Annual report pursuant to Section 13 and 15(d)

Segment Reporting

Segment Reporting

12 Months Ended

Dec. 31, 2018

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 chief operating decision maker (“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 currently have three reporting segments, which include Treatment and Services Segments, which are based on a service offering approach; and Medical, whose primary purpose at this time is the R&D of a new medical isotope production technology. The Medical Segment has not generated any revenues and all costs incurred are reflected within R&D in the accompanying Consolidated Statements of Operations. As previously disclosed, the Medical Segment ceased a substantial portion of its R&D activities for the medical isotope production technology due to the need for substantial capital to fund such activities. Additionally, the Company is reviewing further strategic options for the Medical Segment. The Company does not anticipate that the Medical Segment will restart such activities until it obtains such funding. Our reporting segments exclude our corporate headquarter 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, 2018 and 2017 (in thousands).

Segment Reporting as of and for the year ended December 31, 2018

	Treatment			Services			Medical			Segments Total			Corporate ⁽²⁾			Consolidated Total
Revenue from external customers	$	36,271		$	13,268			—		$	49,539	⁽³⁾	$	—		$	49,539
Intercompany revenues		509			70			—			579			—			—
Gross profit		7,197			1,264			—			8,461			—			8,461
Research and development		483			—			811			1,294			76			1,370
Interest income		—			—			—			—			295			295
Interest expense		(22	)		(2	)		—			(24	)		(227	)		(251	)
Interest expense-financing fees		—			—			—			—			(38	)		(38	)
Depreciation and amortization		943			465			—			1,408			47			1,455
Segment income (loss) before income taxes		4,550	⁽⁶⁾		(756	)		(811	)		2,983			(4,993	)		(2,010	)
Income tax (benefit) expense		(943	)⁽⁷⁾		—			—			(943	)		7			(936	)
Segment income (loss)		5,493			(756	)		(811	)		3,926			(5,000	)		(1,074	)
Segment assets⁽¹⁾		32,800			5,188			25			38,013			19,429	⁽⁴⁾		57,442
Expenditures for segment assets		1,311			117			—			1,428			4			1,432
Total debt		—			—			—			—			3,302	⁽⁵⁾		3,302

Segment Reporting as of and for the year ended December 31, 2017

	Treatment			Services			Medical			Segments Total			Corporate ⁽²⁾			Consolidated Total
Revenue from external customers	$	37,750		$	12,019			—		$	49,769	⁽³⁾	$	—		$	49,769
Intercompany revenues		362			31			—			393			—			—
Gross profit		7,916			704			—			8,620			—			8,620
Research and development		439			—			1,141			1,580			15			1,595
Interest income		—			—			—			—			140			140
Interest expense		(35	)		(5	)		—			(40	)		(275	)		(315	)
Interest expense-financing fees		—			—			—			—			(35	)		(35	)
Depreciation and amortization		3,228			536			—			3,764			39			3,803
Segment income (loss) before income taxes		3,577	⁽⁸⁾		(2,286	)		(1,141	)		150			(4,973	)		(4,823	)
Income tax (benefit) expense		(1,290	)⁽⁷⁾		—			—			(1,290	)		5			(1,285	)
Segment income (loss)		4,867			(2,286	)		(1,141	)		1,440			(4,978	)		(3,538	)
Segment assets⁽¹⁾		32,724			6,324			548			39,596			19,942	⁽⁴⁾		59,538
Expenditures for segment assets		396			43			—			439			—			439
Total debt		—			—			—			—			3,847	⁽⁵⁾		3,847

	⁽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 the domestic government clients (includes U.S federal, state and local), either directly as a prime contractor or indirectly for others as a subcontractor to government entities, representing approximately $34,811,000 or 70.3% of total revenue for 2018 and $37,019,000 or 74.4% of total revenue for 2017. The following reflects such revenue generated by our two segments:

	2018		2017
Treatment	$	25,181,000	$	27,956,000
Services		9,630,000		9,063,000
Total	$	34,811,000	$	37,019,000

	⁽⁴⁾	Amount includes assets from our discontinued operations of $306,000 and $365,000 at December 31, 2018 and 2017, respectively.

	⁽⁵⁾	Net of debt issuance costs of ($80,000) and ($115,000) for 2018 and 2017, respectively (see “Note 10 – “Long-Term Debt” for additional information).

	⁽⁶⁾	Amount includes a net gain of $1,596,000 recorded resulting from the exchange offer of the Series B Preferred Stock of the Company’s M&EC subsidiary (see “Note 8 – Series B Preferred Stock”)

	⁽⁷⁾	For the year ended December 31, 2018 and 2017, amount includes a tax benefit recorded in the amount of approximately $1,235,000 and $1,695,000, respectively, resulting from the TCJA enacted on December 22, 2017 (see “Note 14 – Income Taxes” for further information of this tax benefit).

	⁽⁸⁾	Amount includes tangible asset impairment loss of $672,000 recorded in connection with the closure of M&EC (see “Note 4 – M&EC Facility”).