SEGMENT REPORTING

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

12. SEGMENT REPORTING

We report our segment results based on our geographic areas of operations, North America and International. These segments have similarities from a product perspective, but management believes that due to operational differences, such as sales models and regulatory environments, information about the segments would be useful to readers of the financial statements.

● North America includes our PDC drill bit and specialty tool sales and contract services business in the United States and Mexico, which have been aggregated

● International includes our specialty tool rental business in the Middle East

Revenues and certain operating expenses are directly attributable to our segments.

Unallocated corporate costs primarily include corporate shared costs, such as payroll and compensation, professional fees, and rent, as well as costs associated with certain shared research and development activities.

Our operating segments are not evaluated using asset information. Prior periods have been restated to conform with the current year presentation. This change was made due to international revenue becoming more significant in the current year.

The following table summarizes information about our segments:

	Three Months Ended March 31,
	2023			2022
Revenues:
North America	$	5,475,061		$	3,745,014
International		806,153			385,150
Total revenue	$	6,281,214		$	4,130,164
Operating income:
North America	$	3,605,959		$	2,096,321
International		109,810			(144,871	)
Corporate costs, unallocated		(2,338,007	)		(1,646,565	)
Total operating income	$	1,377,762		$	304,885

North America revenue includes revenue from operations in Mexico totaling approximately $15,000 and $18,000 for the three months ended March 31, 2023 and 2022, respectively. The remainder of the North America revenue was derived from operations in the United States of America.

Information about products and services

See Note 2 – Revenue.