Quest Resource第二季收入增7.6% 惟商譽減值拖累淨虧損擴大至1222萬美元

10-Q
 
 
 
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

  
 
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
WASHINGTON, D.C. 20549 
 
FORM 10-Q 
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended June 30, 2026 
Commission file number: 001-36451 
 
Quest Resource Holding Corporation 
(Exact Name of Registrant as Specified in its Charter)
 
 

 
 
 
 
 
 

 
 Nevada

 

 51-0665952

 

 
 (State or other Jurisdiction of
Incorporation or Organization)

 

 (I.R.S. Employer
Identification No.)

 

 433 E. Las Colinas Boulevard, Suite 675 
Irving, Texas 75039 
(Address of Principal Executive Offices and Zip Code) 
(972) 464-0004 
(Registrant’s Telephone Number, Including Area Code) 
 
Securities registered pursuant to Section 12(b) of the Act: 
 

 
 
 
 
 
 
 
 

 
 Title of each class

  

 Trading
Symbol

  

 Name of each exchange on which registered

 

 
 Common stock

  

 QRHC

  

 NASDAQ

 

 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 

 
 
 
 
 
 
 
 
 
 
 

 
 Large accelerated filer

 

 ☐

 

 Accelerated filer

 

 ☐

 

 
 Non-accelerated filer

 

 ☒ 

 

 Smaller reporting company

 

 ☒

 

 
 Emerging growth company

  

 ☐

  

  

 

  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ 
As of August 3, 2026, there were 21,092,856 shares of the registrant’s common stock, $0.001 par value, outstanding.
 

 

 
  

 TABLE OF CONTENTS
 

 
 
 
 
 
 

 
 

 

 Page

 

 
 PART I. FINANCIAL INFORMATION

 

  

 

 
  

  

  

 

 
 Item 1. Financial Statements (Unaudited)

 

 2

 

 
  

  

  

 

 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 17

 

 
  

  

  

 

 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

 23

 

 
  

  

  

 

 
 Item 4. Controls and Procedures

 

 23

 

 
  

  

  

 

 
 PART II. OTHER INFORMATION

 

  

 

 
  

  

  

 

 
 Item 1. Legal Proceedings

 

 24

 

 
  

  

  

 

 
 Item 1A. Risk Factors

 

 24

 

 
  

  

  

 

 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

 24

 

 
  

  

  

 

 
 Item 3. Defaults Upon Senior Securities

 

 24

 

 
  

  

  

 

 
 Item 4. Mine Safety Disclosures

 

 24

 

 
  

  

  

 

 
 Item 5. Other Information

 

 24

 

 
  

  

  

 

 
 Item 6. Exhibits

 

 25

 

 
  

  

  

 

 
 Signatures

 

 26

 

  
 
 

 1
 

 
  

 PART I. FINANCIAL INFORMATION 
 
 
Item 1. Financial Statements (Unaudited)
QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Par Value Amounts) 
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (Unaudited)

  

  

  

  

 

 
 ASSETS

  

 

 
 Current assets:

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 1,023

  

  

 $

 1,014

  

 

 
 Accounts receivable, less allowance for doubtful accounts of $728
   and $780 as of June 30, 2026 and December 31, 2025, respectively

  

  

 49,533

  

  

  

 49,010

  

 

 
 Prepaid expenses and other current assets

  

  

 1,726

  

  

  

 1,174

  

 

 
 Total current assets

  

  

 52,282

  

  

  

 51,198

  

 

 
  

  

  

  

  

  

  

 

 
 Goodwill

  

  

 70,065

  

  

  

 81,065

  

 

 
 Intangible assets, net

  

  

 6,292

  

  

  

 7,650

  

 

 
 Property and equipment, net, and other assets

  

  

 5,638

  

  

  

 5,638

  

 

 
 Total assets

  

 $

 134,277

  

  

 $

 145,551

  

 

 
 LIABILITIES AND STOCKHOLDERS’ EQUITY

  

 

 
 Current liabilities:

  

  

  

  

  

  

 

 
 Accounts payable and accrued liabilities

  

 $

 43,801

  

  

 $

 38,384

  

 

 
 Other current liabilities

  

  

 60

  

  

  

 128

  

 

 
 Current portion of notes payable

  

  

 540

  

  

  

 1,015

  

 

 
 Total current liabilities

  

  

 44,401

  

  

  

 39,527

  

 

 
  

  

  

  

  

  

  

 

 
 Notes payable, net

  

  

 59,365

  

  

  

 63,999

  

 

 
 Other long-term liabilities

  

  

 3,725

  

  

  

 1,513

  

 

 
 Total liabilities

  

  

 107,491

  

  

  

 105,039

  

 

 
  

  

  

  

  

  

  

 

 
 Commitments and contingencies

  

  

  

  

  

  

 

 
  

  

  

  

  

  

  

 

 
 Stockholders’ equity:

  

  

  

  

  

  

 

 
 Preferred stock, $0.001 par value, 10,000 shares authorized, no shares
   issued and outstanding as of June 30, 2026 and December 31, 2025

  

  

 —

  

  

  

 —

  

 

 
 Common stock, $0.001 par value, 200,000 shares authorized,
    21,093 and 20,960 shares issued and outstanding
    as of June 30, 2026 and December 31, 2025, respectively

  

  

 21

  

  

  

 21

  

 

 
 Additional paid-in capital

  

  

 181,793

  

  

  

 180,984

  

 

 
 Accumulated deficit

  

  

 (155,028

 )

  

  

 (140,493

 )

 

 
 Total stockholders’ equity

  

  

 26,786

  

  

  

 40,512

  

 

 
 Total liabilities and stockholders’ equity

  

 $

 134,277

  

  

 $

 145,551

  

 

 The accompanying notes are an integral part of these condensed consolidated financial statements. 
 

 2
 

 
  

 QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(UNAUDITED) 
(In Thousands, Except Per Share Amounts)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 Revenue

  

 $

 64,069

  

  

 $

 59,540

  

  

 $

 125,804

  

  

 $

 127,970

  

 

 
 Cost of revenue

  

  

 53,639

  

  

  

 48,503

  

  

  

 105,709

  

  

  

 106,002

  

 

 
 Gross profit

  

  

 10,430

  

  

  

 11,037

  

  

  

 20,095

  

  

  

 21,968

  

 

 
 Operating expenses:

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Selling, general, and administrative

  

  

 8,246

  

  

  

 9,295

  

  

  

 16,635

  

  

  

 20,707

  

 

 
 Depreciation and amortization

  

  

 1,059

  

  

  

 1,299

  

  

  

 2,104

  

  

  

 2,842

  

 

 
 Loss on sale of assets, net

  

  

 88

  

  

  

 61

  

  

  

 77

  

  

  

 4,491

  

 

 
 Impairment loss

  

  

 11,000

  

  

  

 —

  

  

  

 11,000

  

  

  

 1,707

  

 

 
 Total operating expenses

  

  

 20,393

  

  

  

 10,655

  

  

  

 29,816

  

  

  

 29,747

  

 

 
 Operating (loss) income

  

  

 (9,963

 )

  

  

 382

  

  

  

 (9,721

 )

  

  

 (7,779

 )

 

 
 Interest expense

  

  

 (2,208

 )

  

  

 (2,375

 )

  

  

 (4,258

 )

  

  

 (4,642

 )

 

 
 Loss on extinguishment of debt

  

  

 —

  

  

  

 —

  

  

  

 (488

 )

  

  

 —

  

 

 
 Loss before taxes

  

  

 (12,171

 )

  

  

 (1,993

 )

  

  

 (14,467

 )

  

  

 (12,421

 )

 

 
 Income tax expense (benefit)

  

  

 46

  

  

  

 (22

 )

  

  

 68

  

  

  

 (44

 )

 

 
 Net loss

  

 $

 (12,217

 )

  

 $

 (1,971

 )

  

 $

 (14,535

 )

  

 $

 (12,377

 )

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Net loss per share applicable to common shareholders

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic and diluted

  

 $

 (0.57

 )

  

 $

 (0.09

 )

  

 $

 (0.68

 )

  

 $

 (0.59

 )

 

 
 Weighted average number of common shares outstanding

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic and diluted

  

  

 21,334

  

  

  

 20,933

  

  

  

 21,266

  

  

  

 20,896

  

 

 The accompanying notes are an integral part of these condensed consolidated financial statements. 
 

 3
 

 
  

 QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 
 (UNAUDITED) 
(In Thousands)
 
For the Three and Six Months Ended June 30, 2026

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

  

  

  

  

 Additional

  

  

  

  

  

 Total

  

 

 
  

  

 Common Stock

  

  

 Paid-in

  

  

 Accumulated

  

  

 Stockholders’

  

 

 
  

  

 Shares

  

  

 Par Value

  

  

 Capital

  

  

 Deficit

  

  

 Equity

  

 

 
 Balance, December 31, 2025

  

  

 20,960

  

  

 $

 21

  

  

 $

 180,984

  

  

 $

 (140,493

 )

  

 $

 40,512

  

 

 
 Stock-based compensation

  

  

 —

  

  

  

 —

  

  

  

 311

  

  

  

 —

  

  

  

 311

  

 

 
 Release of restricted stock units

  

  

 82

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Tax withholdings related to net stock settlements

  

  

 (28

 )

  

  

 —

  

  

  

 (41

 )

  

  

 —

  

  

  

 (41

 )

 

 
 Warrant modification

  

  

 —

  

  

  

 —

  

  

  

 198

  

  

  

 —

  

  

  

 198

  

 

 
 Net loss

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (2,318

 )

  

  

 (2,318

 )

 

 
 Balance, March 31, 2026

  

  

 21,014

  

  

  

 21

  

  

  

 181,452

  

  

  

 (142,811

 )

  

  

 38,662

  

 

 
 Stock-based compensation

  

  

 —

  

  

  

 —

  

  

  

 296

  

  

  

 —

  

  

  

 296

  

 

 
 Release of restricted stock units

  

  

 27

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Tax withholdings related to net stock settlements

  

  

 (8

 )

  

  

 —

  

  

  

 (10

 )

  

  

 —

  

  

  

 (10

 )

 

 
 Shares issued for Employee Stock Purchase Plan

  

  

 60

  

  

  

 —

  

  

  

 55

  

  

  

 —

  

  

  

 55

  

 

 
 Net loss

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (12,217

 )

  

  

 (12,217

 )

 

 
 Balance, June 30, 2026

  

  

 21,093

  

  

 $

 21

  

  

 $

 181,793

  

  

 $

 (155,028

 )

  

 $

 26,786

  

 

  
For the Three and Six Months Ended June 30, 2025

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

  

  

  

  

 Additional

  

  

  

  

  

 Total

  

 

 
  

  

 Common Stock

  

  

 Paid-in

  

  

 Accumulated

  

  

 Stockholders’

  

 

 
  

  

 Shares

  

  

 Par Value

  

  

 Capital

  

  

 Deficit

  

  

 Equity

  

 

 
 Balance, December 31, 2024

  

  

 20,606

  

  

 $

 21

  

  

 $

 179,246

  

  

 $

 (125,111

 )

  

 $

 54,156

  

 

 
 Stock-based compensation

  

  

 —

  

  

  

 —

  

  

  

 612

  

  

  

 —

  

  

  

 612

  

 

 
 Net loss

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (10,406

 )

  

  

 (10,406

 )

 

 
 Balance, March 31, 2025

  

  

 20,606

  

  

  

 21

  

  

  

 179,858

  

  

  

 (135,517

 )

  

  

 44,362

  

 

 
 Stock-based compensation

  

  

 —

  

  

  

 —

  

  

  

 500

  

  

  

 —

  

  

  

 500

  

 

 
 Release of deferred and restricted stock units

  

  

 74

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Tax withholdings related to net stock settlements

  

  

 (13

 )

  

  

 —

  

  

  

 (31

 )

  

  

 —

  

  

  

 (31

 )

 

 
 Shares issued for Employee Stock Purchase Plan

  

  

 45

  

  

  

 —

  

  

  

 78

  

  

  

 —

  

  

  

 78

  

 

 
 Net loss

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (1,971

 )

  

  

 (1,971

 )

 

 
 Balance, June 30, 2025

  

  

 20,712

  

  

 $

 21

  

  

 $

 180,405

  

  

 $

 (137,488

 )

  

 $

 42,938

  

 

 The accompanying notes are an integral part of these condensed consolidated financial statements.

 4
 

 
  

 QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(UNAUDITED) 
(In Thousands)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 For the Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities:

  

  

  

  

  

  

 

 
 Net loss

  

 $

 (14,535

 )

  

 $

 (12,377

 )

 

 
 Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

  

  

  

  

  

  

 

 
 Depreciation

  

  

 358

  

  

  

 477

  

 

 
 Amortization of intangibles

  

  

 2,068

  

  

  

 2,769

  

 

 
 Amortization of debt issuance costs and discounts

  

  

 442

  

  

  

 408

  

 

 
 Provision for doubtful accounts

  

  

 120

  

  

  

 428

  

 

 
 Stock-based compensation

  

  

 745

  

  

  

 1,195

  

 

 
 Loss on sale of assets, net

  

  

 77

  

  

  

 4,491

  

 

 
 Impairment loss

  

  

 11,000

  

  

  

 1,707

  

 

 
 Loss on extinguishment of debt

  

  

 488

  

  

  

 —

  

 

 
 Changes in operating assets and liabilities:

  

  

  

  

  

  

 

 
 Accounts receivable

  

  

 (717

 )

  

  

 8,510

  

 

 
 Prepaid expenses and other current assets

  

  

 (537

 )

  

  

 (270

 )

 

 
 Security deposits and other assets

  

  

 (7

 )

  

  

 —

  

 

 
 Accounts payable and accrued liabilities

  

  

 5,249

  

  

  

 (3,638

 )

 

 
 Deferred revenue and other liabilities

  

  

 (100

 )

  

  

 (855

 )

 

 
 Net cash provided by operating activities

  

  

 4,651

  

  

  

 2,845

  

 

 
 Cash flows from investing activities:

  

  

  

  

  

  

 

 
 Purchase of property and equipment

  

  

 (83

 )

  

  

 (177

 )

 

 
 Purchase of intangible assets

  

  

 (711

 )

  

  

 (593

 )

 

 
 Proceeds from sale of assets

  

  

 129

  

  

  

 5,004

  

 

 
 Net cash (used in) provided by investing activities

  

  

 (665

 )

  

  

 4,234

  

 

 
 Cash flows from financing activities:

  

  

  

  

  

  

 

 
 Proceeds from credit facilities

  

  

 37,549

  

  

  

 54,274

  

 

 
 Repayments of credit facilities

  

  

 (37,037

 )

  

  

 (57,028

 )

 

 
 Proceeds from long-term debt

  

  

 —

  

  

  

 390

  

 

 
 Repayments of long-term debt

  

  

 (4,270

 )

  

  

 (4,235

 )

 

 
 Proceeds from shares issued for Employee Stock Purchase Plan

  

  

 55

  

  

  

 78

  

 

 
 Tax payments for net share settlements

  

  

 (51

 )

  

  

 —

  

 

 
 Debt issuance costs

  

  

 (223

 )

  

  

 (505

 )

 

 
 Net cash used in financing activities

  

  

 (3,977

 )

  

  

 (7,026

 )

 

 
 Net increase in cash and cash equivalents

  

  

 9

  

  

  

 53

  

 

 
 Cash and cash equivalents at beginning of period

  

  

 1,014

  

  

  

 396

  

 

 
 Cash and cash equivalents at end of period

  

 $

 1,023

  

  

 $

 449

  

 

 
  

  

  

  

  

  

  

 

 
 Supplemental cash flow information:

  

  

  

  

  

  

 

 
 Cash paid for interest

  

 $

 3,516

  

  

 $

 3,269

  

 

 
 Cash paid for income taxes, net

  

 $

 71

  

  

 $

 110

  

 

 
 Supplemental non-cash investing and financing activities:

  

  

  

  

  

  

 

 
 Debt issuance costs added to notes payable

  

 $

 691

  

  

 $

 —

  

 

 
 Debt issuance cost added to other long-term liabilities

  

 $

 2,000

  

  

 $

 —

  

 

 
 Liabilities assumed in exchange for right of use lease assets

  

 $

 489

  

  

 $

 —

  

 

 The accompanying notes are an integral part of these condensed consolidated financial statements. 

 5
 

 
  

 QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED) 
 
1. The Company and Description of Business 
The accompanying condensed consolidated financial statements include the accounts of Quest Resource Holding Corporation (“QRHC”) and its subsidiaries, Quest Resource Management Group, LLC (“Quest”), Quest Equipment, LLC, Youchange, Inc., Quest Vertigent Corporation, Quest Vertigent One, LLC, Quest Sustainability Services, Inc. and Global Alerts, LLC (collectively, “we”, “us”, or “our company”).
We are a national provider of waste and recycling management services to customers from across multiple industry sectors that are typically larger, multi-location businesses. We create customer-specific programs and perform the related services for the collection, processing, recycling, disposal, and tracking of waste streams and recyclables to maximize resource utilization. Our programs and services also enable our customers to address their business sustainability and environmental, social and governance goals and responsibilities, while also receiving optimized operational efficiencies and lower costs. In addition, we offer products such as antifreeze and windshield washer fluid, dumpster and compacting equipment, and other minor ancillary services. 

2. Summary of Significant Accounting Policies 
Principles of Presentation and Consolidation 
The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2025. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading. 
The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at June 30, 2026 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2025 condensed consolidated balance sheet data from audited financial statements. 
Our chief operating decision maker (“CODM”), the President and Chief Executive Officer, manages our company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses consolidated net income (loss) to measure segment profit or loss, allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (cost of revenue, selling, general and administrative) at the consolidated level to manage our operations. Other segment items included in consolidated net income (loss) are interest expense and income tax expense (benefit), which are reflected in the condensed consolidated statements of operations. For expenses incurred during the three and six months ended June 30, 2026 and 2025, refer to our condensed consolidated statements of operations.
All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year.

Recent Accounting Pronouncements 
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement-Reporting Comprehensive Income/Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting ASU No. 2024-03.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 306): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that allows public entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. We adopted ASU 2025-05 effective January 1, 2026 on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal—Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes guidance on accounting for costs related to internal-use software. This ASU removes references to software development project stages and applies a more principles-based approach for capitalization. The ASU also clarifies related disclosure requirements. The ASU is effective for annual periods beginning 

 6
 

 
  

 after December 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied prospectively, retrospectively or using a modified transition approach. Early adoption is permitted. We are currently evaluating the provisions of this ASU, but we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. 
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Subtopic 270-10): Narrow-Scope Improvements, which clarifies the interim disclosure requirements in Topic 270 to improve consistency of interim financial reporting. This ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events or changes occurring after the end of the most recent annual reporting period that have a material impact on interim results. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. This guidance is only related to disclosures, and early adoption is permitted. We are currently evaluating the impact of adopting this ASU, but we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.
There have been no other recent accounting pronouncements or changes in accounting pronouncements that have been issued but not yet adopted that are of significance, or potential significance, to us.

3. Sale of Assets
On March 31, 2025, Quest entered into an asset purchase agreement (the “APA”) with Lincoln Waste Solutions, LLC, a Connecticut limited liability company (“Purchaser”), and completed the sale to Purchaser of substantially all of the assets used in Quest’s divested business operations as set forth in the APA. The selling price of the assets was approximately $5.0 million in cash, and we recognized a $4.5 million loss on the sale of the assets for the six months ended June 30, 2025. The cash proceeds received at the time of sale were used to repay debt as further discussed in Note 8, Notes Payable and Other Long-Term Liabilities.
The APA provides for the selling price to also include (i) additional amounts, not to exceed $6.5 million, based on the future performance of the contracts sold over the three years following the date of sale (collectively, the “Milestone Payments”) and (ii) a one-time payment based on the Purchaser’s ability to collect the accounts receivable and other monies due for sales and delivery of goods, performance of services and other business transactions, subject to certain other adjustments as set forth in the APA, during the four months immediately following the sale (the “Collection Period”). The APA also includes clawback provisions, not to exceed $5.0 million, to be applied against Quest’s collection of accounts receivable during the Collection Period and receipt of any future Milestone Payments if certain metrics were not met. We will adjust the purchase price as the Milestone Payments, net of clawback adjustments, become reasonably estimable. 

4. Accounts Receivable, Net of Allowance for Doubtful Accounts
Our receivables, which are recorded when services are performed or when services are billed in advance, are claims against third parties that will generally be settled in cash. The carrying value of our receivables, net of the allowance for doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based on consideration of a number of factors, including the length of time trade accounts are past due, our previous loss history, the creditworthiness of individual customers, economic conditions affecting specific customer industries, and economic conditions in general. We write off past-due receivable balances after all reasonable collection efforts have been exhausted. We credit payments subsequently received on such receivables to the allowance for doubtful accounts in the period we receive the payment. We record delinquent finance charges on outstanding accounts receivable only if they are collected.
The changes in our allowance for doubtful accounts of trade receivables for the three and six months ended June 30, 2026 and 2025, were as follows (in thousands):

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
  

  

 (Unaudited)

  

  

 (Unaudited)

  

 

 
 Beginning balance

  

 $

 712

  

  

 $

 873

  

  

 $

 780

  

  

 $

 831

  

 

 
 Bad debt expense

  

  

 52

  

  

  

 112

  

  

  

 120

  

  

  

 428

  

 

 
 Uncollectible accounts written off, net

  

  

 (36

 )

  

  

 (234

 )

  

  

 (172

 )

  

  

 (508

 )

 

 
 Ending balance

  

 $

 728

  

  

 $

 751

  

  

 $

 728

  

  

 $

 751

  

 

  

 7
 

 
  

 5. Property and Equipment, Net, and Other Assets 
At June 30, 2026 and December 31, 2025, property and equipment, net, and other assets consisted of the following (in thousands): 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (Unaudited)

  

  

  

  

 

 
 Property and equipment, net of accumulated depreciation of $3,662
   and $3,447 as of June 30, 2026 and December 31, 2025, respectively

  

 $

 2,707

  

  

 $

 2,883

  

 

 
 Right-of-use operating lease assets

  

  

 2,218

  

  

  

 2,112

  

 

 
 Security deposits and other assets

  

  

 713

  

  

  

 643

  

 

 
     Property and equipment, net, and other assets

  

 $

 5,638

  

  

 $

 5,638

  

 

 
We compute depreciation using the straight-line method over the estimated useful lives of the property and equipment. Depreciation expense for the three months ended June 30, 2026 was $177 thousand, including $159 thousand of depreciation expense reflected within “Cost of revenue” in our condensed consolidated statements of operations, as it related to assets used in directly servicing customer contracts, and was $358 thousand for the six months ended June 30, 2026, including $322 thousand of depreciation expense reflected within “Cost of revenue”. Depreciation expense for the three months ended June 30, 2025 was $236 thousand, including $202 thousand of depreciation expense reflected within “Cost of revenue”, and was $477 thousand for the six months ended June 30, 2025, including $404 thousand of depreciation expense reflected within “Cost of revenue”.
Right-of-use operating lease assets are recognized in accordance with ASC 842. See Note 9, Leases for additional information.

6. Goodwill and Other Intangible Assets 
The components of goodwill and other intangible assets were as follows (in thousands): 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 June 30, 2026 (Unaudited)

  

 Estimated
Useful Life

  

 Gross Carrying
Amount

  

  

 Accumulated
Amortization

  

  

 Net

  

 

 
 Finite-lived intangible assets:

  

  

  

  

  

  

  

  

  

  

  

 

 
 Customer relationships

  

 5 years

  

 $

 20,685

  

  

 $

 19,500

  

  

 $

 1,185

  

 

 
 Software

  

 7 years

  

  

 6,450

  

  

  

 1,989

  

  

  

 4,461

  

 

 
 Trademarks

  

 7 years

  

  

 2,026

  

  

  

 1,380

  

  

  

 646

  

 

 
 Non-compete agreements

  

 3 years

  

  

 140

  

  

  

 140

  

  

  

 —

  

 

 
 Total finite-lived intangible assets

  

  

  

 $

 29,301

  

  

 $

 23,009

  

  

 $

 6,292

  

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 December 31, 2025

  

 Estimated
Useful Life

  

 Gross Carrying
Amount

  

  

 Accumulated
Amortization

  

  

 Net

  

 

 
 Finite-lived intangible assets:

  

  

  

  

  

  

  

  

  

  

  

 

 
 Customer relationships

  

 5 years

  

 $

 20,685

  

  

 $

 17,979

  

  

 $

 2,706

  

 

 
 Software

  

 7 years

  

  

 5,740

  

  

  

 1,586

  

  

  

 4,154

  

 

 
 Trademarks

  

 7 years

  

  

 2,026

  

  

  

 1,236

  

  

  

 790

  

 

 
 Non-compete agreements

  

 3 years

  

  

 140

  

  

  

 140

  

  

  

 —

  

 

 
 Total finite-lived intangible assets

  

  

  

 $

 28,591

  

  

 $

 20,941

  

  

 $

 7,650

  

 

 
 

 
 
 
 
 
 
 
 
 
 

 
 Changes in goodwill:

  

  

  

 Carrying Amount

  

 

 
 Goodwill balance at December 31, 2025

  

  

  

 $

 81,065

  

 

 
 Impairment

  

  

  

  

 (11,000

 )

 

 
 Goodwill balance at June 30, 2026

  

  

  

 $

 70,065

  

 

 
We compute amortization using the straight-line method over the useful lives of the finite-lived intangible assets. Amortization expense related to finite-lived intangible assets was $1.0 million and $1.3 million for the three months ended June 30, 2026 and 2025, respectively. Amortization expense related to finite-lived intangible assets was $2.1 million and $2.8 million for the six months ended June 30, 2026 and 2025, respectively. 
We have no indefinite-lived intangible assets other than goodwill. Approximately $55.1 million of goodwill is not deductible for tax purposes, while $15.0 million of goodwill is deductible over its tax-basis life.
We review our finite-lived intangible assets periodically for indicators of impairment. During the first quarter of 2025, following certain customer activity, we evaluated the customer relationship intangible asset balance for recoverability and noted the unamortized balance of the intangible was not recoverable. Accordingly, we performed an impairment test for the intangible asset using a discounted cash flow analysis and internal forecasts (Level 3 inputs) to determine the fair value of the asset. The carrying value of the intangible asset exceeded its fair value, which resulted in an impairment charge of $1.7 million in the six months ended June 30, 2025.

 8
 

 
  

 During the three months ended June 30, 2026, our Company’s stock price traded below its book value per share for a sustained period. As a sustained decline in market capitalization is a potential indicator of goodwill impairment, we performed an interim quantitative goodwill assessment. Management engaged a third-party to perform the assessment as of May 31, 2026, which estimated the fair value of the Company using the discounted cash flow method and guideline public company method (Level 3 inputs). We considered the relationship between estimated fair value and market capitalization when evaluating the goodwill impairment analysis. The results of these assessments indicated that the Company's fair value was less than the Company's carrying value, and therefore, we recognized a goodwill impairment of $11.0 million as of June 30, 2026. The goodwill impairment charges are reflected in “Impairment loss” in our condensed consolidated statements of operations. The remaining goodwill value as of June 30, 2026 was $70.1 million. We will continue to monitor for any additional indicators of impairment in future periods. Goodwill is tested for impairment at least annually and between annual tests whenever there is an indication of impairment.

7. Current Liabilities
The components of accounts payable and accrued liabilities were as follows (in thousands):

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (Unaudited)

  

  

  

  

 

 
 Accounts payable

  

 $

 38,811

  

  

 $

 34,105

  

 

 
 Accrued taxes

  

  

 560

  

  

  

 382

  

 

 
 Employee compensation (1)

  

  

 1,685

  

  

  

 2,049

  

 

 
 Operating lease liability - current portion

  

  

 733

  

  

  

 621

  

 

 
 Accrued interest

  

  

 487

  

  

  

 532

  

 

 
 Miscellaneous

  

  

 1,525

  

  

  

 695

  

 

 
 Accounts payable and accrued liabilities

  

 $

 43,801

  

  

 $

 38,384

  

 

  
(1) Employee compensation includes accrued severance and retirement costs of approximately $310 thousand and $766 thousand at June 30, 2026 and December 31, 2025, respectively.

 
See Note 9, Leases for additional disclosure related to the operating lease liabilities.

8. Notes Payable and Other Long-Term Liabilities
Our debt obligations were as follows (in thousands):
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Interest

  

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 Rate (1)

  

  

 2026

  

  

 2025

  

 

 
  

  

  

  

  

 (Unaudited)

  

  

  

  

 

 
 Monroe Term Loan (2)

  

 11.23%

  

  

 $

 46,823

  

  

 $

 51,093

  

 

 
 TCB ABL Facility (3)

  

 6.12%

  

  

  

 17,473

  

  

  

 —

  

 

 
 PNC ABL Facility

  

  

 —

  

  

  

 —

  

  

  

 15,639

  

 

 
 PNC Equipment Term Loan 1

  

  

 —

  

  

  

 —

  

  

  

 345

  

 

 
 PNC Equipment Term Loan 2

  

  

 —

  

  

  

 —

  

  

  

 147

  

 

 
 Total notes payable

  

  

  

  

  

 64,296

  

  

  

 67,224

  

 

 
 Less: Current portion of notes payable

  

  

  

  

  

 (540

 )

  

  

 (1,015

 )

 

 
 Less: Unamortized debt issuance costs and discounts

  

  

  

  

  

 (4,391

 )

  

  

 (2,210

 )

 

 
 Notes payable, net

  

  

  

  

 $

 59,365

  

  

 $

 63,999

  

 

 
  

  

  

  

  

  

  

  

  

  

 

 
 (1) Interest rates as of June 30, 2026

  

 

 
 (2) Bears interest based on SOFR plus Applicable Margin ranging from 5.5% to 7.5%

  

 

 
 (3) Bears interest based on SOFR plus Applicable Margin ranging from 1.75% to 2.75%

  

 

 
 

 9
 

 
  

 We capitalize financing costs we incur related to implementing our debt arrangements. We record these debt issuance costs associated with our revolving credit facility and our term loan as a reduction of long-term debt, net and amortize them over the contractual life of the related debt arrangements. The table below summarizes changes in debt issuance costs and discounts (in thousands).
 

 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

 June 30,

  

 

 
  

  

  

  

 2026

  

 

 
  

  

  

  

  

  

 

 
 Debt issuance costs and discounts, net of accumulated amortization

  

  

  

  

  

 

 
 Balance at December 31, 2025

  

  

  

 $

 2,210

  

 

 
 Financing costs deferred and discounts

  

  

  

  

 3,111

  

 

 
 Less: Amortization expense

  

  

  

  

 (442

 )

 

 
 Less: Write-off of costs in debt extinguishment

  

  

  

  

 (488

 )

 

 
 Balance at June 30, 2026 (Unaudited)

  

  

  

 $

 4,391

  

 

 
 
Revolving Credit Facility
On March 12, 2026, QRHC and certain of its domestic subsidiaries entered into a Loan and Security Agreement with Texas Capital Bank (the “TCB Loan Agreement”). Capitalized terms not otherwise defined herein have the meanings set forth in the TCB Loan Agreement. Among other things, the TCB Loan Agreement provides for an asset-based revolving credit facility (the “TCB ABL Facility”) in the maximum principal amount of $40.0 million with a sublimit for issuance of letters of credit of up to $3.5 million. The maturity date of the TCB ABL Facility is December 30, 2029. The TCB ABL Facility contains an accordion feature permitting the TCB ABL Facility to be increased by up to $10 million.
Certain of QRHC’s domestic subsidiaries are the borrowers under the TCB Loan Agreement. QRHC and certain of its domestic subsidiaries are guarantors under the TCB Loan Agreement. As security for the obligations of the borrowers under the TCB Loan Agreement, (i) the borrowers under the TCB Loan Agreement have granted a first priority lien on substantially all of their tangible and intangible personal property, including a pledge of the capital stock and membership interests, as applicable, of certain of QRHC’s direct and indirect subsidiaries, and (ii) the guarantors under the TCB Loan Agreement have granted a first priority lien on the capital stock and membership interests, as applicable, of certain of QRHC’s direct and indirect domestic subsidiaries.
The TCB Loan Agreement contains certain financial covenants, including a minimum fixed charge coverage ratio. In addition, the TCB Loan Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The TCB Loan Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, change of control, and failure of any guaranty or security document supporting the TCB Loan Agreement to be in full force and effect. Upon the occurrence of an event of default, the outstanding obligations under the TCB Loan Agreement may be accelerated and become immediately due and payable.
The TCB ABL Facility bears interest, at the lesser of the Maximum Rate, as defined in the TCB Loan Agreement, or the Applicable Rate of Term SOFR for the interest period in effect, plus a margin ranging from 1.75% to 2.75%.
In connection with the TCB ABL Facility, we incurred a fee of $300 thousand as well as other direct costs of approximately $614 thousand, which are being amortized over the life of the TCB ABL Facility.
The TCB Loan Agreement replaced our Loan, Security and Guaranty Agreement, dated as of August 5, 2020, as subsequently amended, with