Drilling Tools International Corp

Current report

The Saltire Acquisition is subject to conditions, some of which are outside our control, and may not be completed on the anticipated timeline or at all.

Current report

Completion of the Saltire Acquisition is subject to conditions, including the effectiveness of our registration statement on Form S-4, approval by our stockholders of the share issuance and the Section 204 ratification (or a Section 205 validation order), Nasdaq listing approval and the Buyer obtaining the required financing. The Purchase Agreement does not permit our Board to change its recommendation in response to a superior proposal and does not provide a termination right if our stockholders fail to approve the applicable proposals. If the transaction is not completed by March 31, 2027, it may be terminated. If the Saltire Acquisition is not completed, we will have incurred significant costs without realizing the expected benefits, and the market price of our Common Stock may decline.

Current report

We will incur substantial additional indebtedness to finance the Saltire Acquisition, and the financing may not be available on acceptable terms.

Current report

We expect to fund the cash consideration through new debt financing, which may include a senior secured bond issue, and borrowings under the Credit Facility Agreement. Increased indebtedness will increase our interest expense and may subject us to restrictive covenants that limit our operating flexibility. If we are unable to obtain financing by November 30, 2026, the Seller Representative may, in certain circumstances, terminate the Purchase Agreement.

Current report

The issuance of shares in the Saltire Acquisition will dilute our existing stockholders, and future sales by the Sellers could depress our stock price.

Current report

We will issue a fixed 17,355,139 shares of Common Stock to the Sellers, who are expected to own approximately 30% of our outstanding Common Stock following closing, and the number of shares will not be adjusted for changes in our stock price. The Sellers will have the right to designate a director or board observer, and following expiration of the lock-up restrictions, which release in tranches at 12, 18 and 24 months after closing, sales of these shares could adversely affect the market price of our Common Stock.

Current report

We may not realize the anticipated benefits of the Saltire Acquisition, and the acquisition will increase our exposure to international operations and foreign currency fluctuations.

Current report

The Group operates primarily in the United Kingdom, Norway, the United Arab Emirates, Singapore and Malaysia, and its results are largely denominated in British pounds sterling. Integrating the Group may be more difficult, costly or time-consuming than expected, and fluctuations in the U.S. dollar/British pound sterling exchange rate may affect the U.S. dollar cost of the cash consideration and our reported results. Following completion of the Saltire Acquisition, we will also be subject to additional legal, regulatory, tax and compliance requirements in these jurisdictions, including anti-corruption, sanctions and export control laws, which may increase our costs and exposure to liability.