangible assets				9,423			1,550
Less: accumulated amortization				(1,365	)		(1,334	)

Intangible assets, net			$	8,058		$	216

Total amortization expense for the three months ended March 31, 2024 and 2023 was approximately $31 thousand and $12 thousand, respectively.

NOTE 7 -INTANGIBLES, NET

The following table shows the components of intangible assets, net (in thousands):


	Useful Lives (in Years)		December 31, 2023			December 31, 2022
Trade name		10-13	$	1,280		$	1,280
Technology		13		270			270

Total intangible assets				1,550			1,550
Less: accumulated amortization				(1,334	)		(1,287	)

Intangible assets, net			$	216		$	263

Total amortization expense for the year ended December 31, 2023 and 2022 was approximately $47 thousand and $0.1 million respectively.

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Provision for (Benefit From) Income Taxes

he geographical breakdown of the Company’s income before provision for income taxes was as follows (in thousands):


	Year Ended December 31,
	2023		2022
Domestic	$	17,352	$	19,094
International		2,442		5,683

Profits before provision for income taxes	$	19,794	$	24,777

Summary of Income Tax Expense Attributable to Income From Continuing Operations

Income tax expense attributable to income from continuing operations consists of (in thousands):


	Year Ended December 31,
	2023			2022
Current provision for income taxes:
Federal	$	162		$	702
Foreign		656			1,444
State		785			472

Total current		1,603			2,618
Deferred tax expense (benefit):
Federal		3,826			574
Foreign		34			488
State		(417	)		18

Total deferred tax expense:		3,443			1,080

Total provision for income taxes	$	5,046		$	3,698

Schedule of Reconciliation of Federal Statutory Rate to Company's Effective Tax Rate

The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate:


	Year Ended December 31,
	2023			2022
U.S. federal tax benefit at statutory rate		21.0	%		21.0	%
State taxes, net of federal benefit		1.9	%		2.1	%
Permanent differences		3.6	%		2.0	%
Foreign rate differential		0.2	%		0.5	%
Valuation allowance		0.0	%		-2.1	%
Other		-1.2	%		-9.0	%

Effective tax rate		25.5	%		14.5	%

Schedule of Deferred Tax Assets and Deferred Tax Liabilities


	Year Ended December 31,
	2023			2022
Deferred tax assets
Net operating loss carryforward	$	1,544		$	3,378
Allowance for doubtful accounts		333			323
Share-based compensation		1,451			941
Bonus accrual		440			599
Inventory		130			53
Intangible assets		1,129			1,152
Other		—			140

Gross deferred tax assets		5,028			6,587
Valuation allowance		—			—

Net deferred tax assets		5,028			6,587
Deferred tax liabilities
Depreciation on property, plant, and equipment		(11,391	)		(8,958	)
Withholding tax on unremitted earnings		(264	)		(72	)
Other		—			(742	)

Deferred tax liabilities		(11,655	)		(9,772	)

Net deferred liabilities	$	(6,627	)	$	(3,185	)