| 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. WHS — Segment operations consist of hospitality services revenue and construction fee income from the contract with Lithium Nevada, LLC (“Lithium Nevada”), supporting a North American critical mineral supply chain, specialty rental and vertically integrated hospitality services revenue from customers in support of power generation expansion for mining and data center projects located in Northern Nevada and Texas, as well as specialty rental and vertically integrated hospitality services revenue from customers in support of the development of data center infrastructure projects located in the Southwestern United States and Texas. Government — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers with Government contracts located in Texas. All Other — Segment operations primarily 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 cost of sales for the CODM’s analysis includes the services and construction costs 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: 2026 | | | | | | | | | | | | | | | | | | HFS - South | | WHS | | Government | | All Other | | Total | For the Three Months Ended March 31, 2026 | | | | | | | | | | | | | | | | Revenue | | $ | 33,057 | | $ | 23,620 | | $ | 13,443 | | $ | 2,661 | (a) | $ | 72,781 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | $ | 9,953 | | $ | 2,413 | | $ | 2,695 | | $ | 1,135 | | $ | 16,196 | Outside services | | | 83 | | | 45 | | | 1 | | | — | | | 129 | Community operating costs | | | 12,845 | | | 3,410 | | | 5,181 | | | 1,570 | | | 23,006 | Costs of construction | | | 7 | | | 6,504 | | | — | | | — | | | 6,511 | Repairs and maintenance | | | 1,212 | | | 410 | | | 548 | | | 85 | | | 2,255 | Other costs | | | 554 | | | 1,573 | | | 63 | | | 36 | | | 2,226 | Adjusted gross profit | | $ | 8,403 | | $ | 9,265 | | $ | 4,955 | | $ | (165) | | $ | 22,458 | Depreciation of specialty rental assets | | $ | 4,276 | | $ | 4,036 | | $ | 6,395 | | $ | 868 | | $ | 15,575 | Capital expenditures (c) | | $ | 1,217 | | $ | 43,754 | | $ | 63 | | $ | 20 | | | | Total Assets | | $ | 159,521 | | $ | 142,110 | | $ | 115,103 | | $ | 19,984 | | $ | 436,718 |
2025 | | | | | | | | | | | | | | | | | | HFS - South | | WHS | | Government | | All Other | | Total | For the Three Months Ended March 31, 2025 | | | | | | | | | | | | | | | | Revenue | | $ | 36,068 | | $ | 5,204 | | $ | 25,717 | | $ | 2,908 | (a) | $ | 69,897 | Less: Adjusted Cost of Sales (b) | | | | | | | | | | | | | | | | Labor costs | | $ | 9,779 | | $ | 82 | | $ | 1,438 | | $ | 1,101 | | $ | 12,400 | Outside services | | | 83 | | | 14 | | | 70 | | | — | | | 167 | Community operating costs | | | 13,105 | | | 83 | | | 4,345 | | | 1,512 | | | 19,045 | Costs of construction | | | — | | | 3,744 | | | — | | | — | | | 3,744 | Repairs and maintenance | | | 1,469 | | | 5 | | | 596 | | | 106 | | | 2,176 | Other costs | | | 599 | | | 7 | | | 90 | | | 33 | | | 729 | Adjusted gross profit | | $ | 11,033 | | $ | 1,269 | | $ | 19,178 | | $ | 156 | | $ | 31,636 | Depreciation of specialty rental assets | | $ | 4,493 | | $ | 370 | | $ | 7,931 | | $ | 878 | | $ | 13,672 | Capital expenditures (c) | | $ | 2,653 | | $ | 15,647 | | $ | 2,598 | | $ | 18 | | | | Total Assets (as of December 31, 2025) | | $ | 165,406 | | $ | 63,934 | | $ | 157,460 | | $ | 21,100 | | $ | 407,900 |
| (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 the segment information. Such unallocated corporate capital expenditure amounts for the three months ended March 31, 2026 and 2025 were approximately $0.4 million and approximately $0.2 million, respectively. |
A reconciliation of total segment adjusted gross profit to total consolidated loss before income taxes for the dates indicated below, is as follows: | | | | | | | | | For the Three Months Ended | | | March 31, 2026 | | March 31, 2025 | | | | | | | | Total reportable segment adjusted gross profit | | $ | 22,623 | | $ | 31,480 | Other adjusted gross profit | | | (165) | | | 156 | Depreciation and amortization | | | (19,596) | | | (17,645) | Selling, general, and administrative expenses | | | (14,557) | | | (14,805) | Other expense, net | | | (2,628) | | | (262) | Loss on extinguishment of debt | | | — | | | (2,370) | Interest expense, net | | | (892) | | | (4,329) | Consolidated loss before income taxes | | $ | (15,215) | | $ | (7,775) |
A reconciliation of total segment assets to total consolidated assets as of the dates indicated below, is as follows: | | | | | | | | | March 31, 2026 | | December 31, 2025 | Total reportable segment assets | | $ | 416,734 | | $ | 386,800 | Other assets (d) | | | 21,421 | | | 22,398 | Other unallocated amounts | | | 101,385 | | | 121,007 | Total Assets | | $ | 539,540 | | $ | 530,205 |
| (d) | Other assets in the table above includes unallocated corporate assets of approximately $1.4 million and $1.3 million as of March 31, 2026 and December 31, 2025, respectively. |
Other unallocated assets consist of the following as reported (except as otherwise indicated below) in the consolidated balance sheets of the Company as of the dates indicated below: | | | | | | | | | March 31, 2026 | | December 31, 2025 | Total current assets | | $ | 58,606 | | $ | 73,338 | Other intangible assets, net | | | 35,969 | | | 39,332 | Operating lease right-of-use assets, net | | | 5,204 | | | 6,544 | Deferred financing costs revolver, net | | | 1,581 | | | 1,793 | Other non-current assets (e) | | | 25 | | | — | Total other unallocated amounts of assets | | $ | 101,385 | | $ | 121,007 |
| (e) | Other non-current assets in the table above excludes allocated deposits for specialty rental assets of approximately $6.9 million and $0 as of March 31, 2026 and December 31, 2025, respectively, all of which is allocated to the WHS segment as a component of WHS Total Assets and is included in the Total reportable segment assets above. Refer to Note 6 for discussion of deposits for specialty rental assets. |
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