Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 1)¹

Superior Drilling Products, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

868153107

(CUSIP Number)

jeffrey E. eberwein

lone star value management, LLC

53 Forest Avenue, 1^st Floor

Old Greenwich, Connecticut 06870

(203) 489-9500

 

STEVE WOLOSKY, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

May 17, 2017

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

	1		NAME OF REPORTING PERSON
				LONE STAR VALUE INVESTORS, LP
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,997,458
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,997,458
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,997,458
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.3%
	14		TYPE OF REPORTING PERSON
				PN

  

	1		NAME OF REPORTING PERSON
				LONE STAR VALUE CO-INVEST I, LP
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				- 0 -
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				0%
	14		TYPE OF REPORTING PERSON
				PN

  

 

	1		NAME OF REPORTING PERSON
				LONE STAR VALUE INVESTORS GP, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,997,458
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,997,458
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,997,458
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.3%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				LONE STAR VALUE MANAGEMENT, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF, OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				CONNECTICUT
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							2,264,198
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							2,264,198
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				2,264,198
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				9.4%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				JEFFREY E. EBERWEIN
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☒
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				USA
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							2,264,198
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							-0-
PERSON WITH				9		SOLE DISPOSITIVE POWER
							2,264,198
				10		SHARED DISPOSITIVE POWER
							-0-
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				2,264,198
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				9.4%
	14		TYPE OF REPORTING PERSON
				IN

  

 

The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.

Item 2.

Identity and Background.

Item 2(e) is hereby amended and restated to read as follows:

Other than as set forth herein, no Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Lone Star Value Management and Mr. Eberwein are each subject to a Securities and Exchange Commission (“SEC”) administrative order, dated February 14, 2017 (File No. 3-17847), relating to alleged violations of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules promulgated thereunder, including failing to disclose the members of a stockholder group, and further allegations that Mr. Eberwein violated Section 16(a) of the Exchange Act and the rules promulgated thereunder, including failing to timely file initial statements of beneficial ownership on Form 3 and changes thereto on Form 4. Without admitting or denying any violations, (i) Lone Star Value Management agreed to cease and desist from committing or causing any violations of Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 promulgated thereunder, and paid a civil penalty of $120,000 to the SEC and (ii) Mr. Eberwein agreed to cease and desist from committing or causing any violations of (x) Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 promulgated thereunder and (y) Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 promulgated thereunder, and paid a civil penalty to the SEC in the amount of $90,000.

 

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The Shares purchased by Lone Star Value Investors, Lone Star Value Co-Invest I and held in the Separately Managed Account were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted, as set forth in Schedule A, which is incorporated by reference herein. The aggregate purchase price of the 1,997,458 Shares beneficially owned by Lone Star Value Investors is approximately $2,199,201, including brokerage commissions. The aggregate purchase price of the 266,740 Shares held in the Separately Managed Account is approximately $541,480, including brokerage commissions.

Item 4.

Purpose of Transaction

Item 4 is hereby amended to add the following:

The Reporting Persons intend to continue to engage in general discussions with the Issuer’s Board of Directors (the “Board”) and management team, including with respect to Board composition.

 

Item 5.

Interest in Securities of the Issuer.

Items 5(a)-(c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon 24,197,148 Shares outstanding as of May 11, 2017, which is the total number of Shares reported outstanding in the Issuer’s Form 10Q filed with the Securities and Exchange Commission on May 15, 2017.

A.

Lone Star Value Investors

(a)

As of the close of business on May 18, 2017, Lone Star Value Investors beneficially owned 1,997,458 Shares.

Percentage: Approximately 8.3%

(b)

1. Sole power to vote or direct vote: 1,997,458 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,997,458 4. Shared power to dispose or direct the disposition: 0

 

(c)

The transactions in the Shares by Lone Star Value Investors during the past 60 days are set forth in Schedule A and are incorporated herein by reference.

B.

Lone Star Value Co-Invest I

(a)

As of the close of business on May 18, 2017, Lone Star Value Co-Invest I did not beneficially own any Shares.

Percentage: 0%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 0

 

(c)

The transactions in the Shares by Lone Star Value Co-Invest I during the past 60 days are set forth in Schedule A and are incorporated herein by reference.

C.

Lone Star Value GP

(a)

Lone Star Value GP, as the general partner of Lone Star Value Investors and Lone Star Value Co-Invest I, may be deemed the beneficial owner of the 1,997,458 Shares owned by Lone Star Value Investors.

Percentage: Approximately 8.3%

(b)

1. Sole power to vote or direct vote: 1,997,458 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,997,458 4. Shared power to dispose or direct the disposition: 0

 

 

(c)

Lone Star Value GP has not entered into any transactions in the Shares during the last 60 days. The transactions in the Shares on behalf of Lone Star Value Investors and Lone Star Value Co-Invest I during the past 60 days are set forth in Schedule A and are incorporated herein by reference.

D.

Lone Star Value Management

(a)

As of the close of business on May 18, 2017, 266,740 Shares were held in the Separately Managed Account. Lone Star Value Management, as the investment manager of Lone Star Value Investors, Lone Star Value Co-Invest I and the Separately Managed Account, may be deemed the beneficial owner of the (i) 1,997,458 Shares owned by Lone Star Value Investors and (ii) 266,740 Shares held in the Separately Managed Account.

Percentage: Approximately 9.4%

(b)

1. Sole power to vote or direct vote: 2,264,198 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 2,264,198 4. Shared power to dispose or direct the disposition: 0

 

(c)

Lone Star Value Management has not entered into any transactions in the Shares during the last 60 days. The transactions in the Shares on behalf of Lone Star Value Investors and Lone Star Value Co-Invest I during the past 60 days are set forth in Schedule A and are incorporated herein by reference.

E.

Mr. Eberwein

(a)

Mr. Eberwein, as the manager of Lone Star Value GP and sole member of Lone Star Value Management, may be deemed the beneficial owner of the (i) 1,997,458 Shares owned by Lone Star Value Investors and (ii) 266,740 Shares held in the Separately Managed Account.

Percentage: Approximately 9.4%

(b)

1. Sole power to vote or direct vote: 2,264,198 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 2,264,198 4. Shared power to dispose or direct the disposition: 0

(c)

Mr. Eberwein has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares on behalf of Lone Star Value Investors and Lone Star Value Co-Invest I during the past 60 days are set forth in Schedule A and are incorporated herein by reference.

 

 

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: May 19, 2017

	Lone Star Value Investors, LP
	By:	Lone Star Value Investors GP, LLC General Partner
	By:	/s/ Jeffrey E. Eberwein
		Name:	Jeffrey E. Eberwein
		Title:	Manager

 

 

	Lone Star Value Co-Invest I, LP
	By:	Lone Star Value Investors GP, LLC General Partner
	By:	/s/ Jeffrey E. Eberwein
		Name:	Jeffrey E. Eberwein
		Title:	Manager

 

 

	Lone Star Value Investors GP, LLC
	By:	/s/ Jeffrey E. Eberwein
		Name:	Jeffrey E. Eberwein
		Title:	Manager

 

 

	Lone Star Value Management, LLC
	By:	/s/ Jeffrey E. Eberwein
		Name:	Jeffrey E. Eberwein
		Title:	Sole Member

 

 

	/s/ Jeffrey E. Eberwein
	Jeffrey E. Eberwein

 

 

SCHEDULE A

Transactions in the Securities of the Issuer during the Past 60 Days

Shares of Common Stock Purchased/(Sold)

Price Per Share ($)

Date of Purchase / Sale

 

LONE STAR VALUE INVESTORS, LP

 

(155,281)	0.8209(1)	05/12/2017
(10,000)	0.7957(2)	05/16/2017
(50,000)	0.7801(3)	05/18/2017

 

LONE STAR VALUE CO-INVEST I, LP

 

5,000	0.8043(4)	04/26/2017
(25,000)	0.8622(5)	05/12/2017
(3,868)	0.8410(6)	05/15/2017
(26,132)	0.8093(7)	05/16/2017
(43,000)	0.7794(8)	05/17/2017
(107,000)	0.7630(9)	05/18/2017

⁽¹⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7800 to $0.9400. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽²⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7700 to $0.8000. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽³⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7800 to $0.7900. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽⁴⁾ The price reported is a weighted average price. These Shares were purchased in multiple transactions at prices ranging from $0.7997 to $0.8196. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of Shares purchased at each separate price within the range set forth in this footnote.

⁽⁵⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.8500 to $0.9000. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽⁶⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.8342 to $0.8500. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽⁷⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7764 to $0.8700. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽⁸⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7383 to $0.8900. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

⁽⁹⁾ The price reported is a weighted average price. These Shares were sold in multiple transactions at prices ranging from $0.7500 to $0.8014. The Reporting Persons undertake to provide to the Issuer, any security holder of the Issuer, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.