UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ______________________ to ______________________

Commission File No.

001-11596

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware		58-1954497
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

8302 Dunwoody Place, Suite 250, Atlanta, GA		30350
(Address of principal executive offices)		(Zip Code)

(770) 587-9898

(Registrant’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.001 Par Value		PESI		Nasdaq Capital Markets

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the close of the latest practical date.

Class

Outstanding at July 30, 2024

Common Stock, $.001 Par Value

15,800,604 shares

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

INDEX

			Page No.
PART I	FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets -June 30, 2024 and December 31, 2023	1
		Condensed Consolidated Statements of Operations -Three and Six Months Ended June 30, 2024 and 2023	3
		Condensed Consolidated Statements of Comprehensive (Loss) Income -Three and Six Months Ended June 30, 2024 and 2023	4
		Condensed Consolidated Statements of Stockholders’ Equity -Six Months Ended June 30, 2024 and 2023	5
		Condensed Consolidated Statements of Cash Flows -Six Months Ended June 30, 2024 and 2023	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4.	Controls and Procedures	34

PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	34
	Item 1A.	Risk Factors	34
	Item 6.	Exhibits	35

PART I - FINANCIAL INFORMATION

Item 1. – Financial Statements

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Condensed Consolidated Balance Sheets


	June 30,
	2024			December 31,
(Amounts in Thousands, Except for Share and Per Share Amounts)	(Unaudited)			2023

ASSETS
Current assets:
Cash	$	18,122		$	7,500
Accounts receivable, net of allowance for credit losses of $19 and $30, respectively		6,423			9,722
Unbilled receivables		7,076			8,432
Inventories		965			1,155
Prepaid and other assets		2,860			3,738
Current assets related to discontinued operations		5			13
Total current assets		35,451			30,560

Property and equipment:
Buildings and land		24,319			24,311
Equipment		23,293			22,809
Vehicles		434			434
Leasehold improvements		8			8
Office furniture and equipment		1,138			1,130
Construction-in-progress		1,201			1,010
Total property and equipment		50,393			49,702
Less accumulated depreciation		(31,314	)		(30,693	)
Net property and equipment		19,079			19,009

Property and equipment related to discontinued operations		130			81

Operating lease right-of-use assets		2,278			1,990

Intangibles and other long term assets:
Permits		10,391			9,905
Other intangible assets - net		436			461
Finite risk sinking fund (restricted cash)		12,372			12,074
Deferred tax assets		6,495			4,299
Other assets		339			370
Total assets	$	86,971		$	78,749

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Condensed Consolidated Balance Sheets, Continued

	June 30,
	2024			December 31,
(Amounts in Thousands, Except for Share and per Share Amounts)	(Unaudited)			2023

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,111		$	9,582
Accrued expenses		4,207			6,560
Disposal/transportation accrual		1,926			1,198
Deferred revenue		5,818			6,815
Accrued closure costs - current		20			79
Current portion of long-term debt		546			773
Current portion of operating lease liabilities		378			380
Current portion of finance lease liabilities		286			291
Current liabilities related to discontinued operations		376			269
Total current liabilities		22,668			25,947

Accrued closure costs		8,111			8,051
Long-term debt, less current portion		1,695			1,975
Long-term operating lease liabilities, less current portion		1,956			1,670
Long-term finance lease liabilities, less current portion		636			776
Long-term liabilities related to discontinued operations		940			953
Total long-term liabilities		13,338			13,425

Total liabilities		36,006			39,372

Commitments and Contingencies (Note 9 )		-			-

Stockholders’ Equity:
Preferred Stock, $.001 par value; 2,000,000 shares authorized, no shares issued and outstanding		—			—
Common Stock, $.001 par value; 30,000,000 shares authorized; 15,796,028 and 13,654,201 shares issued, respectively; 15,788,386 and 13,646,559 shares outstanding, respectively		16			14
Additional paid-in capital		135,686			116,502
Accumulated deficit		(84,462	)		(76,951	)
Accumulated other comprehensive loss		(187	)		(100	)
Less Common Stock in treasury, at cost; 7,642 shares		(88	)		(88	)
Total stockholders’ equity		50,965			39,377

Total liabilities and stockholders’ equity	$	86,971		$	78,749

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in Thousands, Except for Per Share Amounts)	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Amounts in Thousands, Except for Per Share Amounts)	2024			2023			2024			2023

Net revenues	$	13,986		$	25,032		$	27,603		$	45,139
Cost of goods sold		15,292			20,516			29,529			37,614
Gross (loss) profit		(1,306	)		4,516			(1,926	)		7,525

Selling, general and administrative expenses		3,455			3,551			6,999			7,036
Research and development		273			121			569			220
Loss on disposal of property and equipment		1			—			1			—
(Loss) income from operations		(5,035	)		844			(9,495	)		269

Other income (expense):
Interest income		213			172			387			298
Interest expense		(109	)		(47	)		(225	)		(100	)
Interest expense-financing fees		(16	)		(24	)		(29	)		(44	)
Other		1			6			2			7
(Loss) income from continuing operations before taxes		(4,946	)		951			(9,360	)		430
Income tax (benefit) expense		(1,161	)		432			(2,117	)		228
(Loss) income from continuing operations, net of taxes		(3,785	)		519			(7,243	)		202

Loss from discontinued operations, net of taxes (Note 10)		(166	)		(45	)		(268	)		(139	)
Net (loss) income	$	(3,951	)	$	474		$	(7,511	)	$	63

Net (loss) income per common share - basic:
Continuing operations	$	(.26	)	$	.04		$	(.51	)	$	.01
Discontinued operations		(.01	)		—			(.02	)		(.01	)
Net (loss) income per common share	$	(.27	)	$	.04		$	(.53	)	$	—

Net (loss) income per common share - diluted:
Continuing operations	$	(.26	)	$	.03		$	(.51	)	$	.01
Discontinued operations		(.01	)		—			(.02	)		(.01	)
Net (loss) income per common share	$	(.27	)	$	.03		$	(.53	)	$	—

Number of common shares used in computing net (loss) income per share:
Basic		14,593			13,474			14,134			13,417
Diluted		14,593			13,848			14,134			13,657

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

(Amounts in Thousands)	2024			2023		2024			2023
	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Amounts in Thousands)	2024			2023		2024			2023

Net (loss) income	$	(3,951	)	$	474	$	(7,511	)	$	63
Other comprehensive (loss) income:
Foreign currency translation (loss) gain		(31	)		46		(87	)		53
Total other comprehensive (loss) income		(31	)		46		(87	)		53

Comprehensive (loss) income	$	(3,982	)	$	520	$	(7,598	)	$	116

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(Amounts in thousands, except for share amounts)

	Shares		Amount		Capital		In Treasury			Loss			Deficit			Equity
	Common Stock				Additional Paid-In		Common Stock Held			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		In Treasury			Loss			Deficit			Equity
Balance at December 31, 2023		13,654,201	$	14	$	116,502	$	(88	)	$	(100	)	$	(76,951	)	$	39,377
Net loss		—		—		—		—			—			(3,560	)		(3,560	)
Foreign currency translation		—		—		—		—			(56	)		—			(56	)
Issuance of Common Stock for services		14,963		—		118		—			—			—			118
Issuance of Common Stock upon exercise of options		31,416		—		104		—			—			—			104
Issuance of Common Stock upon exercise of warrant		30,000		—		105		—			—			—			105
Stock-Based Compensation		—		—		152		—			—			—			152
Balance at March 31, 2024		13,730,580	$	14	$	116,981	$	(88	)	$	(156	)	$	(80,511	)	$	36,240
Net loss		—		—		—		—			—			(3,951	)		(3,951	)
Foreign currency translation		—		—		—		—			(31	)		—			(31	)
Issuance of Common Stock for services		9,965		—		120		—			—			—			120
Issuance of Common Stock upon exercise of options		4,201		—		9		—			—			—			9
Sale of Common Stock, net of offering costs (Note 14)		2,051,282		2		18,113		—			—			—			18,115
Issuance of warrants from sale of Common Stock (Note 14)		—		—		331		—			—			—			331
Stock-Based Compensation		—		—		132		—									132
Balance at June 30, 2024		15,796,028	$	16	$	135,686	$	(88	)	$	(187	)	$	(84,462	)	$	50,965

Balance at December 31, 2022		13,332,398	$	13	$	115,209	$	(88	)	$	(165	)	$	(77,436	)	$	37,533
Net loss		—		—		—		—			—			(411	)		(411	)
Foreign currency translation		—		—		—		—			7			—			7
Issuance of Common Stock for services		33,319		—		118		—			—			—			118
Issuance of Common Stock upon exercise of options		31,719		—		7		—			—			—			7
Stock-Based Compensation		—		—		118		—			—			—			118
Balance at March 31, 2023		13,397,436	$	13	$	115,452	$	(88	)	$	(158	)	$	(77,847	)	$	37,372
Net income		—		—		—		—			—			474			474
Net income (loss)		—		—		—		—			—			474			474
Foreign currency translation		—		—		—		—			46			—			46
Issuance of Common Stock for services		10,171		—		119		—			—			—			119
Issuance of Common Stock upon exercise of options		155,136		1		93		—			—			—			94
Stock-Based Compensation		—		—		125		—			—			—			125
Balance at June 30, 2023		13,562,743	$	14	$	115,789	$	(88	)	$	(112	)	$	(77,373	)	$	38,230

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in Thousands)	2024			2023
	Six Months Ended
	June 30,
(Amounts in Thousands)	2024			2023
Cash flows from operating activities:
Net (loss) income	$	(7,511	)	$	63
Less: loss from discontinued operations, net of taxes (Note 10)		(268	)		(139	)

(Loss) income from continuing operations, net of taxes		(7,243	)		202
Adjustments to reconcile (loss) income from continuing operations to cash (used in) provided by operating activities:
Depreciation and amortization		862			1,439
Amortization of debt issuance costs		29			43
Deferred tax (benefit) expense		(2,117	)		228
(Recovery of) provision for credit losses on accounts receivable		(12	)		24
Loss on disposal of property and equipment		1			—
Issuance of common stock for services		238			237
Stock-based compensation		284			243
Changes in operating assets and liabilities of continuing operations
Accounts receivable		3,311			(2,590	)
Unbilled receivables		1,356			(1,059	)
Prepaid expenses, inventories and other assets		1,168			3,160
Accounts payable, accrued expenses and unearned revenue		(3,949	)		2,835
Cash (used in) provided by continuing operations		(6,072	)		4,762
Cash used in discontinued operations		(245	)		(336	)
Cash (used in) provided by operating activities		(6,317	)		4,426

Cash flows from investing activities:
Purchases of property and equipment, net of financed amount		(841	)		(1,047	)
Proceeds from sale of property and equipment		1			—
Cash used in continuing operations		(840	)		(1,047	)
Cash used in discontinued operations		(49	)		—
Cash used in investing activities		(889	)		(1,047	)

Cash flows from financing activities:
Repayments of revolving credit borrowings		(56,393	)		(44,130	)
Borrowing on revolving credit		56,393			44,130
Proceeds from issuance of Common Stock upon exercise of options/warrant		218			101
Proceeds from sale of Common Stock, net of offering costs paid (Note 14)		18,636			—
Principal repayments of finance lease liabilities		(146	)		(81	)
Principal repayments of long term debt		(520	)		(273	)
Payment of debt issuance costs		(61	)		(37	)
Cash provided by (used in) financing activities of continuing operations		18,127			(290	)

Effect of exchange rate changes on cash		(1	)		5

Increase in cash and finite risk sinking fund (restricted cash)		10,920			3,094
Cash and finite risk sinking fund (restricted cash) at beginning of period		19,574			13,436
Cash and finite risk sinking fund (restricted cash) at end of period	$	30,494		$	16,530

Supplemental disclosure:
Interest paid	$	227		$	103
Income taxes paid		50			—
Non-cash financing activities:
Equipment purchase subject to finance		44			157

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERMA-FIX ENVIRONMENTAL SERVICES, INC.

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(Unaudited)

1. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by the Company (which may be referred to as we, us or our), without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the six months ended June 30, 2024, are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2024.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2023.

The condensed consolidated financial statements include the accounts of our wholly-owned subsidiaries.

2. Summary of Significant Accounting Policies

Our accounting policies are as set forth in the notes to the December 31, 2023, consolidated financial statements referred to above.

Recently Issued Accounting Standards – Not Yet Adopted

In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement.” ASU 2023-05 applies to the formation of a “joint venture” or a “corporate joint venture” and requires a joint venture to initially measure all contributions received upon its formation at fair value. The guidance does not impact accounting by the venturers. The new guidance is applicable to joint venture entities with a formation date on or after January 1, 2025, on a prospective basis. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of a segment’s profit or loss. The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. Additionally, ASU 2023-07 requires all segment profit or loss and assets disclosures to be provided on an annual and interim basis. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted, and should be applied on a retrospective basis. ASU 2023-07 will be effective for the Company’s financial statements for the year ended December 31, 2024. This ASU will not have impact on the Company’s consolidated financial condition or results of operations. The Company is evaluating the impact to the related segment reporting disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. This ASU will not have impact on the Company’s consolidated financial condition or results of operations. The Company is evaluating the impact to its income taxes reporting disclosures.

3. Revenue

Disaggregation of Revenue

In general, the Company’s business segmentation is aligned according to the nature and economic characteristics of our services and provides meaningful disaggregation of each business segment’s results of operations. The nature of the Company’s performance obligations within our Treatment and Services Segments results in the recognition of our revenue primarily over time. The following tables present further disaggregation of our revenues by different categories for our Services and Treatment Segments:

Schedule of Disaggregation of Revenue

	Treatment		Services		Total		Treatment		Services		Total
Revenue by Contract Type
(In thousands)	Three Months Ended						Three Months Ended
	June 30, 2024						June 30, 2023
	Treatment		Services		Total		Treatment		Services		Total
Fixed price	$	8,343	$	4,755	$	13,098	$	12,834	$	11,161	$	23,995
Time and materials		—		888		888		—		1,037		1,037
Total	$	8,343	$	5,643	$	13,986	$	12,834	$	12,198	$	25,032

	Treatment		Services		Total		Treatment		Services		Total
Revenue by Contract Type
(In thousands)	Six Months Ended						Six Months Ended
	June 30, 2024						June 30, 2023
	Treatment		Services		Total		Treatment		Services		Total
Fixed price	$	17,052	$	9,069	$	26,121	$	22,428	$	19,808	$	42,236
Time and materials		—		1,482		1,482		—		2,903		2,903
Total	$	17,052	$	10,551	$	27,603	$	22,428	$	22,711	$	45,139

	Treatment		Services		Total		Treatment		Services			Total
Revenue by generator
(In thousands)	Three Months Ended						Three Months Ended
	June 30, 2024						June 30, 2023
	Treatment		Services		Total		Treatment		Services			Total
Domestic government	$	6,252	$	4,168	$	10,420	$	9,808	$	11,441		$	21,249
Domestic commercial		1,721		1,363		3,084		2,269		742			3,011
Foreign government		1		88		89		657		(7	)		650
Foreign commercial		369		24		393		100		22			122
Total	$	8,343	$	5,643	$	13,986	$	12,834	$	12,198		$	25,032

	Treatment		Services		Total		Treatment		Services		Total
Revenue by generator
(In thousands)	Six Months Ended						Six Months Ended
	June 30, 2024						June 30, 2023
	Treatment		Services		Total		Treatment		Services		Total
Domestic government	$	12,013	$	8,471	$	20,484	$	17,065	$	21,159	$	38,224
Domestic commercial		4,222		1,867		6,089