# Perma Fix Environmental Services Inc: Form 10-Q for the period ended Mar 31, 2025

- Company: [Perma Fix Environmental Services Inc](/companies/pesi.md) (CIK 891532)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 12:27 ET
- Period: 2025-03-31
- Accession: 0001641172-25-009194
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/891532/000164117225009194/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/891532/000164117225009194/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $13.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $13.3m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $657.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $383.0k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $4.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$3.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $112.0k | us-gaap:InterestExpense |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$3.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.19 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.19 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 18,424,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$2.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $523.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $25.7m | us-gaap:Cash |
| Current assets | at 2025-03-31 | $45.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $92.9m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $20.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $33.7m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $1.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $541.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $59.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,287 characters.

### 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.” All statements in this report other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors, which could cause actual results and performance of the Company to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “intend,” “will,” and similar expressions identify forward-looking statements. Forward-looking statements contained herein relate to, among other things,

- demand for our services;
- reductions in the level of government funding in future years;
- improvements in waste receipts and procurements;
- accelerated investments;
- growth in remainder of 2025;
- revenue contribution from the West Valley Development Project in the second half of 2025;
- approvals of scope attributable to the Company under the West Valley Development Project contract;
- operations of the West Valley Development Project;
- DFLAW begin operations in the third quarter of 2025;
- reducing operating costs and non-essential expenditures;
- ability to meet loan agreement financial covenant requirements;
- additional CR impact;
- spending priorities under new Administration;
- cash flow requirements for the next twelve months;
- sufficient cash flow and Liquidity to fund operations for the next twelve months;
- reduction in Liquidity;
- international initiatives;
- amount of capital expenditures;
- 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 Loan Agreement, and/or financing;
- our PFAS technology process will exceed current treatment options available;
- receipt of an additional 50,000 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;
- potential effect of being a potentially responsible party (“PRP”); and
- potential violations of environmental laws and attendant remediation at our facilities.

While the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance such expectations will prove to be correct. 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;
- inability to properly bid contracts;
- reduction in or inability to obtain new contracts with federal, state and local governments, agencies and departments, resulting in a reduction in 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;
- 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;

22

- results of routine and non-routine government audits and investigations, including the unpredictability of the actions of the newly-formed Department of Government Efficiency (“DOGE”);
- tariff actions and uncertainties related to trade wars;
- 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;
- 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;
- 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;
- new or additional requirements to handle low-level radioactive and hazardous waste materials;
- 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 or termination 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 and other factors set forth in “Special Note Regarding Forward-Looking Statements” contained in the Company’s 2024 Form 10-K and the “Forward-Looking Statements” contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) of this first quarter 2025 10-Q.

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. You should not place undue reliance on the forward-looking statements as noted above, which apply only to as of the date of this Form 10-Q. We undertake no obligation to update these forward-looking statements, even if our situation changes in the future.

### Overview

We were disappointed with our overall financial result for the first quarter of 2025 which were impacted by a number of factors which included the following, among other things:

- usual seasonal slowdown in overall operations by customers due to winter weather and holiday returns which contributed to project and waste shipment delays;
- delays in procurements and large waste shipments from certain customers due to temporary suspension mandates as directed by the new Administration transition team;
- implementation of operational readiness to support receipts of a certain specific waste stream that are expected to continue for at least the remainder of 2025. The processing of this waste stream required hiring of additional staff, associated training and start-up costs. In late March, we began to accelerate processing of this waste stream backlog; and
- continued aggressive approach to development of our PFAS (Per- and polyfluoroalkyl) technology which included increased spending in research and development (“R&D”), sales and marketing and capital expenditures.

The majority of these factors had limited duration effects as we began seeing improvement in waste receipts starting in the latter part of the first quarter of 2025 which is reflected in our strengthened waste backlog of approximately $10,237,000 as of March 31, 2025, an increase of approximately $2,378,000 or approximately 30.3%, from $7,859,000 as of December 31, 2024. We have also begun to see improvements in procurement actions within the government arena. We believe the continuing increase in waste receipts, combined with improving project visibility, should position us for a return to growth in the remainder of 2025.

In December 2024, BWXT Technologies and its team, of which we are a member, were awarded the West Valley Project contract for the cleanup operations at the West Valley Development Project in West Valley, New York. 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. We expect revenue contribution from this project in the second half of 2025 as our scope under the contract is further defined, approved and transitions into operation. Additionally, we are optimistic that the Direct-Feed Low-Activity Waste (“DFLAW”) program at Hanford, Washington remains on track to begin initial tank waste treatment operations in the third quarter of 2025 which our Perma-Fix Northwest, Richland facility is well-positioned to support. We continue to focus on increasing our expansion into the international markets.

We are continually monitoring our operating costs in order to align with our revenue level.

See “Federal Funding” and “Market Trends and Uncertainties” in “Known Trends and Uncertainties” within this MD&A for a discussion of factors that could negatively impact our results of operations for the remainder of 2025.

Revenue for the first quarter of 2025 increased by approximately $302,000 or approximately 2.2% to $13,919,000 for the first quarter of 2025 from $13,617,000 for the first quarter of 2024. The increase was attributed entirely to our Treatment Segment where revenue increased to $9,186,000 for the first quarter of 2025 from $8,709,000 for the first quarter of 2024, an increase of approximately $477,000 or 5.5%. Services Segment revenue decreased by approximately $175,000 or 3.6% to $4,733,000 for the first quarter of 2025 from $4,908,000 for the first quarter of 2024. Overall gross profit increased by approximately $1,277,000 or 206.0% for the first quarter of 2025 as compared to the corresponding period of 2024. Selling, General, and Administrative (“SG&A”) expenses increased by $471,000 or 13.3% for the three months ended March 31, 2025, as compared to the corresponding period of 2024 (see below “Results of Operations” for further discussions of our financial results).

### 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. 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 the potential impact from the Continuing Resolution enacted by Congress through the next fiscal federal government budget. In addition, our governmental contracts and subcontracts relating to activities at federal governmental sites are generally subject to termination for convenience at any time, at the government’s option. 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.

### Results of Operations

The reporting of financial results and pertinent discussions are tailored to our two reportable segments: The Treatment and Services.

### Summary – Three Months Ended March 31, 2025 and 2024

|  | Three Months Ended March 31, |  |
| --- | ---: | ---: |
| Consolidated (amounts in thousands) | 2025% | 2024% |
| Revenues | $13,919 100.0 | $13,617 100.0 |
| Cost of good sold | 13,262 95.3 | 14,237 104.6 |
| Gross profit (loss) | 657 4.7 | (620) (4.6) |
| Selling, general and administrative | 4,015 28.8 | 3,544 26.0 |
| Gain on disposal of property and equipment | (5) — | — — |
| Research and development | 383 2.7 | 296 2.2 |
| Loss from operations | $(3,736) (26.8) | $(4,460) (32.8) |
| Interest income | 335 2.4 | 174 1.3 |
| Interest expense | (112) (.8) | (116) (.8) |
| Interest expense-financing fees | (20) (.1) | (13) (.1) |
| Other | 33 .2 | 1 — |
| Loss from continuing operations before taxes | (3,500) (25.1) | (4,414) (32.4) |
| Income tax benefit | — — | (956) (7.0) |
| Loss from continuing operations | $(3,500) (25.1) | $(3,458) (25.4) |

Revenues

Consolidated revenues increased $302,000 for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, as follows:

*(In thousands)*

| Treatment | 2025 | % Revenue | 2024 | % Revenue | Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Government waste | $7,017 | 50.4 | $5,133 | 37.7 | $1,884 | 36.7 |
| Hazardous/non-hazardous (1) | 1,067 | 7.7 | 1,337 | 9.8 | (270) | (20.2) |
| Other nuclear waste | 1,102 | 7.9 | 2,239 | 16.5 | (1,137) | (50.8) |
| Total | 9,186 | 66.0 | 8,709 | 64.0 | 477 | 5.5 |
| Services |  |  |  |  |  |  |
| Nuclear services | 3,375 | 24.2 | 4,569 | 33.5 | (1,194) | (26.1) |
| Technical services | 1,358 | 9.8 | 339 | 2.5 | 1,019 | 300.6 |
| Total | 4,733 | 34.0 | 4,908 | 36.0 | (175) | (3.6) |
| Total | $13,919 | 100.0 | $13,617 | 100.0 | $302 | 2.2 |

(1) Includes wastes generated by government clients of $440,000 and $628,000 for the three months ended March 31, 2025, and the corresponding period of 2024, respectively.

Treatment Segment revenue increased by $477,000 or 5.5% for the three months ended March 31, 2025, over the same period in 2024. The overall increase in revenue generated from government clients was primarily due to higher waste volume, partially offset by lower averaged price from waste mix. Revenue generated from government clients included approximately $2,207,000 in revenue generated from foreign waste receipts as the Company remains focused on its international initiatives. The decrease in other nuclear waste was primarily due to lower waste volume, partially offset by higher averaged price from waste mix. The decrease in revenue in the Services Segment was due to lack of projects due in part, to delay in procurement action resulting from the new Administration transition as previously discussed in the “Overview” section. Additionally, our Services Segment revenues are project based; as such, the scope, duration, and completion of each project vary.

#### Cost of Goods Sold

Cost of goods sold decreased $975,000 for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, as follows:

*(In thousands)*

|  | 2025 | %% Revenue | 2024 | Revenue | Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| Treatment | $8,936 | 97.3 | $8,761 | 100.6 | $175 |
| Services | 4,326 | 91.4 | 5,476 | 111.6 | (1,150) |
| Total | $13,262 | 95.3 | $14,237 | 104.6 | $(975) |

Cost of goods sold for the Treatment Segment increased by approximately $175,000 or 2.0%. Treatment Segment’s variable costs decreased by approximately $368,000 primarily due to lower disposal costs, partially offset by higher material and transportation costs. Treatment Segment’s overall fixed costs were higher by approximately $543,000 resulting from the following: salaries and payroll related expenses were higher by $556,000 due to higher headcount, attributed partly to the hiring of additional staff in connection with a certain waste stream as discussed in the “Overview” above. Also, salaries and payroll related expenses were higher in the first quarter of 2025 as more employees took vacation time in the first quarter of 2024 resulting in more hours charged to vacation accrual account; general expenses were higher by $113,000 primarily due to higher utility costs; maintenance expenses were higher by approximately $14,000; and regulatory expenses were lower by approximately $140,000. Services Segment cost of goods sold decreased by $1,150,000 or 21.0%. The decrease in cost of goods sold was primarily due to lower salaries/payroll related, outside services, and travel costs totaling approximately $1,513,000; lower general expenses by approximately $78,000 in various categories; and higher overall material and supplies, disposal, lab and regulatory expenses totaling approximately $441,000. The overall decrease in cost of goods sold within the Services Segment was attributed partly to cost cutting initiatives that we implemented in order to align expenses with revenue backlog. Additionally, cost of goods sold within our Services Segment are subject to variability as projects are competitively bid on. Included within cost of goods sold is depreciation and amortization expense of $421,000 and $404,000 for the three months ended March 31, 2025, and 2024, respectively.

#### Gross profit (loss)

Gross profit increased $1,277,000 for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, as follows:

*(In thousands)*

|  | 2025 | %% Revenue | 2024 | Revenue | Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| Treatment | $250 | 2.7 | $(52) | (0.6) | $302 |
| Services | 407 | 8.6 | (568) | (11.6) | 975 |
| Total | $657 | 4.7 | $(620) | (4.6) | $1,277 |

Treatment Segment gross profit increased by $302,000 or approximately 580.8% and gross margin increased to 2.7% from (0.6)% primarily due higher revenue from overall higher waste volume, partially offset by overall lower averaged price from waste mix. The increase in fixed costs negatively impacted gross margin. Services Segment gross profit increased by $975,000 or 171.7% and gross margin increased to 8.6% from (11.6)%. The increase was attributed partly to cost cutting initiatives that we implemented within our Service Segment to align expenses with its revenue backlog as procurement cycles stabilize. Additionally, our overall Services Segment gross margin is impacted by our current projects which are competitively bid on and will therefore, have varying margin structures.

#### SG&A

SG&A expenses increased $471,000 for the three months ended March 31, 2025, as compared to the corresponding period for 2024, as follows:

*(In thousands)*

|  | 2025 | % Revenue | 2024 | % Revenue | Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| Administrative | $1,923 | — | $1,687 | — | $236 |
| Treatment | 1,356 | 14.8 | 1,065 | 12.2 | 291 |
| Services | 736 | 15.6 | 792 | 16.1 | (56) |
| Total | $4,015 | 28.8 | $3,544 | 26.0 | $471 |

Administrative SG&A expenses were higher primarily due to higher salaries, payroll related expenses and stock option compensation expenses totaling approximately $98,000. The hiring of the Company’s new COO in January 2025 contributed to this increase. Additionally, salaries and payroll related expenses were higher in the first quarter of 2025 as more employees took vacation time in the first quarter of 2024 resulting in more hours charged to vacation accrual account. Administrative Travel expenses were also higher by approximately $12,000 due trips made to the Company’s various facilities by the new COO. The remaining higher expenses in Administrative SG&A expenses were primarily due to higher outside services expenses by approximately $126,000 from more legal and consulting matters. Treatment Segment SG&A expenses were higher primarily due to higher salaries and payroll related expenses of approximately $204,000 as more employee hours were allocated to marketing initiatives of our new PFAS technology. Treatment Segment general expenses were also higher by approximately $87,000 primarily due to higher trade show expenses and higher expenses in various other categories. The decrease in Services Segment SG&A was primarily due to lower salaries and payroll related expenses totaling approximately $117,000, which was partially offset by higher general expenses of approximately $26,000 in various categories, higher travel expenses of approximately $9,000 and higher outside services expenses of approximately $26,000. Included in SG&A expenses is depreciation and amortization expense of $15,000 and $27,000 for the three months ended March 31, 2025, and 2024, respectively.

#### R&D

R&D expenses increased by approximately $87,000 in the first quarter of 2025 as compared to the corresponding period of 2024 primarily due to expenses incurred for our PFAS technology (see “Known Trends and Uncertainties – New Processing Technology” within this MD&A for a discussion of this technology).

#### Interest Income

Interest income increased by approximately $161,000 in the first quarter of 2025 as compared to the corresponding period of 2024 primarily due to interest income earned from funds deposited into our money market deposit account (“MMDA”) from the two equity raises that were completed in May 2024 and December 2024.

#### Income Taxes

We had income tax expense of $0 and income tax benefit of approximately $956,000 for continuing operations for the three months ended March 31, 2025, and 2024, respectively. Our effective tax rate was approximately 0% and 21.7% for the three months ended March 31, 2025, and 2024, respectively. Our effective tax rate for the three months ended March 31, 2025, was impacted by our recognition of a full valuation allowance against our U.S federal and state deferred tax assets in the quarter ended September 30, 2024. Our effective tax rate for the three months ended March 31, 2024, was impacted by non-deductible expenses and state taxes.

### Liquidity and Capital Resources

Our cash flow requirements during the three months ended March 31, 2025, were primarily financed by our Liquidity (defined under our Loan Agreement as borrowing availability under the revolving credit plus cash in our MMDA maintained with our lender). 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). We plan to fund these requirements from our operations and our Liquidity. 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. As of March 31, 2025, we had no outstanding borrowing under our revolving credit and our Liquidity was approximately $29,277,000. We believe that our cash flows from operations and our Liquidity should be sufficient to fund our operations for the next twelve months. Although we believe our operations should improve in the remainder of 2025, if we continue to incur losses such as in the first quarter of 2025, this could cause a reduction in our Liquidity.

The following table reflects the cash flow activities during the first three months of 2025 and 2024:

*(In thousands)*

|  | Three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Cash used in operating activities of continuing operations | $(2,048) | $(4,358) |
| Cash used in operating activities of discontinued operations | (56) | (159) |
| Cash used in investing activities of continuing operations | (571) | (318) |
| Cash used in investing activities of discontinued operations | (15) | — |
| Cash used in financing activities of continuing operations | (396) | (125) |
| Effect of exchange rate on cash | — | (18) |
| Decrease in cash and finite risk sinking fund (restricted cash) | $(3,086) | $(4,978) |

As of March 31, 2025, we were in a positive cash position with no revolving credit balance. As of March 31, 2025, we had cash on hand of approximately $25,745,000.

### Operating Activities

Cash used in operating activities of our continuing operations during the first quarter of 2025 consisted mostly of the significant net loss that we incurred of approximately $3,500,000, adjusted for certain non-cash items, such as $196,000 of stock-based compensation expenses and $436,000 of depreciation and amortization expenses. Cash flow increase of approximately $668,000 resulting from net change in assets and liabilities included a decrease in accounts receivable (net of provision for credit losses) of $2,248,000 and a decrease in deferred revenue of approximately $830,000. Our accounts receivables are impacted by timing of invoicing and collections. Our contracts with our customers are subject to various payment terms and conditions.

Cash used in operating activities of our continuing operations during the first quarter of 2024 consisted primarily of the significant net loss that we incurred of approximately $3,458,000, adjusted for certain non-cash items, which included $152,000 of stock-based compensation expenses, $431,000 of depreciation and amortization expense and deferred income tax benefit of $956,000. Cash flow decrease of approximately $646,000 resulting from net change in assets and liabilities included a decrease in accounts payables of approximately $1,603,000 and a decrease in accounts receivable (net of recovery of credit losses) of $1,032,000. Our accounts payable are impacted by the timing of our payments as we are continually managing payment terms with our vendors to maximize our cash position.

Cash used in operating activities of our discontinued operations in the first quarter of 2025 and 2024 consisted primarily of expenses incurred in connection with management and administration of regulatory matters for the Company’s remediation projects. Cash used in operating activities of our discontinued operations in the first quarter of 2025 was reduced by monthly rent payments of approximately $8,800, received from a tenant under a leasing agreement entered into on June 1, 2024, by our PFSG subsidiary, leasing a portion of the PFSG property.

We had working capital of $24,632,000 (which included working capital of our discontinued operations) as of March 31, 2025, as compared to working capital of $28,283,000 as of December 31, 2024. The decrease in our working capital was primarily due to the significant losses incurred from our operations as previously discussed.

### Investing Activities

Cash used in investing activities of our continuing operations in the first quarter of 2025 consisted mostly of our purchases of property and equipment totaling approximately $655,000, of which $132,000 was financed. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating permits and certain intangible assets.

Cash used in investing activities of our discontinued operations in the first quarter of 2025 consisted of payments made in connection with a certain regulatory permit at our PFSG subsidiary.

Cash used in investing activities of our continuing operations in the first quarter of 2024 consisted mostly of our purchases of property and equipment totaling approximately $288,000, of which $44,000 was financed. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating permits and certain intangible assets.

The increase in our purchases of property and equipment in 2025 as compared to 2024 was primarily due to capital expenditures made in connection with our PFAS technology which included the installation of our first unit in addition to upgrades made to the unit.

#### Capital Expenditures

We anticipate making capital expenditures of approximately $2,000,000 to $5,500,000 in 2025 to maintain operations and regulatory compliance requirements and support revenue growth. Our anticipated capital expenditures for 2025 include certain strategic project initiatives which include the installation of our second generation unit for our PFAS technology. We plan to fund our capital expenditures for 2025 from cash from operations, Liquidity and/or financing. The initiation and timing of our capital expenditures in 2025 are subject to a number of factors which include, among other things, cost/benefit analysis, the pace of our strategic project initiatives and improvement in our operations.

### Financing Activities

Our cash used in financing during the first quarter of 2025 consisted mostly of principal payments of approximately $157,000 primarily for our Term and Capital Loans under our Credit Facility (see below for a discussion of our Credit Facility) principal payments of $71,000 for our finance leases, payments of $194,000 of offering costs from the equity raise that we completed in December 2024, partially offset by proceeds received from option exercises of approximately $41,000.

Our cash used in financing during the first quarter of 2024 consisted mostly of principal payments of approximately $259,000 for our Term and Capital Loans under our Credit Facility principal payments of $75,000 for our finance leases, partially offset by proceeds received from option and warrant exercises of approximately $209,000.

#### 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, with PNC National Association (“PNC” and “lender”), acting as agent and lender (the “Loan Agreement”). The Loan Agreement provides us with a credit facility with a maturity date of May 15, 2027 (the “Credit Facility”) which consists of the following as of March 31, 2025: (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 March 31, 2025) and borrowing reductions that our lender may impose from time to time ($750,000 as of March 31, 2025); (b) a term loan (“Term Loan”) of $2,500,000, requiring monthly installments of $41,667; and (c) a capital expenditure loan (“Capital Loan”) of approximately $524,000, requiring monthly installments of principal of approximately $8,700 plus interest.

On March 11, 2025, we entered into an amendment to our Loan Agreement with our lender which provided the following, among other things:

- removed the quarterly fixed charge coverage ratio (“FCCR”) covenant testing requirement utilizing a twelve-month trailing basis; however, such FCCR testing requirement will be triggered on the day we fail to meet a minimum of $5,000,000 in daily Liquidity. If triggered, we will be required to show compliance of an FCCR ratio of not less than 1.15 to 1.00 utilizing a trailing twelve-month-period ended starting with the most recently reported fiscal quarter and each fiscal quarter thereafter. The FCCR testing requirement can be removed again once we are able to achieve a minimum of $5,000,000 in daily Liquidity for a thirty-consecutive-day period from the trigger date;
- revised the Facility Fee (as defined) from .375% to .500%. Such fee percentage will revert back to .375% at such time that we are able to achieve a minimum 1.15 to 1.00 ratio in FCCR on a twelve-month trailing basis; and
- required payment of an amendment fee of $12,500 by the Company, which is being amortized over the remaining term of the Loan Agreement as interest expense-financing fees.

Our Loan Agreement, as amended, with PNC, contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, unless waived by PNC, could result in a default under our Loan Agreement allowing our lender to immediately require the repayment of all outstanding debt under our Loan Agreement and terminate all commitments to extend further credit. We met all of our financial covenant requirements in the first quarter of 2025. We expect to meet our covenant requirements under our Loan Agreement for the next twelve months.

### 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 March 31, 2025, the total amount of standby letters of credit outstanding totaled approximately $3,200,000 and the total amount of bonds outstanding totaled approximately $21,481,000. We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through AIG. As of March 31, 2025, the closure and post-closure requirements for these facilities were approximately $23,949,000.

### Critical Accounting Policies and Estimates

There were no significant changes in our accounting policies or critical accounting estimates that are discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Recent Accounting Pronouncements

See “Note 2 – Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” for the recent accounting pronouncement that was adopted in the first quarter of 2025 and recent accounting pronouncements that will be adopted in future periods.

### Known Trends and Uncertainties

*Significant Customers*. The contracts that we are a party to with others as subcontractors to the 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. Our inability to continue under existing contracts that we have with the federal 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. We performed services relating to waste generated by federal government clients, either indirectly as a subcontractor or directly as a prime contractor to federal government entities, representing approximately $8,404,00 or 60.4% of our total revenue during the three months ended March 31, 2025, as compared to $9,373,000 or 68.8% of our total revenue during the corresponding period of 2024.

*Federal Funding.* On March 15, 2025, the President signed a full-year Continuing Resolution (“CR”) that provides funding to federal government agencies through the rest of the fiscal year which ends September 30, 2025. Under the enactment of the CR, federal government entities continue to operate at the 2024 fiscal year budget approved level. As discussed above, a significant portion of our revenue is generated through contracts entered into indirectly as subcontractors for others who are prime contractors or directly as the prime contractor to federal government authorities. We have, in the past experienced delays in waste shipments and projects from certain federal government related customers resulting from numerous factors, including, but not limited to, impact of CR. Additionally, the mission to slash federal spending by the Department of Government Efficiency (“DOGE”) continues to contribute uncertainties in federal agencies from which we obtain, directly, or indirectly, government contracts. These aforementioned factors, among others, continue to create uncertainties in federal government spendings that 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.

*Market Trends and Uncertainties.* Macroeconomic conditions which include recent government and policy changes implemented in the United States, tariff actions and uncertainties related to trade wars, ambiguity around interest rates, softening labor markets, have created significant uncertainty in the global economy, volatility in the capital markets and recessionary pressures. We continue to monitor potential effects from these conditions that could impact our revenue and profitability which include supply chain challenges, cost volatility in goods that we utilize in our revenue production, and economic pressures on our customers that may result in reduced spending. While we have experienced limited impact from these conditions at this time, we continue to evaluate and implement a range of strategic options to manage potential impacts from these factors, including supply chain optimization, pricing strategies, sourcing adjustments and cost reduction measures in order to minimize impacts to our financial results.

*New Processing Technology.* We have 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. PFAS, commonly known as “forever chemicals,” is the acronym for Perfluoroalkyl and Polyfluoroalkyl Substances, a diverse group of thousands of human-made chemical pollutants that have the potential to persist in both the environment and the human body. 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. Commercial destruction of PFAS offers a promising new source of revenue for us, as it complements our core waste remediation technologies, and we 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. 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. We have already secured and are treating approximately 10,000 gallons of AFFF liquids to support ongoing operations, demonstration, and further testing of our System. We believe that we will receive an additional 50,000 gallons in the coming months.

Our strategy for our System includes continued treatment of PFAS liquids over the coming months and targeting engineering refinements to support larger-scale Systems. With significant upgrades to our prototype currently in the design phase, we anticipate deployment of the second generation unit in the fourth quarter of 2025 at one of our other existing treatment facilities. 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.

### Environmental Contingencies

We are engaged in the waste management services segment of the pollution control industry. As a participant in the on-site treatment, storage and disposal market and the off-site treatment and services market, we are subject to rigorous federal, state and local regulations. These regulations mandate strict compliance and therefore are a cost and concern to us. Because of their integral role in providing quality environmental services, we make every reasonable attempt to maintain complete compliance with these regulations; however, even with a diligent commitment, we, along with many of our competitors, may be required to pay fines for violations or investigate and potentially remediate our waste management facilities.

We routinely use third party disposal companies, who ultimately destroy, or secure landfill residual materials generated at our facilities or at a client’s site. In the past, numerous third-party disposal sites have improperly managed waste and consequently require remedial action; consequently, any party utilizing these sites may be liable for some or all of the remedial costs. Despite our aggressive compliance and auditing procedures for disposal of wastes, we could further be notified, in the future, that we are a potentially responsible party (“PRP”) at a remedial action site, which could have a material adverse effect.

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 expect to fund the expenses to remediate these sites from funds generated from operations. As of March 31, 2025, we had total accrued environmental remediation liabilities of $767,000, no change from the December 31, 2024 balance of $767,000. As of March 31, 2025, the total balance of the accrued environmental remediation liabilities was recorded as long-term.

## Market risk

As filed, 1,428 characters.

Not required for smaller reporting companies.

| Item 4. | Controls and Procedures |
| --- | --- |
| (a) | Evaluation of disclosure controls, and procedures. |
|  | We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management. As of the end of the period covered by this report, we conducted an evaluation with the participation of our Principal Executive Officer and Principal Financial Officer. Based on this recent assessment, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) were effective as of March 31, 2025. |
| (b) | Changes in internal control over financial reporting |
|  | There was no other change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. |

## Risk factors

As filed, 137 characters.

There has been no other material change from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2024.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-009194. Last ingested by Listed: Nov 5, 2026, 13:52 ET. No prices; not investment advice.