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What changed in PERMA FIX ENVIRONMENTAL SERVICES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PERMA FIX ENVIRONMENTAL SERVICES INC'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.

+320 added−274 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-13)

Top changes in PERMA FIX ENVIRONMENTAL SERVICES INC's 2024 10-K

320 paragraphs added · 274 removed · 170 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

36 edited+26 added−21 removed22 unchanged
Biggest changeIn accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, we define an operating segment as: ● a business activity from which we may earn revenue and incur expenses; ● whose operating results are regularly reviewed by the chief operating decision maker “(CODM”) to make decisions about resources to be allocated and assess its performance; and ● for which discrete financial information is available. 1 TREATMENT SEGMENT reporting includes: - nuclear, low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed (Nuclear Regulatory Commission or state equivalent) and permitted (U.S.
Biggest changeSegment Information We have two reporting segments: TREATMENT SEGMENT reporting includes: - nuclear, low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed (Nuclear Regulatory Commission or state equivalent) and permitted (U.S.
Failure to obtain and maintain our permits or approvals would have a material adverse effect on us, our operations, and financial condition. The permits and licenses have terms ranging from one to ten years, and provide that we maintain a reasonable level of compliance, renew with minimal effort, and cost.
Failure to obtain and maintain our permits or approvals would have a material adverse effect on us, our operations, and financial condition. The permits and licenses have terms ranging from one to ten years, and provide that we maintain a reasonable level of compliance, and renew with minimal effort and cost.
This act authorized the Atomic Energy Commission (now the Nuclear Regulatory Commission “USNRC”) to enter into “Agreements with states to carry out those regulatory functions in those respective states except for Nuclear Power Plants and federal facilities like the VA hospitals and the DOE operations.” The State of Florida Department of Health (with the USNRC oversight), Office of Radiation Control, regulates the licensing and radiological program of the PFF facility; the State of Tennessee (with the USNRC oversight), Tennessee Division of Radiological Health, regulates licensing and the radiological program of the DSSI facility and the EWOC facility; and the State of Washington (with the USNRC oversight) Department of Health, regulates licensing and the radiological operations of the PFNWR facility.
This act authorized the Atomic Energy Commission (now the Nuclear Regulatory Commission “USNRC”) to enter into “Agreements with states to carry out those regulatory functions in those respective states except for Nuclear Power Plants and federal facilities like the VA hospitals and the DOE operations.” The State of Florida Department of Health (with USNRC oversight), Office of Radiation Control, regulates the licensing and radiological program of the PFF facility; the State of Tennessee (with USNRC oversight), Tennessee Division of Radiological Health, regulates licensing and the radiological program of the DSSI facility and the EWOC facility; and the State of Washington (with USNRC oversight) Department of Health, regulates licensing and the radiological operations of the PFNWR facility.
Co-regulated TSCA PCB wastes are also managed for PCB destruction under EPA Approval. 3 PFNWR, located in Richland, Washington, operates a low-level radioactive waste processing facility as well as a mixed waste processing facility.
Co-regulated TSCA PCB wastes are also managed for PCB destruction under EPA Approval. PFNWR, located in Richland, Washington, operates a low-level radioactive waste processing facility as well as a mixed waste processing facility.
Our Treatment Segment currently solicits business primarily on a North America basis with both government and commercial clients; however, we continue to focus on emerging international markets for additional work. Our Services Segment is engaged in highly competitive businesses in which a number of our government contracts and some of our commercial contracts are awarded through competitive bidding processes.
Our Treatment Segment currently solicits business primarily on a North American basis with both government and commercial clients; however, we continue to focus on emerging international markets for additional work. Our Services Segment is engaged in highly competitive businesses in which a number of our government contracts and some of our commercial contracts are awarded through competitive bidding processes.
The combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by us and our subsidiaries comprising our Treatment Segment is very difficult to obtain for a single facility and make this Segment unique.
The combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by us and our subsidiaries comprising our Treatment Segment are very difficult to obtain for a single facility and make this Segment unique.
The contracts that we are a party to with others as subcontractors to the U.S federal government or directly with the U.S federal government generally provide that the government may terminate the contract at any time for convenience at the government’s option.
The contracts that we are a party to with others as subcontractors to federal government or directly with the federal government generally provide that the government may terminate the contract at any time for convenience at the government’s option.
The principal element of our business strategy consists of upgrading our facilities within our Treatment Segment to increase efficiency and modernize and expand treatment capabilities to meet the changing markets associated with the waste management industry. Within our Services Segment, we continue to increase competitive procurement effectiveness and broaden the market penetration within both the commercial and government sectors.
The principal element of our business strategy consists of upgrading our facilities within our Treatment Segment to increase efficiency and modernize and expand treatment capabilities to meet the changing markets associated with the waste management industry. Within our Services Segment, we are attempting to increase competitive procurement effectiveness and broaden the market penetration within both the commercial and government sectors.
We continue to increase our focus on expansion into both commercial and international markets (see “Foreign Revenue and Initiatives” below for further discussion of a recently won foreign contract) to supplement government spending in the United States of America (“USA”), from which a significant portion of our revenue is derived.
We continue to increase our focus on expansion into both commercial and international markets (see “Foreign Revenue and Initiatives” below for further discussion of our international initiatives to supplement government spending in the United States of America (“USA”), from which a significant portion of our revenue is derived).
Environmental Protection Agency (“EPA”) or state equivalent) treatment and storage facilities as follow: Perma-Fix of Florida, Inc. (“PFF”), Diversified Scientific Services, Inc., (“DSSI”), Perma-Fix Northwest Richland, Inc. (“PFNWR”) and Oak Ridge Environmental Waste Operations Center (“EWOC”); and - Research & Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.
Environmental Protection Agency (“EPA”) or state equivalent) treatment and storage facilities as follow: Perma-Fix of Florida, Inc. (“PFF”), Diversified Scientific Services, Inc., (“DSSI”), Perma-Fix Northwest Richland, Inc. (“PFNWR”) and Oak Ridge Environmental Waste Operations Center (“EWOC”); and - R&D activities to identify, develop and implement innovative waste-processing techniques for problematic waste streams.
SERVICES SEGMENT, which includes: - Technical services, which include: ○ professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering; ○ health physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support to government and private radioactive materials licensees; ○ integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance; ○ global technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project management, waste management, environmental, and decontamination and decommissioning (“D&D”) field, technical, and management personnel and services to commercial and government customers; and ○ waste management services to commercial and governmental customers. - Nuclear services, which include: ○ D&D of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology applications, specialty services, logistics, transportation, processing and disposal; and ○ license termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process: project management, planning, characterization, waste stream identification and delineation, remediation/demolition, final status survey, compliance demonstration, reporting, transportation, disposal and emergency response. - A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.
SERVICES SEGMENT, which includes: - Technical services, which include: ○ professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering; ○ health physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support to government and private radioactive materials licensees; ○ integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance; ○ global technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project management, waste management, environmental, and decontamination and decommissioning (“D&D”) field, technical, and management personnel and services to commercial and government customers; and ○ waste management services to commercial and governmental customers. - Nuclear services, which include: ○ D&D of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology applications, specialty services, logistics, transportation, processing and disposal; and ○ license termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process: project management, planning, characterization, waste stream identification and delineation, remediation/demolition, final status survey, compliance demonstration, reporting, transportation, disposal and emergency response. - A company-owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation. 2 For 2024, the Services Segment accounted for $24,164,000, or 40.9%, of total revenue, as compared to $46,258,000, or 51.5%, of total revenue for 2023.
Waste Control Specialists, which has licensed treatment/disposal capabilities for low level radioactive waste in Andrews, TX, is also a competitor in the treatment market with increasing market share. These two competitors also provide us with options for disposal of our treated nuclear waste. The Treatment Segment treats and disposes of DOE generated waste largely at DOE owned sites.
Waste Control Specialists is also a competitor in the treatment/disposal market of low-level radioactive waste. These two competitors also provide us with options for disposal of our treated nuclear waste. The Treatment Segment treats and disposes of DOE generated waste largely at DOE owned sites.
The degree and type of competition we face is also often influenced by the project specification being bid on and the different specialty skill sets of each bidder for which our Services Segment competes, especially projects subject to the governmental bid process. We also have the ability to prime federal government small business procurements (small business set asides).
The degree and type of competition we face is also often influenced by the project specification being bid on and the different specialty skill sets of each bidder for which our Services Segment competes, especially projects subject to the governmental bid process.
In addition, we could be deemed a potentially responsible party (“PRP”) for the costs of required cleanup of properties, which may be contaminated by hazardous substances generated or transported by us to a site we selected, including properties owned or leased by us.
In addition, we could be deemed a potentially responsible party (“PRP”) for the costs of required cleanup of properties, which may be contaminated by hazardous substances generated or transported by us to a site we selected, including properties owned or leased by us. We could also be subject to fines and civil penalties in connection with violations of regulatory requirements.
We conduct research internally, and also through collaborations with other third parties. The majority of our research activities are performed as we receive new and unique waste to treat. Our competitors also devote resources to R&D and many such competitors have greater resources at their disposal than we do. R&D totaled $561,000 and $336,000 for 2023 and 2022, respectively.
The majority of our research activities are performed as we receive new and unique waste to treat. Our competitors also devote resources to R&D and many such competitors have greater resources at their disposal than we do. R&D totaled $1,172,000 and $561,000 for 2024 and 2023, respectively.
Dependence Upon a Single or Few Customers Our Treatment and Services Segments have significant relationships with the U.S. governmental authorities. A significant amount of our revenues from our Treatment and Services Segments are generated indirectly as subcontractors for others who are prime contractors to government authorities, particularly the DOE and DOD, or directly as the prime contractor to government authorities.
A significant amount of our revenues from our Treatment and Services Segments are generated indirectly as subcontractors for others who are contractors to federal government authorities, particularly the DOE and DOD, or directly as the prime contractor to federal government authorities.
Regulations promulgated under OSHA by the Department of Labor require employers of persons in the transportation and environmental industries, including independent contractors, to implement hazard communications, work practices and personnel protection programs in order to protect employees from equipment safety hazards and exposure to hazardous chemicals. 6 Atomic Energy Act The Atomic Energy Act of 1954 governs the safe handling and use of Source, Special Nuclear and Byproduct materials in the U.S. and its territories.
Regulations promulgated under OSHA by the Department of Labor require employers of persons in the transportation and environmental industries, including independent contractors, to implement hazard communications, work practices and personnel protection programs in order to protect employees from equipment safety hazards and exposure to hazardous chemicals.
On December 18, 2023, the joint venture (“JV”) where we and Campoverde Srl (“JV partner”) each owns 50% of the partnership, was awarded a multi-year contract valued up to approximately EUR 50 million by the European Commission (the “Contracting Authority”) for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy.
As previously disclosed, in December 2023, we and our partner, Campoverde Srl, each owning 50% of the partnership, in connection with an Italian project, were awarded a multi-year contract valued up to approximately EUR 50 million by the European Commission (the “Contracting Authority”) for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy.
We could also be subject to fines and civil penalties in connection with violations of regulatory requirements. 5 R&D Innovation and technical know-how by our operations is very important to the success of our business. Our goal is to discover, develop and bring to market innovative ways to process waste that address unmet environmental needs.
R&D Innovation and technical know-how by our operations is very important to the success of our business. Our goal is to discover, develop and bring to market innovative ways to process waste that address unmet environmental needs. We conduct research internally, and also through collaborations with other third parties.
Work under this JV has not started as of December 31, 2023. The scope of work to be performed in the initial phases of this contract will be performed predominately by our JV partner. Revenue generated by us under the initial phases will be limited to project management support through 2025.
Revenue generated and to be generated by us from this contract has been and will be limited to project management support through 2025. The scope of work in the initial phases of this contract is being performed predominantly by our partner.
We expect to generate an increase in revenue under this contract starting in 2026 when the waste treatment phases begin. The Contracting Authority may terminate the contract under certain conditions as set forth in the contract.
We expect to generate an increase in revenue under this contract starting in 2026 when the waste treatment phases begin. The Contracting Authority may terminate the contract under certain conditions as set forth in the contract. Our consolidated revenue for 2024 and 2023 included approximately $2,452,000, or 4.1%, and $2,066,000, or 2.3%, respectively, from foreign customers.
Every facility that treats, stores or disposes of hazardous waste must obtain a RCRA permit or must obtain interim status from the EPA, or a state agency, which has been authorized by the EPA to administer its program, and must comply with certain operating, financial responsibility and closure requirements.
Every facility that treats, stores or disposes of hazardous waste must obtain a RCRA permit or must obtain interim status from the EPA, or a state agency, which has been authorized by the EPA to administer its program, and must comply with certain operating, financial responsibility and closure requirements. 6 The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA,” also referred to as the “Superfund Act”) CERCLA governs the cleanup of sites at which hazardous substances are located or at which hazardous substances have been released or are threatened to be released into the environment.
If the permit requirements for hazardous waste treatment, storage, and disposal (“TSD”) activities and/or the licensing requirements for the handling of low-level radioactive matters are eliminated or if such licenses or permits were made less rigorous to obtain, we believe such would allow companies to enter into these markets and provide greater competition.
If the permit requirements for hazardous waste treatment, storage, and disposal (“TSD”) activities and/or the licensing requirements for the handling of low-level radioactive matters are eliminated or if such licenses or permits were made less rigorous to obtain, we believe we would face greater competition in this segment. 4 Number of Employees As of December 31, 2024, we employed approximately 305 employees, of whom 293 are full-time employees and 12 are part-time/temporary employees.
The decrease represents payments for remediation projects. As of December 31, 2023, $61,000 of the total accrued environmental liabilities was recorded as current. The nature of our business exposes us to significant cost to comply with governmental environmental laws, rules and regulations and risk of liability for damages.
The nature of our business exposes us to significant cost to comply with governmental environmental laws, rules and regulations and risk of liability for damages.
Our revenues are project/event based where the completion of one contract with a specific customer may be replaced by another contract with a different customer from year to year.
Our revenues are project/event based where the completion of one contract with a specific customer may be replaced by another contract with a different customer from year to year. Competitive Conditions The Treatment Segment’s largest competitor is EnergySolutions which operates numerous treatment facilities and two treatment/disposal facilities for low level radioactive waste.
Seasonal Factors of our Business Our operations are generally subject to seasonal factors. See “Risk Factors – Risks Related to our Business and Operations – Our operations are subject to seasonal factors, which causes our revenues to fluctuate” for a discussion of our seasonal factors.
See “Risk Factors – Risks Related to our Business and Operations – Our operations are subject to seasonal factors, which causes our revenues to fluctuate” for a discussion of our seasonal factors. Permits and Licenses Waste management service companies are subject to extensive, evolving and increasingly stringent federal, state, and local environmental laws and regulations.
Our inability to continue under existing contracts that we have with U.S government authorities (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition. 4 We performed services relating to waste generated by government clients (domestic), either indirectly for others as a subcontractor to government entities or directly as a prime contractor to government entities, representing approximately $70,642,000 or 78.7%, of our total revenue during 2023, as compared to $59,658,000, or 84.5%, of our total revenue during 2022.
Our inability to continue under existing contracts that we have with federal government authorities (directly or indirectly as a subcontractor) or significant reductions in the level of federal governmental funding in any given year could have a material adverse impact on our operations and financial condition.
Based on past experience, we believe that large businesses are more willing to team with small businesses in order to be part of these often-substantial procurements. There are a number of qualified small businesses in our market that will provide intense competition that may provide a challenge to our ability to maintain strong growth rates and acceptable profit margins.
There are a number of qualified small businesses in our market that will provide intense competition that may challenge our ability to maintain strong growth rates and acceptable profit margins. For international business there are additional competitors, many from within the country the work is to be performed, making winning work in foreign countries more challenging.
The distribution channels for our services are through direct sales to customers or via intermediaries. 2 Our corporate office is located at 8302 Dunwoody Place, Suite 250, Atlanta, Georgia 30350. Foreign Revenue and Initiative As noted previously, we continue to increase our focus on expansion into international markets.
Our corporate office is located at 8302 Dunwoody Place, Suite 250, Atlanta, Georgia 30350. Foreign Revenue and Initiatives We continue to increase our focus on expansion into international markets. In 2024, we were awarded contracts in support of waste treatment services from Mexico and Canada totaling approximately $6,000,000 (US$).
These remediation projects principally entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground water. These remediation activities are closely reviewed and monitored by the applicable state regulators. As of December 31, 2023, we had total accrued environmental remediation liabilities of $845,000, a decrease of $16,000 from the December 31, 2022, balance of $861,000.
(“PFM”), and Perma-Fix South Georgia, Inc. (“PFSG”) subsidiaries, which are all included within our discontinued operations. These remediation projects principally entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground water. These remediation activities are closely reviewed and monitored by the applicable state regulators.
Certain Environmental Expenditures and Potential Environmental Liabilities Environmental Liabilities We have three remediation projects, which are currently in progress relating to our Perma-Fix of Dayton, Inc. (“PFD”), Perma-Fix of Memphis, Inc. (“PFM”), and Perma-Fix South Georgia, Inc. (“PFSG”) subsidiaries, which are all included within our discontinued operations.
If our Services Segment is unable to meet these competitive challenges, it could lose market share and experience an overall reduction in its profits. 5 Certain Environmental Expenditures and Potential Environmental Liabilities Environmental Liabilities We have three remediation projects, that are currently in progress relating to our Perma-Fix of Dayton, Inc. (“PFD”), Perma-Fix of Memphis, Inc.
Number of Employees At December 31, 2023, we employed approximately 297 employees, of whom 288 are full-time employees and 9 are part-time/temporary employees. None of our current employees are unionized. The Company entered into a Project Labor Agreement (“PLA”) dated June 21, 2023, with UA Plumbers & Steamfitters Local 598.
As previously disclosed, the Company entered into a Project Labor Agreement (“PLA”), dated June 21, 2023, with UA Plumbers & Steamfitters Local 598.
This supplemental capability would support DOE’s glassifying process provided by the Hanford Vitrification Plant for safe transport and disposal off-site. Environmental, Social and Governance (“ESG”) We have a ESG subcommittee under our Corporate Governance and Nominating Committee to provide guidance on ESG management.
We believe that this supplemental capability would support DOE’s glassifying process provided by the Hanford Vitrification Plant for safe transport and disposal off-site of the Low Activity Tank Waste. Dependence Upon a Single or Few Customers Our Treatment and Services Segments have significant relationships with federal government authorities.
For 2023, the Treatment Segment accounted for $43,477,000, or 48.5%, of total revenue, as compared to $33,358,000, or 47.2%, of total revenue for 2022. See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our Segments’ contracts with government clients (domestic) or with others as a subcontractor to government clients.
For 2024, the Treatment Segment accounted for $34,953,000, or 59.1%, of total revenue, as compared to $43,477,000, or 48.5%, of total revenue for 2023.
Our Treatment and Services Segments provide services primarily to research institutions, commercial companies, public utilities, and governmental entities, including the U.S. Department of Energy (“DOE”) and U.S. Department of Defense (“DOD”).
Our Treatment and Services Segments provide services primarily to research institutions, commercial companies, public utilities, and governmental entities, including the DOE and DOD. However, we continue to increase our focus on expansion into international markets. The distribution channels for our services are through direct sales to customers or via intermediaries.
This includes new services, new customers and increased market share in our current markets. We experienced significant improvement in our 2023 financial results as the lingering effects of COVID-19 began to subside starting in the early part of 2022.
This includes new services, new customers and increased market share in our current markets. We were disappointed with our 2024 financial results, which were negatively impacted by a number of unexpected events and factors.
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Our Treatment Segment continued to see steady improvements in waste receipts from certain customers who had previously delayed waste shipments due, in part, from the impact of COVID-19.
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These events and factors included among other things, ● Continuing Resolution (“CR”) impacts primarily in the first half of 2024, that directly resulted in delays in project starts for existing services backlogs along with delays in procurement cycles for pipeline projects; ● poor weather conditions, including two hurricanes, which resulted in delays in waste shipments and project mobilization activities by certain customers and power outages and plant shutdowns at certain of our treatment facilities; ● temporary outages at certain of our facilities for equipment replacement and repairs, program enhancement and testing to support permit expansion and broader market penetration, which contributed to revenue production delays; ● accelerated investments in R&D of our new technology to treat PFAS (Per- and polyfluoroalkyl substances), which required significant management and operation support, thereby also limiting resources needed for revenue production; and ● completion of two large projects in the fourth quarter of 2023 in the Services Segment that were not replaced by new projects of similar value.
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Within our Services Segment, certain projects which were delayed/curtailed in the first part of 2022 due, in part, from the lingering effects of the COVID-19, achieved full operational status and improved productivity in 2023 which positively impacted revenue.
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Although we are disappointed with our 2024 financial results, we believe our base business is positioned for improvement and we expect that our results of operations should improve in 2025. We continue to advance a number of initiatives that are discussed within this report.
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Revenues from both of our Segments were also positively impacted from contracts won in 2023 as procurement and planning on behalf of our government clients continued to progress as the lingering effects of COVID-19 pandemic subsided.
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Some of these initiatives have been realized, with additional initiatives expected to be more fully realized in 2025. In December 2024, BWXT Technologies, Inc (“BWXT”) announced that the U.S.
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Heading into 2024, we expect to see overall continue steady improvements in waste receipts and increases in project work from certain existing contracts, contracts won in 2023, and bids submitted in both segments that are awaiting awards.
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Department of Energy (“DOE”) had awarded BWXT and its team, of which we are a member, the contract for the cleanup operations at the West Valley Development Project in West Valley, NY.
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However, due to our operations which is subject to seasonal factor, we generally experience lower revenue in the first quarter due to overall reduced activities by our customers from the usual slowdown in operations due, in part, from returning from the holiday periods and poorer weather conditions.
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As disclosed by BWXT, the contract has a 10-year ordering period with a maximum value of up to $3 billion that can be performed for up to 15 years. The scope attributable to us has not yet been defined and is subject to certain approvals.
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Additionally, due to Congress’s inability to timely approve FY 2024 budget and the extension of the continuing resolution, certain of our government related customers have informed us that waste shipments will likely be delayed.
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The West Valley Project is anticipated to begin transition in the first quarter of 2025 and realize full operations 120 days from initiation.
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Although we expect to see overall improvements in revenue in 2024 as disclosed above, if Congress is unable to enact the full FY 2024 appropriation bills or further extend the continuing resolutions to fund government spending by the late March deadline, the U.S. government will enter into a partial shutdown.
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Also, as previously disclosed, in December 2023 we and our Italian team partner were awarded a multi-year contract for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy (see “Foreign Revenue and Initiatives” below for a discussion of this contract and further international initiatives).
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The full impact of any additional continued resolution beyond March or a partial government shutdown is uncertain. If a partial government shutdown were to occur and were to continue an extended period, our financial results of operations could be negatively impacted by delays in procurement actions, waste shipments and project delays on newly awarded projects (See “Item 7.
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Our continuing initiatives include, among other things, positioning ourselves for further large and mid-size procurements within the DOE and U.S.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations – for a full discussion of the Company’s results of operations for 2023). Segment Information and Foreign and Domestic Operations and Sales For 2023, we have two reportable segments.
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Department of Defense (“DOD”) and waste treatment in support of DOE’s Hanford closure strategy, continued investments in our facilities and capabilities to allow for broader waste treatment (including PFAS) (see “New Processing Technology” below for a discussion of our PFAS technology), and continued expansion of our waste treatment offerings within the international and commercial markets. 1 Although we expect our financial results to improve in 2025, uncertainties exist regarding how future federal government budget and program and policy decisions will unfold, which include the spending priorities of the new Administration and Congress, passage of the 2025 fiscal year U.S. government budget and potential for enactment of additional continuing resolutions to keep government departments and agencies in operations.
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For 2023, the Services Segment accounted for $46,258,000, or 51.5%, of total revenue, as compared to $37,241,000, or 52.8%, of total revenue for 2022. See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our Segments’ contracts with government clients (domestic) or with others as a subcontractor to government clients.
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A significant amount of our revenues are generated indirectly as subcontractors for others who are contractors to federal government authorities, which include the DOE and DOD, or directly as the prime contractor to federal government authorities.
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During March 2022, we signed a non-binding joint venture term sheet addressing plans to partner with Springfields Fuels Limited (“SFL”), an affiliate of Westinghouse Electric Company LLC, to develop and manage a nuclear waste-materials treatment facility (the “Facility”) in the United Kingdom. The Facility is for the purpose of expanding the partners’ waste treatment capabilities for the European nuclear market.
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The full impact of these uncertainties could negatively impact our financial results by impairing our ability to perform work on existing contracts, delaying or cancelling procurement actions by government entities, and/or cause other disruptions or delays, including payment delays.
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It is expected that upon finalization of a partnership agreement, SFL will have an ownership interest of fifty-five (55) percent and our interest will be forty-five (45) percent.
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These contracts require specific permits that can include a six to nine-month approval period. As such, receipts of these waste shipments are expected in 2025. We expect additional opportunities forthcoming in Germany in support of existing commercial clients as well as providing support to Germany’s power utility decommissioning program.
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The finalization, form and capitalization of this unpopulated partnership is subject to numerous conditions, including but not limited to, completion and execution of a definitive agreement and facility design, granting of required regulatory, lender or permitting approvals and updated cost and profitability analysis based on current and forecast future economic conditions.
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New Processing Technology During 2024, we completed the fabrication, installation, commissioning and startup of our first full scale commercial Perma-FAS system (“System”) for PFAS destruction, located at our Perma-Fix Florida, Inc. facility.
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Upon finalization of this venture, we will be required to make an investment in this venture. The amount of our investment, the period of which it is to be made and the method of funding are to be determined. Our consolidated revenue for 2023 and 2022 included approximately $2,066,000, or 2.3%, and $1,226,000, or 1.7%, respectively, from foreign customers.
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PFAS, commonly known as “forever chemicals,” is the acronym for Perfluoroalkyl and Polyfluoroalkyl Substances, a diverse group of thousands of humanmade chemical pollutants that have the potential to persist in both the environment and the human body.
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Permits and Licenses Waste management service companies are subject to extensive, evolving and increasingly stringent federal, state, and local environmental laws and regulations.
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An increasing number of studies have documented adverse health risks that are associated with PFAS exposure, including increased risks of some cancers, reduced immune function, and developmental delays in children.
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Our executive team is responsible for the continuing development of our ESG strategic roadmap with support from management from key functional areas.
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Commercial destruction of PFAS offers a promising new source of revenue for us, as it complements our core waste remediation technologies, and wee have filed patent applications relating to our System technology for PFAS destruction. With the successful startup of our pilot System, we have already processed commercial quantities of PFAS-containing waste materials.
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The key areas of focus under our ESG initiatives continue to be health and safety, environmental performance, DEI (diversity, equality and inclusion), talent retention and development, corporate governance and climate-forward service development that support our customers’ transition to low carbon economy. Our executive team is involved in policy planning and coordination of corporate-wide ESG efforts.
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There are limited current treatment options for these materials, and we expect that our process will exceed any of these other current methods. Some of the sizable markets for PFAS include AFFF (aqueous film-forming foam) firefighting foams, both expired concentrate and flushing liquids, contaminated liquids from PFAS systems, and other water-based separation products from a variety of industrial systems.
Removed
See our website at https://www.perma-fix.com/esg.aspx for some highlights of our ESG initiatives as well as our policies under our ESG as we continue to improve our ESG initiatives. The information on our website is not part of, or incorporated by reference in this Form 10-K.
Added
We have already secured and are treating approximately 6,000 gallons of AFFF liquids to support ongoing operations, demonstration, and further testing of our System.
Removed
Competitive Conditions The Treatment Segment’s largest competitor is EnergySolutions which operates treatment facilities in Oak Ridge, TN and Erwin, TN and treatment/disposal facilities for low level radioactive waste in Clive, UT and Barnwell, SC.
Added
We believe that we will receive an additional 20,000 gallons in the coming months. 3 Our strategy for our System includes continued treatment of PFAS liquids over the coming months and targeting engineering refinements to support larger-scale Systems.
Removed
For international business there are additional competitors, many from within the country the work is to be performed, making winning work in foreign countries more challenging. If our Services Segment is unable to meet these competitive challenges, it could lose market share and experience an overall reduction in its profits.
Added
With significant upgrades to our prototype currently in the design phase, we anticipate deployment of the second generation unit in the third quarter of 2025 at one of our other existing treatment facilities.
Removed
The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA,” also referred to as the “Superfund Act”) CERCLA governs the cleanup of sites at which hazardous substances are located or at which hazardous substances have been released or are threatened to be released into the environment.
Added
By the third quarter of 2025, we expect to advance this technology into pilot-scale applications for soil, biosolids, and filter media, broadening the reach of our System’s PFAS destruction capabilities. Seasonal Factors of our Business Our operations are generally subject to seasonal factors.
Added
We performed services relating to waste generated by federal government clients, either indirectly for others as a subcontractor to federal government entities or directly as a prime contractor to federal government entities, representing approximately $40,550,000 or 68.6% of our total revenue during 2024, as compared to $68,595,000 or 76.4% of our total revenue during 2023.
Added
We also have the ability to directly bid on prime federal government small business procurements (small business set asides). Based on past experience, we believe that large businesses are more willing to team with small businesses in order to be part of these often-substantial procurements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeInvesting in our securities involves a high degree of risk, and before making an investment decision, you should carefully consider these risk factors as well as other information we include or incorporate by reference in the other reports we file with the Securities and Exchange Commission (the “Commission”).
Biggest changeInvesting in our securities involves a high degree of risk, and before making an investment decision, you should carefully consider these risk factors as well as other information we include or incorporate by reference in the other reports we file with the Securities and Exchange Commission (the “Commission”). 7 Risks Relating to our Business and Operations The failure of Congress to approve appropriations bills in a timely manner for the federal government agencies and departments we support, or the failure of the Administration and Congress to reach an agreement on fiscal issues, could delay and reduce spending, cause us to lose revenue and profit, and affect our cash flow.
Prevailing economic conditions, interest rate levels, and financial, competitive, business, and other factors affect us. Many of these factors are beyond our control. If our financial and operating activities are limited, it could adversely affect our ability to incur additional debt to fund future needs.
Prevailing economic conditions, interest rate levels, and financial, competitive, business, and other factors affect us. Many of these factors are beyond our control. 14 If our financial and operating activities are limited, it could adversely affect our ability to incur additional debt to fund future needs.
This creates the potential for future developments in regulations relating to cybersecurity that may adversely impact us, our customers and how we offer our services to our customers. Climate change could negatively impact the Company’s operations and financial condition.
This creates the potential for future developments in regulations relating to cybersecurity that may adversely impact us, our customers and how we offer our services to our customers. 16 Climate change could negatively impact the Company’s operations and financial condition.
Additionally, world conflicts currently occurring in various regions may lead to similar macroeconomic effects which could have a downward effect on our business, financial conditions and results of operations.
Additionally, world conflicts occurring in various regions may lead to similar macroeconomic effects which could have a downward effect on our business, financial conditions and results of operations.
A material amount of our Treatment and Services Segments’ revenues are generated through various government contracts or subcontracts. Most of our government contracts or our subcontracts granted under government contracts are awarded through a regulated competitive bidding process.
A material amount of our Treatment and Services Segments’ revenues are generated through various federal government contracts or subcontracts. Most of our federal government contracts or our subcontracts granted under federal government contracts are awarded through a regulated competitive bidding process.
Our operations depend, in large part, upon governmental funding (for example, the annual budget of the DOE) or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations and cash flow. 8 The loss of one or a few customers could have an adverse effect on us.
Our operations depend, in large part, upon governmental funding (for example, the annual budget of the DOE) or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations and cash flow. 9 The loss of one or a few customers could have an adverse effect on us.
Some government contracts are awarded to multiple competitors, which increase overall competition and pricing pressure and may require us to make sustained post-award efforts to realize revenues under these government contracts. Contracts with, or subcontracts involving, the U.S federal government are generally terminable for convenience at any time at the option of the governmental agency.
Some federal government contracts are awarded to multiple competitors, which increase overall competition and pricing pressure and may require us to make sustained post-award efforts to realize revenues under these government contracts. Contracts with, or subcontracts involving, federal government are generally terminable for convenience at any time at the option of the governmental agency.
Delaware law, certain of our charter provisions, our stock option plans, outstanding warrants and our Preferred Stock may inhibit a change of control under circumstances that could give you an opportunity to realize a premium over prevailing market prices. We are a Delaware corporation governed by the General Corporation Law of Delaware, an anti-takeover law.
Delaware law, certain of our charter provisions, our stock option plans, outstanding warrants and our Preferred Stock may inhibit a change of control under circumstances that could give you an opportunity to realize a premium over prevailing market prices. We are a Delaware corporation governed by the Delaware General Corporation Law.
Economic downturns, reductions in government funding or other events beyond our control could have a material negative impact on our businesses.
Economic downturns, reductions in federal government funding or other events beyond our control could have a material negative impact on our businesses.
That indemnification protects DOE prime contractor, but also similar companies that work under contract or subcontract for a DOE prime contract or transporting radioactive material to or from a site. The indemnification authority of the DOE under the PAA was extended through 2025 by the Energy Policy Act of 2005.
That indemnification protects DOE prime contractors, but also similar companies that work under contract or subcontract for a DOE prime contract or transporting radioactive material to or from a site. The indemnification authority of the DOE under the PAA was extended through 2025 by the Energy Policy Act of 2005.
These events would have a material adverse effect on our financial condition. 7 The inability to maintain existing government contracts or win new government contracts over an extended period could have a material adverse effect on our operations and adversely affect our future revenues.
These events would have a material adverse effect on our financial condition. The inability to maintain existing federal government contracts or win new government contracts over an extended period could have a material adverse effect on our operations and adversely affect our future revenues.
During economic downturns, large budget deficits that the federal government and many states are experiencing, and other events beyond our control, including, but not limited to the impact from public health events (such as COVID-19), the ability of private and government entities to spend on waste services, including nuclear services, may decline significantly.
During economic downturns, large budget deficits that the federal government and many states are experiencing, and other events beyond our control, including, but not limited to the impact from public health events (such as COVID-19 or other unforeseen public health event), the ability of private and government entities to spend on waste services, including nuclear services, may decline significantly.
Because customers generally contract with us for specific projects, we may lose these significant customers from year to year as their projects with us are completed. Our inability to replace the business with other similar significant projects could have an adverse effect on our business and results of operations.
Because customers generally contract with us for specific projects, we may lose, and have in the past lost, these significant customers from year to year as their projects with us are completed. Our inability to replace the business with other similar significant projects could have an adverse effect on our business and results of operations.
A variety of factors may cause our existing or future customers (including government clients) to reduce or halt their spending on hazardous waste and nuclear services from outside vendors, including us.
Our existing and future customers may reduce or halt their spending on hazardous waste and nuclear services with outside vendors, including us. A variety of factors may cause our existing or future customers to reduce, delay or halt their spending on hazardous waste and nuclear services from outside vendors, including us.
If we are unable to maintain adequate internal control over financial reporting, there is a reasonable possibility that a misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner.
If we are unable to maintain adequate internal control over financial reporting or remediate any material weakness identified, there is a reasonable possibility that a misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner.
In the past, when we failed to meet our minimum FCCR requirement in certain instances, our lender has either waived these instances of non-compliance or provided certain amendments to our FCCR requirements which enabled us to meet our quarterly FCCR requirements. Also, our lender has in the past waived our FCCR testing requirement in certain quarters.
In the past, we have failed to meet our minimum FCCR requirement in certain instances and in each case, our lender has either waived these instances of non-compliance or provided certain amendments to our FCCR requirements which enabled us to meet our quarterly FCCR requirements. Also, our lender has in the past waived our FCCR testing requirement in certain quarters.
We were not required to perform testing of our fixed charge coverage ratio (“FCCR”) in the first quarter of 2023 but otherwise met all of our other financial covenant requirements. We met all of our covenant requirements in each of the remaining quarters of 2023.
We were not required to perform testing of our fixed charge coverage ratio (“FCCR”) in each of the quarters in 2024 but otherwise met all of our other financial covenant requirements.
A lack of positive operating results could have material adverse consequences on our ability to operate our business. Our ability to make principal and interest payments, to refinance indebtedness, and borrow under our credit facility will depend on both our and our subsidiaries’ future operating performance and cash flow.
These sales were consummated at a negotiated price. A lack of positive operating results could have material adverse consequences on our ability to operate our business. Our ability to make principal and interest payments, to refinance indebtedness, and borrow under our credit facility will depend on both our and our subsidiaries’ future operating performance and cash flow.
Our business exposes us to various risks, including claims for causing damage to property and injuries to persons that may involve allegations of negligence or professional errors or omissions in the performance of our services. Such claims could be substantial.
Our business exposes us to various risks, including claims for causing damage to property and injuries to persons that may involve allegations of negligence or professional errors or omissions in the performance of our services. Such claims could be substantial. We believe that our insurance coverage is presently adequate.
The direct impacts of these such events resulted in delayed waste shipments from certain of our customers and delays in procurement, contract awards and planning on behalf of our government clients which negatively impacted our revenue.
The direct impacts of these such events resulted in delayed waste shipments and temporary shut-down of projects by certain of our customers, and delays in procurement, contract awards and planning on behalf of our government clients which negatively impacted our revenue.
Demand for our services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors beyond our control, including, without limitation, economic conditions, reductions in the budget for spending to remediate federal sites due to numerous reasons including, without limitation, the substantial deficits that the federal government has and is continuing to incur.
Demand for our services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors beyond our control, including, without limitation, economic conditions, reductions in the budget for spending to remediate federal sites due to numerous reasons including, without limitation, the substantial deficits that the federal government has and is continuing to incur, domestic political environment, and competing demands for federal funds that can pressure various areas.
We have in the past, and could in the future, be subject to substantial fines, penalties, and sanctions for violations of environmental laws and substantial expenditures as a responsible party for the cost of remediating any property which may be contaminated by hazardous substances generated by us and disposed at such property, or transported by us to a site selected by us, including properties we own or lease.
We have in the past, and could in the future, be subject to substantial fines, penalties, and sanctions for violations of environmental laws and substantial expenditures as a responsible party for the cost of remediating any property which may be contaminated by hazardous substances generated by us and disposed at such property or transported by us to a site selected by us, including properties we own or lease. 12 As our operations expand, we may be subject to increased litigation, which could have a negative impact on our future financial results.
Such litigation, if significant and not adequately insured against, could adversely affect our financial condition and our ability to fund our operations. Protracted litigation would likely cause us to spend significant amounts of our time, effort, and money.
Such litigation, if significant and not adequately insured against, could adversely affect our financial condition and our ability to fund our operations. Protracted litigation would likely cause us to spend significant amounts of our time, effort, and money. This could prevent our management from focusing on our operations and expansion.
We may be required, in the future, to record impairment charges in our financial statements, in which any impairment of our permit, other intangible assets and tangible assets is determined.
We may be required, in the future, to record impairment charges in our financial statements, in which any impairment of our permit, other intangible assets and tangible assets is determined. Such impairment charges could negatively impact our results of operations.
In the event that we are unable to obtain or maintain our financial assurance coverage for any reason, this could materially impact our operations and our permits which we are required to have in order to operate our treatment, storage, and disposal facilities. If we cannot maintain adequate insurance coverage, we will be unable to continue certain operations.
Although we have not had a problem as of the date of this report in maintaining our financial assurance coverage, in the event that we are unable to obtain or maintain our financial assurance coverage for any reason, this could materially impact our operations and our permits which we are required to have in order to operate our treatment, storage, and disposal facilities. 8 If we cannot maintain adequate insurance coverage, we will be unable to continue certain operations.
The demand for our services is substantially dependent upon the public’s concern with, and the continuation and proliferation of, the laws and regulations governing the treatment, storage, recycling, and disposal of hazardous, non-hazardous, and low-level radioactive waste.
If environmental regulation or enforcement is relaxed, the demand for our services could decrease. The demand for our services is substantially dependent upon the public’s concern with, and the continuation and proliferation of, the laws and regulations governing the treatment, storage, recycling, and disposal of hazardous, non-hazardous, and low-level radioactive waste.
Further, certain of our option plans provide for the immediate acceleration of, and removal of restrictions from, options and other awards under such plans upon a “change of control” (as defined in the respective plans). Such provisions may also have the result of discouraging acquisition of us.
Further, certain of our option plans provide for the immediate acceleration of, and removal of restrictions from, options and other awards under such plans upon a “change of control” (as defined in the respective plans).
In such event, we may not have sufficient liquidity to repay our debt under our credit facility and other indebtedness and/or operate our business. Inability to borrow under our credit facility could adversely affect our operations.
In such event, we may not have sufficient liquidity to repay our debt under our credit facility and other indebtedness and/or operate our business. Inability to maintain the required liquidity under our loan agreement with our lender could adversely affect our operations.
GAAP”), we review our intangible and tangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Our permits are tested for impairment at least annually.
Under accounting principles generally accepted in the United States (“U.S. GAAP”), we review our intangible and tangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Our permits are tested for impairment at least annually.
As a result, our failure to maintain our safety record could have a material adverse effect on our business, financial condition and results of operations. Systems failures, interruptions or breaches of security and other cybersecurity risks could have an adverse effect on our financial condition and results of operations. We are subject to certain operational risks to our information systems.
Systems failures, interruptions or breaches of security and other cybersecurity risks could have an adverse effect on our financial condition and results of operations. We are subject to certain operational risks to our information systems.
Such impairment charges could negatively impact our results of operations. 12 Breach of any of the covenants in our credit facility could result in a default, triggering repayment of outstanding debt under the credit facility and the termination of our credit facility. Our credit facility with our bank contains financial covenants.
Breach of any of the covenants in our credit facility could result in a default, triggering repayment of outstanding debt under the credit facility and the termination of our credit facility. Our credit facility with our bank contains financial covenants.
These factors include, but are not limited to: ● accidents, terrorism, natural disasters or other incidents occurring at nuclear facilities or involving shipments of nuclear materials; ● failure of government to approve necessary budgets, or to reduce the amount of the budget necessary, to fund remediation sites, including DOE and DOD sites; ● government shut-downs; ● civic opposition to or changes in government policies regarding nuclear operations; ● a reduction in demand for nuclear generating capacity; or ● failure to perform under existing contracts, directly or indirectly, with the government.
We have experienced certain of the below factors from time to time: ● accidents, terrorism, natural disasters or other incidents occurring at nuclear facilities or involving shipments of nuclear materials; ● failure of government to approve necessary budgets, or to reduce the amount of the budget necessary, to fund remediation sites, including DOE and DOD sites; ● government shut-downs or government Continuing Resolutions; ● civic opposition to or changes in government policies regarding nuclear operations; ● a reduction in demand for nuclear generating capacity; ● failure to perform under existing contracts, directly or indirectly, with the government; ● COVID pandemic; or ● poor weather conditions.
As our operations expand, we may be subject to increased litigation, which could have a negative impact on our future financial results. Our operations are highly regulated and we are subject to numerous laws and regulations regarding procedures for waste treatment, storage, recycling, transportation, and disposal activities, all of which may provide the basis for litigation against us.
Our operations are highly regulated and we are subject to numerous laws and regulations regarding procedures for waste treatment, storage, recycling, transportation, and disposal activities, all of which may provide the basis for litigation against us.
Many of these contracts include express or implied certifications of compliance with applicable regulations and contractual provisions. If we fail to comply with any regulations, requirements or statutes, our existing governmental contracts or subcontracts involving governmental facilities could be terminated or we could be suspended from government contracting or subcontracting.
If we fail to comply with any regulations, requirements or statutes, our existing governmental contracts or subcontracts involving governmental facilities could be terminated or we could be suspended from government contracting or subcontracting.
Assuming the issuance of the Common Stock underlying such options and warrant, at December 31, 2023, we had available for future issuance 15,321,299 shares of authorized and unissued Common Stock, and 2,000,000 shares of our preferred stock.
Assuming the issuance of the Common Stock underlying such options and warrant, as of December 31, 2024, we had available for future issuance 10,426,183 shares of authorized and unissued Common Stock, and 2,000,000 shares of our preferred stock. All of our authorized preferred stock ae available for issuance.
Changes to current environmental laws and regulations also could limit the use of our proprietary technology. 15 Failure to maintain effective internal control over financial reporting or failure to remediate a material weakness in internal control over financial reporting could have a material adverse effect on our business, operating results, and stock price.
Failure to maintain effective internal control over financial reporting or failure to remediate a material weakness in internal control over financial reporting could have a material adverse effect on our business, operating results, and stock price.
Our business and operating results can be adversely affected by the size and timing of a single material contract. 14 Our failure to maintain our safety record could have an adverse effect on our business. Our safety record is critical to our reputation.
We bid on numerous projects, and a number of the projects we bid on, we are not successful in obtaining. Our business and operating results can be adversely affected by the size and timing of a single material contract. Our failure to maintain our safety record could have an adverse effect on our business.
In addition, even if we are qualified to work on a new government contract, we might not be awarded the contract because of existing government policies designed to protect certain types of businesses and under-represented minority contractors.
Some of our competitors have greater financial and other resources than we do, which can give them a competitive advantage. In addition, even if we are qualified to work on a new government contract, we might not be awarded the contract because of existing government policies designed to protect certain types of businesses and under-represented minority contractors.
We believe our proprietary technology is important to us. We believe that it is important that we maintain our proprietary technologies. There can be no assurance that our steps to protect our proprietary technologies will be adequate to prevent misappropriation of these technologies by third parties. Such misappropriation could adversely effect our operations and financial condition.
Failure to obtain intellectual property protection for our proprietary technologies could negatively affect us. We believe that it is important that we maintain our proprietary technologies. There can be no assurance that our steps to protect our proprietary technologies will be adequate to prevent misappropriation of these technologies by third parties.
If any of our facilities are unable to maintain currently held permits or licenses or obtain any additional permits or licenses which may be required to conduct its operations, we may not be able to continue those operations at these facilities, which could have a material adverse effect on us.
If any of our facilities are unable to maintain currently-held permits or licenses or obtain any additional permits or licenses which may be required to conduct its operations, we may not be able to continue those operations at these facilities, which could have a material adverse effect on us. 11 Risks Related to Laws and Regulations As a government contractor, we are subject to extensive government regulation, and our failure to comply with applicable regulations could subject us to penalties that may restrict our ability to conduct our business.
Our revenues may be earned under contracts that are fixed-price or maximum price in nature. Fixed-price contracts expose us to a number of risks not inherent in cost-reimbursable contracts.
A number of contracts in our Services Segment are and have in past, been fixed-price or maximum price contracts. Fixed-price contracts expose us to a number of risks not inherent in cost-reimbursable contracts.
Any of the foregoing could adversely impact our operating results, financial condition, and liquidity. Our ability to continue our operations depends on our ability to generate profitable operations or complete equity or debt financings to increase our capital. 13 We may be unable to utilize loss carryforwards in future.
Any of the foregoing could adversely impact our operating results, financial condition, and liquidity. Our ability to continue our operations depends on our ability to generate profitable operations or complete equity or debt financings to increase our capital. See above risk factor for a discussion as to raising Liquidity in connection with our equity financing.
If we are unable to meet these competitive challenges, we could lose market share and experience on overall reduction in our profits. 9 We bear the risk of cost overruns in fixed-price contracts. We may experience reduced profits or, in some cases, losses under these contracts if costs increase above our estimates.
We bear the risk of cost overruns in fixed-price contracts. We may experience reduced profits or, in some cases, losses under these contracts if costs increase above our estimates. Our revenues may be earned under contracts that are fixed-price or maximum price in nature.
Risks Relating to our Business and Operations Failure to maintain our financial assurance coverage that we are required to have in order to operate our permitted treatment, storage and disposal facilities could have a material adverse effect on us.
Shift in decreased priorities in government funding for remediation projects by the new administration may also negatively impact our results of operations and financial conditions. Failure to maintain our financial assurance coverage that we are required to have in order to operate our permitted treatment, storage and disposal facilities could have a material adverse effect on us.
During our second and third fiscal quarters there has historically been an increase in revenues and operating profits. If we do not continue to have increased revenues and profitability during the second and third fiscal quarters, this could have a material adverse effect on our results of operations and liquidity.
If we do not continue to have increased revenues and profitability during the second and third fiscal quarters, this could have a material adverse effect on our results of operations and liquidity. 10 We are engaged in highly competitive businesses and typically must bid against other competitors to obtain major contracts.
If these audits result in determinations that costs claimed as reimbursable are not allowed costs or were not allocated in accordance with applicable regulations, we could be required to reimburse the U.S. government for amounts previously received. 10 Governmental contracts or subcontracts involving governmental facilities are often subject to specific procurement regulations, contract provisions and a variety of other requirements relating to the formation, administration, performance and accounting of these contracts.
Although we believe that we have complied with applicable environmental regulations, if these audits result in determinations that costs claimed as reimbursable are not allowed costs or were not allocated in accordance with applicable regulations, we could be required to reimburse the U.S. government for amounts previously received.
If such indemnification authority is not applicable in the future, our business could be adversely affected if the owners and operators of new facilities fail to retain our services in the absence of commercial adequate insurance and indemnification.
If such indemnification authority is not applicable in the future, our business could be adversely affected if the owners and operators of new facilities fail to retain our services in the absence of commercial adequate insurance and indemnification. 13 Risks Relating to our Financial Performance and Position and Need for Financing If any of our permits, other intangible assets, and tangible assets becomes impaired, we may be required to record significant charges to earnings.
Future sales of authorized and unissued shares could be used by our management to make it more difficult for, and thereby discourage, an attempt to acquire control of us. Third party expectations relating to ESG factors may impose additional costs and expose us and our clients to new risks.
Future sales of authorized and unissued shares could be used by our management to make it more difficult for, and thereby discourage, an attempt to acquire control of us. ITEM 1B. UNRESOLVED STAFF COMMENTS Not Applicable.
In addition, as of December 31, 2023, we had outstanding options to purchase 994,500 shares of our Common Stock at exercise prices ranging from $3.15 to $9.81 per share and an outstanding warrant to purchase 30,000 shares of our Common Stock at exercise price of $3.51 per share.
In addition, as of December 31, 2024, we had outstanding options to purchase 1,000,900 shares of our Common Stock at exercise prices ranging from $3.15 to $10.20 per share and warrants to purchase 188,038 shares of our Common Stock at exercise prices of $11.50 and $12.19 per share.
If we fail to maintain or replace these relationships, or if a material contract is terminated or renegotiated in a manner that is materially adverse to us, our revenues and future operations could be materially adversely affected. Our existing and future customers may reduce or halt their spending on hazardous waste and nuclear services with outside vendors, including us.
From time to time, we have experienced difficulty in obtaining new federal contracts or subcontracts. If we fail to maintain or replace these relationships, or if a material contract is terminated or renegotiated in a manner that is materially adverse to us, our revenues and future operations could be materially adversely affected.
In addition, at December 31, 2023, we had outstanding options to purchase 994,500 shares of our common stock at exercise prices ranging from $3.15 to $9.81 per share, and an outstanding warrant to purchase 30,000 shares of our Common Stock at an exercise price of $3.51 per share.
In addition, as of December 31, 2024, we had outstanding options to purchase 1,000,900 shares of our Common Stock at exercise prices ranging from $3.15 to $10.20 per share and warrants to purchase 188,038 shares of our Common Stock at exercise prices of $11.50 and $12.19 per share.
The price of our Common Stock on the Nasdaq Capital Market constantly fluctuates. We expect that the market price of our Common Stock will continue to fluctuate. This may make it difficult for our stockholders to resell the Common Stock when a stockholder wants or at prices a stockholder finds attractive.
The price of our Common Stock on the Nasdaq Capital Market constantly fluctuates. We expect that the market price of our Common Stock will continue to fluctuate.
The issuance of our Common Stock will result in the dilution in the percentage membership interest of our stockholders and the dilution in ownership value. As of December 31, 2023, we had 13,646,559 shares of Common Stock outstanding.
The issuance of our Common Stock will result in the dilution in the percentage equity interest of our stockholders and the dilution in ownership value. During 2024, we raised capital through the sales of our Common Stock in May 2024 (2,051,282 shares) and December 2024 (2,530,000 shares). As of December 31, 2024, we had 18,377,237 shares of Common Stock outstanding.
Our net loss carryforwards are subject to various limitations. Our ability to use the net loss carryforwards depends on whether we are able to generate sufficient income in the future years. Further, our net loss carryforwards have not been audited or approved by the Internal Revenue Service.
All of our federal net operating loss carryforwards were generated after December 31, 2017 and thus do not expire. Our net loss carryforwards are subject to various limitations. Our ability to use the net loss carryforwards depends on whether we are able to generate sufficient income in the future years.
In addition, many of our government and commercial customers require that we maintain certain specified safety record guidelines to be eligible to bid for contracts with these customers. Furthermore, contract terms may provide for automatic termination in the event that our safety record fails to adhere to agreed-upon guidelines during performance of the contract.
Our safety record is critical to our reputation. We have from time to time, experienced incidents which impacted certain safety records. In addition, many of our government and commercial customers require that we maintain certain specified safety record guidelines to be eligible to bid for contracts with these customers.
We have approximately $19,450,000 and $72,859,000 in net operating loss carryforwards for federal and state income tax purposes, respectively and expires in various amounts starting in 2023 if not used against future federal and state income tax liabilities, respectively. All of our federal net operating loss carryforwards were generated after December 31, 2017 and thus do not expire.
We may be unable to utilize loss carryforwards in the future. We have approximately $33,470,000 and $81,775,000 in net operating loss carryforwards for federal and state income tax purposes, respectively and expires in various amounts starting in 2024 if not used against future federal and state income tax liabilities, respectively.
Allowable costs under U.S. government contracts are subject to audit by the U.S. government.
Our governmental contracts or subcontracts relating to DOE and DOD sites are a significant part of our business. Allowable costs under U.S. government contracts are subject to audit by the U.S. government.
We compete with national, regional firms and some international firms with nuclear and/or hazardous waste services practices, as well as small or local contractors. Some of our competitors have greater financial and other resources than we do, which can give them a competitive advantage.
We are engaged in highly competitive business in which most of our government contracts and some of our commercial contracts are awarded through competitive bidding processes. We compete with national, regional firms and some international firms with nuclear and/or hazardous waste services practices, as well as small or local contractors.
General Risk Factors Loss of certain key personnel could have a material adverse effect on us. Our success depends on the contributions of our key management, environmental and engineering personnel. Our future success depends on our ability to retain and expand our staff of qualified personnel, including environmental specialists and technicians, sales personnel, and engineers.
Our future success depends on our ability to retain and expand our staff of qualified personnel, including environmental specialists and technicians, sales personnel, and engineers. Without qualified personnel, we may incur delays in rendering our services or be unable to render certain services. We have in the past lost certain key personnel.
At December 31, 2023, out of 30,000,000 shares of our Common Stock authorized, we had 13,646,559 shares of common stock outstanding and 7,642 shares of treasury stock.
Such provisions may also have the result of discouraging acquisition of us. 17 As of December 31, 2024, out of 30,000,000 shares of our Common Stock authorized, we had 18,377,237 shares of Common Stock outstanding and 7,642 shares of treasury stock.
Removed
We believe that our insurance coverage is presently adequate and similar to, or greater than, the coverage maintained by other companies in the industry of our size.
Added
On an annual basis, Congress is required to approve appropriations bills that govern spending by each of the federal government agencies and departments we support.
Removed
The multi-year contract that was awarded to us and our JV partner, Campoverde Srl, by the European Commission (the “Contracting Authority”) on December 18, 2023, for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy as discussed previously may be terminated by the Contracting Authority under certain conditions as set forth in the contract.
Added
When Congress is, or Congress and the Administration are, unable to agree on budget priorities or specifics, and thus unable to pass annual appropriations bills on a timely basis, Congress typically enacts a continuing resolution (“CR”). CRs generally allow federal government agencies and departments to operate at spending levels based on the previous fiscal year.
Removed
We are engaged in highly competitive businesses and typically must bid against other competitors to obtain major contracts. We are engaged in highly competitive business in which most of our government contracts and some of our commercial contracts are awarded through competitive bidding processes.
Added
When agencies and departments operate on the basis of a CR, funding we expect to receive from clients for work we are already performing and for new initiatives may be delayed or canceled.
Removed
Risks Related to Laws and Regulations As a government contractor, we are subject to extensive government regulation, and our failure to comply with applicable regulations could subject us to penalties that may restrict our ability to conduct our business. Our governmental contracts or subcontracts relating to DOE and DOD sites, are a significant part of our business.
Added
Congress and the Administration have from time to time failed to agree on a CR, resulting in temporary shutdowns of non-essential federal government functions and our work on such functions.
Removed
This could prevent our management from focusing on our operations and expansion. 11 If environmental regulation or enforcement is relaxed, the demand for our services could decrease.
Added
Failures by Congress and the Administration to enact appropriations bills in a timely manner can force federal government agencies and departments to shut down or to cancel, change, or delay the implementation of existing or new initiatives. Such events may result in the loss of revenue and profit, or the deferral of revenue and profit to later periods.
Removed
Risks Relating to our Financial Performance and Position and Need for Financing If any of our permits, other intangible assets, and tangible assets becomes impaired, we may be required to record significant charges to earnings. Under accounting principles generally accepted in the United States (“U.S.
Added
There is also the possibility that Congress will fail to raise the U.S. debt ceiling when necessary which, in addition to resulting in federal government shutdowns, could significantly impact the U.S. and global economy, affecting the discretionary spending decisions of our non-governmental clients and affecting the capital markets and our access to sources of liquidity on terms that are acceptable to us.
Removed
As of December 31, 2023, we had no borrowing under the revolving part of our credit facility and borrowing availability of up to an additional $10,622,000, which included our cash (deposited with our lender) and was based on our eligible receivables and was net of approximately $3,950,000 in outstanding standby letters of credit and a $750,000 indefinite reduction in borrowing availability that our lender imposed.
Added
The delayed funding or shutdown of many parts of the federal government, including agencies, departments, programs, and projects we support, could have a substantial negative effect on our revenue, profit, and cash flows.
Removed
Without qualified personnel, we may incur delays in rendering our services or be unable to render certain services.
Added
Budget compromises that may be needed for future fiscal years may continue to be extraordinarily difficult given the complicated grassroots political environment, a closely divided Congress, an increasing federal deficit and debt load, and a challenged economy.
Removed
There is an increasing focus from certain investors and certain of our customers, and other stakeholders concerning corporate responsibility, specifically related to ESG factors.
Added
The budgets of many of our state and local government clients are also subject to similar divisions, risks, and uncertainties as are inherent in the federal budget process. Government regulation, policy and program decisions under the new Administration could impact our business, affecting our profitability and future growth.
Removed
Some investors may use these factors to guide their investment strategies and, in some cases, may choose not to invest in us, or otherwise do business with us, if they believe our policies relating to corporate responsibility are inadequate or do not align with theirs.
Added
A material amount of our revenues is derived from various federal government contracts or subcontracts. Considerable uncertainties exist regarding how future federal budget and program decisions under the new Administration will unfold. Program and policy decisions that have been implemented or may be implemented could negatively impact our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe VP of information system is a participant in the overall Company strategic process and has aligned the program to best service the strategic objectives of the business. Cybersecurity Governance The Company’s Audit Committee has oversight responsibility for risks and incidents relating to cybersecurity threats. Our senior management is responsible for the day-to-day management of the material risks we face.
Biggest changeThe VP of information Systems is a participant in the overall Company strategic process and has aligned the program to best service the strategic objectives of the business. 18 Cybersecurity Governance The Company’s Audit Committee has oversight responsibility for risks and incidents relating to cybersecurity threats.
Our Board is also engaged in discussion with senior management and the Audit Committee at least on a quarterly basis on cybersecurity matters to discuss any updates to our cybersecurity risk management and strategy program. Each member of our Board has a working knowledge and/or experience with cybersecurity, IT strategy and IT risk assessment.
Our Board is also engaged in discussion with senior management and the Audit Committee on at least a quarterly basis to discuss any updates to our cybersecurity risk management and strategy program. Each member of our Board has a working knowledge and/or experience with cybersecurity, IT strategy and IT risk assessment.
For more information on our cybersecurity related risk and potential effects on the Company of a material cybersecurity breach, see under “General Risk Factors” in “Item 1A. Risk Factors” 17
For more information on our cybersecurity related risk and potential effects on the Company of a material cybersecurity breach, see under “General Risk Factors” in “Item 1A. Risk Factors”
In the past 2 years, the Company does not believe that it has experienced any material cybersecurity incidents, nor any material costs related to immaterial cyber incidents.
In the past two years, the Company does not believe that it has experienced any material cybersecurity incidents, nor any material costs related to immaterial cyber incidents.
The Company’s cybersecurity program is managed by the Vice President (“VP”) of IS, who has been employed by the Company for 20 years and has over 35 years of total experience in information systems. The VP of IS has an extensive career in software development and infrastructure management including working with Fortune 500 companies in his prior positions.
The Company’s cybersecurity program is managed by the Vice President (“VP”) of Information Systems, who has been employed by the Company for 21 years and has over 36 years of total experience in information systems. The VP of Information Systems has an extensive career in software development and infrastructure management including working with Fortune 500 companies in his prior positions.
Added
Our senior management is responsible for the day-to-day management of the material risks we face.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeThe Company currently leases properties in the following locations for operations and administrative functions within our Treatment and Services Segments, including our corporate office and Business Center: Square Footage (SF)/ Location Acreage (AC) Expiration of Lease Oak Ridge, TN (Business Center) 16,319 SF April 30, 2026 Oak Ridge, TN (Services) 5,000 SF September 30, 2024 Blaydon On Tyne, England (Services) 1,000 SF Monthly New Brighton, PA (Services) 3,558 SF June 30, 2024 Newport, KY (Services) 1,566 SF Monthly Atlanta, GA (Corporate) 6,499 SF July 31, 2024 Oak Ridge, TN (Treatment) 8.7 AC, including 17,400 SF September 30, 2028 We believe that the above facilities currently provide adequate capacity for our operations and that additional facilities are readily available in the regions in which we operate, which could support and supplement our existing facilities.
Biggest changeThe Company currently leases properties in the following locations for operations and administrative functions within our Treatment and Services Segments, including our corporate office and Business Center: Square Footage (SF)/ Location Acreage (AC) Expiration of Lease Oak Ridge, TN (Business Center) 16,319 SF April 30, 2026 Oak Ridge, TN (Services) 5,000 SF September 30, 2026 Blaydon On Tyne, England (Services) 1,000 SF April 30, 2026 New Brighton, PA (Services) 3,558 SF June 30, 2026 Newport, KY (Services) 1,566 SF Monthly Atlanta, GA (Corporate) 6,499 SF November 30, 2027 We believe that the above facilities currently provide adequate capacity for our operations and that additional facilities are readily available in the regions in which we operate, which could support and supplement our existing facilities.
All of the properties where these facilities operate on are pledged to our senior lender as collateral for our credit facility with the exception of the property at Oak Ridge, Tennessee which is leased. Our Services Segment maintains offices, which are all leased properties.
All of the properties where these facilities operate on are pledged to our senior lender as collateral for our credit facility with the exception of the property at Oak Ridge, Tennessee, which is held as collateral by another bank. Our Services Segment maintains offices, which are all leased properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS See “Part II – Item 8 - Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 14 – Commitments and Contingencies – Legal Matters” for a discussion of our legal proceedings. ITEM 4. MINE SAFETY DISCLOSURE Not Applicable. PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS See “Part II – Item 8 - Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 13 – Commitments and Contingencies – Legal Matters” for a discussion of our legal proceedings.
Added
Additionally, see “Note 18 – Subsequent Events – Shareholder Demand Letter” for a discussion of a request for the removal of a certain provision within the Company’s Amended and Restated Bylaws. ITEM 4. MINE SAFETY DISCLOSURE Not Applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed2 unchanged
Biggest changeThe source of such quotations and information is the NASDAQ online trading history reports. 2023 2022 Low High Low High Common Stock 1st Quarter $ 3.56 $ 12.00 $ 4.89 $ 6.52 2nd Quarter 7.52 12.60 4.91 6.09 3rd Quarter 8.73 13.87 4.26 5.93 4th Quarter 6.50 10.72 3.20 4.57 18 At February 12, 2024, there were approximately 121 stockholders of record of our Common Stock.
Biggest changeThe source of such quotations and information is the NASDAQ online trading history reports. 2024 2023 Low High Low High Common Stock 1st Quarter $ 7.50 $ 12.00 $ 3.56 $ 12.00 2nd Quarter 8.89 14.17 7.52 12.60 3rd Quarter 8.06 13.00 8.73 13.87 4th Quarter 10.31 16.25 6.50 10.72 At March 10, 2025, there were approximately 115 stockholders of record of our Common Stock.
See “Warrant” in “Note 6 - Capital Stock, Stock Plans, Warrants, and Stock Based Compensation” in “Part II, Item 8, Financial Statements and Supplementary Data” for further discussion of this warrant exercise. There were no purchases made by us or on behalf of us or any of our affiliated members of shares of our Common Stock during 2023.
See “Warrant” in “Note 6 - Capital Stock, Stock Plans, Warrants, and Stock Based Compensation” in “Part II, Item 8, Financial Statements and Supplementary Data” for further discussion of this warrant exercise. There were no purchases made by us or on behalf of us or any of our affiliated members of shares of our Common Stock during 2024.
The actual number of our stockholders is greater than this number, and includes beneficial owners whose shares are held in “street name” by banks, brokers, and other nominees. Since our inception, we have not paid any cash dividends on our Common Stock and have no dividend policy.
The actual number of our stockholders is greater than this number since beneficial owners are owners of shares that are held in “street name” by banks, brokers, and other nominees. Since our inception, we have not paid any cash dividends on our Common Stock and have no dividend policy.
Our Loan Agreement dated May 8, 2020, as amended, prohibits us from paying any cash dividends on our Common Stock without prior approval from our lender. We do not anticipate paying cash dividends on our outstanding Common Stock in the foreseeable future. No sales of unregistered securities occurred during the first three quarters of 2023.
Our Loan Agreement dated May 8, 2020, as amended, prohibits us from paying any cash dividends on our Common Stock without prior approval from our lender. We do not anticipate paying cash dividends on our outstanding Common Stock in the foreseeable future.
On December 12, 2023, the Company issued 30,000 shares of its Common Stock resulting from the exercise of a Warrant for the purchase of up to 30,000 shares of the Company’s Common Stock at an exercise price of $3.51 per share, resulting in proceeds received by the Company of approximately $105,000.
No sales of unregistered securities occurred during 2024 except the following: During the first quarter of 2024, the Company issued 30,000 shares of its Common Stock resulting from the exercise of a warrant for the purchase of up to 30,000 shares of the Company’s Common Stock at an exercise price of $3.51 per share, resulting in proceeds received by the Company of approximately $105,000.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 6. Reserved 19 Item 7. Management’s Discussion and Analysis of Financial Condition And Results of Operations 19 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30 Special Note Regarding Forward-Looking Statements 30 Item 8. Financial Statements and Supplementary Data 32
Biggest changeItem 6. Reserved 20 Item 7. Management’s Discussion and Analysis of Financial Condition And Results of Operations 20 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Special Note Regarding Forward-Looking Statements 34 Item 8. Financial Statements and Supplementary Data 35 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 72 Item 9A.
Added
Controls and Procedures 72 Item 9B. Other Information 74

Item 7. Management's Discussion & Analysis

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

57 edited+90 added−68 removed20 unchanged
Biggest changeOn March 21, 2023, we entered into an amendment to our Loan Agreement, as amended, with our lender which provided, among other things, the following: ● removed the quarterly fixed charge coverage ratio (“FCCR”) testing requirement for the fourth quarter of 2022 and removed the FCCR testing requirement for the first quarter of 2023; ● reduced the maximum revolving credit line under the credit facility from $18,000,000 to $12,500,000; ● reinstated the quarterly FCCR testing requirement starting in the second quarter of 2023 using a trailing twelve-months period (with no change to the minimum 1.15:1 ratio requirement for each quarter); and ● required maintenance of a minimum of $3,000,000 in borrowing availability under the revolving credit until the minimum FCCR requirement for the quarter ended June 30, 2023 has been met and certified to the lender (we met our FCCR requirement in the second quarter of 2023 which was certified to our lender and therefore, this requirement is no longer applicable under our Loan Agreement, as amended).
Biggest changeOn May 8, 2024 and November 12, 2024, we entered into amendments to our Loan Agreement with our lender which provided the following, among other things: ● removed the quarterly fixed charge coverage ratio (“FCCR”) testing requirement for the first, second and third quarters of 2024; ● reinstated the quarterly FCCR testing requirement starting in the fourth quarter of 2024 and revises the methodology to be used in calculating the FCCR as follows (with no change to the minimum 1.15:1 ratio requirement): FCCR for the fourth quarter is to be determined based on financial results for the three-months period ending December 31, 2024; FCCR for the first quarter of 2025 is to be determined based on financial results for the six-months period ending March 31, 2025; FCCR for the second quarter of 2025 is to be determined based on financial results for the nine-months period ending June 30, 2025; and FCCR for the third quarter of 2025 and each fiscal quarter thereafter is to be determined based on financial results for a trailing twelve-months period ending basis; ● requires maintenance of a minimum of $3,000,000 in daily Liquidity starting June 30, 2024, through September 29, 2025 (which we have met to date); and ● in the event that we are able to achieve our minimum quarterly FCCR requirement utilizing our financial results based on a trailing twelve-months period starting with the quarter ended September 30, 2024 (which we did not achieve as of December 31, 2024), the maintenance of a minimum of $3,000,000 in daily Liquidity requirement as discussed above will be removed.
Our other accounting policies are described in the accompanying notes to our consolidated financial statements of this Form 10-K (see “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies”): Revenues. Our revenues are generated from our two segments, Treatment and Services.
Our other accounting policies are described in the accompanying notes to our consolidated financial statements of this Form 10-K (see “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies”): Revenues . Our revenues are generated from our two reportable segments, Treatment and Services.
These estimates are re-assessed each reporting period as required. 27 Intangible Assets . Intangible assets consist primarily of the recognized value of the permits required to operate our business. We continually monitor the propriety of the carrying amount of our permits to determine whether current events and circumstances warrant adjustments to the carrying value.
These estimates are re-assessed each reporting period as required. Intangible Assets . Intangible assets consist primarily of the recognized value of the permits required to operate our business. We continually monitor the propriety of the carrying amount of our permits to determine whether current events and circumstances warrant adjustments to the carrying value.
Significant reductions in the level of governmental funding or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations and cash flows. Significant Customers .
Significant reductions in the level of governmental funding or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations, and cash flows.
Business Environment Our Treatment and Services Segments’ business continues to be heavily dependent on services that we provide to governmental clients, primarily as subcontractors for others who are prime contractors to government entities or directly as the prime contractor.
Business Environment Our Treatment and Services Segments’ business continues to be heavily dependent on services that we provide to federal governmental clients, primarily as subcontractors for others who are contractors to government entities or directly as the prime contractor.
A breach of any of these financial covenants, unless waived by our lender, could result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit.
A breach of any of these financial covenants, unless waived by PNC, could result in a default under our Credit Facility allowing our lender to immediately require the repayment of all outstanding debt under our Credit Facility and terminate all commitments to extend further credit.
Intangible assets with definite useful lives are also tested for impairment whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable.
Intangible assets with definite useful lives are tested for impairment whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable.
In addition, our governmental contracts and subcontracts relating to activities at governmental sites in the United States are generally subject to termination for convenience at any time at the government’s option.
In addition, our governmental contracts and subcontracts relating to activities at federal governmental sites in the United States are generally subject to termination for convenience at any time at the government’s option.
Indefinite-lived intangible assets are not amortized but are reviewed for impairment annually as of October 1, or when events or changes in the business environment indicate that the carrying value may be impaired. If the fair value of the asset is less than the carrying amount, we perform a quantitative test to determine the fair value.
Indefinite-lived intangible assets are not amortized but are reviewed for impairment annually as of October 1, or when events or changes in the business environment indicate that the carrying value may be impaired. We perform a quantitative test to determine if the fair value of the assets is less than the carrying value.
Changes in the estimated future cash flows costs underlying the obligations (resulting from changes or expansion at the facilities) require adjustment to the ARO liability calculated and are capitalized and charged as depreciation expense, in accordance with our depreciation policy. 28 Income Taxes.
Changes in the estimated future cash flows costs underlying the obligations (resulting from changes or expansion at the facilities) require adjustment to the ARO liability calculated and are capitalized and charged as depreciation expense, in accordance with our depreciation policy. 31 Income Taxes .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements contained within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) may be deemed “forward-looking statements” within the meaning of Section 27A of the Act, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the “Private Securities Litigation Reform Act of 1995”).
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements contained within Item 1 – “Business” and this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) may be deemed “forward-looking statements” within the meaning of Section 27A of the Act, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the “Private Securities Litigation Reform Act of 1995”).
Our inability to continue under existing contracts that we have with the U.S government (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition.
Our inability to continue under existing contracts that we have with the federal government (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition.
Related Party Transactions See a discussion of our related party transactions in “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidate Financial Statements – Note 16 – Related Party Transactions.”
Related Party Transactions See a discussion of our related party transactions in “Item 8 – Financial Statements and Supplementary Data – Notes to Consolidate Financial Statements – Note 15 – Related Party Transactions.”
Our Treatment and Services Segments have significant relationships with the U.S governmental authorities through contracts entered into indirectly as subcontractors for others who are prime contractors or directly as the prime contractor to government authorities.
Our Treatment and Services Segments have significant relationships with federal governmental authorities through contracts entered into indirectly as subcontractors for others who are contractors or directly as the prime contractor to federal government authorities.
Our effective tax rates for the twelve-months ended December 31, 2023, and 2022 were impacted by non-deductible expenses and state taxes. Backlog Our Treatment Segment maintains a backlog of stored waste, which represents waste that has not been processed.
Our effective tax rate for the twelve-months ended December 31, 2023, was impacted by non-deductible expenses and state taxes. Backlog Our Treatment Segment maintains a backlog of stored waste, which represents waste that has not been processed.
The backlog is principally a result of the timing and complexity of the waste being brought into the facilities and the selling price per container. As of December 31, 2023, our Treatment Segment had a backlog of approximately $8,702,000, as compared to approximately $9,156,000 as of December 31, 2022.
The backlog is principally a result of the timing and complexity of the waste being brought into the facilities and the selling price per container. As of December 31, 2024, our Treatment Segment had a backlog of approximately $7,859,000, as compared to approximately $8,702,000 as of December 31, 2023.
Our contracts generally do not give rise to variable consideration. However, from time to time, we may submit requests for equitable adjustments under certain of our government contracts for price or other modifications that are determined to be variable consideration.
However, from time to time, we may submit requests for equitable adjustments under certain of our government contracts for price or other modifications that are determined to be variable consideration.
Recent Accounting Pronouncements See “Item 8 – Financial Statements and Supplementary Data” – Notes to Consolidated Financial Statements” – Note 2 – Summary of Significant Accounting Policies” for the recent accounting pronouncements that will be adopted in future periods. Known Trends and Uncertainties Economic Conditions.
Recent Accounting Pronouncements See “Item 8 – Financial Statements and Supplementary Data” – Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies” for the recent accounting pronouncement that was adopted in 2024 and recent accounting pronouncements that will be adopted in future periods. Known Trends and Uncertainties Significant Customers .
We believe demand for our services will continue to be subject to fluctuations due to a variety of factors beyond our control, including, without limitation, the economic conditions and the manner in which the applicable government will be required to spend funding to remediate various sites and a potential partial government shutdown.
We believe demand for our services will continue to be subject to fluctuations due to a variety of factors beyond our control, including, without limitation, current economic and political conditions, the manner in which the applicable government authority will be required to spend funding to remediate various sites and potential future federal budget issues.
We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through American International Group, Inc. (“AIG”). At December 31, 2023, the closure and post-closure requirements for these facilities were approximately $22,461,000.
We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through American International Group, Inc. (“AIG”). As of December 31, 2024, the closure and post-closure requirements for these facilities were approximately $23,379,000.
Transaction price is estimated based upon the estimated cost to complete the overall project. Revenue from fixed price contracts is recognized over time primarily using the input method. For the input method, revenue is recognized based on costs incurred on the project relative to the total estimated costs of the project.
Transaction price is determined based on fixed price outline within the contract. Revenue from fixed price contracts is recognized over time primarily using the input method. For the input method, revenue is recognized based on costs incurred on the project relative to the total estimated costs of the project.
Off Balance Sheet Arrangements From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. At December 31, 2023, the total amount of standby letters of credit outstanding totaled approximately $3,950,000 and the total amount of bonds outstanding totaled approximately $36,674,000.
Off Balance Sheet Arrangements From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. As of December 31, 2024, the total amount of standby letters of credit outstanding was approximately $3,200,000 and the total amount of bonds outstanding was approximately $20,930,000.
The following table reflects the cash flow activity for the year ended December 31, 2023, and the corresponding period of 2022: (In thousands) 2023 2022 Cash provided by operating activities of continuing operations $ 6,745 $ 164 Cash used in operating activities of discontinued operations (597 ) (717 ) Cash used in investing activities of continuing operations (1,714 ) (997 ) Cash provided by (used in) financing activities of continuing operations 1,696 (921 ) Effect of exchange rate changes on cash 8 (4 ) Increase (decrease) in cash and finite risk sinking fund (restricted cash) $ 6,138 $ (2,475 ) As of December 31, 2023, we were in a positive cash position with no revolving credit balance.
The following table reflects the cash flow activity for the year ended December 31, 2024, and the corresponding period of 2023: (In thousands) 2024 2023 Cash (used in) provided by operating activities of continuing operations $ (14,146 ) $ 7,069 Cash used in operating activities of discontinued operations (597 ) (597 ) Cash used in investing activities of continuing operations (4,079 ) (2,038 ) Cash used in investing activities of discontinued operations (51 ) — Cash provided by financing activities of continuing operations 40,955 1,696 Effect of exchange rate changes on cash (1 ) 8 Increase in cash and finite risk sinking fund (restricted cash) $ 22,081 $ 6,138 As of December 31, 2024, we were in a positive cash position with no revolving credit balance.
Income Taxes We had income tax expense of $17,000 and income tax benefit of $378,000 for continuing operations for the twelve-months ended December 31, 2023 and 2022, respectively. Our effective tax rates were approximately 1.8% and 10.5% for the twelve- month ended December 31, 2023 and 2022, respectively.
We had income tax expenses of $4,435,000 and $17,000 for continuing operations for the twelve-months ended December 31, 2024 and 2023, respectively. Our effective tax rates were approximately 29.3% and 1.8% for the twelve-month ended December 31, 2024 and 2023, respectively.
We were not required to perform testing of the FCCR requirement in the first quarter of 2023 pursuant to the March 21, 2023, amendment as discussed above. We otherwise met all of our other financial covenant requirements.
We were also not required to perform testing of our FCCR requirement for the fourth quarter of 2024 pursuant to the amendment dated March 11, 2025, to our Loan Agreement, as amended, as discussed above. Otherwise, we met all of our other financial covenant requirements in each of the quarters in 2024.
The overall increase in cost of goods sold was primarily due to the following: aggregated higher salaries/payroll related, outside services, and travel costs totaling approximately $4,356,000; higher depreciation expenses of $63,000; lower material and supplies, lab, regulatory and disposal expenses totaling approximately $444,000; and lower general expenses by approximately $85,000 in various categories.
The decrease in cost of goods sold was primarily due to overall lower salaries/payroll related, outside services, and travel costs totaling approximately $13,565,000; lower depreciation expenses of approximately $220,000; lower general expenses of $49,000 in various categories; and higher material and supplies expenses of approximately $121,000.
Once activities commence under this JV, we will consolidate the operations of this JV into our financial statements. 20 Results of Operations The reporting of financial results and pertinent discussions are tailored to our two reportable segments: The Treatment Segment and Services Segment.
Results of Operations The reporting of financial results and pertinent discussions are tailored to our two reportable segments: The Treatment Segment and Services Segment.
Summary - Years Ended December 31, 2023 and 2022 Below are the results of continuing operations for years ended December 31, 2023, and 2022 (amounts in thousands): (Consolidated) 2023 % 2022 % Net revenues $ 89,735 100.0 $ 70,599 100.0 Cost of goods sold 73,366 81.8 60,990 86.4 Gross profit 16,369 18.2 9,609 13.6 Selling, general and administrative 14,975 16.7 14,652 20.8 Research and development 561 .6 336 .4 Loss on disposal of property and equipment 77 .1 18 — Income (loss) from operations 756 .8 (5,397 ) (7.6 ) Interest income 606 .7 99 .1 Interest expense (323 ) (.4 ) (175 ) (.3 ) Interest expense – financing fees (93 ) (.1 ) (61 ) (.1 ) Other (expense) income (11 ) — 1,945 2.8 Income (loss) from continuing operations before taxes 935 1.0 (3,589 ) (5.1 ) Income tax expense (benefit) 17 — (378 ) (.6 ) Income (loss) from continuing operations $ 918 1.0 $ (3,211 ) (4.5 ) Revenue Consolidated revenues increased $19,136,000 for the year ended December 31, 2023, compared to the year ended December 31, 2022, as follows: (In thousands) 2023 % Revenue 2022 % Revenue Change % Change Treatment Government waste $ 29,506 32.9 $ 21,946 31.1 $ 7,560 34.4 Hazardous/non-hazardous (1) 6,260 7.0 5,062 7.1 1,198 23.7 Other nuclear waste 7,711 8.6 6,350 9.0 1,361 21.4 Total 43,477 48.5 33,358 47.2 10,119 30.3 Services Nuclear 43,121 48.0 35,952 50.9 7,169 19.9 Technical 3,137 3.5 1,289 1.9 1,848 143.4 Total 46,258 51.5 37,241 52.8 9,017 24.2 Total $ 89,735 100.0 $ 70,599 100.0 $ 19,136 27.1 1) Includes wastes generated by government clients of $2,943,000 and $2,380,000 for the twelve months ended December 31, 2023, and 2022, respectively. 21 Treatment Segment revenue increased by $10,119,000 or 30.3% for the twelve-months ended December 31, 2023 over the same period in 2022.
Summary - Years Ended December 31, 2024 and 2023 Below are the results of continuing operations for years ended December 31, 2024, and 2023 (amounts in thousands): (Consolidated) 2024 % 2023 % Net revenues $ 59,117 100.0 $ 89,735 100.0 Cost of goods sold 59,115 100.0 73,366 81.8 Gross profit 2 — 16,369 18.2 Selling, general and administrative 14,491 24.5 14,975 16.7 Research and development 1,172 2.0 561 .6 Loss on disposal of property and equipment 21 — 77 .1 (Loss) income from operations (15,682 ) (26.5 ) 756 .8 Interest income 921 1.5 606 .7 Interest expense (473 ) (.8 ) (323 ) (.4 ) Interest expense – financing fees (66 ) (.1 ) (93 ) (.1 ) Other income (expense) 166 .3 (11 ) — (Loss) income from continuing operations before taxes (15,134 ) (25.6 ) 935 1.0 Income tax expense 4,435 7.5 17 — (Loss) income from continuing operations $ (19,569 ) (33.1 ) $ 918 1.0 22 Revenue Consolidated revenues decreased $30,618,000 for the year ended December 31, 2024, compared to the year ended December 31, 2023, as follows: (In thousands) 2024 % Revenue 2023 % Revenue Change % Change Treatment Government waste $ 22,098 37.4 $ 29,506 32.9 $ (7,408 ) (25.1 ) Hazardous/non-hazardous (1) 4,995 8.4 6,260 7.0 (1,265 ) (20.2 ) Other nuclear waste 7,860 13.3 7,711 8.6 149 1.9 Total 34,953 59.1 43,477 48.5 (8,524 ) (19.6 ) Services Nuclear 20,353 34.4 43,121 48.0 (22,768 ) (52.8 ) Technical 3,811 6.5 3,137 3.5 674 21.5 Total 24,164 40.9 46,258 51.5 (22,094 ) (47.8 ) Total $ 59,117 100.0 $ 89,735 100.0 $ (30,618 ) (34.1 ) 1) Includes wastes generated by government clients of $2,898,000 and $2,943,000 for the twelve months ended December 31, 2024, and 2023, respectively.
We performed services relating to waste generated by government clients (domestic), either directly as a prime contractor or indirectly for others as a subcontractor to government entities, representing approximately $70,642,000, or 78.7%, of our total revenue during 2023, as compared to $59,658,000, or 84.5%, of our total revenue during 2022.
We performed services relating to waste generated by federal government clients, either directly as a prime contractor or indirectly for others as a subcontractor to federal government entities, representing approximately $40,551,000, or 68.6%, of our total revenue during 2024, as compared to $68,595,000 or 76.4%, of our total revenue during 2023. 32 Federal Funding .
The amount of our investment, the period of which it is to be made and the method of funding are to be determined. 25 Financing Activities We entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020 (“Loan Agreement”), with PNC National Association (“PNC” and “lender”), acting as agent and lender.
Credit Facility We entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, which has since been amended from time to time, with PNC National Association (“PNC” and “lender”), acting as agent and lender (the “Loan Agreement”).
Intangible assets that have definite useful lives are amortized using the straight-line method over the estimated useful lives (with the exception of customer relationships which are amortized using an accelerated method) and are excluded from our annual intangible asset valuation review as of October 1.
Impairment testing of our permits related to our Treatment reporting unit as of October 1, 2024, and 2023 resulted in no impairment charges. Intangible assets that have definite useful lives are amortized using the straight-line method over the estimated useful lives and are excluded from our annual intangible asset valuation review as of October 1.
Additionally, the time it takes to process waste from the time it arrives may increase due to the types and complexities of the waste we are currently receiving.
Additionally, the time it takes to process waste from the time it arrives may increase due to the types and complexities of the waste we are currently receiving. We typically process our backlog during periods of low waste receipts, which historically has been in the first or fourth quarters.
Cost of Goods Sold Cost of goods sold increased $12,376,000 for the year ended December 31, 2023, as compared to the year ended December 31, 2022, as follows: (In thousands) 2023 % Revenue 2022 % Revenue Change Treatment $ 36,601 84.2 $ 28,115 84.3 $ 8,486 Services 36,765 79.5 32,875 88.3 $ 3,890 Total $ 73,366 81.8 $ 60,990 86.4 $ 12,376 Cost of goods sold for the Treatment Segment increased by approximately $8,486,000 or 30.2%.
Cost of Goods Sold Cost of goods sold decreased $14,251,000 for the year ended December 31, 2024, as compared to the year ended December 31, 2023, as follows: % % (In thousands) 2024 Revenue 2023 Revenue Change Treatment $ 36,063 103.2 $ 36,601 84.2 $ (538 ) Services 23,052 95.4 36,765 79.5 $ (13,713 ) Total $ 59,115 100.0 $ 73,366 81.8 $ (14,251 ) Cost of goods sold for the Treatment Segment decreased by approximately $538,000 or 1.5%.
There are no assurances that we will be successful in increasing our liquidity through our efforts. We are continually reviewing operating costs and reviewing the possibility of further reducing operating costs and non-essential expenditures to bring them in line with revenue levels, when necessary.
We plan to fund these requirements from our operations and Liquidity under our Credit Facility. We are continually reviewing operating costs and reviewing the possibility of further reducing operating costs and non-essential expenditures to bring them in line with revenue levels.
Treatment Segment SG&A expenses were lower primarily due to the following: outside services expenses were lower by approximately $110,000 due to fewer consulting matters; salaries and payroll related expenses were lower by approximately $212,000; travel expenses were lower by approximately $24,000; and general expenses were higher by approximately $176,000 in various categories.
Treatment Segment SG&A expenses were higher primarily due to higher salaries and payroll related expenses of approximately $420,000 which were offset by overall lower travel, outside services and general expenses totaling approximately $379,000.
The Loan Agreement, as amended (including the two amendments that we entered into with our lender in 2023 described below), provides us with the following credit facility with a maturity date of May 15, 2027: (a) up to $12,500,000 revolving credit (“revolving credit”), with the maximum that we can borrow under the revolving credit based on a percentage of eligible receivables (as defined) at any one time reduced by outstanding standby letters of credit and borrowing reductions that our lender may impose from time to time; (b) a term loan (“Term Loan 1”) dated May 8, 2020, of approximately $1,742,000, requiring monthly installments of $35,547; (c) a term loan (“Term Loan 2”) of $2,500,000 dated July 31, 2023, requiring monthly installments of $41,667; and (d) a capital expenditure line (“Capital Line”) of up to $1,000,000 with advances on the line, subject to certain limitations, permitted for up to twelve months starting May 4, 2021 (the “Borrowing Period”), with interest only payable on advances during the Borrowing Period.
The Loan Agreement provides us with the following credit facility with a maturity date of May 15, 2027 (the “Credit Facility): (a) up to $12,500,000 revolving credit (“revolving credit”), which borrowing capacity is subject to eligible receivables (as defined) and reduced by outstanding standby letters of credit ($3,200,000 as of December 31, 2024) and borrowing reductions that our lender may impose from time to time ($750,000 as of December 31, 2024); (b) a term loan (“Term Loan 1”) of approximately $1,742,000, requiring monthly installments of $35,547 (Term Loan 1 was paid off by us in June 2024); (c) a term loan (“Term Loan 2”) of $2,500,000, requiring monthly installments of $41,667; and (d) a capital expenditure loan (“Capital Loan”) of approximately $524,000, requiring monthly installments of principal of approximately $8,700 plus interest, that commenced on June 1, 2022.
Services Segment cost of goods sold increased $3,890,000 or 11.8% due to higher revenue.
Services Segment cost of goods sold decreased $13,713,000 or 37.3% primarily due to lower revenue.
Treatment Segment’s overall fixed costs were higher by approximately $2,297,000 resulting from the following: salaries and payroll related expenses were higher by approximately $1,483,000 due to higher headcount; depreciation expenses were higher by approximately $393,000 due to depreciation for asset retirement obligations in connection with our EWOC facility; general expenses were higher by approximately $279,000 primarily due to higher utility costs; maintenance costs were higher by approximately $235,000; travel expenses were higher by approximately $90,000; and regulatory expenses were lower by approximately $183,000.
Treatment Segment’s overall fixed costs increased by approximately $929,000 resulting from the following: salaries and payroll related expenses were higher by $1,717,000 due to higher headcount; regulatory costs were higher by approximately $101,000; depreciation expenses were lower by approximately $626,000 due to fully depreciated AROs that occurred in the third quarter of 2023 in connection with our EWOC facility; maintenance costs were lower by approximately $123,000; general expenses were lower by $111,000 in various categories; and travel expenses were lower by approximately $29,000.
We had working capital of $4,613,000 (which included working capital of our discontinued operations) as of December 31, 2023, as compared to working capital of $818,000 as of December 31, 2022. The improvement in our working capital was primarily due to increases in our cash and unbilled receivables from improved operations.
We had working capital of $28,283,000 (which included working capital of our discontinued operations) as of December 31, 2024, as compared to working capital of $4,613,000 as of December 31, 2023.
Our cash flow requirements for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on our debt obligations, remediation projects, and planned capital expenditures. We plan to fund these requirements from our operations, credit facility availability, cash on hand and collections of unpaid receivables (See “Known Trends and Uncertainties – Perma-Fix Canada, Inc.
We believe our cash flow requirements for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on our debt obligations, remediation projects, R&D on our PFAS technology and capital expenditures (which include our PFAS technology) (see “Known Trends and Uncertainties – New Processing Technology” within this MD&A for a discussion of this technology).
During the fourth quarter of 2022, project work under this VIE was completed. The following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 8 of this report.
Management’s discussion and analysis is based, among other things, on our audited consolidated financial statements and includes our accounts and the accounts of our wholly-owned subsidiaries. 20 The following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 8 of this report.
W e believe that our cash flows from operations, our available liquidity from our credit facility, and our cash on hand should be sufficient to fund our operations for the next twelve months.
As of December 31, 2024, we had no outstanding borrowing under our revolving credit and our Liquidity under our Credit Facility was approximately $33,905,000. We believe that our cash flows from operations and our Liquidity should be sufficient to fund our operations for the next twelve months.
We typically process our backlog during periods of low waste receipts, which historically has been in the first or fourth quarters. 23 Discontinued Operations and Environmental Contingencies Our discontinued operations consist of all our subsidiaries included in our Industrial Segment which encompasses subsidiaries divested in 2011 and earlier, as well as three previously closed locations.
Discontinued Operations and Environmental Contingencies Our discontinued operations consist of all our subsidiaries included in our Industrial Segment which encompasses subsidiaries divested in 2011 and earlier, as well as three previously closed locations. Our discontinued operations had no revenue for the twelve-months ended December 31, 2024 and 2023.
Interest Expense Interest expense increased by approximately $148,000 for the twelve-months ended December 31, 2023, as compared to the corresponding period of 2022 due to interest incurred on the new $2,500,000 term loan dated July 31, 2023, under our credit facility.
R&D R&D expenses increased by $611,000 for the twelve-months ended December 31, 2024, as compared to the corresponding period of 2023 primarily due to expenses incurred in connection with our new PFAS technology. Interest Income Interest income increased by approximately $315,000 for the twelve-months ended December 31, 2024, as compared to the corresponding period of 2023.
Our discontinued operations had no revenue for the twelve-months ended December 31, 2023 and 2022. We incurred net losses of $433,000 (net of tax benefit of $117,000) and $605,000 (net of tax benefit of $199,000) for our discontinued operations for the twelve-months ended December 31, 2023, and 2022, respectively.
We incurred net losses of $410,000 (net of tax benefit of $149,000) and $433,000 (net of tax benefit of $117,000) for our discontinued operations for the twelve-months ended December 31, 2024, and 2023, respectively. Net losses for both years were primarily due to costs incurred in connection with management of administrative and regulatory matters related to our remediation projects.
Our Services Segment revenues are project-based; as such, the scope, duration, and completion of each project vary. As a result, our Services Segment revenues are subject to differences relating to timing and project value. Revenues from both of our segments were also positively impacted from contracts won in 2023.
Additionally, our Services Segment revenues are project based; as such, the scope, duration, and completion of each project vary.
(“CNL”) on a Task Order Agreement (“TOA”) that PF Canada entered into with CNL in May 2019 for remediation work within Ontario, Canada (“Agreement”). The NOT was received after work under the TOA was substantially completed and work under the TOA has since been completed. CNL may terminate the TOA at any time for convenience.
The NOT was received after work under the TOA was substantially completed and work under the TOA has since been completed. CNL may terminate the TOA at any time for convenience. At year-end 2023, PF Canada had approximately $2,389,000 in outstanding receivables due from CNL as a result of work performed under the TOA.
Included in SG&A expenses is depreciation and amortization expense of $84,000 and $82,000 for the twelve months ended December 31, 2023 and 2022, respectively. Interest Income Interest income increased by approximately $507,000 for the twelve-months ended December 31, 2023, respectively, as compared to the corresponding period of 2022 primarily due to higher interest earned from the finite risk sinking fund.
The overall lower SG&A expenses were offset by higher credit loss expenses of approximately $160,000 as a certain account receivable was determined to be uncertain as to collectability as of December 31, 2024. Included in SG&A expenses is depreciation and amortization expense of $126,000 and $84,000 for the twelve months ended December 31, 2024 and 2023, respectively.
As of December 31, 2023, PF Canada has approximately $2,389,000 in unpaid receivables due from CNL as a result of work performed under the TOA. CNL and PF Canada have reached a settlement agreement on payment of the receivables to PF Canada by CNL, subject to certain conditions/terms precedents being met, including release of certain liens.
A settlement agreement was reached between PF Canada and CNL on the payment of the aforementioned amount by CNL, subject to certain conditions/terms precedents being met. PF Canada received a partial payment from CNL of the outstanding receivables during the first quarter of 2024. In May 2024, PF Canada received the remaining approximately $1,612,000 in outstanding receivables from CNL.
Gross Profit Gross profit for the year ended December 31, 2023, was $6,760,000 higher than 2022 as follows: (In thousands) 2023 % Revenue 2022 % Revenue Change Treatment $ 6,876 15.8 $ 5,243 15.7 $ 1,633 Services 9,493 20.5 4,366 11.7 $ 5,127 Total $ 16,369 18.2 $ 9,609 13.6 $ 6,760 Treatment Segment gross profit increased by $1,633,000 or 31.1% primarily due to higher revenue as discussed previously.
Included within cost of goods sold is depreciation and amortization expense of $1,637,000 and $2,484,000 for the twelve months ended December 31, 2024, and 2023, respectively. 23 Gross Profit Gross profit for the year ended December 31, 2024, was $16,367,000 lower than 2023 as follows: % % (In thousands) 2024 Revenue 2023 Revenue Change Treatment $ (1,110 ) (3.2 ) $ 6,876 15.8 $ (7,986 ) Services 1,112 4.6 9,493 20.5 $ (8,381 ) Total $ 2 0.0 $ 16,369 18.2 $ (16,367 ) Treatment Segment gross profit decreased by $7,986,000 or approximately 116.1% and gross margin decreased to (3.2)% from 15.8% primarily due to lower revenue from lower waste volume, overall lower averaged price from waste mix and the impact of our fixed cost structure.
Selling, General, and Administrative (“SG&A”) expenses increased $323,000 or 2.2% for the twelve-months ended December 31, 2023, as compared to the corresponding period of 2022.
Selling, general and administrative (“SG&A”) expenses decreased $484,000 or 3.2% for the twelve-months ended December 31, 2024, as compared to the corresponding period of 2023. During 2024, we provided a full valuation allowance against our deferred tax assets (see a discussion of this valuation allowance and the impact to our financial statements in “Results of Operations – Income Taxes” below).
On December 18, 2023, the JV where we and Campoverde Srl (“JV partner”) each owns 50% of the partnership, was awarded a multi-year contract valued up to approximately EUR 50 million by the European Commission (the “Contracting Authority”) for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy.
As previously disclosed, in December 2023, we and our partner, Campoverde Srl, each owning 50% of the partnership, were awarded a multi-year contract for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy. Revenue generated and to be generated by us from this contract has been and will be limited to project management support through 2025.
See payment of annual rate of interest due on Term Loan 2 under the amendment dated July 31, 2023, as discussed above. Our credit facility under our Loan Agreement, as amended, contains certain financial covenants, along with customary representations and warranties.
Our Credit Facility under our Loan Agreement with PNC contains certain financial covenants, along with customary representations and warranties.
Treatment Segment’s variable costs increased by approximately $6,189,000 primarily due to higher material and supplies, disposal, lab, outside services costs and higher employee incentives.
Treatment Segment’s variable costs decreased by approximately $1,467,000 primarily due to overall lower transportation, disposal, lab and bonus/incentive costs.
In 2022, we incurred additional costs in connection with management of administrative and regulatory matters related to our remediation projects. We have three environmental remediation projects, all within our discontinued operations, which principally entail the removal/remediation of contaminated soil, and, in most cases, the remediation of surrounding ground water.
We have three environmental remediation projects, all within our discontinued operations, which principally entail the removal/remediation of contaminated soil, and, in most cases, the remediation of surrounding ground water. 25 Liquidity and Capital Resources Our cash flow requirements during the twelve-months ended December 31, 2024, were primarily financed by our Liquidity (defined as borrowing availability under the revolving credit plus cash in our MMDA maintained with our lender).
Our overall Services Segment gross margin is impacted by our current projects which are competitively bid and therefore have varying margin structures. 22 SG&A SG& A expenses increased $323,000 for the year ended December 31, 2023, as compared to the corresponding period for 2022 as follows: (In thousands) 2023 % Revenue 2022 % Revenue Change Administrative $ 7,230 - $ 6,882 - $ 348 Treatment 4,249 9.8 4,419 13.2 (170 ) Services 3,496 7.6 3,351 9.0 145 Total $ 14,975 16.7 $ 14,652 20.8 $ 323 Administrative SG&A expenses were higher primarily due to the following: payroll-related expenses were higher by approximately $660,000 primarily due to higher accrued employee incentives (including our management incentive plans (“MIPs”)) and higher 401(k) matching expenses as payroll expenses in 2022 included more forfeitures of 401(k) plan matching funds contributed by us for former employees who failed to meet the 401(k) plan vesting requirements; outside services expenses were lower by approximately $256,000 as a result of fewer audit/consulting matters; and general expenses were lower by approximately $56,000 in various categories.
SG&A SG& A expenses decreased $484,000 for the year ended December 31, 2024, as compared to the corresponding period for 2023 as follows: (In thousands) 2024 % Revenue 2023 % Revenue Change Administrative $ 6,896 — $ 7,230 — $ (334 ) Treatment 4,290 12.3 4,249 9.8 41 Services 3,305 13.7 3,496 7.6 (191 ) Total $ 14,491 24.5 $ 14,975 16.7 $ (484 ) Administrative SG&A expenses were lower primarily due to lower incentive expenses of approximately $540,000, which was offset by overall higher expenses of $206,000 in various categories.
Despite the slight increase in gross margin, Treatment Segment gross margin was negatively impacted by higher variable costs from waste mix and the impact of overall increase in fixed costs. Services Segment gross profit increased by $5,127,000 or 117.4% and gross margin increased from 11.7% to 20.5% primarily due to higher revenue and improved margin projects.
Services Segment gross profit decreased by $8,381,000 or 88.3% primarily due to decreased revenue as discussed in the “Overview” above. The decrease in gross margin from 20.5% to 4.6% was attributed to overall lower margin projects as the two large projects completed in late 2023 were higher margin projects.
Removed
See “Special Note regarding Forward-Looking Statements” contained in this report. Management’s discussion and analysis is based, among other things, our audited consolidated financial statements and includes our accounts and the accounts of our wholly-owned subsidiaries. Our 2022 consolidated financial statements also included the accounts of a variable interest entity (“VIE”) for which we were the primary beneficiary.
Added
See “Special Note regarding Forward-Looking Statements” contained in this report.
Removed
Overview We experienced significant improvement in our 2023 financial results as the lingering effects of COVID-19 began to subside starting in the early part of 2022. Our Treatment Segment continued to see steady improvements in waste receipts from certain customers who had previously delayed waste shipments due, in part, from the impact of COVID-19.
Added
Overview We were disappointed with our 2024 financial results, which were negatively impacted by a number of unexpected events and factors.
Removed
Within our Services Segment, certain projects which were delayed/curtailed in first part of 2022 due, in part, from the lingering effects of the COVID-19, achieved full operational status and improved productivity in 2023 which positively impacted revenue.
Added
These events and factors included among other things, ● Continuing Resolution (“CR”) impacts primarily in the first half of 2024 that directly resulted in delays in project starts for existing services backlogs along with delays in procurement cycles for pipeline projects; ● poor weather conditions, including two hurricanes, which resulted in delays in waste shipments and project mobilization activities by certain customers and power outages and plant shutdowns at certain of our treatment facilities; ● temporary outages at certain of our facilities for equipment replacement and repairs, program enhancement and testing to support permit expansion and broader market penetration which contributed to revenue production delays; ● accelerated investments in R&D of our new technology to treat PFAS which required significant management and operation support, thereby also limiting resources needed for revenue production; and ● completion of two large projects primarily in the fourth quarter of 2023 in the Services Segment that were not replaced by new projects of similar value.
Removed
Revenue from both of our Segments were also positively impacted from contracts won in 2023 as procurement and planning on behalf of our government clients continued to progress as the lingering effects of COVID-19 pandemic subsided. 19 Revenue increased by $19,136,000 or 27.1% to $89,735,000 for the twelve-months ended December 31, 2023, from $70,599,000 for the corresponding period of 2022.
Added
These two projects generated an aggregate of approximately $35,273,000 in revenue in 2023. As a result of the aforementioned events and factors, overall revenue decreased by $30,618,000 or 34.1% to $59,117,000 for the twelve-months ended December 31, 2024, from $89,735,000 for the corresponding period of 2023.
Removed
We saw increases in both Segments where Treatment Segment revenue increased by $10,119,000 or 30.3% to $43,477,000 from $33,358,000 and Services Segment revenue increased by $9,017,000 or 24.2% to $46,258,000 from $37,241,000. The increase in revenue in the Treatment Segment was primarily due to overall higher waste volume which was offset by lower averaged price from waste mix.
Added
Treatment Segment revenue decreased by $8,524,000 to $34,953,000 or 19.6% from $43,477,000, and Services Segment revenue decreased by $22,094,000 or 47.8% to $24,164,000 from $46,258,000. Total gross profit for the twelve-months ended December 31, 2024, decreased $16,367,000 or 100.0% due to decreased revenue generated in both segments.
Removed
The increase in revenue in the Services Segment was primarily due to achievement of full operational status and improved productivity on certain projects which had been delayed/curtailed in 2022 due, in part, from the lingering effects of the COVID-19 pandemic. Total gross profit for 2023 increased $6,760,000 or 70.4% due to increased revenue.
Added
In 2024, we completed two public equity raises and sold an aggregate 4,581,282 shares of our Common Stock. See “Liquidity and Capital Resources - Financing Activities” within this MD&A for discussions of these equity raises that occurred in May 2024 and December 2024.
Removed
In March 2023, we received the Employee Retention Credit (“ERC”) of $1,975,000 that we applied for during the third quarter of 2022 as permitted under the Coronavirus Aid, Relief and Economic Securities Act, as amended (the “CARES Act”). In addition to the $1,975,000, we also received approximately $60,000 in interest (recorded within “Interest Income” on our Consolidated Statements of Operations).
Added
Although we are disappointed with our 2024 financial results, we believe our base business is positioned for improvement and that our results of operations should improve in 2025. We continue to advance a number of initiatives which are discussed within this report on Form 10-K.
Removed
We believe we have sufficient liquidity on hand to continue business operations during the next twelve months.
Added
Some of these initiatives have been realized, with additional initiatives that are expected to be more fully realized in 2025. In December 2024, BWXT Technologies, Inc (“BWXT”) announced that the DOE had awarded BWXT and its team, which we are a member of, the contract for the cleanup operations at the West Valley Development Project in West Valley, NY.
Removed
See a discussion of our liquidity overview within this MD&A – “Liquidity and Capital Resources.” Heading into 2024, we expect to see overall continue steady improvements in waste receipts and increases in project work from certain existing contracts, contracts won in 2023, and bids submitted in both segments that are awaiting awards.
Added
As disclosed by BWXT, the contract has a 10-year ordering period with a maximum value of up to $3 billion that can be performed for up to 15 years. The scope attributable to us has not yet been defined and is subject to certain approvals.
Removed
However, due to our operations which is subject to seasonal factor, we generally experience lower revenue in the first quarter due to overall reduced activities by our customers from the usual slowdown in operations due, in part, from returning from the holiday periods and poorer weather conditions.
Added
The West Valley Project is anticipated to begin transition in the first quarter of 2025 and realize full operations in 120 days from initiation.
Removed
Additionally, due to Congress’s inability to timely approve FY 2024 budget and the extension of the continuing resolution, certain of our government related customers have informed us that waste shipments will likely be delayed.
Added
The scope of work in the initial phases of this contract is being performed predominantly by our partner.
Removed
Although we expect to see overall improvements in revenue in 2024 as disclosed above, if Congress is unable to enact the full FY 2024 appropriation bills or further extend the continuing resolutions to fund government spending by the late March deadline, the U.S. government will enter into a partial shutdown.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+2 added−0 removed2 unchanged
Biggest changeForward-looking statements contained herein relate to, among other things, ● demand for our services; ● partial U.S. government shutdown or additional continued resolution; ● delay waste shipment by government related customers; ● reductions in the level of government funding in future years; ● reducing operating costs and non-essential expenditures; ● ability to meet loan agreement quarterly covenant requirements; ● cash flow requirements; ● receipt of remaining Canadian receivable upon completion of conditions/terms of the settlement agreement in 2024; ● sufficient liquidity to fund operations for the next twelve months; ● revenue under the Italian project; ● future results of operations and liquidity; 30 ● effect of macroeconomic concerns, such as inflation and higher interest rates, on our business; ● manner in which the applicable government will be required to spend funding to remediate various sites; ● finalization of non-binding partnership agreement with Springfields Fuels Limited; ● successful on international bids; ● continued increases in operating costs; ● funding of capital expenditures from cash from operations, collections of unpaid receivables, borrowing availability under our credit facility and/or financing; ● steady improvement in waste shipments and work under projects in 2024; ● funding of remediation expenditures for sites from funds generated internally; ● compliance with environmental regulations; ● potential effect of being a PRP; ● potential violations of environmental laws and attendant remediation at our facilities; and ● our ability to effect increases in the prices of the services we offer.
Biggest changeForward-looking statements contained herein relate to, among other things, ● demand for our services; ● opportunities in Germany; ● reductions in the level of government funding in future years; ● accelerated investments; ● base business is positioned for improvement in 2025; ● results of operations improvement in 2025; ● advancement of initiatives to be further realized in 2025; ● approvals of scope attributable to the Company under the West Valley Development Project contract; ● operations of the West Valley Development Project; ● Low-Level Tank Waste and benefits of supplemental capability; ● reducing operating costs and non-essential expenditures; ● revenues relating to the West Valley Development Project; ● ability to meet loan agreement quarterly financial covenant requirements; ● additional CR impact; ● spending priorities under new Administration; ● passage of the 2025 fiscal year U.S. government budget; ● cash flow requirements; ● sufficient cash flow and Liquidity to fund operations for the next twelve months; ● receipt of international waste shipments in 2025; ● amount of capital expenditures; ● revenue under the Italian project; ● manner in which the applicable government will be required to spend funding to remediate various sites; ● successful on international bids; ● funding of operating and capital expenditures from cash from operations, Liquidity under our Credit Facility, and/or financing; ● our PFAS technology process will exceed current treatment options available; ● receipt of an additional 20,000 AFFF liquid; ● deployment of the second generation unit; ● strategy for our System; ● advancement of our PFAS technology; ● funding of remediation expenditures for sites from funds generated internally; ● compliance with environmental regulations; ● positioning for procurements from DOE and other government agencies; ● potential effect of being a potentially responsible party (“PRP”); ● potential violations of environmental laws and attendant remediation at our facilities; and ● Quarterly financial covenant requirement for the next twelve months.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required under Regulation S-K for smaller reporting companies. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Forward-looking Statements Certain statements contained within this report may be deemed “forward-looking statements” within the meaning of the “Private Securities Litigation Reform Act of 1995”.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required under Regulation S-K for smaller reporting companies. 33 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Forward-looking Statements Certain statements contained within this report may be deemed “forward-looking statements” within the meaning of the “Private Securities Litigation Reform Act of 1995”.
There are a variety of factors which could cause future outcomes to differ materially from those described in this report, including, but not limited to: ● general economic conditions; ● contract bids, including international markets; ● material reduction in revenues; ● inability to meet PNC covenant requirements; ● inability to collect in a timely manner a material amount of receivables; ● increased competitive pressures; ● inability to maintain and obtain required permits and approvals to conduct operations; ● inability to develop new and existing technologies in the conduct of operations; ● inability to maintain and obtain closure and operating insurance requirements; ● inability to retain or renew certain required permits; ● discovery of additional contamination or expanded contamination at any of the sites or facilities leased or owned by us or our subsidiaries which would result in a material increase in remediation expenditures; ● delays at our third-party disposal site can extend collection of our receivables greater than twelve months; ● refusal of third-party disposal sites to accept our waste; ● changes in federal, state and local laws and regulations, especially environmental laws and regulations, or in interpretation of such; ● requirements to obtain permits for TSD activities or licensing requirements to handle low level radioactive materials are limited or lessened; ● management retention and development; ● financial valuation of intangible assets is substantially more/less than expected; ● the need to use internally generated funds for purposes not presently anticipated; ● inability of the Company to maintain the listing of its Common Stock on the NASDAQ; ● terminations of contracts with government agencies or subcontracts involving government agencies or reduction in amount of waste delivered to the Company under the contracts or subcontracts; ● failure of joint venture partner to perform its requirements in connection with the Italian project; ● failure to approve 2024 budget by the U.S. government; ● partial government shutdown; ● Changes in the scope of work relating to existing contracts; ● occurrence of an event similar to COVID-19 having adverse effects on the U.S. and world economics; ● renegotiation of contracts involving government agencies; ● disposal expense accrual could prove to be inadequate in the event the waste requires re-treatment; ● inability to raise capital on commercially reasonable terms; ● inability to increase profitable revenue; ● economic uncertainties; ● new governmental regulations; and ● risk factors contained in Item 1A of this report. 31
There are a variety of factors which could cause future outcomes to differ materially from those described in this report, including, but not limited to: ● general economic conditions and uncertainties; ● contract bids, including international markets; ● our dependence on contracts with federal, state and local governments, agencies, and departments for the majority of our revenue; ● changes in federal government budgeting and spending priorities; ● failure by Congress or other governmental bodies to approve budgets and debt ceiling increases in a timely fashion and related reductions in government spending and/or a government shutdown; ● uncertainties relating to the new presidential administration (the “Administration”) and failure of the Administration to spend Congressionally mandated appropriations, which may result in the failure to realize the full amount of our backlog; ● failure of the Administration and Congress to agree on spending priorities, which may result in temporary shutdowns of non-essential federal functions, including our work to support such functions; ● results of routine and non-routine government audits and investigations, including the unpredictability of the actions of the newly-formed DOGE; ● inability to meet PNC covenant requirements; ● inability to collect in a timely manner a material amount of receivables; ● increased competitive pressures; ● inability to maintain and obtain required permits and approvals to conduct operations; ● inability to develop new and existing technologies in the conduct of operations; ● inability to maintain and obtain closure and operating insurance requirements; ● inability to retain or renew certain required permits; ● discovery of additional contamination or expanded contamination at any of the sites or facilities leased or owned by us or our subsidiaries which would result in a material increase in remediation expenditures; ● delays at our third-party disposal site can extend collection of our receivables greater than twelve months; ● refusal of third-party disposal sites to accept our waste; ● changes in federal, state and local laws and regulations, especially environmental laws and regulations, or in interpretation of such; ● requirements to obtain permits for treatment, storage and disposal (TSD) activities or licensing requirements to handle low level radioactive materials are limited or lessened; ● management retention and development; ● financial valuation of intangible assets is substantially more/less than expected; ● the need to use internally generated funds for purposes not presently anticipated; ● inability of the Company to maintain the listing of its Common Stock on the Nasdaq; ● terminations of contracts with government agencies or subcontracts involving government agencies or reduction in amount of waste delivered to the Company under the contracts or subcontracts; ● failure of our Italian team partner to perform its requirements in connection with the Italian project; ● changes in the scope of work relating to existing contracts; ● occurrence of an event similar to COVID-19 having adverse effects on the U.S. and world economics; ● renegotiation of contracts involving government agencies; ● disposal expense accrual could prove to be inadequate in the event the waste requires re-treatment; ● inability to raise capital on commercially reasonable terms; ● inability to increase profitable revenue; ● risks resulting from expanding our service offerings and client base; ● non-acceptance of our new technology; ● adjustments to our valuation allowance; ● new governmental regulations; and ● risk factors contained in Item 1A of this report.
Added
Our forward-looking statements are based on the beliefs and assumptions of our management and the information available to our management at the time these statements were prepared. Although we believe the expectations reflected in these statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
Added
You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update these forward-looking statements, even if our situation changes in the future. 34

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