UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 8-K



CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2022


 
CHARAH SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)



Delaware
001-38523
82-4228671
(State or other jurisdiction of incorporation)
 (Commission File Number)
 (IRS Employer Identification No.)

12601 Plantside Drive
Louisville, Kentucky
 
40299
(Address of principal executive offices)
 
(Zip Code)

(Registrant’s telephone number, including area code): (502) 245-1353



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
CHRA
New York Stock Exchange
8.50% Senior Notes due 2026
CHRB
New York Stock Exchange


 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐



Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation and Appointment of Chief Financial Officer and Treasurer

Appointment of Chief Executive Officer and President

On November 14, 2022, the Company announced that the Board of Directors (the “Board”) of the Company appointed Jonathan Batarseh, age 47, as Chief Executive Officer and President of the Company, effective immediately after the filing of the Company’s third quarter 2022 Form 10-Q (the “Start Date”). The appointment is in conjunction with the announcement that Scott Sewell has resigned as the Company’s President and Chief Executive Officer and as a member of the Company’s Board, effective as of the filing of the Company’s third quarter 2022 Form 10-Q. Mr. Sewell’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s financials, operations, policies, or practices. In addition, on November 14, 2022, the Board appointed Mr. Batarseh to serve as a member of the Board effective on November 15, 2022.

Mr. Batarseh is a licensed Certified Public Accountant (CPA) with more than 20 years of corporate finance and accounting experience in the engineering and construction industries. He joins the Company from Brown & Root Industrial Services, a partnership between KBR (NYSE: KBR) and Bernhard Capital Partners (BCP) providing engineering, procurement, and construction services, where he was CFO for six years, responsible for overseeing all financial management and reporting, treasury, and information technology and services, and where he also served as Vice President in the finance organization of KBR for two years. Previously, Mr. Batarseh served in senior financial leadership roles in various industrial service companies including The Shaw Group, four years, and Atkins, one year, following 10 years at KPMG serving clients in the manufacturing and industrial sectors. Mr. Batarseh received his Bachelor of Science degree in accounting from Louisiana State University and is a member of the Society of Louisiana CPAs and the Tax Executives Institute.

There are no arrangements or understandings between Mr. Batarseh and any other persons, pursuant to which he was appointed to the offices described above and no family relationships among any of the Company’s directors or executive officers and Mr. Batarseh. Additionally, Mr. Batarseh does not have any direct or indirect interest in any transaction that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Appointment of Chief Financial Officer and Treasurer

On November 14, 2022, the Company announced that the Board appointed Joe Skidmore, age 37, as Chief Financial Officer and Treasurer of the Company, effective on the Start Date. Also, effective as of the Start Date, Mr. Skidmore will serve as the Principal Financial Officer and Principal Accounting Officer of the Company. In connection with his appointment, the Company will enter into its standard indemnification agreement with Mr. Skidmore, the form of which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 18, 2018.

Mr. Skidmore is a licensed Certified Public Accountant (CPA). Mr. Skidmore joined the Company in 2018. Having been promoted with increasing responsibility, he served as Corporate Controller for the past two years. Prior to joining the Company, Mr. Skidmore worked at KPMG in audit for close to a decade. He began his career in tax with positions at Yum! Brands and Jones, Nale & Mattingly. Mr. Skidmore earned his Bachelor of Science degree in accounting and finance from University of Louisville.

There are no arrangements or understandings between Mr. Skidmore and any other persons, pursuant to which he was appointed to the offices described above and no family relationships among any of the Company’s directors or executive officers and Mr. Skidmore. Additionally, Mr. Skidmore does not have any direct or indirect interest in any transaction that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Appointment of Executive Chairman of the Board and Additional Directors

On November 14, 2022, the Board approved an increase in the size of the Board from nine to ten members effective November 15, 2022.

On November 14, 2022, the Board appointed Robert “Bob” Decensi to the Board as a Class I director and as Executive Chairman of the Board, replacing Jack Blossman, Jr., effective on November 15, 2022, with a term expiring at the Company’s 2025 Annual Meeting of Stockholders. Mr. Decensi was recently the CEO and Board member of BHI Energy, a utility service company that provides engineering, construction, and maintenance to the power generation and power delivery markets. Prior joining BHI Energy, Mr. Decensi spent 18 years in the utility power generation and power delivery business filling positions in both middle and senior level management. He has worked for several of the largest U.S. blue-chip utilities, including Northeast Utilities, Dominion Energy, Connecticut Light & Power, and Entergy. During his utility tenure, he was part of two major power plant recovery efforts with Northeast Utilities and Entergy. Mr. Decensi served on the Board of Directors for NEI (Nuclear Energy Institute) and has served in several capacities supporting the Institute of Nuclear Power Operations (INPO). He is a graduate of Millersville University of Pennsylvania and attended the University of New Haven Executive MBA Program. Mr. Decensi was nominated to the Board by Bernhard Capital Partners Management LP (“BCP”) pursuant to its rights under the Series B Preferred Stock Purchase Agreement dated as of November 14, 2022, by and among the Company and Charah Preferred Stock Aggregator, LP. Additionally, there are no transactions involving the Company and Mr. Decensi that the Company would be required to report pursuant to Item 404(a) of Regulation S-K.

In connection with his election, Mr. Decensi will be compensated in accordance with the Company’s standard compensation arrangements for the Chairman of the Board. In connection with his appointment, the Company will enter into its standard indemnification agreement with Mr. Decensi, the form of which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 18, 2018. In addition to his compensation as Chairman of the Board and connection with his services as Executive Chairman, the Company expects to enter into a compensation agreement with Mr. Decensi. The terms of the compensation agreement are currently being finalized and will be included in a subsequent Current Report on Form 8-K.


On November 14, 2022, L.W. “Bill” Varner, upon the nomination of B. Riley as the B. Riley Nominee under its Investor Rights Agreement, was appointed to the Board, effective on November 14, 2022, as a Class I Director with a term expiring at the Company’s 2025 Annual Meeting of Stockholders. Mr. Varner was most recently the CEO and Board member of Select Interior Concepts, a premier installer and nationwide distributor of interior products, leading the company from June 2020 to October 2021 and successfully taking the public company private with a divestiture to Sun Capital Partners. Previously, Mr. Verner was CEO of United Subcontractors, Inc. (USI), the third largest insulation services provider in the United States, from July 2012 to May 2018. During his tenure, he led a transformation of the business through organic growth and strategic M&A that resulted in USI achieving double digit EBITDA margins and an eventual sale of the business, creating significant value for shareholders. From 2004 to 2012, Mr. Varner served as President and CEO of Aquilex Corporation, a leading provider of specialty services to the energy sector. Under his leadership, the company grew revenues by fivefold and achieved record earnings. Prior to joining Aquilex in 2004, Mr. Varner served as President for several global businesses in various equipment/component manufacturing and service industries, orchestrating their growth in new markets through expansion of service and product offerings. He is a graduate of The Citadel in Charleston, South Carolina, and has served on various philanthropic, industry, and community boards. Currently, Mr. Varner serves on the board of directors for Acousti Engineering, Strada Services, and Outdoor Living Supply.

In connection with his appointment, Mr. Varner will be compensated in accordance with the Company’s standard compensation arrangements for non-employee directors. There are no other related party transactions between the Company and Mr. Varner that would require disclosure under Item 404(a) of Regulation S-K. In connection with his appointment, the Company will enter into its standard indemnification agreement with Mr. Varner, the form of which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 18, 2018.

In connection with Mr. Sewell’s departure from the Company, the Company entered into a Separation Agreement and General Release of Claims (the “Separation Agreement”) with Mr. Sewell. Under the Separation Agreement, Mr. Sewell will (1) be paid a Severance Payment amount of $1,120,000, representing 24 months of annual base salary which will be paid out over 24 months, (2) a lump sum Additional Severance Payment of $560,000 to be paid out on the date of the first regular payroll payment date after the second anniversary of the Separation Date, (3) pro-rata vesting of his then-outstanding restricted stock units, and (4) pro-rata vesting of this then-outstanding performance stock units. The Severance Payment and Additional Severance Payment are subject to tax withholding requirements. Mr. Sewell will also be eligible to receive reimbursement from the Company of monthly premium amounts for COBRA premiums for 18 months following the Separation Date.

The foregoing summary of the material terms of the Separation Agreement is subject to the complete provisions set forth in the Separation Agreement, a copy of which is filed with this report as Exhibit 10.1 and incorporated herein by reference.

On November 14, 2022, the Company issued a press release announcing the above discussed issues. That press release is attached to this report as Exhibit 99.1.

Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, the Company entered into the Term Loan Agreement (the “Term Loan Agreement”) by and among Gibbons Creek Environmental Redevelopment Group, LLC, a Texas limited liability company (the “Term Loan Borrower”), as borrower, the Company and Charah, LLC, a Kentucky limited liability company (“Charah, LLC”), as guarantors, and Charah Preferred Stock Aggregator, LP, a Delaware limited partnership, as lender. The Term Loan Agreement provides for a delayed-draw term loan in an aggregate principal amount of $20.0 million. Borrowings under the Term Loan Agreement accrue interest at a percentage per annum equal to 12.0%, with interest payments due on the first business day of each calendar quarter following the effective date of the Term Loan Agreement, and on the maturity date.

On November 8, 2022, the Company elected to draw down $4.0 million of the Term Loan Agreement to fund operating activities. Immediately following this drawdown, $20.0 million of aggregate loans were outstanding and no borrowing capacity remained available under the Term Loan Agreement, representing the Company’s total borrowing capacity under all current long-term financing arrangements at that time. Prior to the drawdown, on October 28, 2022, the parties Amended the Term Loan Agreement to extend the availability date until November 15, 2022.

The foregoing description of the Term Loan Agreement is qualified in its entirety by reference to the full text of such agreement which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 15, 2022. The foregoing summary of the material terms of the Amendment No. 1 to the Term Loan Agreement (“Amendment”) is subject to the complete provisions set forth in the Amendment, a copy of which is filed with this report as Exhibit 10.2 and incorporated herein by reference.

Item 9.01.
Financial Statement and Exhibits.

 
(d)
Exhibits

Exhibit
Number
 
 
Description
 
Separation Agreement and General Release of Claims, dated November 14, 2022
 
Amendment No. 1 to the Term Loan Agreement, dated October 28, 2022

Press Release, dated November 14, 2022
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   
CHARAH SOLUTIONS, INC.
       
Date:
November 15, 2022
By:
/s/ Steven A. Brehm
   
Name:
Steven A. Brehm




Exhibit 10.1

SEPARATION AGREEMENT AND
GENERAL RELEASE OF CLAIMS
 
This SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (“Agreement”) dated November 14, 2022 is entered into by and between Charah, LLC, a Kentucky limited liability company (the “Company”), and Scott Sewell (“Employee”). Charah Solutions, Inc., a Delaware corporation (“Charah Solutions”), enters into this Agreement for the purpose of acknowledging and agreeing to those portions of Sections 2, 5 and 13 applicable to it below.  The Company and Employee are referred to individually as a “Party” and collectively as the “Parties.”
 
WHEREAS, the Parties are party to that certain Amended and Restated Employment Agreement effective as of June 27, 2022 (the “Employment Agreement”);
 
WHEREAS, on November 14, 2022, pursuant to Section 7(e) of the Employment Agreement, Employee provided the Company notice of his voluntary resignation from employment;
 
WHEREAS, Employee’s employment with the Company ended due to his resignation, effective upon the filing of third quarter 2022 Form 10-Q (the “Separation Date”);
 
WHEREAS, if Employee enters into this Agreement and satisfies the terms herein, then the Company will provide Employee with the separation benefits as set forth herein; and
 
WHEREAS, the Parties desire to enter into this Agreement to resolve any and all claims that Employee has or may have against the Company or any of the other Company Parties (as defined below), including any claims that Employee may have arising out of Employee’s employment or the end of such employment.
 
NOW, THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Employee and the Company, the Parties hereby acknowledge and agree as follows:
 
1.           Employment Separation.
 
(a)       Employee acknowledges and agrees that (i) Employee provided the Company written notice, on November 14, 2022, of his voluntary resignation from employment; (ii) Employee’s employment with the Company terminated effective as of the Separation Date; and (iii) Employee’s separation from employment was due to his termination for convenience, pursuant to Section 7(e) of the Employment Agreement.
 
(b)         As of the Separation Date, Employee has no further employment relationship with the Company or any other Company Party.  Employee acknowledges and agrees that, in accordance with Section 22 of the Employment Agreement, as of the Separation Date, Employee is automatically deemed to have resigned from all positions held with the Company and each other Company Party, including, without limitation, (a) as an officer of the Company and each member of the Company Group, as defined in the Employment Agreement; (b) from the Board, as defined in the Employment Agreement; and (c) from the board of directors or board of managers (or similar governing body) of any member of the Company Group, as defined in the Employment Agreement, and from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in which any member of the Company Group, as defined in the Employment Agreement, holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) Employee served as such Company Group member’s designee or other representative.
 
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2.           Severance Payments; COBRA Reimbursement; Accelerated Vesting. Provided that (i) Employee executes this Agreement on or after the Separation Date and returns a copy of this Agreement signed by Employee to the Company, care of Steve Brehm, Vice President of Legal Affairs, 12601 Plantside Drive, Louisville, Kentucky 40299 or via e-mail to sbrehm@charah.com so that it is received by Mr. Brehm no later than 11:59 p.m. Eastern Time on December 5, 2022; (ii) Employee abides by each of his commitments set forth herein; and (iii) Employee does not exercise his revocation right as set forth in Section 11(b) below, then:
 
(a)       The Company shall provide Employee: (x) a total severance payment equal to One Million One Hundred and Twenty Thousand and No/100 Dollars ($1,120,000.00), which represents twenty-four (24) months’ worth of Employee’s base salary in effect as of the Separation Date (the “Severance Payment”); and (y) an additional payment equal to Five Hundred Sixty Thousand and No/100 Dollars (“$560,000”) (the “Additional Severance Payment”).  The Severance Payment shall be paid in substantially equal installments in accordance with the Company’s regular payroll practices over a twenty-four (24)-month period following the Separation Date; provided, that, no installment shall be paid on or prior to the last day of the Revocation Period, as defined below, and the first installment payable after the expiration of the Revocation Period, as defined below, shall include (without interest) any missed payments.  The Additional Severance Payment shall be paid in a lump sum payment on the Company’s first payroll date for executive employees that occurs on or after the second (2nd) anniversary of the Separation Date;
 
(b)        Subject to the eligibility restrictions set forth below, for the portion, if any, of the eighteen (18)-month period following the Separation Date (the “Reimbursement Period”) that Employee elects to continue coverage for Employee and Employee’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), subject to the Employee’s timely submission of applicable documentation as described herein, the Company shall promptly reimburse Employee on a monthly basis for a premium amount equal to the employee contribution amount that similarly situated active employees of the Company pay for the same or similar coverage under such group health plans (the COBRA Benefit”).  After the expiration of the Revocation Period, each payment of the COBRA Benefit shall be paid to Employee on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Employee submits to the Company documentation of the applicable premium payment having been paid by Employee, which documentation shall be submitted by Employee to the Company within thirty (30) days following the date on which the applicable premium payment is paid. Employee shall be eligible to receive such reimbursement payments until the earliest of: (i) the last day of the Reimbursement Period; (ii) the date Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Employee becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Employee); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Employee’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. The Company may cease making such payments to the extent required to avoid any adverse consequences to Employee or the Company under either Section 105(h) of the Code or the Patient Protection and Affordable Care Act of 2010, and, to the extent such payments would not cause any such adverse consequences, the Company shall in lieu thereof provide to Employee (or Employee’s designated beneficiary or legal representative, if applicable) a taxable monthly payment in an amount equal to the monthly COBRA premium that the Company would otherwise be required to pay under this section for Employee’s COBRA coverage, which payment will continue until the end of the subsidized COBRA continuation period otherwise prescribed in this section. The existence and duration of Employee’s rights and/or the COBRA rights of any of Employee’s eligible dependents will be determined in accordance with Section 4980B of the Code (as defined below); and
 
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(c)           Charah Solutions shall cause the accelerated vesting referenced in Section 5 below to occur, as set forth in Section 5.
 
3.         Satisfaction of Severance Obligations; Receipt of Leaves, Bonuses, and Other Compensation. Employee expressly acknowledges and agrees that he would not be entitled to the consideration in Section 2 (or any portion thereof) but for his entry into, and non-revocation of, this Agreement and compliance with the terms herein. Employee further represents, acknowledges and agrees that, with the exception of any unpaid base salary earned by him in the pay period in which the Separation Date occurred, Employee has been paid in full all bonuses, been provided all benefits, and otherwise received all wages, compensation, and other sums that he has been owed or ever could be owed by the Company and the other Company Parties, with the exception of any sums to which Employee may be entitled pursuant to this Agreement.  Employee further represents, acknowledges and agrees that he has received all leaves (paid and unpaid) that he has been entitled to receive from the Company and the other Company Parties. Employee further acknowledges and agrees that he has no further rights to severance pay or benefits from any Company Party other than as set forth in Section 2.
 
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4.            Complete Release of Claims.
 
(a)        For good and valuable consideration, including the consideration set forth in Section 2 herein (and any portion thereof), Employee forever releases and discharges the Company, Charah Solutions, each of their respective affiliates, and each of the foregoing entities’ respective past, present, and future parents, subsidiaries, predecessors, successors, affiliates, assigns, owners, shareholders, partners, officers, directors, members, managers, employees, trustees, representatives, agents, attorneys, successors, administrators, fiduciaries, insurers, and benefit plans and the trustees and fiduciaries of such plans (each a “Company Party” and, collectively, the “Company Parties”), in their personal and representative capacities from, and Employee waives, any and all claims, demands, liabilities, and causes of action, whether statutory or at common law, including any claim for salary, benefits, payments, expenses, costs, damages, penalties, compensation, remuneration, contractual entitlements, and all claims or causes of action relating to any matter that actually or allegedly occurred, whether known or unknown, on or prior to the Signing Date, including, (i) any alleged violation of: (A) the Family and Medical Leave Act of 1993, as amended; (B) Title VII of the Civil Rights Act of 1964, as amended; (C) the Civil Rights Act of 1991; (D) Sections 1981 through 1988 of Title 42 of the United States Code, as amended; (E) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (F) the Immigration Reform Control Act, as amended; (G) the Americans with Disabilities Act of 1990, as amended; (H) the Occupational Safety and Health Act, as amended; (I) the Genetic Information Nondiscrimination Act of 2008; (J) the Fair Labor Standards Act of 1938, as amended; (K) the Age Discrimination in Employment Act of 1967, as amended (including as amended by the Older Workers Benefits Protection Act); (L) the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act; (M) any local, state, or federal anti-discrimination or anti-retaliation law; (N) any other local, state, or federal law, regulation, or ordinance including the laws of the Commonwealth of Kentucky (including the Kentucky Civil Rights Act, the Kentucky Equal Pay Act, the Kentucky Equal Opportunities Act, the Kentucky Wages and Hours Act, the anti-retaliation provisions under the Kentucky Workers’ Compensation Law, the Kentucky Occupational Safety and Health Act); and (O) any other local or state law, regulation, or ordinance in a state or jurisdiction where Employee worked on behalf of the Company or any of the other Company Parties; (ii) any claim for any alleged violation of any public policy, contract, tort, or common law, including any claim for defamation, slander, libel, negligence, emotional distress, fraud or misrepresentation of any kind, promissory estoppel, breach of the covenant or implied duty of good faith and fair dealing, breach of implied or express contract, interference with contractual relations or prospective business advantage, invasion of privacy, breach of fiduciary duty or wrongful discharge; (iii) any allegation for costs, fees, or other expenses, including attorneys’ fees, related to any Released Claim; (iv) any and all claims Employee may have arising under or as the result of any alleged breach of any contract (including the Employment Agreement and any other offer letter, employment contract, or incentive or equity-based compensation plan or agreement) with the Company or any other Company Party; (v) any claim for compensation or benefits of any kind not expressly set forth in this Agreement; and (vi) any and all claims arising from, or relating to, the Charah Solutions, Inc. 2018 Omnibus Incentive Plan (the “Plan”) or any Equity Award (as defined below) or any grants or awards made under the Plan, or arising from or relating to Employee’s status as a holder of equity awards, or otherwise arising (whether directly or derivatively) as the result of Employee being a holder of any shares, units, equity or interest in any Company Party (collectively, the “Released Claims”). This Agreement is not intended to indicate that any such claims exist or that, if they do exist, they are meritorious. Rather, Employee is simply agreeing that, in exchange for any consideration received by Employee pursuant to Section 2 (and any portion thereof), any and all potential claims of this nature that Employee may have against the Company or the other Company Parties, regardless of whether they actually exist, are expressly settled, compromised, and waived. THIS RELEASE INCLUDES MATTERS KNOWN OR UNKNOWN AND ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF THE COMPANY OR COMPANY PARTIES.
 
(b)          Notwithstanding this release of liability, nothing in this Agreement prevents Employee from filing any non-legally waivable claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”), Securities and Exchange Commission (“SEC”), or other governmental agency or governmental authority (collectively, “Governmental Authorities”), or participating in (or cooperating with) any investigation or proceeding conducted by the EEOC, SEC, or other Governmental Authority; however, Employee understands and agrees that Employee is waiving any and all rights to recover any monetary or personal relief or recovery from any Company Party as a result of such EEOC, Securities and Exchange Commission, or other Governmental Authority proceeding or subsequent legal actions. Further, in no event shall the Released Claims include (i) any claim that first arises after the Signing Date, including any claim to enforce Employee’s rights under this Agreement; (ii) any claim to any vested benefits under ERISA that cannot be released pursuant to ERISA; (iii) any rights to severance pay or benefits pursuant to the terms of this Agreement; or (iv) any right to receive an award for information provided to any Governmental Authorities.  In addition, nothing herein prevents Employee from seeking workers’ compensation or unemployment insurance benefits.
 
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5.           Awards.  Employee has been granted equity awards subject to the terms of the Plan and applicable award agreements (collectively, the “Equity Awards”). The Parties agree to the accelerated vesting of the Equity Awards based on the following:
 
 
Grant Type
 
Grant Date
 
Shares to Vest
 
Outstanding
 
RSU
 
09-Jun-2020
 
29,327
 
43,991
 
RSU
 
01-Apr-2021
 
29,525
 
88,574
 
RSU
 
04-Apr-2022
 
29,770
 
133,965
 
Subtotal
     
77,544
 
266,530
 
PSU
 
09-Jun-2020
 
TBD (*)
 
86,598
 
PSU
 
01-Apr-2021
 
TBD (**)
 
100,232
 
PSU
 
04-Apr-2022
 
TBD(***)
 
106,666

(*) Performance period through December 31, 2022 adjusted for duration vested
(**) Performance period through December 31, 2023 adjusted for duration vested
(***) Performance period through December 31, 2024 adjusted for duration vested
 
PSU Agreement: upon a termination of the Participant’s employment with the Company or an Affiliate (i) by the Company or an Affiliate without Cause
 
77,544 of the 266,530 restricted stock units (“RSUs”) and the performance share units (“PSUs”) granted to you on the dates and in the amounts indicated in the table above are not otherwise vested, shall vest on the date on which your right to revoke this Agreement expires (the “Vest Date”).
 
For avoidance of doubt, any other Equity Awards that are not vested on the Vest Date, including any PSUs with respect to which the performance period has not expired on the Separation Date, shall be forfeited, anything in the Plan, or the individual award agreements, to the contrary notwithstanding. For the avoidance of doubt, Employee waives any right to assert that Employee’s termination constitutes a termination without cause or otherwise results in accelerated vesting of any such awards.
 
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6.          Acknowledgment of Restrictive Covenants.  Employee acknowledges and agrees that, in connection with Employee’s employment with the Company, Employee has obtained Confidential Information, as defined in the Employment Agreement, and that he has continuing obligations to the Company and the other Company Parties pursuant to Sections 9, 10 and 11 of the Employment Agreement (the “Restrictive Covenants”).  In entering into this Agreement, Employee acknowledges the enforceability and continued effectiveness of the Restrictive Covenants and reaffirms his commitment to abide by their terms. In the event Company, in breach of this Agreement, fails to pay any future installments of the Severance Payment, the Additional Severance Payment and/or the COBRA Benefit, and fails to cure such breach within thirty (30) following the receipt of written notice from Employee of such breach, then the obligations of Employee under Sections 9, 10 and 11 of the Employment Agreement shall automatically terminate.
 
7.            Mutual Non-Disparagement.
 
(a)           Company and Employee agrees that it and he will engage in no act (including a verbal or written statement) that is intended, or reasonably may be expected, to defame, disparage, or harm the reputation, business, prospects, or operations of the Employee, the Company or any other Company Party.  Nothing in this Section 7(a) will prevent Company or Employee from communicating with any Governmental Authority.
 
(b)         Employee agrees to direct any requests for professional references from third parties to the Company’s Senior Vice President of Human Resources (or such other individual as the Company may direct) and, in response to such requests, the Company shall only verify the dates of Employee’s employment by the Company and the positions he held during such employment.  Further, the Company will provide the following instruction to its directors and officers: “As you know, Scott Sewell is no longer employed by Charah. You are instructed not to engage in any act which is intended, or reasonably may be expected, to defame, disparage, or harm the reputation or business prospects of Mr. Sewell. Thank you in advance for your cooperation with this important instruction. Please direct any third-party inquiries regarding Mr. Sewell to the Senior Vice of Human Resources.”
 
8.           Continued Cooperation. Following the Separation Date, Employee will provide the Company and, as applicable, the other Company Parties, with such assistance as the Company may request from time to time, including assistance with respect to transitioning matters within his prior areas of responsibility for the Company and its affiliates, and providing information relating to the duties he performed for the Company and its affiliates and facts that he knows about the Company and its business and operations, and assistance as set forth in Section 13 of the Employment Agreement.  Such information and assistance shall include providing truthful information and assistance with respect to any investigation, litigation, or other proceeding that may relate to any Company Party practices, acts, omissions, or any other occurrence occurring during the period that Employee was employed by the Company.
 
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9.           Severance Clawback. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company acquires evidence or determines that Employee has failed to abide by the terms of this Agreement, including Sections 6, 7 or 8 of this Agreement, then the Company shall have the right to cease the payment of any future installments of the Severance Payment, the Additional Severance Payment, and the COBRA Benefit, and Employee shall promptly return to the Company all installments (or lump sum), as applicable, of the Severance Payment, the Additional Severance Payment, and the COBRA Benefit received by Employee prior to the date that the Company determines that the conditions of this Section 9 have been satisfied.
 
10.        Representations and Warranties Regarding Claims. Employee represents and warrants that, as of the Signing Date (as defined below), he has not filed any lawsuits against the Company or any of the other Company Parties with any state or federal court or arbitrator for, or with respect to, a matter, claim, or incident, act or omission that occurred or arose out of one or more occurrences that took place on or prior to the Signing Date. Employee further represents and warrants that he has not made any assignment, sale, delivery, transfer, or conveyance of any rights Employee has asserted or may have against the Company or any of the other Company Parties with respect to any Released Claim.
 
11.          Review of Agreement.
 
(a)          The Company hereby advises Employee to consult with an attorney of his choosing before signing this Agreement.  Employee acknowledges and agrees that, (i) Employee has been fully informed and is fully aware of Employee’s right to discuss any and all aspects of this Agreement with an attorney of Employee’s choice; (ii) Employee has had sufficient time (and at least a full twenty-one (21) calendar days from the date Employee received this Agreement) to consider this Agreement before signing it; (iii) Employee is receiving, pursuant to this Agreement, consideration in addition to anything of value to which he is already entitled; (iv) neither the Company nor any other Company Party has provided any tax or legal advice to Employee regarding this Agreement, and Employee has had an adequate opportunity to receive sufficient tax and legal advice from advisors of his own choosing such that Employee enters into this Agreement voluntarily and with full understanding of the tax and legal implications thereof; and (v) Employee fully understands the final and binding effect of this Agreement, is signing this Agreement knowingly, voluntarily, and of his own free will, and understands and agrees to each of the terms and conditions of this Agreement.  In order to receive the consideration set forth in Section 2 of this Agreement, Employee must return the signed Agreement to the Company, care of Steve Brehm, Vice President of Legal Affairs, 12601 Plantside Drive, Louisville, Kentucky 40299 or via e-mail to sbrehm@charah.com so that it is received by Mr. Brehm no later than 11:59 p.m. Eastern Time on December 5, 2022.  Employee may not sign this Agreement before the Separation Date.  The date Employee executes this Agreement is referred to herein as the “Signing Date”.
 
(b)          Notwithstanding the initial effectiveness of this Agreement, Employee may revoke the delivery (and therefore the effectiveness) of this Agreement within the seven (7)-day period beginning on the Signing Date (such seven (7)-day period being referred to herein as the “Revocation Period”).  To be effective, such revocation must be in writing signed by Employee and must be received by the Company, care of Steve Brehm, Vice President of Legal Affairs, 12601 Plantside Drive, Louisville, Kentucky 40299 or via e-mail to sbrehm@charah.com so that it is received by Mr. Brehm no later than 11:59 p.m. Eastern Time, on the last day of the Revocation Period.  In the event Employee exercises his revocation right as set forth herein, this Agreement will be of no force or effect (but Employee’s voluntary resignation from employment and the resignations described in Section 1(b) of this Agreement, in each case, shall still be effective as of the Separation Date), Employee will not be entitled to receive the consideration set forth in Section 2 of the Agreement.
 
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12.         No Waiver. No failure by any Party at any time to give notice of any breach by the other Party of, or to require compliance with, any provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions at the same or at any prior or subsequent time.
 
13.         Applicable Law; Dispute Resolution.
 
(a)          This Agreement is governed by the laws of the Commonwealth of Kentucky; provided, however, Sections 2(c) and 5 herein shall be governed by the laws of the state of Delaware.
 
(b)        Any dispute arising out of or relating to this Agreement shall be subject to the dispute resolution procedures set forth in Section 12 of the Employment Agreement, which are hereby incorporated by reference.  In incorporating such dispute resolution (including arbitration) provisions, THE PARTIES ARE KNOWINGLY AND VOLUNTARILY WAIVING THEIR RIGHTS TO A JURY TRIAL.  Notwithstanding the foregoing, any dispute arising out of or relating to Sections 2(c) or 5 herein shall be subject to the provisions of Section 14.9 of the Plan, which are hereby incorporated by reference.
 
14.        Return of Property.  Employee represents and warrants that Employee has returned to the Company all property belonging to the Company and any other Company Party, including all computer files and other electronically stored information, client materials, electronically stored information, and other materials provided to Employee by the Company or any other Company Party in the course of Employee’s employment and Employee further represents and warrants that Employee has not maintained a copy of any such materials in any form.
 
15.         Severability. Any term of this Agreement, or portion of such a term, that renders such term or any other term of this Agreement invalid or unenforceable in any respect shall be severable and shall be modified or severed to the extent necessary to avoid rendering such term invalid or unenforceable, and such modification or severance shall be accomplished in the manner that most nearly preserves the benefit of the Parties’ bargain in this Agreement.
 
16.          Withholding of Taxes and Other Employee Deductions. Employee authorizes Company to withhold from all payments made pursuant to this Agreement all federal, state, local, and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling.
 
17.          Section 409A.
 
(a)           The payments provided for in this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations and interpretive guidance issued thereunder (collectively, “Section 409A”) and shall be construed and administered in accordance with such intent.  For purposes of Section 409A, each installment payment hereunder shall each be treated as a separate payment.
 
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(b)         Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt of such payment or benefit is not delayed until the earlier of (i) the date of Employee’s death or (ii) the date that is six (6) months after the Separation Date (the applicable date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to Employee (or Employee’s estate, if applicable), until the Section 409A Payment Date.
 
(c)          Notwithstanding the foregoing, the Company makes no representations that the benefits provided under this Agreement are exempt from or comply with the requirements of Section 409A and in no event shall the Company or any other Company Party be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.
 
18.          Counterparts. This Agreement may be executed in one or more counterparts (including portable document format (.pdf) and facsimile counterparts), each of which shall be deemed to be an original, but all of which together constitute one and the same Agreement.
 
19.         Third-Party Beneficiaries. Each Company Party that is not a signatory to this Agreement shall be a third-party beneficiary of Employee’s promises and release of claims in this Agreement and is entitled to rely upon and enforce such provisions as if it was a party to this Agreement. Other than the Company Parties, Company and Employee do not intend for there to be any third-party beneficiaries of this Agreement.
 
20.         Interpretation. Neither this Agreement nor any uncertainty or ambiguity with this Agreement shall be construed or resolved against any Party, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each Party and shall be construed and interpreted according to the ordinary meaning of the words used to fairly accomplish the purposes and intentions of the Parties.  Further, in this Agreement, (a) the use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter; (b) references to Sections refer to Sections of this Agreement; (c) the words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole (including the Exhibit hereto), and not to any particular subdivision unless expressly so limited; (d) reference to any agreement (including this Agreement), document or instrument, means such agreement, document or instrument as amended, restated or otherwise modified (including any waiver or consent) and in effect from time to time in accordance with the terms thereof; (e) reference to any law means such law as amended, modified, codified, reenacted or replaced and in effect from time to time; and (f) references to “or” shall be interpreted to mean “and/or.”  The Section titles and headings in this Agreement are inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement.
 
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21.         Amendment; Entire Agreement. This Agreement may not be changed orally but only by an agreement in writing and signed by the Parties. This Agreement and, with respect to the Restrictive Covenants, the cooperation provisions referenced above in Section 8, and the dispute resolution provisions referenced above in Section 13, the Employment Agreement, constitute the entire agreement of the Parties with regard to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, oral or written, between Employee and the Company or any other Company Party with regard to the subject matter hereof.  Notwithstanding the foregoing, Employee’s commitments herein with respect to confidentiality and non-disclosure, return of property, non-competition, non-solicitation, and non-disparagement are in addition to all other obligations that Employee may have to the Company Parties with respect to such matters, whether such obligations arise by contract, common law, statute, or otherwise.
 
[Signature Page Follows.]
 
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The Company has caused this Agreement to be executed by a duly authorized representative and Employee has executed this Agreement, in each case, as of the dates set forth beneath their signature blocks below. Employee’s signature represents that he (1) understands this Agreement contains a voluntary waiver of all known or unknown claims in exchange for the consideration in Section 2; (2) was advised to consult with an attorney before signing; and (3) has read this entire Agreement carefully before signing and understands and agrees with all of its terms.
 
SCOTT SEWELL

CHARAH, LLC



/s/ Scott Sewell

By /s/ Steve Brehm
Signature

Name: Steve Brehm


Title: Vice President of Legal Affairs and Corporate Secretary



November 14, 2022

November 14, 2022
Date

Date





With respect to those portions of Sections 2, 5 and 13 applicable to it:
     
   
CHARAH SOLUTIONS, INC.
     
   
By /s/ Steve Brehm
   
Name: Steve Brehm
   
Title: Vice President of Legal Affairs and Corporate Secretary


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Exhibit 10.2

AMENDMENT NO. 1 to Term Loan Agreement

This AMENDMENT NO.1 to TERM LOAN AGREEEMENT (this “Agreement”) dated as of October 28, 2022 (the “Effective Date”), is among Gibbons Creek Environmental Redevelopment Group, LLC, a Texas limited liability company (the “Borrower”), Charah Solutions, Inc., a Delaware corporation (“Charah Solutions”), Charah, LLC, a Kentucky limited liability company (“Charah LLC” and, together with Charah Solutions, the “Parent Guarantors”, and each, a “Parent Guarantor”) and Charah Preferred Stock Aggregator, LP, a Delaware limited partnership (the “Lender”).
 
Recitals
 
A.          WHEREAS, the Borrower, the Parent Guarantors and the Lender are parties to that certain Term Loan Agreement dated as of August 15, 2022 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the execution hereof, the “Existing Term Loan Agreement”; and the Existing Term Loan Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time, including, without limitation, as amended by this Agreement, the “Term Loan Agreement”), pursuant to which the Lender has made certain credit available to and on behalf of the Borrower.
 
C.           NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, agree as follows:
 
Section 1.              Defined Terms. Each capitalized term which is defined in the Existing Term Loan Agreement, but which is not defined in this Agreement, shall have the meaning ascribed such term in the Existing Term Loan Agreement.
 
Section 2.              Amendments to Term Loan Agreement.
 
2.1          Amendment to Article 1 – Definitions. Article 1 of the Existing Term Loan Agreement is hereby amended by amending and restating the following existing definition in its entirety:
 
Availability Date” shall mean November 15, 2022.
 
2.2           Amendment to Section 4.02. Section 4.02(c) of the Existing Term Loan Agreement is hereby amended and restated in its entirety as follows:
 
(c) Lender’s receipt of a Borrowing Notice before 12:00 pm central time on the Funding Date (or such shorter time as Lender may agree in its sole discretion).
 
Section 3.              Miscellaneous.
 
3.1          Confirmation; Effect of this Agreement. Except as expressly set forth in Section 2 hereof, this Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lender under the Existing Term Loan Agreement or any other Loan Document and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or other provisions contained in the Existing Term Loan Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is the express intent of the parties hereto that nothing contained herein shall be, nor shall be construed as, a substitution or novation of the Obligations under the Existing Term Loan Agreement and the other Loan Documents, all of which are and shall remain in full force and effect as expressly amended hereby. Nothing herein shall be deemed to entitle the Borrower or any Parent Guarantor to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or other provisions contained in the Term Loan Agreement or any other Loan Document in similar or different circumstances after the date hereof.


3.2          Ratification and Affirmation; Representations and Warranties. Each of the Parent Guarantors and the Borrower (a) acknowledges the terms of this Agreement and the Existing Term Loan Agreement as amended hereby, (b) represents and warrants to the Lender that as of the Effective Date: (i) all of the representations and warranties contained in each Loan Document are true and correct in all material respects (without duplication of materiality), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (without duplication of materiality) as of such specified earlier date, and (ii) no Default or Event of Default has occurred and is continuing, (c) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document (including, without limitation, the Guaranteed Liabilities contained in Article X of the Existing Term Loan Agreement) and agrees that each Loan Document remains in full force and effect as expressly amended hereby, (d)(i) is a party to certain Security Documents securing the Obligations, and (ii) agrees that according to their respective terms the Security Documents to which it is a party are and shall continue in full force and effect, including without limitation to secure the Obligations under the Loan Documents, as the same may be amended, increased, decreased, supplemented or otherwise modified from time to time and (e) acknowledges and agrees for the avoidance of doubt that the delivery of this Agreement does not indicate or establish by implication or otherwise that any Security Document requires any Parent Guarantor’s approval of amendments to the Existing Term Loan Agreement, the Term Loan Agreement or any other Loan Document (except as and to the extent expressly set forth therein).
 
3.3          Counterparts. This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement which may include any Electronic Signature transmitted by telecopy, facsimile or email transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

3.4         No Oral Agreement. This Agreement, the Term Loan Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement among the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.


3.5           GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
3.6          Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

3.7           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns in accordance with Section 9.04 of the Term Loan Agreement.
 
3.8           Loan Documents. This Agreement is a Loan Document.
 
[Signature Pages Follow]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed effective as of the Effective Date.

BORROWER:
GIBBONS CREEK ENVIRONMENTAL REDEVELOPMENT GROUP, LLC
   
 
By: Charah, LLC, its sole manager
     
 
By:
/s/ Scott Sewell
 
Name:
Scott Sewell
 
Title:
President

PARENT GUARANTORS:
CHARAH SOLUTIONS, INC.
     
 
By:
/s/ Scott Sewell
 
Name:
Scott Sewell
 
Title:
President & Chief Executive Officer

 
CHARAH, LLC
     
 
By:
/s/ Scott Sewell
 
Name:
Scott Sewell
 
Title:
President

Amendment No. 1 to Term Loan Agreement
Signature Page


LENDER:
CHARAHPREFERREDSTOCK AGGREGATOR, LP
     
 
By: Charah Preferred Stock Aggregator GP, LLC,
its general partner
     
 
By:
/s/ Timothy J. Poché
 
Name:
Timothy J. Poché
 
Title:
 Authorized Representative
 
Amendment No. 1 to Term Loan Agreement
Signature Page




Exhibit 99.1
 
Charah Solutions, Inc. Announces Third Quarter 2022 Results, Leadership Changes,
 
Sale of $30 Million of Series B Preferred Stock and a Reverse Stock Split
 
Louisville, KY – November 14, 2022 – Charah Solutions, Inc. (NYSE: CHRA), a leading provider of environmental services and byproduct recycling to the power generation industry, today announced financial results for the third quarter of 2022, leadership changes, the sale of Series B Preferred Stock and a one-for-ten reverse stock split of its common stock.
 
“With our newly fortified balance sheet, strengthened leadership and expected growth in demand for our ESG solutions, Charah Solutions is positioned to grow,” said Jonathan Batarseh, incoming President and Chief Executive Officer of Charah Solutions. “Every day, Charah Solutions improves our communities through producing sustainable environment solutions for our customers by remediating environmental risks and recycling what was previously considered unusable. These innovative solutions have and will continue to create tailwinds for our business. From mid-August through mid-November, we secured $42 million in new contract awards from new and existing customers.
 
“As we build upon our heritage as an industry leader, Charah Solutions will focus on three tenets. First, we will continue to prioritize the safety and well-being of our team. Second, we will continue to grow through our commitment to providing our customers with environmentally responsible, innovative and customized solutions. Finally, we will improve our profitability through both increased commercial rigor and risk assessment for new work and improving our project management oversight tools and processes. Also, as announced, during the third quarter, we completed and entered the final demobilization stage of three multi-year legacy projects. Regarding our long-term beneficial use projects that have been hindered by supply chain and logistics issues, we paused work on one of them until we reach a resolution with the customer; however, unfavorable gross profit impacts are expected to continue into the fourth quarter. Overall, we are committed to continual improvements that drive sustainable growth and improved financial performance,” concluded Mr. Batarseh.
 
Highlights for the Third Quarter Financial Results for the Three Months ended September 30, 2022
 

Revenue was $81.5 million, consisting primarily of construction contracts of $40.4 million, byproduct services of $30.1 million and raw materials sales of $11.0 million. This compared to $84.2 million in the third quarter 2021, reflecting decreases in construction contracts year-over-year, and to $77.1 million in the second quarter 2022, reflecting increases in construction contracts and byproduct services quarter-over-quarter.
 

Gross profit of $2.9 million reflects expenses related to supply chain and logistics issues that impacted two long-term beneficial use projects and additional costs incurred to complete and demobilize certain construction projects. This compares to $9.4 million for third quarter 2021 and $2.7 million for second quarter 2022.
 

Other operating expense from ERT services of $5.8 million reflects the operating expenses related to the early phases of newer ERT projects. This compares to $0.8 million for third quarter 2021 and $2.6 million for second quarter 2022.
 

Net loss attributable to Charah Solutions, Inc. was $13.4 million, compared to $1.7 million for third quarter 2021 and $9.6 million for second quarter 2022.
 

Adjusted EBITDA(1) was negative $0.6 million, compared to positive Adjusted EBITDA of $10.4 million for third quarter 2021.
 
(1) This is a non-GAAP financial measure; see below for an explanation and reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.
 
Cash & Liquidity
 
As of September 30, 2022, the Company had $7.7 million of cash on hand, and total liquidity, including availability under the asset-based credit and term loan agreements, was $14.4 million. On November 14, 2022, Charah Solutions entered a private placement with an investment fund affiliated with Bernhard Capital Partners to sell 30,000 shares of a new series of convertible Series B Preferred Stock, par value $0.01 per share, with an initial aggregate liquidation preference of $30.0 million, net of a 4% Original Issue Discount of $1.2 million, for net proceeds of $28.8 million for liquidity and general corporate purposes (the “Preferred Stock Investment”). In conjunction with the Preferred Stock Investment, the Company entered into a binding agreement to convert the outstanding balance of $20.0 million, the commitment fee of $1.0 million and all applicable accrued interest under its term loan agreement into an entity that owns 100% of the Gibbons Creek land and Cheswick land only (the “Debt Conversion Investment”). Together with the remaining availability under the asset-based credit agreement, these transactions will strengthen the Company’s balance sheet and provide additional resources to achieve the long-term working capital needs of the Company.
 
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2022 Guidance
 
The newly established Charah Solutions management team is assessing all aspects of the company including on-going projects and future opportunities.  Therefore, Charah Solutions will suspend guidance and revisit guidance in the future.
 
Reverse Stock Split
 
The Board approved a one-for-ten reverse stock split on November 14, 2022, subject to shareholder approval, amongst other required notifications and approvals. Correspondingly, the initial trading price of CHRA common stock is expected to proportionately increase immediately following the reverse stock split. However, other factors may adversely affect the price of the common stock and there can be no assurance that the reverse stock split will increase the trading price of the Company’s common stock.
 
Strengthened Leadership
 
The Board named Jonathan Batarseh as President, CEO and Director, replacing Scott Sewell, whom the company thanks for his service and leadership as Charah Solutions expanded its ESG and services offerings. Former corporate controller Joe Skidmore has been promoted to CFO and Treasurer. Additionally, the Board appointed Robert (Bob) Decensi as executive Chair and L. W. (Bill) Varner, Jr. as Director. All changes are effective at the close of business on November 14, 2022.
 
Robert (Bob) Decensi Biography

Bob Decensi was recently the CEO and Board member of BHI Energy, a utility service company that provides engineering, construction, and maintenance to the power generation and power delivery markets. Driven by his vision, BHI Energy grew from a single service offering platform to an industry leading integrated platform capable of servicing every asset owned by a utility from the point of generation through the entire power delivery life cycle. During Mr. Decensi’s tenure as BHI Energy’s CEO, he directed the company through nine mergers and acquisitions and five successful transactions. As of 2022, BHI Energy recorded over $1.2B in annual revenue and operated across North America with more than 8000 employees. Prior to joining BHI Energy, Mr. Decensi spent 18 years in the utility power generation and power delivery business filling positions in both middle and senior level management. He has worked for several of the largest U.S. blue-chip utilities, including Northeast Utilities, Dominion Energy, Connecticut Light & Power, and Entergy. During his utility tenure, he was part of two major power plant recovery efforts with Northeast Utilities and Entergy. Mr. Decensi served on the Board of Directors for NEI (Nuclear Energy Institute) and has served in several capacities supporting the Institute of Nuclear Power Operations (INPO). He is a graduate of Millersville University of Pennsylvania and attended the University of New Haven Executive MBA Program.

Jonathan Batarseh Biography

Jonathan Batarseh is a licensed Certified Public Accountant with more than 25 years of corporate finance and operations  experience in the engineering and construction industries. He joined Charah Solutions in October 2022 as the CFO. Prior to Charah Solutions, Mr. Batarseh was the CFO at Brown & Root Industrial Services, where he led strategic planning, acquisitions, and optimizing operational effectiveness in addition overseeing all financial management and reporting, treasury, and information technology. Prior, Mr. Batarseh served as Vice President, Tax at KBR and in senior financial leadership roles in various industrial service companies including The Shaw Group and Atkins. He began his career with 10 years at KPMG serving clients in the manufacturing and industrial sectors. Mr. Batarseh received his Bachelor of Science degree in accounting from Louisiana State University and is a member of the Society of Louisiana CPAs.

L. W. (Bill) Varner, Jr. Biography

Bill Varner was most recently the CEO and Board member of Select Interior Concepts, a premier installer and nationwide distributor of interior products, leading the company from June 2020 to October 2021 where he increased share value 600% and successfully took the public company private with a divestiture to Sun Capital Partners. Previously, he was CEO of United Subcontractors, Inc. (USI), the third largest insulation services provider in the United States, from July 2012 to May 2018. During his tenure, he led a transformation of the business through organic growth and strategic M&A that resulted in USI achieving double digit EBITDA margins and an eventual sale of the business, creating significant value for shareholders. From 2004 to 2012, Mr. Varner served as President and CEO of Aquilex Corporation, a leading provider of specialty services to the energy sector. Under his leadership, the company grew revenues by fivefold and achieved record earnings. Prior to joining Aquilex in 2004, Mr. Varner served as President for several global businesses in various equipment/component manufacturing and service industries, orchestrating their growth in new markets through expansion of service and product offerings. He is a graduate of The Citadel in Charleston, South Carolina, and has served on various philanthropic, industry, and community boards. Currently, Mr. Varner serves on the board of directors for Acousti Engineering, Strada Services, and Outdoor Living Supply. He previously served on the boards of Bartlett Holdings, Aquilex, USI, Select Interior Concepts, and The Identity Group.

Joe Skidmore Biography

Joe Skidmore joined Charah Solutions in 2018. Having been promoted with increasing responsibility, he most recently served as Corporate Controller for the past two years. Prior, Mr. Skidmore began his career at KPMG in audit for close to a decade serving both public and private clients in a variety of industries, including those in the industrial manufacturing sector. Mr. Skidmore earned his Bachelor of Science degree in accounting and finance from the University of Louisville and is a CPA.

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Conference Call and Webcast
 
Charah Solutions will host a conference call at 8:30 a.m. ET on Tuesday, November 15, 2022, to discuss third quarter 2022 results. Information contained within this press release will be referenced and should be considered in conjunction with the call.
 
To participate live on this conference call, please register at https://conferencingportals.com/event/ITqMjowz. A confirmation email will be sent, including dial-in details and a Conference ID for entry. We recommend registering a minimum of 15 minutes before the scheduled start time of the call. Participants may also listen to the conference call via webcast by visiting the Investors section of the Charah Solutions website at ir.charah.com.
 
A webcast replay will be available on the Investors section of the Charah Solutions website at ir.charah.com after 11:30 a.m. ET on Tuesday, November 15, 2022. In addition, an audio replay will be available for one week following the call and will be accessible by dialing (800) 770-2030. The playback ID is 13653.
 
A supplementary presentation will also be available on the Investors section of the Charah Solutions website at ir.charah.com.
 
About Charah Solutions, Inc.
 
With more than 35 years of experience, Charah Solutions, Inc. is a leading provider of environmental services and byproduct recycling to the power generation industry. Based in Louisville, Kentucky, Charah Solutions is the partner of choice for solving customers’ most complex environmental challenges, and as an industry leader in quality, safety, and compliance, the Company is committed to reducing greenhouse gas emissions for a cleaner energy future. Charah Solutions assists utilities and independent power producers with all aspects of sustainably managing and recycling ash byproducts generated from the combustion of coal in the production of electricity. The Company also designs and implements solutions for ash pond management and closure, landfill construction, structural fill projects, power plant remediation and site redevelopment. As a sustainability leader, Charah Solutions is dedicated to preserving our natural resources in an environmentally-conscious manner and is focused on developing innovative solutions for the betterment of the planet, the communities in which it operates and its customers. For more information, please visit www.charah.com or download our 2021 Environmental, Social and Governance (ESG) Report at charah.com/sustainability.
 
Charah Solutions Investor Contact
IR Agency Contact
Charah Solutions Media Contact
Joe Skidmore
Kirsten Chapman
Brad Mercer
Charah Solutions, Inc.
LHA Investor Relations
PriceWeber Marketing
(502) 245-1353
(415) 433-3777
(502) 777-3308
ir@charah.com
charah@lhai.com
media@charah.com

FORWARD-LOOKING STATEMENTS
 
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” “guidance,” and similar terms and phrases. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. See the Company’s Form 10-K for the year ended December 31, 2021 and other periodic reports as filed with the Securities and Exchange Commission for further information regarding risk factors.
 
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
 
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NON-GAAP FINANCIAL MEASURES
 
Adjusted EBITDA and Adjusted EBITDA margin are not financial measures determined in accordance with GAAP. Charah Solutions defines Adjusted EBITDA as net loss attributable to Charah Solutions, Inc. before income from discontinued operations, net of tax, interest expense, net, loss on extinguishment of debt, income taxes, depreciation and amortization, equity-based compensation, impairment expense (including inventory reserves), gain on change in contingent payment liability and transaction-related expenses and other items. Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to total revenue.
 
Management believes Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance compared to our peers, without regard to our financing methods or capital structure. Management excludes the items listed above from net loss attributable to Charah Solutions, Inc. in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within Charah Solutions’ industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss attributable to Charah Solutions, Inc. determined according to GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Charah Solutions’ Adjusted EBITDA presentation should not be construed as an indication that the Company’s results will be unaffected by the items excluded from Adjusted EBITDA. Charah Solutions’ computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. Charah Solutions uses Adjusted EBITDA margin to measure the Company’s business’s success in managing its cost base and improving profitability. A reconciliation between Adjusted EBITDA to net loss attributable to Charah Solutions, Inc., Charah Solutions’ most directly comparable financial measure calculated and presented in accordance with GAAP, along with a calculation of the Company’s Adjusted EBITDA margin is included in the supplemental financial data attached to this press release.
 
The Company uses non-GAAP measures internally as a key performance measure of the results of operations for purposes of evaluating performance. These measures facilitate comparison of operating performance between periods and help investors better understand Company’s operating results by excluding certain items that may not be indicative of the Company’s core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to, or more meaningful than, net income or earnings per basic/diluted share (as determined in accordance with GAAP) as a measure of our operating results.
 
GUIDANCE LANGUAGE
 
This guidance is based on our current expectations of no material worsening of the COVID-19 pandemic, specifically including, but not limited to, no material customer work stoppages, no significant employee absences, no exacerbated supply chain or transportation issues and no government-mandated quarantines. Any worsening of the COVID-19 pandemic could materially affect our 2022 outlook. Although we have not experienced significant disruptions thus far from the pandemic due to the critical nature of our customers’ operations, the pandemic or any future major public health crisis could impact our business, consolidated results of operations and financial condition in the future. We are monitoring the impact on our business of current macroeconomic conditions, particularly with regard to the availability and cost of labor, and supply chain issues, particularly affecting transportation logistics and the availability of certain materials. We have observed an overall tightening and increasingly competitive labor market, although we have not experienced any material disruptions due to labor shortages. A sustained labor shortage or an increase in turnover, whether attributable to the COVID-19 pandemic or general macroeconomic conditions, could result in higher labor costs, for us or our subcontractors. Supply chain issues, including shortages of equipment, vehicles and construction supplies, affecting us or our subcontractors could increase our costs or cause delays in our ability to complete our projects. In addition, there are timing uncertainties associated with the startup of recently announced customer awards, including ERT awards. As with our 2021 results, the impact of weather, including hurricanes, excessive rain or moderate temperatures, could adversely affect our results.
 
4

CHARAH SOLUTIONS, INC.
 
Condensed Consolidated Balance Sheets
(in thousands, except par value amounts)
(Unaudited)

   
September 30, 2022
   
December 31, 2021
 
Assets
           
Current assets:
           
Cash
 
$
7,722
   
$
24,266
 
Restricted cash
   
44,382
     
34,908
 
Trade accounts receivable, net
   
51,533
     
49,303
 
Contract assets
   
26,993
     
26,844
 
Inventory
   
6,899
     
6,289
 
Prepaid expenses and other current assets
   
8,314
     
6,113
 
Total current assets
   
145,843
     
147,723
 
Real estate, property and equipment, net
   
106,079
     
70,473
 
Goodwill
   
62,193
     
62,193
 
Intangible assets, net
   
47,610
     
53,531
 
Equity method investments
   
7
     
7
 
Other assets
   
10,153
     
10,180
 
Total assets
 
$
371,885
   
$
344,107
 
                 
Liabilities, mezzanine equity and stockholders’ equity
               
Current liabilities:
               
Accounts payable
   
30,070
     
30,641
 
Contract liabilities
   
5,638
     
6,199
 
Capital lease obligations, current portion
   
9,529
     
6,979
 
Notes payable, current maturities
   
12,108
     
7,567
 
Asset retirement obligations, current portion
   
44,030
     
27,534
 
Accrued liabilities
   
25,354
     
36,874
 
Other current liabilities
   
1,101
     
460
 
Total current liabilities
   
127,830
     
116,254
 
Deferred tax liabilities
   
1,259
     
949
 
Contingent payments for acquisitions
   
1,950
     
1,950
 
Asset retirement obligations
   
32,742
     
14,879
 
Asset-based lending credit agreement
   
8,800
     
 
Capital lease obligations, less current portion
   
25,626
     
19,444
 
Notes payable, less current maturities
   
129,335
     
133,661
 
Term loan - Related party
   
16,000
     
 
Deferred gain and other liabilities
   
4,310
     
641
 
Total liabilities
   
347,852
     
287,778
 
                 
Commitments and contingencies
               
                 
Mezzanine equity
               
Series A Preferred Stock — $0.01 par value; 50,000 shares authorized, 26 shares issued and outstanding as of September 30, 2022 and December 31, 2021; aggregate liquidation preference of $36,006 and $32,712 as of September 30, 2022 and December 31, 2021, respectively
   
41,636
     
35,532
 
                 
Stockholders equity
               
Retained losses
   
(129,681
)
   
(94,679
)
Common Stock — $0.01 par value; 200,000 shares authorized 33,722 and 33,408 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
   
337
     
334
 
Additional paid-in capital
   
111,482
     
114,880
 
Total stockholders equity
   
(17,862
)
   
20,535
 
Non-controlling interest
   
259
     
262
 
Total equity
   
(17,603
)
   
20,797
 
Total liabilities, mezzanine equity and stockholders equity
 
$
371,885
   
$
344,107
 

5

CHARAH SOLUTIONS, INC.
 
Condensed Consolidated Statement of Operations
(in thousands, except per share data)
(Unaudited)
 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
Revenue
 
$
81,540
   
$
84,161
   
$
224,701
   
$
199,786
 
Cost of sales
   
(78,681
)
   
(74,712
)
   
(222,935
)
   
(177,832
)
Gross profit
   
2,859
     
9,449
     
1,766
     
21,954
 
General and administrative expenses
   
(9,493
)
   
(9,396
)
   
(27,683
)
   
(28,080
)
Gain on sales-type lease
   
     
     
     
5,568
 
Gains on sales of real estate, property and equipment, net
   
2,601
     
2,998
     
8,942
     
6,241
 
Gain on ARO settlement
   
978
     
1,127
     
4,986
     
1,127
 
Other operating expenses from ERT services
   
(5,847
)
   
(817
)
   
(9,100
)
   
(2,114
)
Impairment expense
   
     
(700
)
   
     
(827
)
Operating (loss) income
   
(8,902
)
   
2,661
     
(21,089
)
   
3,869
 
Interest expense, net
   
(4,534
)
   
(3,541
)
   
(13,574
)
   
(10,090
)
Loss on extinguishment of debt
   
     
(638
)
   
     
(638
)
Income (loss) from equity method investment
   
     
     
     
191
 
Loss before income taxes
   
(13,436
)
   
(1,518
)
   
(34,663
)
   
(6,668
)
Income tax (benefit) expense
   
(77
)
   
203
     
342
     
432
 
Net loss
   
(13,359
)
   
(1,721
)
   
(35,005
)
   
(7,100
)
Less (loss) income attributable to non-controlling interest
   
     
(44
)
   
(3
)
   
30
 
Net loss attributable to Charah Solutions, Inc.
   
(13,359
)
   
(1,677
)
   
(35,002
)
   
(7,130
)
Deemed and imputed dividends on Series A Preferred Stock
   
(150
)
   
(148
)
   
(449
)
   
(443
)
Series A Preferred Stock dividends
   
(956
)
   
(1,946
)
   
(4,617
)
   
(6,161
)
Net loss attributable to common stockholders
 
$
(14,465
)
 
$
(3,771
)
 
$
(40,068
)
 
$
(13,734
)
                                 
Net loss attributable to common stockholders per common share:
                               
Basic
 
$
(0.43
)
 
$
(0.12
)
 
$
(1.19
)
 
$
(0.44
)
Diluted
 
$
(0.43
)
 
$
(0.12
)
 
$
(1.19
)
 
$
(0.44
)
                                 
Weighted-average shares outstanding used in loss per common share:
                               
Basic
   
33,722
     
32,277
     
33,592
     
30,955
 
Diluted
   
33,722
     
32,277
     
33,592
     
30,955
 
 
6

CHARAH SOLUTIONS, INC.
 
Condensed Consolidated Statement of Cash Flows
(in thousands)
(Unaudited)
 
   
Nine Months Ended
September 30,
 
   
2022
   
2021
 
Cash flows from operating activities:
           
Net loss
 
$
(35,005
)
 
$
(7,100
)
Adjustments to reconcile net loss to net cash and restricted cash (used in) provided by operating activities:
               
Depreciation and amortization
   
20,398
     
18,578
 
Loss on extinguishment of debt
   
     
638
 
Paid-in-kind interest on long-term debt
   
     
2,844
 
Impairment expense
   
     
827
 
Amortization of debt issuance costs
   
1,732
     
590
 
Deferred income taxes
   
310
     
432
 
Gain on sales-type lease
   
     
(5,568
)
Gains on sales of real estate, property and equipment
   
(8,664
)
   
(7,638
)
Income from equity method investment
   
     
(191
)
Non-cash share-based compensation
   
2,371
     
1,767
 
Gain on interest rate swap
   
     
(190
)
Interest rate swap settlement
   
     
(745
)
Gain on ARO settlements
   
(4,986
)
   
(1,127
)
Realization of deferred gain on ERT project performance
   
(167
)
   
 
Increase (decrease) in cash and restricted cash due to changes in:
               
Trade accounts receivable
   
(2,137
)
   
5,288
 
Contract assets and liabilities
   
(710
)
   
2,667
 
Inventory
   
(610
)
   
(147
)
Accounts payable
   
727
     
9,471
 
Asset retirement obligation
   
(25,133
)
   
(4,654
)
Other assets and liabilities
   
(13,863
)
   
(13,714
)
Net cash and restricted cash (used in) provided by operating activities
   
(65,737
)
   
2,028
 
                 
Cash flows from investing activities:
               
Net proceeds from the sales of real estate, property and equipment
   
11,951
     
10,114
 
Purchases of property and equipment
   
(3,655
)
   
(7,024
)
Cash and restricted cash received from ERT transaction
   
38,239
     
34,900
 
Payments of working capital adjustment and other items for the sale of subsidiary
   
     
(7,367
)
Distribution received from equity method investment
   
     
1,015
 
Net cash and restricted cash provided by investing activities
   
46,535
     
31,638
 
                 
Cash flows from financing activities:
               
Net proceeds on the line of credit
   
     
(12,003
)
Proceeds on asset-based lending credit agreement
   
13,000
     
 
Payments on asset-based lending credit agreement
   
(4,200
)
   
 
Proceeds from long-term debt
   
3,023
     
156,301
 
Proceeds on Term loan - Related party
   
16,000
     
 
Principal payments on long-term debt
   
(7,908
)
   
(134,613
)
Payments of debt issuance costs
   
(677
)
   
(10,912
)
Principal payments on capital lease obligations
   
(6,406
)
   
(2,920
)
Taxes paid related to net settlement of shares
   
(700
)
   
(512
)
Proceeds from issuance of common stock
   
     
13,000
 
Distributions to non-controlling interest
   
     
(165
)
Net cash and restricted cash used in financing activities
   
12,132
     
8,176
 
Net (decrease) increase in cash and restricted cash
   
(7,070
)
   
41,842
 
Cash and restricted cash, beginning of period
   
59,174
     
29,211
 
Cash and restricted cash, end of period
 
$
52,104
   
$
71,053
 
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the period for interest
 
$
11,652
     
5,386
 
Cash paid during the period for taxes
   
98
     
831
 

7

CHARAH SOLUTIONS, INC.
 
Non-GAAP Reconciliation: Net Loss Attributable to Charah Solutions, Inc. to Adjusted EBITDA
(in thousands)
(Unaudited)

We define Adjusted EBITDA as net loss attributable to Charah Solutions, Inc. before income from discontinued operations, net of tax, interest expense, net, loss on extinguishment of debt, income taxes, depreciation and amortization, equity-based compensation, impairment expense (including inventory reserves), gain on change in contingent payment liability and transaction-related expenses and other items. Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to total revenue. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance compared to our peers, without regard to our financing methods or capital structure.
 
The following table presents a reconciliation of Adjusted EBITDA to net loss attributable to Charah Solutions, Inc., our most directly comparable financial measure calculated and presented in accordance with GAAP, along with our Adjusted EBITDA margin.
 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
   
(in thousands)
 
Net loss attributable to Charah Solutions, Inc.
 
$
(13,359
)
 
$
(1,677
)
 
$
(35,002
)
 
$
(7,130
)
Interest expense, net
   
4,534
     
3,541
     
13,574
     
10,090
 
Loss on extinguishment of debt
   
     
638
     
     
638
 
Income tax (benefit) expense
   
(77
)
   
203
     
342
     
432
 
Depreciation and amortization
   
7,008
     
6,263
     
20,398
     
18,578
 
Equity-based compensation
   
834
     
769
     
2,371
     
1,767
 
Impairment expense
   
     
700
     
380
     
827
 
Transaction-related expenses and other items(1)
   
450
     
(73
)
   
458
     
1,174
 
Adjusted EBITDA
 
$
(610
)
 
$
10,364
   
$
2,521
   
$
26,376
 
Adjusted EBITDA margin(2)
   
(0.7
)%
   
12.3
%
   
1.1
%
   
13.2
%
 

(1)
Represents expenses associated with the Amendment to the Credit Facility, non-recurring legal costs and expenses and other miscellaneous items.
 

(2)
Adjusted EBITDA margin is a non-GAAP financial measure that represents the ratio of Adjusted EBITDA to total revenue. We use Adjusted EBITDA margin to measure the success of our businesses in managing our cost base and improving profitability.
 

8