Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

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SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 18

SEGMENT REPORTING

 

In accordance with ASC 280, “Segment Reporting”, we define an operating segment as a business activity:

 

  ● from which we may earn revenue and incur expenses;
  ● whose operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segment and assess its performance; and
  ● for which discrete financial information is available.

 

We have three reporting segments, which include Treatment and Services Segments, which are based on a service offering approach; and Medical, whose primary purpose was the R&D of a medical isotope production technology. The Medical Segment had not generated any revenues. During December 2021, the Company made the strategic decision to cease all R&D activities under the Medical Segment which resulted in the sale of 100% of its interest of PFM Poland (see “Note 14 – PF Medical” for a discussion of this transaction). Our reporting segments exclude our corporate headquarter, business center and our discontinued operations (see “Note 9 – Discontinued Operations”) which do not generate revenues.

 

The table below shows certain financial information of our reporting segments as of and for the years ended December 31, 2021 and 2020 (in thousands).

 

Segment Reporting as of and for the year ended December 31, 2021

 

    Treatment     Services     Medical     Segments Total     Corporate (2)   Consolidated Total  
Revenue from external customers   $ 32,992     $ 39,199        —     $ 72,191 (3)(4)   $ —     $ 72,191  
Intercompany revenues     1,265       47        —       1,312       —      

—

  
Gross profit     6,718       106      —       6,824      

—

     6,824  
Research and development     221       71       414       706       40       746  
Interest income     1        —      

—

     1       25       26  
Interest expense     (100 )     (10 )      —       (110 )     (137 )     (247 )
Interest expense-financing fees      —       (1 )    

—

     (1)     (40 )     (41 )
Depreciation and amortization     1,306       353        —       1,659       28       1,687  
Segment income (loss) before income taxes     2,283       (3,044 )     (1,476)   (11)(12)     (2,237 )     (561) (9)(11)     (2,798 )
Income tax (benefit) expense     (150 )     (962 )     26       (1,086 )     (2,804 )     (3,890) (10)
Segment income (loss)     2,433       (2,082 )     (1,502 )     (1,151 )     2,243       1,092  
Segment assets(1)     37,050       15,244 (8)     48       52,342       24,959 (5)     77,301
Expenditures for segment assets (net)     1,363       205        —       1,568       9       1,577 (7)
Total debt     25       14        —       39       954       993 (6)

 

Segment Reporting as of and for the year ended December 31, 2020

 

    Treatment     Services     Medical     Segments Total     Corporate (2)   Consolidated Total  
Revenue from external customers   $ 30,143     $ 75,283        —     $ 105,426 (3)(4)   $ —     $ 105,426  
Intercompany revenues     1,493       25        —       1,518       —        —  
Gross profit     5,491       10,402        —       15,893        —       15,893  
Research and development     243       132       311       686       76       762  
Interest income     1        —        —       1       139       140  
Interest expense     (115 )     (27 )      —       (142 )     (256 )     (398 )
Interest expense-financing fees      —        —        —      

—

     (294 )   (294 )
Depreciation and amortization     1,204       354        —       1,558       38       1,596  
Segment income (loss) before income taxes     1,494       7,826       (311 )     9,009       (6,049 )     2,960  
Income tax (benefit) expense     (264 )     6        —       (258 )     69       (189 )
Segment income (loss)     1,758       7,820       (311 )     9,267       (6,118 )     3,149  
Segment assets(1)     32,324       22,368 (8)     17       54,709       24,210 (5)     78,919  
Expenditures for segment assets (net)     1,264       451        —       1,715        —       1,715 (7)
Total debt      —       23        —       23       6,706       6,729 (6)

 

 

(1) Segment assets have been adjusted for intercompany accounts to reflect actual assets for each segment.

 

(2) Amounts reflect the activity for corporate headquarters not included in the segment information.

 

(3) The Company performed services relating to waste generated by government clients (domestic and foreign (primarily Canadian)), either directly as a prime contractor or indirectly for others as a subcontractor to government entities, representing approximately 60,812,000 or 84.2% of total revenue for 2021 and 96,582,000 or 91.6% of total revenue for 2020. The following reflects such revenue generated by our two segments:
(4) The following table reflects revenue based on customer location:
(5) Amount includes assets from our discontinued operations of $96,000 and $103,000 at December 31, 2021 and 2020, respectively.
   
(6) Net of debt discount/debt issuance costs of ($112,000) and ($105,000) for 2021 and 2020, respectively (see “Note 10 – “Long-Term Debt” for additional information).
   
(7) Net of financed amount of $585,000 and $883,000 for the year ended December 31, 2021 and 2020, respectively.
   
(8) Includes long-lived asset (net) for our PF Canada, Inc. subsidiary of $25,000 and $33,000 for the year ended December 31, 2021 and 2020, respectively.
   
(9) Amount includes approximately $5,381,000 of “Gain on extinguishment of debt” recorded in connection with the Company’s PPP Loan which was forgiven by the SBA effective June 15, 2021 (see “Note 10 – Long Term Debt – PPP Loan” for information of this loan forgiveness).
   
(10) Includes tax benefit recorded in amount of approximately $2,351,000 resulting from release of valuation allowance on the Company’s deferred tax assets (see “Note 13 Income Taxes” for a discussion of this tax benefit).
   
(11) Includes elimination of gain/loss of $2,537,000 in debt forgiveness between PFM Poland and the Company (see “Note 14 – PF Medical for a discussion of this debt forgiveness.
   
(12) Amount includes a “Loss on deconsolidation of subsidiary” recorded in the amount of approximately $1,062,000 resulting from the sale of PFM Poland (see “Note 14 – PF Medical for a discussion of this loss).

 

    2021     2020  
    Treatment     Services     Total     Treatment     Services     Total  
Domestic government   $ 22,538     $ 29,013     $ 51,551     $ 22,795     $ 68,237     $ 91,032  
Foreign government     577       8,684       9,261       415       5,135       5,550  
Total   $ 23,115     $ 37,697     $ 60,812     $ 23,210     $ 73,372     $ 96,582  

 

 

(4) The following table reflects revenue based on customer location:

 

  

    2021     2020  
United States   $ 62,257     $ 99,790  
Canada     9,277       5,550  

Germany

     567      

—

  
United Kingdom     90       86  
Total   $ 72,191     $ 105,426  

 

 

(5) Amount includes assets from our discontinued operations of $96,000 and $103,000 at December 31, 2021 and 2020, respectively.
   
(6) Net of debt discount/debt issuance costs of ($112,000) and ($105,000) for 2021 and 2020, respectively (see “Note 10 – “Long-Term Debt” for additional information).
   
(7) Net of financed amount of $585,000 and $883,000 for the year ended December 31, 2021 and 2020, respectively.
   
(8) Includes long-lived asset (net) for our PF Canada, Inc. subsidiary of $25,000 and $33,000 for the year ended December 31, 2021 and 2020, respectively.
   
(9) Amount includes approximately $5,381,000 of “Gain on extinguishment of debt” recorded in connection with the Company’s PPP Loan which was forgiven by the SBA effective June 15, 2021 (see “Note 10 – Long Term Debt – PPP Loan” for information of this loan forgiveness).
   
(10) Includes tax benefit recorded in amount of approximately $2,351,000 resulting from release of valuation allowance on the Company’s deferred tax assets (see “Note 13 Income Taxes” for a discussion of this tax benefit).
   
(11) Includes elimination of gain/loss of $2,537,000 in debt forgiveness between PFM Poland and the Company (see “Note 14 – PF Medical for a discussion of this debt forgiveness.
   
(12) Amount includes a “Loss on deconsolidation of subsidiary” recorded in the amount of approximately $1,062,000 resulting from the sale of PFM Poland (see “Note 14 – PF Medical for a discussion of this loss).