Quest Resource Holding Corp Commitments Disclosure

12. Commitments and Contingencies

Claims and Indemnifications

During the normal course of business, we make certain indemnities and commitments under which we may be required to make payments in relation to certain transactions. These may include (i) intellectual property indemnities to customers in connection with the use, sales, and/or license of products and services; (ii) indemnities to customers in connection with losses incurred while performing services on their premises; (iii) indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct; and (iv) indemnities involving the representations and warranties in certain contracts. In addition, under our bylaws we are committed to our directors and officers for providing for payments upon the occurrence of certain prescribed events. The majority of these indemnities and commitments do not provide for any limitation on the maximum potential for future payments that we could be obligated to make. In addition, we may be named defendants in various claims and lawsuits for alleged damages to persons and property and alleged liabilities occurring during the ordinary operation of a waste management business. We have not incurred costs to defend lawsuits or settle claims related to indemnification agreements. We believe the estimated fair value of these claims or agreements is minimal. Accordingly, we had no liabilities recorded for these agreements as of December 31, 2024 and 2023.

Medical Self-Insured Losses

Beginning in 2024, we offer employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. We contract with a third-party administrator for medical claims and benefit processing. As of December 31, 2024, the Company had accrued $165 thousand for estimated health claims incurred but not reported based on historical claims amounts and average lag time.

Defined Contribution Plan

We maintain a defined contribution 401(k) plan covering substantially all full-time employees. Employees are permitted to make voluntary contributions, which we match at a certain percentage, to the plan. For the years ended December 31, 2024 and 2023, our plan contribution expense was $373 thousand and $349 thousand, respectively.