Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)

12 Months Ended

Dec. 31, 2021

SCHEDULE OF SEGMENT REPORTING INFORMATION

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:

⁽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).

⁽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).

SCHEDULE OF REVENUE BY MAJOR CUSTOMERS BY REPORTING SEGMENTS

	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

SCHEDULE OF 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