| Business Segments |
16. Business Segments The Company has three reportable operating segments as defined below. The aggregate external revenues of these reportable segments exceeded 75% of the Company’s consolidated revenues for all periods presented. The remaining operating segments were combined in the “All Other” category. The Company is organized primarily on the basis of geographic region and customer industry group and operates in three reportable segments. These reportable segments are also operating segments. Resources are allocated, and performance is assessed by our CEO, whom we have determined to be our CODM. Our remaining operating segments have been consolidated and included in an “All Other” category. The following is a brief description of our reportable segments and a description of business activities conducted by All Other. HFS – South — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers in the natural resources and development industry located primarily in Texas and New Mexico. Government — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers with Government contracts located in Texas. WHS — Segment operations consist primarily of revenue from the construction phase of the contract with Lithium Nevada, LLC (“Lithium Nevada”), supporting a North American critical mineral supply chain. All Other — Segment operations consist of revenue from specialty rental and vertically integrated hospitality services revenue from customers primarily in the natural resources and development industry located outside of the HFS – South segment. The Company evaluates performance of their segments and allocates resources to them based on revenue and adjusted gross profit. Adjusted gross profit and Adjusted costs of sales for the CODM’s analysis includes the services and specialty rental costs in the financial statements and excludes depreciation, loss on impairment, and certain severance costs. The table below presents information about reported segments for the dates indicated below: 2025 | | | | | | | | | | | | | | | | | | HFS - South | | Government | | WHS | | All Other | | Total | For the Six Months Ended June 30, 2025 | | | | | | | | | | | | | | | | Revenue | | $ | 72,234 | | $ | 33,204 | | $ | 20,245 | | $ | 5,820 | (a) | $ | 131,503 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | $ | 20,111 | | $ | 3,761 | | $ | 215 | | $ | 2,370 | | $ | 26,457 | Outside services | | | 249 | | | 73 | | | 34 | | | — | | | 356 | Community operating costs | | | 26,291 | | | 9,502 | | | 218 | | | 2,878 | | | 38,889 | Costs of construction | | | 4 | | | — | | | 14,777 | | | — | | | 14,781 | Repairs and maintenance | | | 2,908 | | | 1,600 | | | 19 | | | 241 | | | 4,768 | Other costs | | | 1,091 | | | 170 | | | 26 | | | 73 | | | 1,360 | Adjusted gross profit | | $ | 21,580 | | $ | 18,098 | | $ | 4,956 | | $ | 258 | | $ | 44,892 | Depreciation of specialty rental assets | | $ | 8,933 | | $ | 15,835 | | $ | 743 | | $ | 1,745 | | $ | 27,256 | Capital expenditures (c) | | $ | 4,234 | | $ | 6,885 | | $ | 15,760 | | $ | 19 | | | | Total Assets | | $ | 171,245 | | $ | 181,801 | | $ | 15,009 | | $ | 25,659 | | $ | 393,714 | | | | | | | | | | | | | | | | | For the Three Months Ended June 30, 2025 | | | | | | | | | | | | | | | | Revenue | | $ | 36,166 | | $ | 7,487 | | $ | 15,042 | | $ | 2,911 | (a) | $ | 61,606 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | | 10,332 | | | 2,321 | | | 133 | | | 1,269 | | | 14,055 | Outside services | | | 166 | | | 4 | | | 20 | | | — | | | 190 | Community operating costs | | | 13,187 | | | 5,158 | | | 135 | | | 1,367 | | | 19,847 | Costs of construction | | | 4 | | | — | | | 11,033 | | | — | | | 11,037 | Repairs and maintenance | | | 1,439 | | | 1,005 | | | 14 | | | 135 | | | 2,593 | Other costs | | | 491 | | | 79 | | | 20 | | | 38 | | | 628 | Adjusted gross profit | | $ | 10,547 | | $ | (1,080) | | $ | 3,687 | | $ | 102 | | $ | 13,256 | Depreciation of specialty rental assets | | $ | 4,441 | | $ | 7,904 | | $ | 372 | | $ | 867 | | $ | 13,584 | Capital expenditures (c) | | $ | 1,581 | | $ | 4,287 | | $ | 113 | | $ | 1 | | | |
2024 | | | | | | | | | | | | | | | | | | HFS - South | | Government | | WHS | | All Other | | Total | For the Six Months Ended June 30, 2024 | | | | | | | | | | | | | | | | Revenue | | $ | 75,165 | | $ | 127,466 | | $ | — | | $ | 4,762 | (a) | $ | 207,393 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | $ | 19,911 | | $ | 7,662 | | $ | — | | $ | 2,489 | | $ | 30,062 | Outside services | | | 141 | | | 56 | | | — | | | 1 | | | 198 | Community operating costs | | | 25,605 | | | 15,520 | | | — | | | 2,794 | | | 43,919 | Repairs and maintenance | | | 2,595 | | | 1,921 | | | — | | | 376 | | | 4,892 | Other costs | | | 1,007 | | | 1,030 | | | — | | | 761 | | | 2,798 | Adjusted gross profit | | $ | 25,906 | | $ | 101,277 | | $ | — | | $ | (1,659) | | $ | 125,524 | Depreciation of specialty rental assets | | $ | 11,546 | | $ | 16,234 | | $ | — | | $ | 1,806 | | $ | 29,586 | Capital expenditures (c) | | $ | 8,467 | | $ | 9,313 | | $ | — | | $ | 94 | | | | Total Assets (as of December 31, 2024) | | $ | 176,907 | | $ | 190,751 | | $ | — | | $ | 27,389 | | $ | 395,047 | | | | | | | | | | | | | | | | | For the Three Months Ended June 30, 2024 | | | | | | | | | | | | | | | | Revenue | | $ | 38,232 | | $ | 59,860 | | $ | — | | $ | 2,629 | (a) | $ | 100,721 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | | 10,356 | | | 3,162 | | | — | | | 1,401 | | | 14,919 | Outside services | | | 77 | | | 42 | | | — | | | — | | | 119 | Community operating costs | | | 13,138 | | | 6,787 | | | — | | | 1,305 | | | 21,230 | Repairs and maintenance | | | 1,122 | | | 919 | | | — | | | 122 | | | 2,163 | Other costs | | | 474 | | | 106 | | | — | | | 35 | | | 615 | Adjusted Gross Profit | | $ | 13,065 | | $ | 48,844 | | $ | — | | $ | (234) | | $ | 61,675 | Depreciation of specialty rental assets | | $ | 5,845 | | $ | 8,058 | | $ | — | | $ | 902 | | $ | 14,805 | Capital expenditures (c) | | $ | 5,691 | | $ | 2,745 | | $ | — | | $ | 86 | | | |
| (a) | Revenues from segments below the quantitative thresholds are reported in the “All Other” category previously described. |
| (b) | The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There are no intersegment expenses. Note that community operating costs consist primarily of catering food purchases, lodge supplies, apparel and uniform expenses, linen expenses, operating lease expense for land, facilities, and equipment to service certain communities, property taxes, and utility costs. Other costs includes transportation and travel expenses, including the cost of relocating community assets. |
| (c) | The primary difference between capital expenditures allocated to segments included in the tables above and total capital expenditures for the Company is the amount of expenditures incurred for corporate unallocated amounts, which is not included in segment information. Such unallocated corporate capital expenditure amounts for the six months ended June 30, 2025 and 2024 were approximately $0.3 million and $0.5 million, respectively. Such unallocated corporate capital expenditure amounts for the three months ended June 30, 2025 and 2024 were less than $0.1 million and approximately $0.1 million, respectively. |
A reconciliation of total segment adjusted gross profit to total consolidated income (loss) before income taxes for the dates indicated below, is as follows: | | | | | | | | | | | | | | | For the Three Months Ended | | For the Six Months Ended | | | June 30, 2025 | | June 30, 2024 | | June 30, 2025 | | June 30, 2024 | | | | | | | | | | | | | | Total reportable segment adjusted gross profit | | $ | 13,154 | | $ | 61,909 | | $ | 44,634 | | $ | 127,183 | Other adjusted gross profit | | | 102 | | | (234) | | | 258 | | | (1,659) | Depreciation and amortization | | | (17,666) | | | (18,713) | | | (35,311) | | | (37,378) | Selling, general, and administrative expenses | | | (12,664) | | | (13,457) | | | (27,469) | | | (28,312) | Other income (expense), net | | | 156 | | | 46 | | | (106) | | | 156 | Loss on extinguishment of debt | | | — | | | — | | | (2,370) | | | — | Interest expense, net | | | (937) | | | (4,273) | | | (5,266) | | | (8,861) | Change in fair value of warrant liabilities | | | — | | | — | | | — | | | 675 | Consolidated income (loss) before income taxes | | $ | (17,855) | | $ | 25,278 | | $ | (25,630) | | $ | 51,804 |
A reconciliation of total segment assets to total consolidated assets as of the dates indicated below, is as follows: | | | | | | | | | June 30, 2025 | | December 31, 2024 | Total reportable segment assets | | $ | 368,055 | | $ | 367,658 | Other assets | | | 27,247 | | | 29,167 | Other unallocated amounts | | | 138,412 | | | 328,949 | Total Assets | | $ | 533,714 | | $ | 725,774 |
Other unallocated assets consist of the following as reported in the consolidated balance sheets of the Company as of the dates indicated below: | | | | | | | | | June 30, 2025 | | December 31, 2024 | Total current assets | | $ | 83,047 | | $ | 249,336 | Other intangible assets, net | | | 46,076 | | | 52,807 | Operating lease right-of-use assets, net | | | 7,719 | | | 24,935 | Deferred financing costs revolver, net | | | 1,570 | | | 1,871 | Total other unallocated amounts of assets | | $ | 138,412 | | $ | 328,949 |
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