| OPERATING SEGMENTS |
5. OPERATING SEGMENTS The Company’s chief operating decision maker (President and Chief Executive Officer) reviews the discrete segment financial information on a geographic basis for the United States (“USA”) operations and Canada (“CA”) operations. As a result, our business has two reportable segments, USA Operations and Canada Operations. The revenue for both of the Company’s segments is generated by the same services, which utilize the same type of equipment and personnel. The performance of our segments is evaluated primarily on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation and amortization and (iv) non-recurring and other charges, such as strategic transaction expenses or severance expenses. A portion of the management charges incurred by the U.S. segment were allocated to the Canadian segment based upon an activity level determined to be appropriate by management. These charges totaled approximately $70,000 and $55,000 for the three months ended June 30, 2026 and 2025, respectively and approximately $208,000 and $215,000 for the six months ended June 30, 2026 and 2025, respectively. The following tables present the Company’s income statements by operating segment (in thousands): | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2026 | | Six Months Ended June 30, 2026 | | USA Operations | | Canada Operations | | Consolidated | | USA Operations | | Canada Operations | | Consolidated | Operating revenues | | | | | | | | | | | | | | | | | | Fee revenue | $ | 13,176 | | $ | 830 | | $ | 14,006 | | $ | 34,041 | | $ | 12,473 | | $ | 46,514 | Reimbursable revenue | | 3,902 | | | 4 | | | 3,906 | | | 7,910 | | | 187 | | | 8,097 | | | 17,078 | | | 834 | | | 17,912 | | | 41,951 | | | 12,660 | | | 54,611 | | | | | | | | | | | | | | | | | | | Operating costs: | | | | | | | | | | | | | | | | | | Fee operating expenses | | 9,779 | | | 1,619 | | | 11,398 | | | 23,661 | | | 7,167 | | | 30,828 | Reimbursable operating expenses | | 3,902 | | | 4 | | | 3,906 | | | 7,910 | | | 187 | | | 8,097 | Operating expenses | | 13,681 | | | 1,623 | | | 15,304 | | | 31,571 | | | 7,354 | | | 38,925 | General and administrative | | 3,324 | | | 328 | | | 3,652 | | | 5,800 | | | 793 | | | 6,593 | Depreciation and amortization | | 1,755 | | | 230 | | | 1,985 | | | 3,521 | | | 461 | | | 3,982 | | | 18,760 | | | 2,181 | | | 20,941 | | | 40,892 | | | 8,608 | | | 49,500 | | | | | | | | | | | | | | | | | | | (Loss) income from operations | | (1,682) | | | (1,347) | | | (3,029) | | | 1,059 | | | 4,052 | | | 5,111 | | | | | | | | | | | | | | | | | | | Other income (expense): | | | | | | | | | | | | | | | | | | Interest income | | 26 | | | 6 | | | 32 | | | 32 | | | 9 | | | 41 | Interest expense | | (407) | | | (19) | | | (426) | | | (891) | | | (36) | | | (927) | Other income (expense), net | | 44 | | | (46) | | | (2) | | | 67 | | | (46) | | | 21 | (Loss) income before income tax | | (2,019) | | | (1,406) | | | (3,425) | | | 267 | | | 3,979 | | | 4,246 | Income tax expense | | (15) | | | — | | | (15) | | | (25) | | | — | | | (25) | Net (loss) income | $ | (2,034) | | $ | (1,406) | | $ | (3,440) | | $ | 242 | | $ | 3,979 | | $ | 4,221 | Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | Net unrealized income (loss) on foreign currency translation | | — | | | 85 | | | 85 | | | — | | | (101) | | | (101) | Comprehensive (loss) income | $ | (2,034) | | $ | (1,321) | | $ | (3,355) | | $ | 242 | | $ | 3,878 | | $ | 4,120 | | | | | | | | | | | | | | | | | | | Adjusted EBITDA | $ | 1,806 | | | (1,163) | | $ | 643 | | $ | 7,031 | | $ | 4,467 | | $ | 11,498 |
| | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2025 | | Six Months Ended June 30, 2025 | | USA Operations | | Canada Operations | | Consolidated | | USA Operations | | Canada Operations | | Consolidated | Operating revenues | | | | | | | | | | | | | | | | | | Fee revenue | $ | 8,404 | | $ | 331 | | $ | 8,735 | | $ | 11,130 | | $ | 12,864 | | $ | 23,994 | Reimbursable revenue | | 1,116 | | | — | | | 1,116 | | | 1,686 | | | 249 | | | 1,935 | | | 9,520 | | | 331 | | | 9,851 | | | 12,816 | | | 13,113 | | | 25,929 | | | | | | | | | | | | | | | | | | | Operating costs: | | | | | | | | | | | | | | | | | | Fee operating expenses | | 6,742 | | | 859 | | | 7,601 | | | 11,357 | | | 7,204 | | | 18,561 | Reimbursable operating expenses | | 1,116 | | | — | | | 1,116 | | | 1,686 | | | 249 | | | 1,935 | Operating expenses | | 7,858 | | | 859 | | | 8,717 | | | 13,043 | | | 7,453 | | | 20,496 | General and administrative | | 1,998 | | | 333 | | | 2,331 | | | 3,553 | | | 772 | | | 4,325 | Depreciation and amortization | | 981 | | | 193 | | | 1,174 | | | 2,058 | | | 387 | | | 2,445 | | | 10,837 | | | 1,385 | | | 12,222 | | | 18,654 | | | 8,612 | | | 27,266 | | | | | | | | | | | | | | | | | | | (Loss) income from operations | | (1,317) | | | (1,054) | | | (2,371) | | | (5,838) | | | 4,501 | | | (1,337) | | | | | | | | | | | | | | | | | | | Other income (expense): | | | | | | | | | | | | | | | | | | Interest income | | 26 | | | 9 | | | 35 | | | 26 | | | 13 | | | 39 | Interest expense | | (46) | | | (12) | | | (58) | | | (109) | | | (25) | | | (134) | Other income (expense), net | | 33 | | | 5 | | | 38 | | | 74 | | | (3) | | | 71 | (Loss) income before income tax | | (1,304) | | | (1,052) | | | (2,356) | | | (5,847) | | | 4,486 | | | (1,361) | Income tax benefit | | 7 | | | — | | | 7 | | | 4 | | | — | | | 4 | Net (loss) income | $ | (1,297) | | $ | (1,052) | | $ | (2,349) | | $ | (5,843) | | $ | 4,486 | | $ | (1,357) | | | | | | | | | | | | | | | | | | | Adjusted EBITDA | $ | (303) | | $ | (856) | | $ | (1,159) | | $ | (3,706) | | $ | 4,885 | | $ | 1,179 |
The following tables present the Company’s total assets, net property and equipment, capital expenditures and operating right of use assets disaggregated by operating segment (in thousands): | | | | | | | | | June 30, | | December 31, | | | 2026 | | 2025 | Total Assets | | | | | | | United States | | $ | 50,629 | | $ | 48,577 | Canada | | | 4,695 | | | 7,433 | Total Assets | | $ | 55,324 | | $ | 56,010 |
| | | | | | | | | | | | | | | | June 30, | | December 31, | | | 2026 | | 2025 | Net Property and Equipment | | | | | | | United States | | $ | 30,044 | | $ | 28,683 | Canada | | | 1,680 | | | 2,092 | Total | | $ | 31,724 | | $ | 30,775 |
| | | | | | | | | June 30, | | June 30, | | | 2026 | | 2025 | Capital Expenditures | | | | | | | United States | | $ | 4,919 | | $ | 683 | Canada | | | 104 | | | — | Total Capital Expenditures | | $ | 5,023 | | $ | 683 |
| | | | | | | | | June 30, | | December 31, | | | 2026 | | 2025 | Net Operating Right-of-use Assets | | | | | | | United States | | $ | 1,935 | | $ | 2,093 | Canada | | | 794 | | | 943 | Total | | $ | 2,729 | | $ | 3,036 |
The reconciliation of the Company’s Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and to net cash (used in) provided by operating activities, are provided in the following tables (in thousands): | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | 2026 US | | 2026 CA | | 2026 Consol. | | 2025 US | | 2025 CA | | 2025 Consol. | Net loss | $ | (2,034) | | $ | (1,406) | | $ | (3,440) | | $ | (1,297) | | $ | (1,052) | | $ | (2,349) | Depreciation and amortization | | 1,755 | | | 230 | | | 1,985 | | | 981 | | | 193 | | | 1,174 | Interest expense (income), net | | 381 | | | 13 | | | 394 | | | 20 | | | 3 | | | 23 | Income tax expense (benefit) | | 15 | | | — | | | 15 | | | (7) | | | — | | | (7) | EBITDA | | 117 | | | (1,163) | | | (1,046) | | | (303) | | | (856) | | | (1,159) | Strategic transaction expenses | | 1,689 | | | — | | | 1,689 | | | — | | | — | | | — | Adjusted EBITDA | $ | 1,806 | | $ | (1,163) | | $ | 643 | | $ | (303) | | $ | (856) | | $ | (1,159) |
| | | | | | | | | | | | | | | | | | | Six Months Ended June 30, | | 2026 US | | 2026 CA | | 2026 Consol. | | 2025 US | | 2025 CA | | 2025 Consol. | Net income (loss) | $ | 242 | | $ | 3,979 | | $ | 4,221 | | $ | (5,843) | | $ | 4,486 | | $ | (1,357) | Depreciation and amortization | | 3,521 | | | 461 | | | 3,982 | | | 2,058 | | | 387 | | | 2,445 | Interest expense (income), net | | 859 | | | 27 | | | 886 | | | 83 | | | 12 | | | 95 | Income tax expense (benefit) | | 25 | | | — | | | 25 | | | (4) | | | — | | | (4) | EBITDA | | 4,647 | | | 4,467 | | | 9,114 | | | (3,706) | | | 4,885 | | | 1,179 | Strategic transaction expenses | | 2,384 | | | — | | | 2,384 | | | — | | | — | | | — | Adjusted EBITDA | $ | 7,031 | | $ | 4,467 | | $ | 11,498 | | $ | (3,706) | | $ | 4,885 | | $ | 1,179 |
| | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | 2026 US | | 2026 CA | | 2026 Consol. | | 2025 US | | 2025 CA | | 2025 Consol. | Net cash (used in) provided by operating activities | $ | (1,799) | | $ | 8,262 | | $ | 6,463 | | $ | 6,742 | | $ | 8,133 | | $ | 14,875 | Changes in working capital and other items | | 2,119 | | | (9,364) | | | (7,245) | | | (6,805) | | | (8,932) | | | (15,737) | Non-cash adjustments to net (loss) income | | (203) | | | (61) | | | (264) | | | (240) | | | (57) | | | (297) | EBITDA | | 117 | | | (1,163) | | | (1,046) | | | (303) | | | (856) | | | (1,159) | Strategic transaction expenses | | 1,689 | | | — | | | 1,689 | | | — | | | — | | | — | Adjusted EBITDA | $ | 1,806 | | $ | (1,163) | | $ | 643 | | $ | (303) | | $ | (856) | | $ | (1,159) |
| | | | | | | | | | | | | | | | | | | Six Months Ended June 30, | | 2026 US | | 2026 CA | | 2026 Consol. | | 2025 US | | 2025 CA | | 2025 Consol. | Net cash provided by (used in) operating activities | $ | 100 | | $ | 5,898 | | $ | 5,998 | | $ | 8,286 | | $ | 8,341 | | $ | 16,627 | Changes in working capital and other items | | 4,928 | | | (1,310) | | | 3,618 | | | (11,335) | | | (3,345) | | | (14,680) | Non-cash adjustments to net income (loss) | | (381) | | | (121) | | | (502) | | | (657) | | | (111) | | | (768) | EBITDA | | 4,647 | | | 4,467 | | | 9,114 | | | (3,706) | | | 4,885 | | | 1,179 | Strategic transaction expenses | | 2,384 | | | — | | | 2,384 | | | — | | | — | | | — | Adjusted EBITDA | $ | 7,031 | | $ | 4,467 | | $ | 11,498 | | $ | (3,706) | | $ | 4,885 | | $ | 1,179 |
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