Quarterly report pursuant to Section 13 or 15(d)

Operating Segments (Tables)

Operating Segments (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Segment Reporting Information

The table below presents certain financial information of our operating segments for the three and nine months ended September 30, 2018 and 2017 (in thousands).

Segment Reporting for the Quarter Ended September 30, 2018

	Treatment			Services			Medical			Segments Total			Corporate ⁽¹⁾			Consolidated Total
Revenue from external customers	$	9,103		$	2,881			—		$	11,984		$	—		$	11,984
Intercompany revenues		174			16			—			190			—			—
Gross profit		1,564			261			—			1,825			—			1,825
Research and development		126			—			88			214			15			229
Interest income		—			—			—			—			82			82
Interest expense		(8	)		(1	)		—			(9	)		(53	)		(62	)
Interest expense-financing fees		—			—			—			—			(10	)		(10	)
Depreciation and amortization		234			122			—			356			8			364
Segment income (loss) before income taxes		506			(224	)		(88	)		194			(1,219	)		(1,025	)
Income tax (benefit) expense		(1,342)	⁽⁴⁾		—			—			(1,342	)		—			(1,342	)
Segment income (loss)		1,848			(224	)		(88	)		1,536			(1,219	)		317
Expenditures for segment assets		525			22			—			547			1			548

Segment Reporting for the Quarter Ended September 30, 2017

	Treatment			Services			Medical			Segments Total			Corporate ⁽¹⁾			Consolidated Total
Revenue from external customers	$	9,355		$	2,403			—		$	11,758		$	—		$	11,758
Intercompany revenues		77			10			—			87			—			—
Gross profit		1,613			132			—			1,745			—			1,745
Research and development		96			—			197			293			—			293
Interest income		—			—			—			—			34			34
Interest expense		(1	)		(1	)		—			(2	)		(57	)		(59	)
Interest expense-financing fees		—			—			—			—			(9	)		(9	)
Depreciation and amortization		964			134			—			1,098			9			1,107
Segment income (loss) before income taxes		40	⁽²⁾		(478	)		(197	)		(635	)		(1,271	)		(1,906	)
Income tax expense		70			—			—			70			1			71
Segment (loss) income		(30	)		(478	)		(197	)		(705	)		(1,272	)		(1,977	)
Expenditures for segment assets		81			3			—			84			—			84

Segment Reporting for the Nine Months Ended September 30, 2018

	Treatment			Services			Medical			Segments Total			Corporate ⁽¹⁾			Consolidated Total
Revenue from external customers	$	27,207		$	10,594			—		$	37,801		$	—		$	37,801
Intercompany revenues		463			55			—			518			—			—
Gross profit		5,867			1,322			—			7,189			—			7,189
Research and development		355			—			259			614			66			680
Interest income		—			—			—			—			212			212
Interest expense		(16	)		(2	)		—			(18	)		(159	)		(177	)
Interest expense-financing fees		—			—			—			—			(27	)		(27	)
Depreciation and amortization		702			367			—			1,069			26			1,095
Segment income (loss) before income taxes		4,279	⁽³⁾		(194	)		(259	)		3,826			(3,740	)		86
Income tax (benefit) expense		(1,277)	⁽⁴⁾		—			—			(1,277	)		5			(1,272	)
Segment income (loss)		5,556			(194	)		(259	)		5,103			(3,745	)		1,358
Expenditures for segment assets		1,016			82			—			1,098			4			1,102

Segment Reporting for the Nine Months Ended September 30, 2017

	Treatment			Services			Medical			Segments Total			Corporate ⁽¹⁾			Consolidated Total
Revenue from external customers	$	29,019		$	8,160			—		$	37,179		$	—		$	37,179
Intercompany revenues		191			21			—			212			—			—
Gross profit		6,474			343			—			6,817			—			6,817
Research and development		339			—			947			1,286			14			1,300
Interest income		—			—			—			—			105			105
Interest expense		(27	)		(2	)		—			(29	)		(220	)		(249	)
Interest expense-financing fees		—			—			—			—			(27	)		(27	)
Depreciation and amortization		2,960			405			—			3,365			29			3,394
Segment income (loss) before income taxes		2,880	⁽²⁾		(1,738	)		(947	)		195			(3,855	)		(3,660	)
Income tax expense		215			—			—			215			3			218
Segment income (loss)		2,665			(1,738	)		(947	)		(20	)		(3,858	)		(3,878	)
Expenditures for segment assets		188			12			—			200			—			200

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

⁽²⁾Amounts include tangible asset impairment loss of $672,000 for the Company’s M&EC subsidiary.

⁽³⁾Amounts included a net gain of $1,596,000 recorded resulting from the exchange offer of the Series B Preferred Stock of our M&EC subsidiary (see “Note 13 – M&EC Series B Preferred Stock” below).

⁽⁴⁾Amounts included a tax benefit recorded in the amount of approximately $1,380,000 during the third quarter. (see “Note 12 – Income Taxes” below).