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What changed in HUDSON TECHNOLOGIES INC /NY's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HUDSON TECHNOLOGIES INC /NY's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+100 added−100 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-14)

Top changes in HUDSON TECHNOLOGIES INC /NY's 2024 10-K

100 paragraphs added · 100 removed · 73 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

23 edited+5 added−8 removed61 unchanged
Biggest changeThe proposed rule, which is expected to be finalized during the third quarter of 2024, includes requirements for repairing leaky equipment, use of automatic leak detection systems on large refrigeration systems, use of reclaimed HFCs for certain applications, recovery of HFCs from cylinders before their disposal, and a container tracking system. 4 Table of Contents Products and Services Sustainability From its inception, the Company has sold refrigerants, and has provided refrigerant reclamation and refrigerant management services that are designed to recover and reuse refrigerants, thereby protecting the environment from release of refrigerants to the atmosphere and the corresponding ozone depletion and global warming impact and supporting the circular economy.
Biggest changeProducts and Services Sustainability From its inception, the Company has sold refrigerants, and has provided refrigerant reclamation and refrigerant management services that are designed to recover and reuse refrigerants, thereby protecting the environment from release of refrigerants to the atmosphere and the corresponding ozone depletion and global warming impact and supporting the circular economy.
The Company purchases virgin refrigerants, such as HFC’s and HFO’s, from several suppliers and resold by the Company. Additionally, the Company regularly purchases used or contaminated refrigerants, from many different sources, which refrigerants are then reclaimed using the Company’s high speed proprietary reclamation equipment, its proprietary Zugibeast® system, and then are resold by the Company.
The Company purchases virgin refrigerants, such as HFC’s and HFO’s, from several suppliers, which are then resold by the Company. Additionally, the Company regularly purchases used or contaminated refrigerants, from many different sources, which refrigerants are then reclaimed using the Company’s high speed proprietary reclamation equipment, its proprietary Zugibeast® system, and then are resold by the Company.
AIM Act The United States Environmental Protection Agency (“EPA”) issued several final rules establishing the framework to allocate allowances for virgin production and consumption of hydrofluorocarbon refrigerants (“HFCs”) that currently provide allowances through 2028. The EPA is responsible for the administration of the HFC phase down enacted by Congress under the AIM Act.
AIM Act The United States Environmental Protection Agency (“EPA”) issued several final rules establishing the framework to allocate allowances for virgin production and consumption of hydrofluorocarbon refrigerants (“HFCs”) that currently provide allowances through 2029. The EPA is responsible for the administration of the HFC phase down enacted by Congress under the AIM Act.
RefrigerantSide® Services consists of system decontamination to remove moisture, oils and other contaminants intended to restore systems to designed capacity.As a component of the Company’s products and services, the Company also participates in the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company.
RefrigerantSide® Services consist of system decontamination to remove moisture, oils and other contaminants intended to restore systems to designed capacity. As a component of the Company’s products and services, the Company also participates in the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company.
Congress required that the EPA consider ways to promote reclamation in all phases of its implementation of the AIM Act. The AIM Act introduced a stepdown of 10% from baseline levels in 2022 and 2023, and establishes a cumulative 40% reduction in the baseline for 2024.
Congress required that the EPA consider ways to promote reclamation in all phases of its implementation of the AIM Act. The AIM Act introduced a stepdown of 10% from baseline levels in 2022 and 2023, and establishes a cumulative 40% reduction in the baseline for 2024 through 2029.
Fluid Chemistry®, an abbreviated version of the Company’s Chiller Chemistry® offering, is designed to quickly identify systems that require further examination. 5 Table of Contents The Company has also been awarded several US patents for its SmartEnergy OPS®, which is a system for measuring, modifying and improving the efficiency of energy systems, including air conditioning and refrigeration systems, in industrial and commercial applications.
Fluid Chemistry®, an abbreviated version of the Company’s Chiller Chemistry® offering, is designed to quickly identify systems that require further examination. The Company has also been awarded several US patents for its SmartEnergy OPS®, which is a system for measuring, modifying and improving the efficiency of energy systems, including air conditioning and refrigeration systems, in industrial and commercial applications.
The Company’s engineers who developed and support SmartEnergy OPS® are recognized as Energy Experts and Qualified Best Practices Specialists by the United States Department of Energy (“DOE”) in the areas of Steam and Process Heating under the DOE “Best Practices” program, and are the Lead International Energy Experts for steam, chillers and refrigeration systems for the United Nations Industrial Development Organization (“UNIDO”).
The Company’s engineers who developed and support SmartEnergy OPS® are recognized as Energy Experts and Qualified Best Practices Specialists by the United States Department of Energy (“DOE”) in the areas of Steam and Process Heating under the DOE “Best Practices” program, and are the Lead International Energy Experts for steam, chillers and refrigeration systems for the United 5 Table of Contents Nations Industrial Development Organization (“UNIDO”).
The Company is also subject to regulations adopted by the California Air Resources Board which impose certain reporting requirements arising out of the reclamation and sale of refrigerants that takes place within the State of California. 8 Table of Contents The Company believes that it is in material compliance with all applicable regulations that are material to its business operations.
The Company is also subject to regulations adopted by the California Air Resources Board which impose certain reporting requirements arising out of the reclamation and sale of refrigerants that takes place within the State of California. The Company believes that it is in material compliance with all applicable regulations that are material to its business operations.
These patents will expire between December 2024 and December 2036. There can be no assurance as to the breadth or degree of protection that patents may afford the Company, that any patent applications will result in issued patents or that patents will not be circumvented or invalidated.
These patents will expire between April 2025 and December 2036. There can be no assurance as to the breadth or degree of protection that patents may afford the Company, that any patent applications will result in issued patents or that patents will not be circumvented or invalidated.
The reclamation process allows the refrigerant to be re-used thereby eliminating the need to destroy or manufacture additional refrigerant and eliminating the corresponding impact to the environment associated with the destruction and manufacturing. The Company believes it is the largest refrigerant reclaimer in the United States.
The reclamation process allows the refrigerant to be re-used thereby eliminating the need to destroy or manufacture additional refrigerant and eliminating the corresponding impact to the environment associated with the destruction and manufacturing. The Company believes it is one of the largest refrigerant reclaimers in the United States.
The Company employs twelve persons engaged full-time in quality control and to monitor the Company’s operations for regulatory compliance. Human Capital Resources On February 1, 2024, the Company had 237 full time employees including air conditioning and refrigeration technicians, chemists, engineers, sales and administrative personnel. None of the Company’s employees are represented by a union.
The Company employs twelve persons engaged full-time in quality control and to monitor the Company’s operations for regulatory compliance. Human Capital Resources On January 31, 2025, the Company had 238 full time employees including air conditioning and refrigeration technicians, chemists, engineers, sales and administrative personnel. None of the Company’s employees are represented by a union.
Certain HFC refrigerants are highly weighted greenhouse gases that are believed to contribute to global warming and climate change and, as a result, are now subject to various state regulations relating to the sale, use and emissions of HFC refrigerants, as well as federal restrictions on the production and consumption of HFCs under the AIM Act (as set forth below).
Certain HFC refrigerants are highly weighted greenhouse gases that are believed to contribute to global warming and climate change and, as a result, are now subject to various state regulations relating to the sale, use and emissions of HFC refrigerants, as well as federal restrictions on the production and consumption of HFCs under the American Innovation and Manufacturing Act (the “AIM Act”) (as described below).
The Company’s executive officers devote significant time and effort to customer relationships. Competition The Company competes primarily on the basis of the performance of its proprietary high volume, high-speed equipment used in its operations, the breadth of services offered by the Company, including proprietary RefrigerantSide® Services and other on-site services, and price, particularly with respect to refrigerant sales.
Competition The Company competes primarily on the basis of the performance of its proprietary high volume, high-speed equipment used in its operations, the breadth of services offered by the Company, including proprietary RefrigerantSide® Services and other on-site services, and price, particularly with respect to refrigerant sales.
Patents and Proprietary Information The Company holds several U.S. and foreign patents, as well as pending patent applications, related to certain RefrigerantSide® Services and supporting systems developed by the Company for systems and processes for measuring and improving the efficiency of refrigeration systems, and for certain refrigerant recycling and reclamation technologies.
The Company believes it has good relations with its employees. 8 Table of Contents Patents and Proprietary Information The Company holds several U.S. and foreign patents, as well as pending patent applications, related to certain RefrigerantSide® Services and supporting systems developed by the Company for systems and processes for measuring and improving the efficiency of refrigeration systems, and for certain refrigerant recycling and reclamation technologies.
Hudson maintains environmental impairment insurance of $10,000,000 per occurrence, and $10,000,000 annual in the aggregate. 7 Table of Contents Government Regulation The business of refrigerant and industrial gas sales, reclamation and management is subject to extensive, stringent and frequently changing federal, state and local laws and substantial regulation under these laws by governmental agencies, including the EPA, the United States Occupational Safety and Health Administration (“OSHA”) and the United States Department of Transportation (“DOT”).
Government Regulation The business of refrigerant and industrial gas sales, reclamation and management is subject to extensive, stringent and frequently changing federal, state and local laws and substantial regulation under these laws by governmental agencies, including the EPA, the United States Occupational Safety and Health Administration (“OSHA”) and the United States Department of Transportation (“DOT”).
The Company provides a complete offering of refrigerant management services, which primarily include reclamation of refrigerants, laboratory testing through the Company’s laboratory, which has been certified by the Air Conditioning, Heating and Refrigeration Institute (“AHRI”), and banking (storage) services tailored to individual customer requirements.
In addition, the Company participates in the creation and monetization of verified emission reductions utilizing third party protocols. 4 Table of Contents The Company provides a complete offering of refrigerant management services, which primarily include reclamation of refrigerants, laboratory testing through the Company’s laboratory, which has been certified by the Air Conditioning, Heating and Refrigeration Institute (“AHRI”), and banking (storage) services tailored to individual customer requirements.
The Company may be held strictly liable for damages, which could be substantial, regardless of whether it exercised due care and complied with all relevant laws and regulations.
The Company may be held strictly liable for damages, which could be substantial, regardless of whether it exercised due care and complied with all relevant laws and regulations. Hudson maintains environmental impairment insurance of $10,000,000 per occurrence, and $10,000,000 annual in the aggregate.
For the year ended December 31, 2021, one customer accounted for 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2021. 6 Table of Contents Strategic Relationships Hudson announced the following strategic relationships: - In, January 2022, Hudson entered into an agreement with AprilAire, the leading provider of professional grade healthy air solutions for homes, to meet the requirements of the recently finalized California Air Resources Board (CARB) Regulation Order for Reclaimed Refrigerant Use for Manufacturers of AC Equipment.
Strategic Relationships Hudson announced the following strategic relationships: - In January 2022, Hudson entered into an agreement with AprilAire, the leading provider of professional grade healthy air solutions for homes, to meet the requirements of the recently finalized California Air Resources Board (CARB) Regulation Order for Reclaimed Refrigerant Use for Manufacturers of AC Equipment.
Hudson employs various marketing methods, including digital marketing, segment targeted outreach, social media, trade and industry events, webinars, in-person solicitation, print advertising, response to quotation requests and the internet through the Company’s website (www.hudsontech.com). Information on the Company’s website is not part of this report. The Company’s sales personnel are compensated on a combination of a base salary and commission.
Hudson employs various marketing methods, including digital marketing, segment targeted outreach, social media, trade and industry events, webinars, in-person solicitation, print advertising, response to quotation requests and the internet through the Company’s website (www.hudsontech.com).
Hudson and its customers are subject to the requirements of the Clean Air Act and the AIM Act, and the regulations promulgated thereunder by the EPA, which make it unlawful for any person in the course of maintaining, servicing, repairing, and disposing of air conditioning or refrigeration equipment, to knowingly vent or otherwise release or dispose of ozone depleting substances, and non-ozone depleting substitutes, used as refrigerants.
Hudson and its customers are subject to the requirements of the Clean Air Act and the AIM Act, and the regulations promulgated thereunder by the EPA, which make it unlawful for any person in the course of maintaining, servicing, repairing, and disposing of air conditioning or refrigeration equipment, to knowingly vent or otherwise release or dispose of ozone depleting substances, and non-ozone depleting substitutes, used as refrigerants. 7 Table of Contents Pursuant to the Act, reclaimed refrigerant must satisfy the same purity standards as newly manufactured, virgin refrigerants in accordance with standards established by AHRI prior to resale to a person other than the owner of the equipment from which it was recovered.
Carbon Offset Projects CFC refrigerants are ozone depleting substances and are also highly weighted greenhouse gases that contribute to global warming and climate change. The destruction of CFC refrigerants may be eligible for verified emission reductions that can be converted and monetized into carbon offset credits, which then can be traded in the emerging carbon offset markets.
The destruction of CFC refrigerants may be eligible for verified emission reductions that can be converted and monetized into carbon offset credits, which then can be traded in the emerging carbon offset markets.
The Company’s staff have trained more than 4,000 industrial plant personnel in the US and internationally and have developed, and are currently delivering, training curriculums in 12 different countries. The Company’s staff have completed more than 200 industrial ESAs in the US and internationally.
The Company’s staff have trained more than 4,000 industrial plant personnel in the US and internationally and have developed, and are currently delivering, training curriculums in 12 different countries. Carbon Offset Projects CFC refrigerants are ozone depleting substances and are also highly weighted greenhouse gases that contribute to global warming and climate change.
Importantly, to qualify for the extended compliance deadline, all components of a system using the higher GWP HFC must be manufactured or imported prior to January 1, 2025. 2) Proposed Refrigerant Management Rule- The second action is a proposed rule to better manage and reuse existing HFCs, including by reducing wasteful leaks from equipment and supporting HFC recycling and reclamation.
On September 20, 2024, the EPA announced the latest actions to phase down HFCs under the AIM Act: 1) Final Refrigerant Management Rule – The rule requires better management and reuse of existing HFCs, including by reducing wasteful leaks from equipment and supporting HFC recycling and reclamation.
Removed
Hudson received allocation allowances for calendar years 2022, 2023 and 2024 equal to approximately 3 million, 3 million and 1.9 million Metric Tons Exchange Value Equivalents, respectively, per year, or approximately 1% of the total HFC consumption. Reclamation will be critical to maintaining necessary HFC supply levels to ensure an orderly phasedown.
Added
Hudson received allocation allowances for calendar years 2023 and 2024 equal to approximately 1% of the total HFC consumption allowances, with allowances for future periods to be determined at a later date. In addition, the EPA has finalized its technology transition rule, requiring the manufacturing and installation of lower global warming potential (“GWP”) systems commencing in 2025 and beyond.
Removed
Reclamation is not subject to the allowance system or restricted from use.
Added
Reclamation is critical to maintaining necessary HFC supply levels for the installed base of operating systems to ensure an orderly phasedown so that systems owners are able to recognize the full economic value of their systems through end of life. Reclamation is not subject to the allowance system or restricted from use.
Removed
On October 6, 2023, the EPA announced the latest actions to phase down HFCs under the AIM Act: 1) Finalization of the Technology Transition Rule- The first new action is a final rule to accelerate the ongoing transition to more efficient and climate-safe technologies in new refrigeration, heating and cooling systems and other products by restricting the use of HFCs where alternatives are already available.
Added
The rule includes requirements for repairing leaky equipment, use of automatic leak detection systems on large refrigeration systems, mandating the use of reclaimed HFCs for certain applications, recovery of HFCs from cylinders before their disposal, and a container tracking system.
Removed
The rule, which applies to both imported and domestically manufactured products, bans HFCs in certain equipment and sets a limit on the global warming potentials (GWPs) of the HFCs that can be used in each subsector, with compliance dates ranging from 2025 to 2028.
Added
For the year ended December 31, 2024, there was one customer accounting for greater than 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2024.
Removed
In December 2023, the EPA announced an interim final rule on this matter, which provides an additional year, until January 1, 2026, for the installation of new residential and light commercial A/C and heat pump systems that use components manufactured or imported prior to January 1, 2025.
Added
Information on the Company’s website is not part of this report. 6 Table of Contents The Company’s sales personnel are compensated on a combination of a base salary and commission. The Company’s executive officers devote significant time and effort to customer relationships.
Removed
In addition, the Company participates in the creation and monetization of verified emission reductions utilizing third party protocols.
Removed
Pursuant to the Act, reclaimed refrigerant must satisfy the same purity standards as newly manufactured, virgin refrigerants in accordance with standards established by AHRI prior to resale to a person other than the owner of the equipment from which it was recovered.
Removed
The Company believes it has good relations with its employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur failure to comply with applicable laws, rules or regulations or permit requirements could subject us to civil remedies, including substantial fines, penalties and injunctions, as well as possible criminal sanctions, which would, if of significant magnitude, materially adversely impact our operations and future financial condition. 11 Table of Contents A number of factors could negatively impact the price and/or availability of refrigerants, which would, in turn, adversely affect our business and financial condition.
Biggest changeOur failure to comply with applicable laws, rules or regulations or permit requirements could subject us to civil remedies, including substantial fines, penalties and injunctions, as well as possible criminal sanctions, which would, if of significant magnitude, materially adversely impact our operations and future financial condition.
Cybersecurity threats are evolving and include, but are not limited to, malicious software, cyber espionage, attempts to gain unauthorized access to our sensitive information, including that of our customers, suppliers, and subcontractors, and other electronic security breaches that could lead to disruptions in mission critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data.
Cybersecurity threats are evolving and include, but are not limited to, malicious software, cyber espionage, attempts to gain unauthorized access to our 10 Table of Contents sensitive information, including that of our customers, suppliers, and subcontractors, and other electronic security breaches that could lead to disruptions in mission critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data.
Our failure to obtain and resell sufficient quantities of virgin refrigerants on commercially reasonable terms, or at all, or to obtain, reclaim and resell sufficient quantities of used refrigerants would have a material adverse effect on our operating margins and results of operations. Issues relating to potential global warming and climate change could have an impact on our business.
Our failure to obtain and resell sufficient quantities of virgin refrigerants on commercially reasonable terms, or at all, or to obtain, reclaim and resell sufficient quantities of used refrigerants would have a material adverse effect on our operating margins and results of operations. 11 Table of Contents Issues relating to potential global warming and climate change could have an impact on our business.
Financial Covenants These conditions could impact our ability to meet our loan covenants which, if we are unable to obtain a waiver from our lenders, could materially adversely affect our business and future financial condition and could require us to curtail or otherwise cease our existing operations. 10 Table of Contents Our business is impacted by customer concentration.
Financial Covenants These conditions could impact our ability to meet our loan covenants which, if we are unable to obtain a waiver from our lenders, could materially adversely affect our business and future financial condition and could require us to curtail or otherwise cease our existing operations. Our business is impacted by customer concentration.
Our contract with DLA expires in July 2026. For the years ended December 31, 2023, 2022 and 2021, the DLA accounted for 18%, 8% and 10% of our revenues. The loss of DLA as a customer could have a material adverse effect on our financial position and results of operations.
Our contract with DLA expires in July 2026. For the years ended December 31, 2024, 2023 and 2022, the DLA accounted for 15%, 18% and 8% of our revenues. The loss of DLA as a customer could have a material adverse effect on our financial position and results of operations.
Our systems and technologies, or those of third parties on which we rely, could fail or become unreliable due to equipment failures, software viruses, cyber threats, terrorist acts, natural disasters, power failures or other causes.
Our systems and technologies, or those of third parties on which we rely, could fail or become unreliable due to equipment failures, software viruses, cyber threats, system conversion issues, software implementation issues, terrorist acts, natural disasters, power failures or other causes.
If we are unable to maintain our listing on NASDAQ, the market liquidity of our common stock may be severely limited. 12 Table of Contents Our management has significant control over our affairs. Currently, our officers and directors collectively beneficially own approximately 7.8% of our outstanding common stock.
If we are unable to maintain our listing on NASDAQ, the market liquidity of our common stock may be severely limited. Our management has significant control over our affairs. Currently, our officers and directors collectively beneficially own approximately 8.0% of our outstanding common stock.
Moreover, the terms of our credit facility also includes financial and negative covenants that, among other things, may limit our ability to incur additional indebtedness.
Moreover, the terms of our credit facility also include financial and negative 9 Table of Contents covenants that, among other things, may limit our ability to incur additional indebtedness.
In addition, we may not be able to successfully integrate any assets, liabilities, customers, systems or management personnel we may acquire into our operations and we may not be able to realize related revenue synergies and cost savings within expected time frames. There can be no assurance that we will be able to successfully integrate any prior or future acquisition.
In addition, we may not be able to successfully integrate any assets, liabilities, customers, systems or management personnel we may acquire into our operations and we may not be able to realize related revenue synergies and cost savings within expected time frames.
We have processes in place to monitor exposures to these risks and engage in strategies to manage these risks. If these controls and strategies are not successful in mitigating our exposure to these fluctuations, we could be materially and adversely affected.
We have processes in place to monitor exposures to these risks and engage in strategies to manage these risks. If these controls and strategies are not successful in mitigating our exposure to these fluctuations, we could be materially and adversely affected. Our existing and future debt obligations could impair our liquidity and financial condition.
Our revenues, results of operations and cash flows could be materially and adversely affected by changes in commodity prices. Our revenues, results of operations and cash flows are affected by market prices for refrigerant gases.
Some of the factors are beyond Hudson’s control and future trends are difficult to predict. Risks Related to Business Strategy and Operations Our revenues, results of operations and cash flows could be materially and adversely affected by changes in commodity prices. Our revenues, results of operations and cash flows are affected by market prices for refrigerant gases.
Refrigerant sales continue to represent a significant majority of our revenues.
A number of factors could negatively impact the price and/or availability of refrigerants, which would, in turn, adversely affect our business and financial condition. Refrigerant sales continue to represent a significant majority of our revenues.
Removed
Some of the factors are beyond Hudson’s control and future trends are difficult to predict. 9 Table of Contents Risks Related to Business Strategy and Operations Our existing and future debt obligations could impair our liquidity and financial condition.
Added
Furthermore, our inventories, consisting primarily of refrigerant products available for sale, are stated at the lower of cost, on a first-in first-out basis, or net realizable value.
Added
Where the market price of inventory is less than the related cost, the Company may be required to write down its inventory through a lower of cost or net realizable value adjustment, the impact of which would be reflected in cost of sales on the Consolidated Income Statements.
Added
There can be no assurance that we will be able to successfully integrate any prior or future acquisition. 12 Table of Contents

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed15 unchanged
Biggest changeDepending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider, conducting security assessments, and conducting periodic reassessments during their engagement. 13 Table of Contents We are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition.
Biggest changeDepending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider, conducting security assessments, and conducting periodic reassessments during their engagement.
The Director of IT then formulates and oversees a response to contain, eradicate and resolve incidents in accordance with the Company’s incident response plan. Management is responsible for reporting incidents to the appropriate authorities as necessary and engaging the senior leadership on all material incidents. ​
The Director of IT then formulates and oversees a response to contain, eradicate and resolve incidents in accordance with the Company’s incident response plan. Management is responsible for reporting incidents to the appropriate authorities as necessary and engaging senior leadership on all material incidents. ​
The Board also receives prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. Management plays a crucial role in assessing and managing material risks from cybersecurity threats.
The Board also receives prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. 13 Table of Contents Management plays a crucial role in assessing and managing material risks from cybersecurity threats.
Added
We are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company also maintains four smaller service depots for the performance of its RefrigerantSide® Services and maintains three sales and telemarketing offices. ​ 14 Table of Contents Hudson’s key operational facilities are as follows: Location Owned or Leased Description Woodcliff Lake, New Jersey ​ Leased ​ Company headquarters and administrative offices Champaign, Illinois ​ Owned ​ Reclamation and separation of refrigerants and cylinder refurbishment Champaign, Illinois ​ Leased ​ Refrigerant packaging, cylinder refurbishment, RefrigerantSide® Service depot, refrigerant and industrial gases storage Smyrna, Georgia ​ Leased ​ Reclamation and separation of refrigerants and cylinder refurbishment center Smyrna, Georgia ​ Owned ​ Refrigerant storage Escondido, California ​ Leased ​ Refrigerant and Industrial gas storage and cylinder refurbishment center Ontario, California ​ Leased ​ Refrigerant reclamation and cylinder refurbishment center ​ ​
Biggest changeHudson’s key operational facilities are as follows: Location Owned or Leased Description Woodcliff Lake, New Jersey ​ Leased ​ Company headquarters and administrative offices Champaign, Illinois ​ Owned ​ Reclamation and separation of refrigerants and cylinder refurbishment Champaign, Illinois ​ Leased ​ Refrigerant packaging, cylinder refurbishment, RefrigerantSide® Service depot, refrigerant and industrial gases storage Smyrna, Georgia ​ Leased ​ Reclamation and separation of refrigerants and cylinder refurbishment center Smyrna, Georgia ​ Owned ​ Refrigerant storage Escondido, California ​ Leased ​ Refrigerant and Industrial gas storage and cylinder refurbishment center Ontario, California ​ Leased ​ Refrigerant reclamation and cylinder refurbishment center ​ ​
The Company also sells industrial gases out of facilities located in Escondido, California and in Champaign, Illinois. The Company maintains smaller reclamation and cylinder refurbishing facilities in Ontario, California.
The Company also sells industrial gases out of facilities located in Escondido, California and in Champaign, Illinois. The Company maintains smaller reclamation and cylinder refurbishing facilities in Ontario, California. The Company also maintains four smaller service depots for the performance of its RefrigerantSide® Services and maintains three sales and telemarketing offices.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock trades on the NASDAQ Capital Market under the symbol “HDSN”. The number of record holders of the Company’s common stock was approximately 87 as of March 8, 2024.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock trades on the NASDAQ Capital Market under the symbol “HDSN”. The number of record holders of the Company’s common stock was approximately 84 as of March 3, 2025.
Stock Price Performance Graph The following graph illustrates a comparison of the total cumulative five-year stockholder return of a $100 investment in our common stock on December 31, 2018, to two indices: the NASDAQ Composite Index and the Nasdaq Industrial Index.
Stock Price Performance Graph The following graph illustrates a comparison of the total cumulative five-year stockholder return of a $100 investment in our common stock on December 31, 2019, to two indices: the NASDAQ Composite Index and the Nasdaq Industrial Index.
Added
Issuer Purchases of Equity Securities HUDSON TECHNOLOGIES, INC.
Added
ISSUER PURCHASES OF EQUITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar Value of ​ ​ ​ ​ ​ ​ Total Number of ​ Shares that May ​ ​ ​ ​ ​ ​ Shares Purchased ​ Yet be Purchased ​ ​ Total Number ​ ​ ​ as Part of Publicly ​ Under the ​ ​ of Shares ​ Average Price Paid ​ Announced ​ Program (millions Period Purchased (1) Per Share Program of dollars) (2) October 1-31, 2024 — ​ — — ​ $ 17.4 November 1-30, 2024 409,468 ​ $ 6.08 409,468 ​ $ 14.9 December 1-31, 2024 ​ 508,580 ​ $ 5.90 508,580 ​ $ 10.0 Total 918,048 ​ $ 5.98 ​ 918,048 ​ $ 10.0 ​ (1) On August 6, 2024, the Company announced that its Board of Directors approved a share repurchase program pursuant to which the Company may purchase up to $10 million in shares of the Company’s common stock during 2024 and 2025 (the “Repurchase Program”).
Added
Under the terms of the Repurchase Program, the Company may purchase shares of its common stock on a discretionary basis from time to time through open market repurchases or privately negotiated transactions or through other means, including by entering into Rule 10b5-1 trading plans, in each case, during an “open window” and when the Company does not possess material non-public information.
Added
The timing and actual number of shares repurchased under the Repurchase Program will depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The Repurchase Program may be modified, suspended or discontinued at any time without prior notice.
Added
Repurchases under the Repurchase Program may be funded from the Company’s existing cash and cash equivalents, and future cash flow.
Added
(2) On October 25, 2024, the Company announced that its Board of Directors approved an increase to its previously disclosed repurchase program pursuant to which the Company may now purchase up to $20 million in shares of the Company’s common stock (consisting of up to $10 million in shares during each of calendar year 2024 and 2025) (as amended, the “Repurchase Program”). ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

29 edited+12 added−18 removed38 unchanged
Biggest changeThe increase in the cost of sales percentage from 61% to 50% is primarily due to the lower selling prices of certain refrigerants sold, as described above. Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 were $30.5 million, an increase of $1.9 million from the $28.6 million reported during the comparable 2022 period.
Biggest changeSelling, general and administrative (“SG&A”) expenses for the year ended December 31, 2024 were $33.0 million, an increase of $2.5 million from the $30.5 million reported during the comparable 2023 period. The increase in SG&A was primarily due to increased personnel cost, professional fees and acquisition costs with approximately $0.7 million considered non-recurring charges.
The Amended Wells Fargo Facility also contains customary non-financial covenants relating to the Company and the Borrowers, including limitations on the Borrowers’ ability to pay dividends on common stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, impairments to guarantees and a change of control. 20 Table of Contents The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470-50 to determine if the amendment was a modification or an extinguishment of debt and concluded that the amendment was a modification of the original revolving credit facility for accounting purposes.
The Amended Wells Fargo Facility also contains customary non-financial covenants relating to the Company and the Borrowers, including limitations on the Borrowers’ ability to pay dividends on common stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, impairments to guarantees and a change of control. 20 Table of Contents The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470-50 to determine if the amendment and restatement was a modification or an extinguishment of debt and concluded that the amendment and restatement was a modification of the original revolving credit facility for accounting purposes.
Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company’s RefrigerantSide® Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company’s future capital needs.
Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company’s RefrigerantSide(R) Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company’s future capital needs.
As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.
As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment and restatement, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.
The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer’s site, consisting of system decontamination to remove moisture, oils and other contaminants.
The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and 17 Table of Contents RefrigerantSide® Services performed at a customer’s site, consisting of system decontamination to remove moisture, oils and other contaminants.
Amounts borrowed under the Term Loan Facility were used by the Borrowers to repay the outstanding principal amount and related fees and expenses under the Prior Term Loan Facility (as defined below) and for other corporate purposes. The Company paid approximately $4.3 million of term loan deferred financing costs.
Amounts borrowed under the Term Loan Facility were used by the Borrowers to repay the outstanding principal amount and related fees and expenses under a prior term loan facility and for other corporate purposes. The Company paid approximately $4.3 million of term loan deferred financing costs.
Year ended December 31, 2022 as compared to the year ended December 31, 2021 Management’s discussion and analysis of the year ended December 31, 2022 as compared to the year ended December 31, 2021 is contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2024.
For the year ended December 31, 2022, there was no customer accounted for 10% of the Company’s revenues but one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2022.
For the year ended December 31, 2022, no customer accounted for 10% of the Company’s revenues; however, the DLA accounted for over 10% of the outstanding accounts receivable at December 31, 2022.
For the year ended December 31, 2023, there was one customer accounting for greater than 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2023.
For the year ended December 31, 2024, the DLA accounted for greater than 10% of the Company’s revenues and over 10% of the outstanding accounts receivable at December 31, 2024. For the year ended December 31, 2023, the DLA accounted for greater than 10% of the Company’s revenues and over 10% of the outstanding accounts receivable at December 31, 2023.
Therefore, we cannot make any assurance that we will continue to be in compliance during future periods. The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operations and available funds under the Amended Wells Fargo Facility.
The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operations and available funds under the Amended Wells Fargo Facility.
During the third quarter of 2023, the Company repaid in full the remaining principal balance outstanding under the Term Loan Facility and the FILO Tranche.
During the third quarter of 2023, the Company repaid in full the remaining principal balance outstanding under the Term Loan Facility and the FILO Tranche. The Company was in compliance with all covenants under the Amended Wells Fargo Facility as of December 31, 2024.
There can be no assurance that the foregoing factors will not occur and result in a material adverse effect on the Company’s financial position and significant losses.
There can be no assurance that the foregoing factors will not occur and result in a material adverse effect on the Company’s financial position and significant losses. The Company believes that to a lesser extent there is a similar seasonal element to RefrigerantSide® Service revenues as refrigerant sales.
Liquidity and Capital Resources At December 31, 2023, the Company had working capital, which represents current assets less current liabilities, of $146.4 million, an increase of $22.2 million from the working capital of $124.2 million at December 31, 2022. The increase in working capital is primarily attributable to continued profitability and the timing of borrowings, accounts receivable and inventory.
Liquidity and Capital Resources At December 31, 2024, the Company had working capital, which represents current assets less current liabilities, of $147.7 million, an increase of $1.3 million from the working capital of $146.4 million at December 31, 2023. The increase in working capital is primarily attributable to a rise in cash.
Inventory and trade receivables are principal components of current assets. At December 31, 2023, the Company had inventory of $154.5 million, an increase of $9.1 million from $145.4 million at December 31, 2022.
Inventory and trade receivables are principal components of current assets. At December 31, 2024, the Company had inventory of $96.2 million, a decrease of $58.3 million from $154.5 million at December 31, 2023.
The Company was in compliance with all covenants under the Amended Wells Fargo Facility as of December 31, 2023. The Company’s ability to comply with these covenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions, regulations and refrigerant pricing.
The Company’s ability to comply with these covenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions, regulations and refrigerant pricing. Therefore, the Company cannot make any assurance that it will continue to be in compliance during future periods.
There can be no assurance that the Company’s proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available on acceptable terms, or at all. 21 Table of Contents CARES Act Loan On April 23, 2020 the Company received a loan in the amount of $2.475 million from Meridian Bank under the Paycheck Protection Program (“PPP”) pursuant to the CARES Act.
There can be no assurance that any of the Company’s proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available on acceptable terms, or at all. 21 Table of Contents Inflation Inflation, historically or the recent increase, has not had a material impact on the Company’s operations.
The decrease was mainly attributable to lower selling prices of certain refrigerants sold, partially offset by increase in revenues from our DLA and carbon credit programs. Cost of sales for the year ended December 31, 2023 was $177.5 million or 61% of sales. Cost of sales for the year ended December 31, 2022 was $162.3 million or 50% of sales.
The decrease was primarily attributable to lower selling prices of certain refrigerants sold. Cost of sales for the year ended December 31, 2024 was $171.4 million or 72% of sales. Cost of sales for the year ended December 31, 2023 was $177.5 million or 61% of sales.
At December 31, 2023, cash and cash equivalents were $12.4 million, or approximately $7.1 million higher than the $5.3 million of cash and cash equivalents at December 31, 2022. Revolving Credit Facility On March 2, 2022, Hudson Technologies Company (“HTC”) and Hudson Holdings, Inc. (“Holdings”), as borrowers (collectively, the “Borrowers”), and Hudson Technologies, Inc.
Revolving Credit Facility On March 2, 2022, Hudson Technologies Company (“HTC”) and Hudson Holdings, Inc. (“Holdings”), as borrowers (collectively, the “Borrowers”), and Hudson Technologies, Inc.
The net income for the year ended December 31, 2023 was $52.2 million, a decrease of $51.6 million from the $103.8 million of net income reported during the comparable 2022 period, primarily due to lower revenues, higher cost of sales and a higher tax rate, as described above.
Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items. 18 Table of Contents Net income for the year ended December 31, 2024 was $24.4 million, a decrease of $27.8 million from the $52.2 million of net income reported during the comparable 2023 period, primarily due to lower sales prices of certain refrigerants sold, and higher SG&A costs, as described above.
Inflation Inflation, historically or the recent increase, has not had a material impact on the Company’s operations. Reliance on Suppliers and Customers The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results.
Reliance on Suppliers and Customers The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results. Currently the Company purchases virgin HCFC and HFC refrigerants and reclaimable, primarily HCFC and CFC, refrigerants from suppliers and its customers.
The Company believes that to a lesser extent there is a similar seasonal element to RefrigerantSide® Service revenues as refrigerant sales. 22 Table of Contents Recent Accounting Pronouncements See recent accounting pronouncements set forth in Note 1 of the financial statements contained in this report and commitments and contingencies noted in Note 11 thereof.
Recent Accounting Pronouncements See recent accounting pronouncements set forth in Note 1 of the financial statements contained in this report and commitments and contingencies described in Note 11 thereof.
At any time, our inventory levels may be substantial and fluctuate, which will materially impact our estimates of net realizable value. Goodwill The Company has made acquisitions that included a significant amount of goodwill and other intangible assets.
At any time, our inventory levels may be substantial and fluctuate, which will materially impact our estimates of net realizable value. Overview The Company is a leading provider of sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration (“HVACR”) industry.
The increase in SG&A was primarily due to an increased number of employees and stock compensation. Amortization expense was $2.8 million during 2023 and 2022, respectively. Other expense for 2023 was $8.4 million, compared to the $14.3 million of other expense reported during the comparable 2022 period.
Amortization expense for the year ended December 31, 2024 was $3.4 million, an increase of $0.6 million from $2.8 million reported during the comparable 2023 period. The increase in amortization was primarily due to the recent acquisition of USA Refrigerants as described above. Interest expense (income) was ($0.5) million, compared to the $8.4 million reported during the comparable 2023 period.
The Company’s trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States. The Company has historically financed its working capital requirements through cash flows from operations, debt, and the issuance of equity securities.
At December 31, 2024, the Company had trade receivables, net of credit losses, of $13.6 million, a decrease of $11.6 million from $25.2 million at December 31, 2023, mainly due to timing. The Company’s trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States.
Primary users include the US Army, Navy, Air Force, Marine Corps and Coast Guard. Our contract with DLA expires in July 2026.
Primary users include the US Army, Navy, Air Force, Marine Corps and Coast Guard. Our contract with DLA expires in July 2026. Recent Acquisition On June 6, 2024, the Company’s subsidiary Hudson Technologies Company completed the acquisition of substantially all the business assets of USA United Suppliers of America, Inc. (d/b/a USA Refrigerants) (“USA Refrigerants”) and B&B Jobber Services, Inc.
Net cash used in investing activities for 2023 was $3.6 million when compared to the net cash used in investing activities of $3.7 million for the comparable 2022 period. Net cash used in financing activities for 2023 was $47.8 million, compared with net cash used in financing activities of $57.4 million for 2022.
Net cash used in financing activities for 2024 was $8.2 million, compared with net cash used in financing activities of $47.8 million for 2023. The change is primarily because in 2023, the Company paid off $47.2 million of its debt as compared to no debt repayment in 2024.
Net cash provided by operating activities for the year ended December 31, 2023 was $58.5 million, when compared to the net cash provided by operating activities of $62.8 million for the comparable 2022 period. As discussed above, selling prices of certain refrigerants declined in 2023. Another contributory factor was the timing of accounts receivable and inventory balances.
The Company has historically financed its working capital requirements through cash flows from operations, debt, and the issuance of equity securities. Net cash provided by operating activities for the year ended December 31, 2024 was $91.8 million, when compared to the net cash provided by operating activities of $58.5 million for the comparable 2023 period.
Excluding these write offs, total interest expense for the year 2023 decreased by $4.7 million from the comparable 2022 period. 18 Table of Contents Income tax expense for 2023 was $17.6 million compared to income tax expense of $13.4 million for 2022.
Income tax expense for 2024 was $7.6 million compared to income tax expense of $17.6 million for 2023.
During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its Term Loan Facility. In conjunction with this payoff, the Company recorded a non-cash write off of $3.4 million of deferred financing costs.
During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its Term Loan Facility. Other income for the year ended December 31, 2024 was $2.3 million. This amount includes proceeds from litigation settlement of $1.8 million and $0.5 million from the lease opt-out related to the Smyrna, Georgia facility lease.
Removed
The Company applies the purchase method of accounting for acquisitions, which among other things, requires the recognition of goodwill (which represents the excess of the purchase price of the acquisition over the fair value of the net assets acquired and identified intangible assets).
Added
(collectively, the “USA Refrigerants Acquisition”). The consideration for the USA Refrigerants Acquisition was approximately $20.7 million in cash, paid at the closing, and provides for a further contingent payment of up to $2.0 million payable, to the extent earned, approximately 18 months from the closing date.
Removed
We test our goodwill for impairment on an annual basis (the first day of the fourth quarter) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of an asset below its carrying value.
Added
USA Refrigerants is a leading refrigerant distributor and distributes, reclaims and packages refrigerant gases for a variety of end uses.
Removed
Other intangible assets that meet certain criteria are amortized over their estimated useful lives. 17 Table of Contents An impairment charge is recorded based on the excess of a reporting unit’s carrying amount over its fair value. An impairment charge would be recognized when the carrying amount exceeds the estimated fair value of a reporting unit.
Added
Potential benefits of the USA Refrigerants Acquisition include (i) providing a broader customer network which will provide the Company with increased access to refrigerant for reclamation and strengthen the Company’s refrigerant distribution capabilities; (ii) adding incremental access to recovered pounds of refrigerants for sale for future periods to support the growth in reclamation; and (iii) enhancing the Company’s geographic footprint in the United States. ​ Results of Operations Year ended December 31, 2024 as compared to the year ended December 31, 2023 Revenues for the year ended December 31, 2024 were $237.1 million, a decrease of $51.9 million or 18% from the $289.0 million reported during the comparable 2023 period.
Removed
These impairment evaluations use many assumptions and estimates in determining an impairment loss, including certain assumptions and estimates related to future earnings. If the Company does not achieve its earnings objectives, the assumptions and estimates underlying these impairment evaluations could be adversely affected, which could result in an asset impairment charge that would negatively impact operating results.
Added
The increase in the cost of sales percentage from 61% to 72% is primarily due to lower revenue as a result of lower selling prices of certain refrigerants, as well as the impact of additional inventory reserve.
Removed
There were no goodwill impairment losses recognized in any of the three years ended December 31, 2023, 2022 and 2021. Overview The Company is a leading provider of sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration (“HVACR”) industry.
Added
The increase is due to timing of accounts receivable, accounts payable and accrued expenses.
Removed
Results of Operations Year ended December 31, 2023 as compared to the year ended December 31, 2022 Revenues for the year ended December 31, 2023 were $289.0 million, a decrease of $36.2 million or 11% from the $325.2 million reported during the comparable 2022 period.
Added
Net cash used in investing activities for 2024 was $26.0 million when compared to the net cash used in investing activities of $3.6 million for the comparable 2023 period, mainly due to the recent acquisition of USA Refrigerants as previously discussed and timing of capital expenditures related to capitalization of the Company’s ERP system.
Removed
Similarly, during the first quarter of 2022, the Company recorded a non-cash write off of $4.7 million of deferred financing cost.
Added
During the year 2024, the Company repurchased 1,244,076 shares of its common stock, at a cost of $8.1 million. At December 31, 2024, cash and cash equivalents were $70.1 million, or approximately $57.7 million higher than the $12.4 million of cash and cash equivalents at December 31, 2023.
Removed
The key drivers of increased income tax expense are the reversal of valuation allowance during 2022 for federal NOLs that were fully utilized and can no longer reduce taxable income. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.
Added
On June 6, 2024, the Borrowers and the Company entered into a First Amendment to Amended and Restated Credit Agreement and Limited Consent (the “First Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility.
Removed
At December 31, 2023, the Company had trade receivables, net of credit losses, of $25.2 million, an increase of $4.3 million from $20.9 million at December 31, 2022, mainly due to timing. The Company typically generates its most significant revenue during the second and third quarters of any given year.
Added
Pursuant to the First Amendment, Wells Fargo and the other lenders consented to the consummation of the USA Refrigerants Acquisition and made certain other technical amendments to the existing Amended Wells Fargo Facility, including the calculation of the borrowing base thereunder.
Removed
The Company refinanced its term loan debt during the first quarter of 2022, as described below, and paid off its remaining $32.5 million term loan debt during the third quarter of 2023.
Added
The First Amendment also provided for permitted stock repurchases by the Company in an amount not to exceed $5 million per calendar year, and $15 million in aggregate over the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions.
Removed
Termination of Prior Term Loan Facility In conjunction with entry into the new Term Loan Facility as described above, on March 2, 2022 the Company’s then-existing term loans, as amended (the “Prior Term Loan Facility”), which had a principal balance of approximately $63.9 million after payment of a $16.0 million excess cash flow amount thereunder, were repaid in full, together with associated required lender fees and expenses of $3.3 million, and the Prior Term Loan Facility was terminated.
Added
On October 23, 2024, the Borrowers and the Company entered into a Second Amendment to Amended and Restated Credit Agreement dated October 23, 2024 (the “Second Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility.
Removed
The termination of the Prior Term Loan Facility constituted an extinguishment of debt, which resulted in the Company recording an additional $4.6 million of interest expense during the first quarter of 2022, which included the aforementioned $3.3 million of prior lender fees and expenses and $1.3 million of pre-existing deferred financing costs from the Prior Term Loan Facility.
Added
The Second Amendment amends the provision relating to permitted stock repurchases by the Company, to permit stock repurchases in an amount not to exceed $10 million per calendar year in each of 2024 and 2025 and $5 million in any calendar year thereafter during the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions, subject to an aggregate cap of $25 million.
Removed
The loan had a term of two years, was unsecured, and bore interest at a fixed rate of one percent per annum, with the first nine months of principal and interest deferred.
Removed
As a result of the COVID-19 pandemic, in applying for the loan the Company made a good faith assertion based upon the degree of uncertainty introduced to the capital markets and the industries affecting the Company’s customers and the Company’s dependency to curtail expenses to fund ongoing operations.
Removed
The PPP loan proceeds were used in part to help offset payroll costs as stipulated in the legislation. All or a portion of the PPP loan could be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company and upon documentation of expenditures in accordance with the SBA requirements.
Removed
Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs and other covered areas, such as rent payments, mortgage interest and utilities, as applicable. During the third quarter of 2021, the Company received forgiveness of the loan from the SBA, resulting in $2.475 million of Other income recorded in the Company’s Consolidated Income Statements.
Removed
Currently the Company purchases virgin HCFC and HFC refrigerants and reclaimable, primarily HCFC and CFC, refrigerants from suppliers and its customers.
Removed
For the year ended December 31, 2021, one customer accounted for 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2021.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed1 unchanged
Biggest changeTo the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms, or experiences a decline in demand and/or price for refrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales or write downs of inventory, which could have a material adverse effect on our consolidated results of operations.
Biggest changeTo the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms, or 22 Table of Contents experiences a decline in demand and/or price for refrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales or write downs of inventory, which could have a material adverse effect on our consolidated results of operations.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity We are exposed to market risk from fluctuations in interest rates on the Amended Wells Fargo Facility. The Amended Wells Fargo Facility is a $75 million secured facility with a $0.0 million outstanding balance as of December 31, 2023.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity We are exposed to market risk from fluctuations in interest rates on the Amended Wells Fargo Facility. The Amended Wells Fargo Facility is a $75 million secured facility with a $0.0 million outstanding balance as of December 31, 2024.

Other HDSN 10-K year-over-year comparisons