What changed in Quest Resource Holding Corp's 2024 10-K compared to 2023?

Across the narrative sections we track, Quest Resource Holding Corp (QRHC) added 165 paragraphs, removed 148, and edited 123 between the 2023 and 2024 10-K filings. The biggest movers are Item 1. Business (+165/−148).

Where does this QRHC 10-K diff come from?

The source filings are Quest Resource Holding Corp's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

QRHC 10-K Diff 2023 vs 2024 — Quest Resource Holding Corp Risk Factors & MD&A Changes

Biggest changeNet cash used in operating activities for the year ended December 31, 2023, related primarily to the net effect of the following: • net loss of $(7.3) million; • non-cash items of $14.2 million, which related primarily to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and • cash used in the net change in operating assets and liabilities of $(8.2) million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities. 23 Net cash used in operating activities for the year ended December 31, 2022, related primarily to the net effect of the following: • net loss of $(6.0) million; • non-cash items of $14.3 million, which related primarily to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and • cash used in the net change in operating assets and liabilities of $(10.6) million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities.

Biggest changeNet cash used in operating activities for the year ended December 31, 2023 related primarily to the net effect of the following: • net loss of $(7.3) million; • non-cash items of $14.2 million, which related primarily to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and • cash used in the net change in operating assets and liabilities of $(8.2) million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities.

If the benefits of any completed or proposed acquisition of do not meet the expectations of investors, stockholders or financial analysts, the market price of our Common Stock may decline.

If the benefits of any completed or proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our Common Stock may decline.

In addition to the risk factors described in this section and elsewhere in this Annual Report on Form 10-K, factors that may cause the price of our Common Stock to fluctuate include the following: • limited trading activity in our Common Stock; • actual or anticipated fluctuations in our quarterly or annual financial results; • the financial guidance we may provide to the public, any changes in such guidance, or our failure to meet such guidance; • the failure of industry or securities analysts to maintain coverage of our company, changes in financial estimates by any industry or securities analysts that follow our company, or our failure to meet such estimates; • various market factors or perceived market factors, including rumors, whether or not correct, involving us, our customers, our strategic partners, or our competitors; • sales, or anticipated sales, of large blocks of our stock; • short selling of our Common Stock by investors; • additions or departures of key personnel; • announcements of technological innovations by us or by our competitors; • introductions of new services or new pricing policies by us or by our competitors; • changing competitive factors; • regulatory or political developments; • fluctuating commodity prices, including oil; • litigation and governmental or regulatory investigations; 14 • acquisitions or strategic alliances by us or by our competitors; and • general economic, political, and financial market conditions or events.

In addition to the risk factors described in this section and elsewhere in this Annual Report on Form 10-K, factors that may cause the price of our Common Stock to fluctuate include the following: • limited trading activity in our Common Stock; • actual or anticipated fluctuations in our quarterly or annual financial results; • the financial guidance we may provide to the public, any changes in such guidance, or our failure to meet such guidance; 14 • the failure of industry or securities analysts to maintain coverage of our company, changes in financial estimates by any industry or securities analysts that follow our company, or our failure to meet such estimates; • various market factors or perceived market factors, including rumors, whether or not correct, involving us, our customers, our strategic partners, or our competitors; • sales, or anticipated sales, of large blocks of our stock; • short selling of our Common Stock by investors; • additions or departures of key personnel; • announcements of technological innovations by us or by our competitors; • introductions of new services or new pricing policies by us or by our competitors; • changing competitive factors; • regulatory or political developments; • fluctuating commodity prices, including oil; • litigation and governmental or regulatory investigations; • acquisitions or strategic alliances by us or by our competitors; and • general economic, political, and financial market conditions or events.

Our services are designed to enable our business customers to capture the commodity value of their waste streams and recyclables, better manage their disposal and total operating costs, enhance their management of environmental risks, enhance their legal and regulatory compliance, and achieve their business and environmental goals while maximizing the efficiency of their assets.

Our articles of incorporation and bylaws include provisions that provide for the following: • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; • specify that special meetings of our stockholders can be called only by our board of directors or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; and • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

Our articles of incorporation and bylaws include provisions that provide for the following: • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; 15 • specify that special meetings of our stockholders can be called only by our board of directors or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; and • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

Cybersecurity risks are evaluated when determining the selection and oversight of applicable third-party service providers. • Continuous Monitoring: We have partnered with a third-party Managed Security Services Provider to provide event logging, monitoring for detection of cybersecurity events, and assistance with investigations into possible cyber-related events, as well as assessment and consultation on security enhancements. • Business Resiliency: We have developed emergency response, business continuity, and disaster recovery plans to respond to a widespread disruption to business operations. • Continuous Improvement: Any previous cybersecurity incidents, whether material or not, have resulted in improvements in the company’s cybersecurity program, policies, or technical controls, where applicable.

Cybersecurity risks are evaluated when determining the selection and oversight of applicable third-party service providers. 17 • Continuous Monitoring: We have partnered with a third-party Managed Security Services Provider to provide event logging, monitoring for detection of cybersecurity events, and assistance with investigations into possible cyber-related events, as well as assessment and consultation on security enhancements. • Business Resiliency: We have developed emergency response, business continuity, and disaster recovery plans to respond to a widespread disruption to business operations. • Continuous Improvement: Any previous cybersecurity incidents, whether material or not, have resulted in improvements in the company’s cybersecurity program, policies, or technical controls, where applicable.

Our ability to expand successfully will depend upon a number of factors, including the following: 7 • our ability to successfully expand, operate, and manage our operations; • the continued development of our business; • the hiring, training, and retention of additional personnel; • the ability to enhance our operational, financial, and management systems; • the availability of adequate financing; • competitive factors; • general economic and business conditions; • the ability to leverage on the factors expanding the growth of recycling; • the ability to expand our customer base, the types of recyclable materials covered by our services, and our network of third-party service providers; • the ability to implement new methods for revenue generation; and • the ability to expand our relationships with third parties that are also engaged in activities relating to reducing, reusing, and recycling.

Our ability to expand successfully will depend upon a number of factors, including the following: • our ability to successfully expand, operate, and manage our operations; • the continued development of our business; • the hiring, training, and retention of additional personnel; • the ability to enhance our operational, financial, and management systems; • the availability of adequate financing; • competitive factors; • general economic and business conditions; • the ability to leverage on the factors expanding the growth of recycling; • the ability to expand our customer base, the types of recyclable materials covered by our services, and our network of third-party service providers; • the ability to implement new methods for revenue generation; and • the ability to expand our relationships with third parties that are also engaged in activities relating to reducing, reusing, and recycling.

We intend to continue to expand the customer base for our services by focusing on the expertise we have gained and the value proposition that we offer to our business customers in terms of overall improved waste program economics, recyclable commodity value, flexible programs, broad service offerings, data reporting, and national capacities that we believe provides us with competitive advantages in expanding our customer base. • Expand into New Customer Verticals .

We intend to continue to expand the customer base for our services by focusing on the expertise we have gained and the value proposition that we offer to our business customers in terms of overall improved waste program economics, recyclable commodity value, flexible programs, broad service offerings, data reporting, and national capacities that we believe provides us with competitive advantages in expanding our customer base. 1 • Expand into New Customer Verticals .

If we have any such problems, we may be unable to service our customers in a cost-effective, high-quality, or timely manner, particularly in certain geographical areas, which may adversely affect our business and operating results. Our subcontractors also may seek to compete with us for customers they serve on our behalf or potential customers that we desire to serve.

If we have any such problems, we may be unable to service our customers in a cost-effective, high-quality, or timely manner, particularly in certain geographical areas, which may adversely affect our 8 business and operating results. Our subcontractors also may seek to compete with us for customers they serve on our behalf or potential customers that we desire to serve.

The fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of notes payable, based on borrowing rates currently available to us for loans with similar terms and maturities. 25 Recently Issued Accounting Pronouncements See Note 2 to our consolidated financial statements.

The fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of notes payable, based on borrowing rates currently available to us for loans with similar terms and maturities. Recently Issued Accounting Pronouncements See Note 2 to our consolidated financial statements.

If the equity and credit markets continue to deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs, including salary costs.

If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs, including salary costs.

Further, under our agreements with our customers, we are often required to indemnify our customers from any liabilities or claims arising out of our actions or those of our subcontractors and from any release, threatened release, handling, or storage of hazardous and other materials from our customers’ premises as a result of or connected with the performance of services by us or our 8 subcontractors to our customers.

Further, under our agreements with our customers, we are often required to indemnify our customers from any liabilities or claims arising out of our actions or those of our subcontractors and from any release, threatened release, handling, or storage of hazardous and other materials from our customers’ premises as a result of or connected with the performance of services by us or our subcontractors to our customers.

The costs of complying with these regulations could be substantial, and may reduce the ability or willingness of our customers to use our services. This may adversely affect our results of operations. Environmental advocacy groups and regulatory agencies have focused on the potential role that greenhouse gases have on climate change.

The costs of complying with these regulations could be substantial, and may reduce the ability or willingness of our customers to use our services. This may adversely affect our results of operations. 10 Environmental advocacy groups and regulatory agencies have focused on the potential role that greenhouse gases have on climate change.

Any provision of our articles of incorporation or bylaws or Nevada law that has the effect of delaying or deterring a change in control 15 could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common Stock.

Any provision of our articles of incorporation or bylaws or Nevada law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common Stock.

Furthermore, our contractual arrangements with our major customers generally are on a multi-year basis and pertain to the management of only certain forms of materials. These contractual arrangements typically have a term of two to three years and they do not typically provide us with firm, long-term volume commitments.

Furthermore, our contractual arrangements with our major customers generally are on a multi-year basis and pertain to the management of only certain forms of materials. These contractual arrangements typically have a term of two to three 7 years and they do not typically provide us with firm, long-term volume commitments.

The PNC Loan Agreement and the Credit Agreement each 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 PNC Loan Agreement or the Credit Agreement, as applicable, to be in full force and effect.

The PNC Loan Agreement and the Credit Agreement each 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 11 document supporting the PNC Loan Agreement or the Credit Agreement, as applicable, to be in full force and effect.

Volumes of waste and recyclable materials generated by our customers are impacted period to period based on 20 several factors including their production or sales levels, demand of their product or services in the market, supply chain reliability, and labor force stability, among other business factors.

Volumes of waste and recyclable materials generated by our customers are impacted period to period based on several factors including their production or sales levels, demand of their product or services in the market, supply chain reliability, and labor force stability, among other business factors.

As a result, they may be able to devote greater 4 resources to the promotion and sale of services similar to those we offer, to provide comparable services at lower prices, and to introduce new solutions and respond to customer requirements more quickly than we can.

As a result, they may be able to devote greater resources to the promotion and sale of services similar to those we offer, to provide comparable services at lower prices, and to introduce new solutions and respond to customer requirements more quickly than we can.

We also rely on third-party providers for components of our technology platform, such as hardware and software providers and domain name registrars. A failure or limitation of service or available capacity by any of these third-party providers could adversely affect our business.

We also rely on third-party providers for components of our technology platform, such as hardware and software providers and domain 9 name registrars. A failure or limitation of service or available capacity by any of these third-party providers could adversely affect our business.

Management uses adjusted net income and adjusted net income per diluted share as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income to exclude the effects of items management believes impact the comparability of operating results between periods.

Management uses adjusted net income (loss) and adjusted net income (loss) per diluted share as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income (loss) to exclude the effects of items management believes impact the comparability of operating results between periods.

We require working capital primarily to carry accounts receivable, 22 service debt, purchase capital assets, fund operating expenses, address unanticipated competitive threats or technical problems, withstand adverse economic conditions, fund potential acquisition transactions, and pursue goals and strategies.

We require working capital primarily to carry accounts receivable, service debt, purchase capital assets, fund operating expenses, address unanticipated competitive threats or technical problems, withstand adverse economic conditions, fund potential acquisition transactions, and pursue goals and strategies.

An adverse determination of any litigation or defense proceedings could 9 cause us to pay substantial damages, including treble damages, if we willfully infringe and also could increase the risk of our patent applications not being issued.

An adverse determination of any litigation or defense proceedings could cause us to pay substantial damages, including treble damages, if we willfully infringe and also could increase the risk of our patent applications not being issued.

Such financing may not be available or may not be available on satisfactory terms. In addition, the terms of our PNC Loan Agreement and the Credit Agreement could limit our ability to obtain additional debt 11 financing. If financing is not available on satisfactory terms, we may be unable to expand our operations.

Such financing may not be available or may not be available on satisfactory terms. In addition, the terms of our PNC Loan Agreement and the Credit Agreement could limit our ability to obtain additional debt financing. If financing is not available on satisfactory terms, we may be unable to expand our operations.

The foregoing is a summary only and does not purport to be a complete description of all the terms, provisions, covenants and agreements contained in the Credit Agreement and is subject to and qualified in its entirety by reference to the full text of the Credit Agreement.

The foregoing is a summary only and does not purport to be a complete description of all the terms, 23 provisions, covenants and agreements contained in the Credit Agreement and is subject to and qualified in its entirety by reference to the full text of the Credit Agreement.

We present adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures, supplementally because they are widely used by investors as a valuation measure in the solid waste industry.

We present adjusted net income (loss) and adjusted net income (loss) per diluted share, both non-GAAP financial measures, supplementally because they are widely used by investors as a valuation measure in the solid waste industry.

They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates than those 13 which we have to offer.

They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates than those which we have to offer.

Increased competition for acquisition candidates 12 may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in the returns required by our acquisition criteria.

Increased competition for acquisition candidates may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in the returns required by our acquisition criteria.

We can provide no assurance that such litigation or dispute will not arise in the future. Increased prices and inflation could negatively impact our financial results.

We can provide no assurance that such litigation or dispute will not arise in the future. 13 Increased prices and inflation could negatively impact our financial results.

The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities.

The preparation of our consolidated 24 financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities.

The Credit Agreement contains certain financial covenants, including a minimum fixed charge coverage ratio and a senior net leverage ratio. In addition, the Credit 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 matter customarily restricted in such agreements.

The Credit Agreement contains certain financial covenants, including a minimum fixed charge coverage ratio and a senior net leverage ratio. In addition, the Credit 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.

See Note 7 to our consolidated financial statements for a discussion of the ABL Facility and other notes payable. Inflation Although the overall economy has experienced some inflationary pressures, we do not believe that inflation had a material impact on us during the years ended December 31, 2023 and 2022.

See Note 7 to our consolidated financial statements for a discussion of the ABL Facility and other notes payable. Inflation Although the overall economy has experienced some inflationary pressures, we do not believe that inflation had a material impact on us during the years ended December 31, 2024 and 2023.

Concurrently with our acquisition of the QRMG Interests, we assigned the QRMG Interests to Earth911 so that Earth911 now holds 100% of the issued and outstanding membership interests of QRMG.

Concurrently with our acquisition of the QRMG Interests, we assigned the QRMG Interests to Earth911 so that Earth911 now holds 6 100% of the issued and outstanding membership interests of QRMG.

Equity Compensation Plan Information For equity compensation plan information, refer to Item 12 in Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities Except as previously disclosed in the Company’s filings with the SEC, there were no sales of unregistered securities for the year ended December 31, 2023.

Equity Compensation Plan Information For equity compensation plan information, refer to Item 12 in Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities Except as previously disclosed in the Company’s filings with the SEC, there were no sales of unregistered securities for the year ended December 31, 2024.

As of December 31, 2023 and 2022, we did not recognize any assets or liabilities relative to uncertain tax positions, nor do we anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. We recognize any interest or penalties related to unrecognized tax benefits in income tax expense.

As of December 31, 2024 and 2023, we did not recognize any assets or liabilities relative to uncertain tax positions, nor do we anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. We recognize any interest or penalties related to unrecognized tax benefits in income tax expense.

To the extent we establish or increase a valuation allowance in a period, we include an adjustment within the tax provision of our consolidated statements of operations. As of December 31, 2023 and 2022, we had established a full valuation allowance for all deferred tax assets.

To the extent we establish or increase a valuation allowance in a period, we include an adjustment within the tax provision of our consolidated statements of operations. As of December 31, 2024 and 2023, we had established a full valuation allowance for all deferred tax assets.

Other investing activities are primarily from purchases of property and equipment and intangible assets such as software development.

Other investing activities are primarily from intangible assets such as software development costs and purchases of other property and equipment.

We rely on third-party technology, server, and hardware providers for our operations and for maintaining our data, and a failure of service by these providers could adversely affect our business and reputation. We rely upon third-party data center providers to host our main servers.

We rely on third-party providers to provide services and technology, server, and hardware for our operations and for maintaining our data, and a failure of service by these providers could adversely affect our business and reputation. We rely upon third-party data center providers to host our main servers.

Our services currently focus on the waste streams and recyclables from big box retailers, including grocers and other specialty retailers; transportation, logistics, and fleet operators; manufacturing and industrial facilities; automotive after-market operations such as automotive maintenance, quick lube, dealerships, and collision repair; multi-family and commercial properties; restaurant chains and food operations; malls and shopping centers; and construction and demolition projects.

Our services currently focus on the waste streams and recyclables from big box retailers, including grocers and other specialty retailers; transportation, logistics, and fleet operators; manufacturing and industrial facilities; automotive after-market operations such as automotive maintenance, quick lube, dealerships, and collision repair; multi-family and commercial properties; restaurant chains and food operations; and construction and demolition projects.

Our services currently focus on the waste streams and recyclables from big box retailers, including grocers and other specialty retailers; transportation, logistics, and fleet operators; manufacturing and industrial facilities; automotive after-market operations such as automotive maintenance, quick lube, dealerships, and collision repair; multi-family and commercial properties; restaurant chains and food operations; malls and shopping centers; and construction and demolition projects.

Our services currently focus on the waste streams and recyclables from big box retailers, including grocers and other specialty retailers; transportation, logistics, and fleet operators; manufacturing and industrial facilities; automotive after-market operations such as automotive maintenance, quick lube, dealerships, and collision repair; multi-family and commercial properties; restaurant chains and food operations; and construction and demolition projects.

The recovery of valuable materials is a strong motivator to educate businesses and consumers about proper disposal. We provide our services on a national basis as well as in certain international regions. We currently service tens of thousands of locations for various customers throughout the United States (including Puerto Rico) and Canada. Our customers generally have multiple locations.

The recovery of valuable materials is a strong motivator to educate businesses and consumers about proper disposal. We provide our services on a national basis as well as in certain international regions. We currently service tens of thousands of locations for various customers throughout the United States (including Puerto Rico) and Canada.

We believe we are regarded as an attractive acquiror because of (1) our historical performance of successfully developing, servicing and growing customer relationships; (2) the experience and reputation of our management team within the industry; (3) our ability to bring our vendor network to service accounts; (4) our ability to integrate customer service, invoicing, accounting and other financial functions into our company, which generally enables the management of an acquired company to continue their involvement in the combined company by focusing on existing and new customers; (5) the ability of management and employees of acquired companies to participate in our potential growth and expansion through a combination of stock ownership, performance linked incentives, and career advancement opportunities; and (6) the ability to offer liquidity to the owners of acquired companies through the receipt of common stock or cash. • Expand our Customer Base .

We believe we are regarded as an attractive acquiror because of (1) our historical performance of successfully developing, servicing and growing customer relationships; (2) the experience and reputation of our management team within the industry; (3) our ability to bring our vendor network to service accounts; (4) our ability to integrate customer service, invoicing, accounting and other financial functions into our company, which generally enables the management of an acquired company to continue their involvement in the combined company by focusing on existing and new customers; (5) the ability of management and employees of acquired companies to participate in our potential growth and expansion through a combination of stock ownership, performance linked incentives, and career advancement opportunities; and (6) the ability to offer liquidity to the owners of acquired companies through the receipt of common stock or cash. • Maintain Virtual Facilities and Equipment .

Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition. Revenue For the year ended December 31, 2023, revenue was $288.4 million, an increase of $4.4 million, or 1.5%, compared with revenue of $284.0 million for the year ended December 31, 2022.

Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition. Revenue For the year ended December 31, 2024, revenue was $288.5 million, an increase of $0.1 million, or 0.1%, compared with revenue of $288.4 million for the year ended December 31, 2023.

We intend to emphasize the monetary advantages of recycling by demonstrating to businesses their ability to capture the commodity value of their waste streams and recyclables, better 1 manage their disposal and total operating cost, enhance their management of environmental risks, enhance their legal and regulatory compliance, and achieve their business, sustainability, and ESG goals. • Pursue Strategic Acquisitions .

We intend to emphasize the monetary advantages of recycling by demonstrating to businesses their ability to capture the commodity value of their waste streams and recyclables, better manage their disposal and total operating cost, enhance their management of environmental risks, enhance their legal and regulatory compliance, and achieve their business, sustainability, and ESG goals. • Pursue Strategic Technologies and Processes .

However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 to 24 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed.

However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 48 to 60 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed.

These areas include carrying amounts of accounts receivable, goodwill and other intangible assets, deferred taxes and the fair value of assets and liabilities acquired in business acquisitions and stock-based compensation expense.

These areas include carrying amounts of accounts receivable, goodwill and other intangible assets, deferred taxes and the fair value of assets and liabilities acquired in business acquisitions, assets held for sale, and stock-based compensation expense.

The provision for income taxes for both periods is primarily attributable to state tax obligations based on current estimated state tax apportionments for states with no net operating loss carryforwards. We recorded a full valuation allowance against all of our deferred tax assets (“DTAs”) as of both December 31, 2023 and 2022.

The provision for income taxes for both periods is primarily attributable to state tax obligations based on current estimated state tax apportionments for states with no net operating loss carryforwards and other timing differences. We recorded a full valuation allowance against all of our deferred tax assets (“DTAs”) as of both December 31, 2024 and 2023.

We can provide disposal and recycling services for virtually all forms of solids and liquids, with our current services being primarily related to cardboard, paper, metals, used motor oil, oil filters, scrap tires, plastics, grease, cooking oil, food waste, expired food 2 products, glass, industrial cleaning (separator cleaning and tank cleaning), construction debris, universal waste (batteries, mercury, lights), regulated waste, and electronic devices.

We can provide disposal and recycling services for virtually all forms of solids and liquids, with our current services being primarily related to cardboard, paper, metals, used motor oil, oil filters, scrap tires, plastics, grease, cooking oil, food waste, expired food products, glass, industrial cleaning (separator cleaning and tank cleaning), construction debris, universal waste (batteries, mercury, lights), regulated waste, and electronic devices. 2 Our value proposition to our business customers is simple.

We intend to leverage the demands by governmental authorities and by the public to expand efforts to recycle materials because of concerns about sustainability, greenhouse gases, and other environmental concerns, including the proliferation of ESG initiatives as evidenced by the SEC’s recent proposed rules. • Pursue Strategic Technologies and Processes .

We intend to leverage the demands by governmental authorities and by the public to expand efforts to recycle materials because of concerns about sustainability, greenhouse gases, and other environmental concerns, including the proliferation of ESG initiatives as evidenced by the SEC’s recent proposed rules.

Purchases of Equity Securities by the Issuer and Affiliate Purchasers None I TEM 6. [RESERVED] ITE M 7.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. I TEM 6. [RESERVED] ITE M 7.

Our business, including revenue, operating expenses, and operating margins, may vary depending on the blend of services we provide to our customers, the terms of customer contracts, commodity contracts, and our business volume levels.

Our business, including revenue, operating expenses, and operating margins, may vary depending on the blend of services we provide to our customers, the terms of customer contracts, recyclable materials contracts, and our business volume levels.

We depend on a small number of customers and the loss of one or more major customers could have a material adverse effect on our business. For the years ended December 31, 2023 and 2022 , two of our customers accounted for 29% and 24% of our revenues, respectively.

We depend on a small number of customers and the loss of one or more major customers could have a material adverse effect on our business. For the years ended December 31, 2024 and 2023, one of our customers accounted for 27% and two of our customers accounted for 29% of our revenues, respectively.

We also have administrative offices in Pennsylvania and South Carolina. We believe that our current facilities are adequate to meet our needs for the near future and that suitable additional or alternative space will be available on commercially reasonable terms to accommodate our foreseeable future operations. I TEM 3.

We also have an administrative office in Pennsylvania. We believe that our current facilities are adequate to meet our needs for the near future and that suitable additional or alternative space will be available on commercially reasonable terms to accommodate our foreseeable future operations. I TEM 3.

Loss per Share Net loss per basic and diluted share attributable to common stockholders was $(0.36) and ($0.31) for the years ended December 31, 2023 and 2022, respectively.

Loss per Share Net loss per basic and diluted share attributable to common stockholders was $(0.73) and ($0.36) for the years ended December 31, 2024 and 2023, respectively.

Finally, various states have enacted, or are considering enacting, laws that restrict the disposal within the state of solid or hazardous wastes generated outside the state. While courts have declared unconstitutional laws that overtly discriminate against out of state waste, courts have upheld some laws that are less overtly discriminatory. Challenges to other such laws are pending.

Finally, various states have enacted, or are considering enacting, laws that restrict the disposal within the state of solid or hazardous wastes generated outside the state. While courts have declared unconstitutional laws that overtly discriminate against out of state waste, courts have upheld some laws that are less overtly discriminatory.

We plan to continue to pursue an “asset light” strategy that utilizes third-party vendors or subcontractors for the collection, sorting, and processing of recyclable and waste materials for businesses.

We plan to continue to pursue an “asset light” strategy in our core business that utilizes third-party vendors or subcontractors for the collection, sorting, and processing of recyclable and waste materials for businesses.

In general, under Rule 144 as currently in effect, any person or persons whose shares are aggregated for purposes of Rule 144, who is deemed an affiliate of our company and beneficially owns restricted securities with respect to which at least six months has elapsed since the later of the date the shares were acquired from us, or from an affiliate of ours, is entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of our Common Stock and the average weekly trading volume in Common Stock during the four calendar weeks preceding such sale.

We also may register for resale shares that are deemed to be “restricted securities” or shares held by affiliates of our company. 16 In general, under Rule 144 as currently in effect, any person or persons whose shares are aggregated for purposes of Rule 144, who is deemed an affiliate of our company and beneficially owns restricted securities with respect to which at least six months has elapsed since the later of the date the shares were acquired from us, or from an affiliate of ours, is entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of our Common Stock and the average weekly trading volume in Common Stock during the four calendar weeks preceding such sale.

There are also significant geopolitical concerns, including the current conflict between Ukraine and Russia and the Israel-Hamas war, which have created extreme volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.

There are also significant geopolitical concerns, including the ongoing conflict between Ukraine and Russia, which have created extreme volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.

Cash Flows from Financing Activities Net cash used in financing activities was $(6.0) million for the year ended December 31, 2023, primarily from $8.1 million repayment of notes payable, which was partially offset by net borrowings of $1.0 million on our ABL Facility and $1.1 million proceeds from stock option exercises and shares issued under our 2014 Employee Stock Purchase Plan (“2014 ESPP”).

Net cash used in financing activities was $(6.0) million for the year ended December 31, 2023, primarily from $8.1 million repayment of notes payable, which was partially offset by net borrowings of $1.0 million on our ABL Facility and $1.1 million proceeds from stock option exercises and shares issued under our 2014 ESPP.

Cash Flows The following discussion relates to the major components of our cash flows. Cash Flows from Operating Activities Net cash used in operating activities was $(1.4) million for the year ended December 31, 2023, compared with net cash used in operating activities of $(2.3) million for the year ended December 31, 2022.

Cash Flows The following discussion relates to the major components of our cash flows. Cash Flows from Operating Activities Net cash used in operating activities was $(6.1) million for the year ended December 31, 2024, compared with net cash used in operating activities of $(1.4) million for the year ended December 31, 2023.

We believe our existing cash and cash equivalents of $0.3 million, our borrowing capacity under our $25.0 million ABL Facility (as defined in Note 7 to our consolidated financial statements), and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months and thereafter for the foreseeable future.

We believe our existing cash and cash equivalents of $0.4 million, our borrowing availability under our $45.0 million ABL Facility (as defined and discussed in Note 7 to our consolidated financial statements), and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months and thereafter for the foreseeable future.

The market price of our Common Stock could decline as a result of sales of a large number of shares of our Common Stock in the market, and even the perception that these sales could occur may depress the market price. As of December 31, 2023, we had 20,161,400 shares of our Common Stock outstanding.

The market price of our Common Stock could decline as a result of sales of a large number of shares of our Common Stock in the market, and even the perception that these sales could occur may depress the market price. As of December 31, 2024, we had 20,606,395 shares of our Common Stock outstanding.

Adjusted net income has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income and adjusted net income per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently.

Adjusted net income (loss) has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income (loss) and adjusted net income (loss) per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures.

Critical Accounting Estimates and Policies Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.

Critical Accounting Estimates and Policies Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”).

Beginning in 2023 we determine the expected life based on a weighted average of historical grants taking into account the vesting period of awards, time until exercise and expiration dates; • We measure the expected volatility using the historical daily changes in the market price of our Common Stock; and • We approximate the risk-free interest rate using the implied yield on zero-coupon U.S.

Significant assumptions used in the calculation were determined as follows: • We determine the expected life based on a weighted average of historical grants taking into account the vesting period of awards, time until exercise and expiration dates; • We measure the expected volatility using the historical daily changes in the market price of our Common Stock; and • We approximate the risk-free interest rate using the implied yield on zero-coupon U.S.

Net Loss Net loss for the year ended December 31, 2023 was $(7.3) million compared to net loss of $(6.0) million for the year ended December 31, 2022. The discussions above explain the primary changes related to the change in net results.

Net Loss Net loss for the year ended December 31, 2024 was $(15.1) million compared to net loss of $(7.3) million for the year ended December 31, 2023. The discussions above explain the primary changes related to the change in net results.

For an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors - Cyberattacks and security vulnerabilities could lead to increased costs, liability claims, unauthorized access to customer data, or harm to our reputation ” in Part I, Item 1A of this Annual Report on Form 10-K. 17 Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board of Directors and management team.

For an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors - Cyberattacks and security vulnerabilities could lead to increased costs, liability claims, unauthorized access to customer data, or harm to our reputation ” in Part I, Item 1A of this Annual Report on Form 10-K.

As a result of historical operating losses, we had an accumulated deficit of $110,048,252 as of December 31, 2023. The development of our business will require us to continue to make significant expenditures and incur substantial expenses.

As a result of historical operating losses, we had an accumulated deficit of $(125.1) million as of December 31, 2024. The development of our business will require us to continue to make significant expenditures and incur substantial expenses.

We plan to expand to serve growing industries that we do not currently service, but that generate waste streams and recyclables that can benefit from our ability to manage a large variety of waste streams and recyclables, respond quickly to service requests, and provide what we consider industry-leading collection, processing, and data reporting. • Expand the Types of Materials Covered by our Services .

We plan to expand to serve growing industries that we do not currently service, but that generate waste streams and recyclables that can benefit from our ability to manage a large variety of waste streams and recyclables, respond quickly to service requests, and provide what we consider industry-leading collection, processing, and data reporting. • Emphasize Monetary and other Benefits of Recycling .

Based on our analysis of estimated undiscounted future cash flows expected to result from the use of these net intangibles with finite lives, we determine if we will recover their carrying values as of the test date. If not recoverable, we record an impairment charge.

Based on our analysis of estimated undiscounted future cash flows expected to result from the use of these net intangibles with finite lives, we determine if we will recover their carrying values as of the test date. If not recoverable, we record an impairment charge. Stock Options We estimate the fair value of stock options using the Black-Scholes-Merton valuation model.

We will leverage artificial intelligence (AI), the internet-of-things (IOT), and other leading technologies to improve our customers’ experience, enhance the gathering and analysis of data for better business insights, and automate processes to improve scalability and efficiencies. The application of technologies across our value chain will help maximize the development of all our strategic initiatives.

We will leverage artificial intelligence (AI), the internet-of-things (IOT), and other leading technologies to improve our customers’ experience, enhance the gathering and analysis of data for better business insights, and automate processes to improve scalability and efficiencies.

We own or have filed applications for numerous federally registered trademarks and logos, including the following: • QUEST RESOURCE MANAGEMENT GROUP (and “Circle” design); • QUEST RESOURCE HOLDING CORPORATION (and “Q” design); • YOUCHANGE; • SUSTAINABILITY.

Intellectual Property Trademarks Our trademarks are important to the success of our business. We own or have filed applications for numerous federally registered trademarks and logos, including the following: • QUEST RESOURCE MANAGEMENT GROUP (and “Circle” design); • QUEST RESOURCE HOLDING CORPORATION (and “Q” design); • YOUCHANGE; • SUSTAINABILITY.

Shares held by affiliates of our company, which generally include our directors, officers, and certain principal stockholders, are subject to the resale limitations of Rule 144 as described below. We also may register for resale shares that are deemed to be “restricted securities” or shares held by affiliates of our company.

Shares held by affiliates of our company, which generally include our directors, officers, and certain principal stockholders, are subject to the resale limitations of Rule 144 as described below.

Treasury bonds with a remaining maturity equal to the expected term of the awards. Income Taxes We use the asset and liability method to account for income taxes. We use significant judgment in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets.

Income Taxes We use the asset and liability method to account for income taxes. We use significant judgment in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets.

We intend to continue to enhance the comprehensive, one-stop services that we provide for the waste streams and recyclables produced by our business customers. • Emphasize Monetary and other Benefits of Recycling .

We intend to continue to enhance the comprehensive, one-stop services that we provide for the waste streams and recyclables produced by our business customers. • Expand our Customer Base .

On December 7, 2021, we acquired all of the outstanding membership interests of RWS Facility Services, LLC (“RWS”), a full-service management company engaged in the brokering of recycling, waste and sustainability solutions, located in Chadds Ford, PA. We made other strategic acquisitions in 2021, including the acquisition of environmental services companies in Atlanta, GA, Louisville, KY and Greenville, SC.

On December 7, 2021, we acquired all of the outstanding membership interests of RWS Facility Services, LLC (“RWS”), a full-service management company engaged in the brokering of recycling, waste and sustainability solutions, located in Chadds Ford, PA.

We plan to expand the types of waste streams and recyclables covered by our services. To date, our revenue has been generated primarily from our solutions for used oil, oil filters, scrap tires, grease and cooking oil, solid waste, food waste, metals, cardboard, and regulated materials.

To date, our revenue has been generated primarily from our solutions for used oil, oil filters, scrap tires, grease and cooking oil, solid waste, food waste, metals, cardboard, and regulated materials.

In addition, we have retained Virtual Chief Information Security Officer services to support our cybersecurity risk management and governance practices. Such individuals have substantial prior work experience in various roles involving cybersecurity risk management and information technology, including security, compliance, systems and programming, and bring a wealth of expertise in their roles.

Such individuals have substantial prior work experience in various roles involving cybersecurity risk management and information technology, including security, compliance, systems and programming, and bring a wealth of expertise in their roles.

These factors include the following: • the cyclicality of the markets we serve; • the timing and size of orders; • the volume of business opportunities relative to our capacity; • service introductions and market acceptance of new service offerings; • timing of expenses in anticipation of future business; • changes in the mix of the services we render; • changes in cost and availability of labor and third-party vendors; • changes in the value of commodities; • changes in prices or market requirements for recyclable materials; • timely delivery of services to customers; • pricing and availability of competitive services; • pressures on reducing selling prices; • the success in serving new markets; • introduction of new technologies into the markets we serve; and • changes in economic conditions.

These factors include the following: • cyclicality of the markets we serve; • timing and size of orders; • size and scope of projects and services; • timing of expenses in anticipation of future business; • changes in the mix of the services we render; • changes in cost and availability of labor and third-party vendors; • changes in the value of commodities; • changes in prices or market requirements for recyclable materials; • timely delivery of services to customers; • pricing and availability of competitive services; • pressures on reducing selling prices; • success in serving new markets; • introduction of new technologies into the markets we serve; and • changes in economic conditions. 12 Any acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute stockholder value, and harm our operating results.

If the carrying amount of a reporting unit’s goodwill exceeds the fair value of its goodwill, we recognize an impairment loss equal to the excess, not to exceed the total amount of recorded goodwill.

If the carrying amount of a reporting unit’s goodwill exceeds the fair value of its goodwill, we recognize an impairment loss equal to the excess, not to exceed the total amount of recorded goodwill. We performed our most recent goodwill impairment analysis in the third quarter of 2024 with no impairment recorded.

As a result, they are able to devote greater resources to the promotion and sale of services similar to those that we provide, to provide comparable services at lower prices, and to introduce new solutions and respond to customer requirements more quickly than we can. 10 Our ability to compete successfully in the recycling services market depends on a number of factors, both within and outside our control.

As a result, they are able to devote greater resources to the promotion and sale of services similar to those that we provide, to provide comparable services at lower prices, and to introduce new solutions and respond to customer requirements more quickly than we can.

What changed in Quest Resource Holding Corp's 10-K — 2023 vs 2024

Top changes in Quest Resource Holding Corp's 2024 10-K

Item 1. Business

Other QRHC 10-K year-over-year comparisons