Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
Income Taxes

 

11. Operating Segments

 

In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity: (1) from which we may earn revenue and incur expenses; (2) whose operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and (3) for which discrete financial information is available.

 

 

The Company has two reporting segments, consisting of the Treatment and Services Segments, which are primarily based on a service offering approach and defined as follow:

 

TREATMENT SEGMENT, which includes:

 

- nuclear, low-level radioactive, mixed waste (containing both hazardous and low-level radioactive constituents), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities; and
- Research and Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.

 

SERVICES SEGMENT, which includes:

 

- Technical services, which include:

 

○ professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering;
○ integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance;
○ global technical services providing consulting, engineering, project management, waste management, environmental, and decontamination and decommissioning (“D&D”) field, technical, and management personnel and services to commercial and government customers; and
○ on-site waste management services to commercial and governmental customers.

 

- Nuclear services, which include:

 

○ technology-based services including engineering, D&D, specialty services and construction, logistics, transportation, processing and disposal;
○ remediation of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites. Such service capabilities include project investigation; radiological engineering; partial and total plant D&D; facility decontamination, dismantling, demolition, and planning; site restoration; logistics; transportation; and emergency response; and

 

- A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.

 

The Company’s reporting segments exclude our corporate headquarter which serves to support its two reporting segments through various functions, such as our executives, finance, treasury, human resources, accounting, and legal departments. Financial results for the corporate headquarter are not considered by the CODM in evaluating the performance of the reportable segments. Our reporting segment also excludes our discontinued operations (see “Note 10 – Discontinued Operations”) which do not generate revenues.

 

The Company’s CODM is represented by its Chief Executive Officer (“CEO”) and COO (or “CODM group”). The CODM group evaluates the performance of the Treatment and Services segments and allocates resources (including financial or capital resources) to each reporting segment based on revenue and income (loss) from operations by comparing actual results for these metrics to budgeted and forecasted amounts for these metrics on a monthly, quarterly and year-to-date basis. The Company’s CODM group does not evaluate and allocate resources for the reportable segments using assets; therefore, the Company does not disclose assets for its reporting segments.

 

The table below summarizes income (loss) from operations for the Company’s two reporting segments and its corporate headquarter and provides reconciliation of such financial metric to the Company’s consolidated totals for the three and nine months ended September 30, 2025, and 2024 for our continuing operations. Significant segment expenses that are included in the measure of segment profit or losses for each reportable segment and regularly provided to the CODM group include payroll and benefit, material and supplies, disposal, transportation and subcontract expenses and are reflected separately, where applicable (in thousands).

 

 

 Schedule of Segment Reporting Information

Segment Reporting for the Three Months Ended September 30, 2025

 

                                         
    Treatment     Services     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 13,114     $ 4,340     $ 17,454     $ —     $ 17,454  
Cost of Goods Sold:                                        
Payroll and benefits expenses     4,809       2,358       7,167       —       7,167  
Material and supplies expenses     2,158       —       2,158       —       2,158  
Disposal expenses     1,075       —       1,075       —       1,075  
Transportation expenses     361       —       361       —       361  
Subcontract expenses     —       118       118       —       118  
Other cost of goods sold (2)     2,445       1,573       4,018       —       4,018  
Total cost of goods sold     10,848       4,049       14,897       —       14,897  
Gross profit     2,266       291       2,557       —       2,557  
SG&A:                                        
Payroll and benefits     947       547       1,494       997       2,491  
Other SG&A (3)     386       199       585       1,007       1,592  
Total SG&A     1,333       746       2,079       2,004       4,083  
Research and development     257       2       259       83       342  
Loss on disposal of property and equipment     4       —       4       —       4  
Income (loss) from operations   $ 672     $ (457 )   $ 215     $ (2,087 )     (1,872 )
Interest income                                     266  
Interest expense                                     (116 )
Interest expense-financing fees                                     (22 )
Other expense                                     (18 )
Loss from continuing operations before taxes                                     (1,762 )
Income tax expense                                     —  
Loss from continuing operations, net of taxes                                   $ (1,762 )

 

Segment Reporting for the Three Months Ended September 30, 2024

 

                                         
    Treatment     Services     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 9,064     $ 7,748     $ 16,812     $ —     $ 16,812  
Cost of goods sold:                                        
Payroll and benefit expenses     4,275       2,636       6,911       —       6,911  
Material and supplies expenses     1,035       —       1,035       —       1,035  
Disposal expenses     788       —       788       —       788  
Transportation expenses     322       —       322       —       322  
Subcontract expenses     —       2,135       2,135       —       2,135  
Other cost of goods sold (2)     2,234       2,053       4,287       —       4,287  
Total cost of goods sold     8,654       6,824       15,478       —       15,478  
Gross profit     410       924       1,334       —       1,334  
SG&A:                                        
Payroll and benefits     743       643       1,386       848       2,234  
Other SG&A (3)     341       172       513       885       1,398  
Total SG&A     1,084       815       1,899       1,733       3,632  
Research and development     205       34       239       64       303  
(Loss) income from operations   $ (879 )   $ 75     $ (804 )   $ (1,797 )     (2,601 )
Interest income                                     292  
Interest expense                                     (121 )
Interest expense-financing fees                                     (18 )
Other income                                     59  
Loss from continuing operations before taxes                                     (2,389 )
Income tax expense                                     6,417  
Loss from continuing operations, net of taxes                                   $ (8,806 )

 

 

Segment Reporting for the Nine Months Ended September 30, 2025

 

                                         
    Treatment     Services     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 33,696     $ 12,263     $ 45,959     $ —     $ 45,959  
Cost of Goods Sold:                                        
Payroll and benefits expenses     13,988       6,245       20,233       —       20,233  
Material and supplies expenses     4,744       —       4,744       —       4,744  
Disposal expenses     2,391       —       2,391       —       2,391  
Transportation expenses     1,222       —       1,222       —       1,222  
Subcontract expenses     —       1,184       1,184       —       1,184  
Other cost of goods sold (2)     7,269       4,155       11,424       —       11,424  
Total cost of goods sold     29,614       11,584       41,198       —       41,198  
Gross profit     4,082       679       4,761       —       4,761  
SG&A:                                        
Payroll and benefits     2,763       1,732       4,495       2,869       7,364  
Other SG&A (3)     1,276       573       1,849       3,015       4,864  
Total SG&A     4,039       2,305       6,344       5,884       12,228  
Research and development     780       29       809       228       1,037  
Loss (gain) on disposal of property and equipment     3       (5 )     (2 )     —       (2 )
Loss from operations   $ (740 )   $ (1,650 )   $ (2,390 )   $ (6,112 )     (8,502 )
Interest income                                     901  
Interest expense                                     (351 )
Interest expense-financing fees                                     (63 )
Other income                                     171  
Loss from continuing operations before taxes                                     (7,844 )
Income tax expense                                     —  
Loss from continuing operations, net of taxes                                   $ (7,844 )

 

Segment Reporting for the Nine Months Ended September 30, 2024

 

                                         
    Treatment     Services     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 26,116     $ 18,299     $ 44,415     $ —     $ 44,415  
Cost of goods sold:                                        
Payroll and benefit expenses     11,970       7,065       19,035       —       19,035  
Material and supplies expenses     2,876       —       2,876       —       2,876  
Disposal expenses     4,211       —       4,211       —       4,211  
Transportation expenses     837       —       837       —       837  
Subcontract expenses     —       6,498       6,498       —       6,498  
Other cost of goods sold (2)     7,061       4,489       11,550       —       11,550  
Total cost of goods sold     26,955       18,052       45,007       —       45,007  
Gross (loss) profit     (839 )     247       (592 )     —       (592 )
SG&A:                                        
Payroll and benefits     2,145       1,799       3,944       2,517       6,461  
Other SG&A (3)     1,079       474       1,553       2,617       4,170  
Total SG&A     3,224       2,273       5,497       5,134       10,631  
Research and development     609       87       696       176       872  
Loss on disposal of property and equiment     —       1       1       —       1  
Loss from operations   $ (4,672 )   $ (2,114 )   $ (6,786 )   $ (5,310 )     (12,096 )
Interest income                                     679  
Interest expense                                     (346 )
Interest expense-financing fees                                     (47 )
Other income                                     61  
Loss from continuing operations before taxes                                     (11,749 )
Income tax expense                                     4,300  
Loss from continuing operations, net of taxes                                   $ (16,049 )

 

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

 

(2) Other cost of goods sold for each reportable segment includes:

Treatment - lab, regulatory, repair and maintenance, depreciation and amortization, travel, outside services and general expenses.

Services - material and supplies, disposal, transportation, lab, regulatory, repair and maintenance, depreciation and amortization, travel, outside services and general expenses.

 

(3) Other SG&A for each reportable segment and Corporate includes:

Treatment-depreciation and amortization, travel, outside services, repair and maintenance and general expenses.

Services- travel, outside services, repair and maintenance and general expenses.

Corporate-repair and maintenance, depreciation and amortization, travel, public company, outside services and general expenses.

 

 

The following table presents depreciation and amortization for the three and nine months ended September 30, (in thousand):

 Schedule of Depreciation and Amortization

                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2025     2024     2025     2024  
Treatment   $ 387     $ 370     $ 1,158     $ 1,104  
Services     28       44       109       133  
Total segment     415       414       1,267       1,237  
Corporate     11       19       32       58  
Total   $ 426     $ 433     $ 1,299     $ 1,295  

 

The following table presents capital expenditures for the three and nine months ended September 30, (in thousand):

 

Schedule of Capital Expenditures

                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2025     2024     2025     2024  
Treatment   $ 1,145     $ 1,203     $ 2,525     $ 1,820  
Services     31       180       83       404  
Total segment     1,176       1,383       2,608       2,224  
Corporate     —       —       —       —  
Total   $ 1,176 (1)   $ 1,383 (2)   $ 2,608 (1)   $ 2,224 (2)

 

(1) Net of financed amount of $30 and $162 for the three and nine months ended September 30, 2025, respectively.

 

(2) Net of financed amount of $361 and $406 for the three and nine months ended September 30, 2024, respectively.

 

12. Income Taxes

 

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes.

 

The Company had income tax expenses of $0 and $6,417,000 for continuing operations for the three months ended September 30, 2025, and the corresponding period of 2024, respectively, and income tax expenses of $0 and $4,300,000 for continuing operations for the nine months ended September 30, 2025, and the corresponding period of 2024, respectively. The Company’s effective tax rates were approximately 0% and 268.6% for the three months ended September 30, 2025, and the corresponding period of 2024, respectively, and 0% and 36.6% for the nine months ended September 30, 2025, and the corresponding period of 2024, respectively. The Company’s effective tax rate for the each of the periods above was impacted by the Company’s recognition of a full valuation allowance against its U.S federal and state deferred tax assets in the quarter ended September 30, 2024.

 

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act (“OBBBA”), which changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The Company has evaluated the provisions of the OBBBA and determined that the enactment of the legislation had no material impact to the Company’s condensed consolidated financial statements for the interim period ended September 30, 2025. Additionally, the Company does not expect OBBBA to have a material impact to the Company’s full year 2025 effective tax rate and its consolidated financial statements for the year ended December 31, 2025, due to the Company’s valuation allowance position, among other things. The Company continues to monitor the potential future impacts of the OBBBA on the Company’s consolidated financial statements.