UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended |
Or
| 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.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) | |
(Address of principal executive offices) |
(Zip Code) |
(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 | ||
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.
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).
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 ☐
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 November 3, 2026 | |
| Common Stock, $ Par Value | shares |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
INDEX
| Page No. | |||
| Glossary of Terms and Acronyms | 1 | ||
| PART I | FINANCIAL INFORMATION | ||
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 2 | |
| Condensed Consolidated Balance Sheets - September 30, 2026, and December 31, 2025 | 2 | ||
| 4 | |||
| 5 | |||
| 6 | |||
Condensed Consolidated Statements of Cash Flows -Nine Months Ended September 30, 2026, and 2025 |
8 | ||
| Notes to Condensed Consolidated Financial Statements | 9 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 | |
| Item 3. | 43 | ||
| Item 4. | Controls and Procedures | 43 | |
| PART II | OTHER INFORMATION | ||
|
Item 1. | Legal Proceedings | 44 |
| Item 1A. | Risk Factors | 44 | |
| Item 6. | Exhibits | 45 | |
| i |
Glossary of Terms and Acronyms
Definitions of certain terms and acronyms that may appear in this report are provided below. The defined terms and acronyms identified below are used throughout the document.
| AIG | AIG Specialty Insurance Company | |
| ASC | Accounting Standards Codification | |
| ASU | Accounting Standards Update | |
| Board | Board of Directors | |
| CEO | Chief Executive Officer | |
| CODM | Chief Operating Decision Maker | |
| COLA | Cost-of-Living Adjustment | |
| Common Stock | The Company’s common stock, par value $0.001 per share | |
| COO | Chief Operating Officer | |
| CR | Continuing Resolution | |
| Credit Facility | The Company’s credit facility under a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, as amended, entered into with PNC National Association, acting as agent and lender, with a maturity date of May 15, 2030, consisting of (i) 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 and borrowing reductions that the Company’s lender may impose from time to time; (ii) a term loan of $2,500,000 (“Term Loan”); and (iii) a capital loan (“Capital Loan”) of approximately $524,000 | |
| D&D | Decontamination and Decommissioning | |
| DFLAW | Direct-Feed Low-Activity Waste | |
| DOE | U.S. Department of Energy | |
| DOW | U.S. Department of War | |
| EWOC | Environmental Waste Operations Center, an operating facility of the Company. | |
| Exchange Act | The Securities Exchange Act of 1934 (as amended) | |
| FASB | Financial Accounting Standards Board | |
| IDIQ | Indefinite Delivery/Indefinite Quantity | |
| IH | Industrial Hygiene | |
| ISO | Incentive Stock Option | |
| MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| MMDA | Money Market Deposit Account | |
| NEOSH | Nuclear, Environmental, and Occupational Safety and Health | |
| NQSO | Non-Qualified Stock Option | |
| OSHA | U.S. Occupational Safety and Health Administration | |
| PFAS | Per- and polyfluoroalkyl substances, a group of thousands of synthetic “forever chemicals” manufactured since the 1940s that resist heat, water, stains, and grease. They are found in non-stick cookware, stain-resistant fabrics, food packaging, and firefighting foam, and they persist in the environment and human body, posing significant, long-term health risks | |
| PFNW | Perma-Fix Northwest Richland Inc., a wholly-owned subsidiary of the Company located in Richland, Washington | |
| PRP | Potentially Responsible Party | |
| PFSG | Perma-Fix South Georgia, Inc., a wholly-owned subsidiary of the Company within its discontinued operations | |
| PNC Liquidity | Borrowing availability under the Revolving Credit under the PNC Loan Agreement plus cash in the MMDA maintained with the Company’s lender | |
| PNC Loan Agreement | Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, as amended, entered into with PNC National Association, acting as agent and lender, with a maturity date of May 15, 2030 | |
| R&D | Research and Development | |
| ROU | Right-of-Use | |
| SEC | The U.S. Securities and Exchange Commission | |
| SG&A | Selling, General and Administrative expenses | |
| SOFR | Secured Overnight Finance Rate | |
| U.S. GAAP | Accounting principles generally accepted in the United States of America |
| 1 |
PART I - FINANCIAL INFORMATION
ITEM 1. – Financial Statements
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Condensed Consolidated Balance Sheets
| September 30, | ||||||||
| 2026 | December 31, | |||||||
| (Amounts in Thousands, Except for Share and Per Share Amounts) | (Unaudited) | 2025 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses
of $ | ||||||||
| Unbilled receivables | ||||||||
| Inventories | ||||||||
| Prepaid and other assets | ||||||||
| Current assets related to discontinued operations | ||||||||
| Total current assets | ||||||||
| Property and equipment: | ||||||||
| Buildings and land | ||||||||
| Equipment | ||||||||
| Vehicles | ||||||||
| Leasehold improvements | ||||||||
| Office furniture and equipment | ||||||||
| Construction-in-progress | ||||||||
| Total property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | ||||||||
| Property and equipment related to discontinued operations | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangibles and other long term assets: | ||||||||
| Permits | ||||||||
| Other intangible assets - net | ||||||||
| Finite risk sinking fund (restricted cash) | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 2 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Condensed Consolidated Balance Sheets, Continued
| September 30, | ||||||||
| 2026 | December 31, | |||||||
| (Amounts in Thousands, Except for Share and per Share Amounts) | (Unaudited) | 2025 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Disposal/transportation accrual | ||||||||
| Deferred revenue | ||||||||
| Accrued closure costs - current | ||||||||
| Current portion of long-term debt | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of finance lease liabilities | ||||||||
| Current liabilities related to discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Accrued closure costs | ||||||||
| Long-term debt, less current portion | ||||||||
| Long-term operating lease liabilities, less current portion | ||||||||
| Long-term finance lease liabilities, less current portion | ||||||||
| Long-term liabilities related to discontinued operations | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 9) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred Stock, $ par value; shares authorized, shares issued and outstanding | ||||||||
| Common Stock, $ par value; shares authorized; and shares issued, respectively; and shares outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Less Common Stock in treasury, at cost; shares | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Amounts in Thousands, Except for Per Share Amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| (Gain) loss on disposal of property and equipment | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense-financing fees | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other | ( | ) | ||||||||||||||
| Loss from continuing operations before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
| Loss from continuing operations, net of taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from discontinued operations, net of taxes (Note 10) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share - basic and diluted: | ||||||||||||||||
| Continuing operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Discontinued operations | ) | ) | ||||||||||||||
| Net loss per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares used in computing net loss per share: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Amounts in Thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive (loss) income: | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC
Condensed Consolidated Statement of Stockholders’ Equity
(Unaudited)
(Amounts in thousands, except for share amounts)
| Common Stock | Additional Paid-In | Common Stock Held In | Accumulated | Accumulated | Total
Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Treasury | Loss | Deficit | Equity | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Sale of Common Stock, net of offering | ||||||||||||||||||||||||||||
| costs (Note 13) | ||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC
Condensed Consolidated Statement of Stockholders’ Equity, Continued
(Unaudited)
(Amounts in thousands, except for share amounts)
| Common Stock | Additional Paid-In | Common Stock Held In | Accumulated | Accumulated | Total
Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Treasury | Loss | Deficit | Equity | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | | |||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | |||||||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | |||||||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | — | |||||||||||||||||||||||||||
| Issuance of Common Stock for services | ||||||||||||||||||||||||||||
| Issuance of Common Stock upon exercise of options | ||||||||||||||||||||||||||||
| Stock-Based Compensation | — | |||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| (Amounts in Thousands) | 2026 | 2025 | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: Loss from discontinued operations, net of taxes (Note 10) | ( | ) | ( | ) | ||||
| Loss from continuing operations, net of taxes | ( | ) | ( | ) | ||||
| Adjustments to reconcile loss from continuing operations to cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt issuance costs | ||||||||
| Provision for credit losses on accounts receivable | ( | ) | ||||||
| Gain on disposal of property and equipment | ( | ) | ( | ) | ||||
| Issuance of Common Stock for services | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities of continuing operations | ||||||||
| Accounts receivable | ( | ) | ||||||
| Unbilled receivables | ( | ) | ( | ) | ||||
| Prepaid expenses, inventories and other assets | ||||||||
| Accounts payable, accrued expenses, unearned revenue and other liabilities | ( | ) | ||||||
| Cash used in continuing operations | ( | ) | ( | ) | ||||
| Cash used in discontinued operations | ( | ) | ( | ) | ||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Advances for capital equipment | ( | ) | ||||||
| Addition to permits and other intangible assets | ( | ) | ( | ) | ||||
| Proceeds from sale of property and equipment | ||||||||
| Cash used in continuing operations | ( | ) | ( | ) | ||||
| Cash used in discontinued operations | ( | ) | ( | ) | ||||
| Cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments of revolving credit borrowings | ( | ) | ( | ) | ||||
| Borrowing on revolving credit | ||||||||
| Proceeds from sale of Common Stock completed in May 2026, net of offering costs paid (Note 13) | ||||||||
| Payment of offering costs from sale of Common Stock completed in December 2024 | ( | ) | ||||||
| Principal repayments of finance lease liabilities | ( | ) | ( | ) | ||||
| Principal repayments of long term debt | ( | ) | ( | ) | ||||
| Payment of debt issuance costs | ( | ) | ( | ) | ||||
| Proceeds from issuance of Common Stock upon exercise of options | ||||||||
| Cash provided by (used in) financing activities of continuing operations | ( | ) | ||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Increase (decrease) in cash and finite risk sinking fund (restricted cash) | ( | ) | ||||||
| Cash and finite risk sinking fund (restricted cash) at beginning of period | ||||||||
| Cash and finite risk sinking fund (restricted cash) at end of period | $ | $ | ||||||
| Supplemental disclosure: | ||||||||
| Interest paid, net of capitalized
amount of $ | $ | $ | ||||||
| Income taxes paid | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Equipment/property purchase subject to financing | ||||||||
| Equipment purchase subject to finance leases | ||||||||
| Property and equipment included in accounts payable | ||||||||
| Addition to permits and other intangible assets included in accounts payable | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Notes to Condensed Consolidated Financial Statements
September 30, 2026
(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 SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with 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 nine months ended September 30, 2026, are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2026.
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, 2025.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Financial Position and Liquidity
These condensed consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The
Company incurred losses from continuing operations before tax of $
The Company’s expected cash requirements over the next twelve months include working capital needs, scheduled principal payments on debt, costs associated with the administration and monitoring of discontinued operations, R&D expenditures related to PFAS technology, and capital expenditures.
A significant portion of the projected revenues and cash flows underlying management’s forecast depends on the timing and volume of waste shipments and project activity directed by U.S. government customers. Because these customers do not provide binding assurances regarding the timing or volume of future work, and such activity is subject to appropriations, procurement processes, operational considerations, and other factors outside the Company’s control, management could not conclude that its plans are probable of effectively mitigating the conditions giving rise to substantial doubt. Accordingly, substantial doubt continues to exist about the Company’s ability to continue as a going concern for one year following the date the accompanying Condensed Consolidated Financial Statements are issued.
| 9 |
Management’s
plans to address these conditions include utilizing existing cash and borrowing availability; pursuing operating improvements supported
by the Company’s Treatment and Services Segment backlogs; continuing to pursue additional government, commercial, and international
project opportunities; managing capital expenditures and operating costs; and, if necessary, seeking additional liquidity through equity
or other financing arrangements or potential asset dispositions. In May 2026, the Company completed a public equity offering that generated
net proceeds of approximately $
Although the May 2026 equity offering strengthened the Company’s liquidity, continued operating losses since the offering and significant capital expenditures, including investments made to support anticipated waste treatment volumes and improve operational capabilities, have reduced the Company’s liquidity position. Therefore, management concluded that substantial doubt has not been alleviated. The Company expects to fund its operations during the assessment period with its existing liquidity, anticipated operating cash flows and borrowing availability. However, the ability of management’s plans to mitigate the conditions giving rise to substantial doubt depends in part on the timing and volume of government-directed waste shipments and project activity, as well as other matters outside the Company’s control. In addition, the Company’s borrowing availability is subject to compliance with applicable financial covenants and other conditions. There can be no assurance that additional liquidity, if needed, will be available on acceptable terms or at all.
The Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty.
Reclassification
During
the third quarter of 2026, the Company revised the presentation of the disaggregation of revenue in “Note 3 – Revenue”
for the three and nine months ended September 30, 2025, to reclassify certain contracts previously presented as fixed-price revenue to
time-and-materials revenue. Approximately $
Correction of an Immaterial Error
During the preparation of the accompanying Condensed Consolidated Financial Statements, the Company determined that the cash flow effects of certain property and equipment additions included in accounts payable were incorrectly presented in its previously issued Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2025. Specifically, the change in “Accounts payable, accrued expenses, unearned revenue and other liabilities” within operating activities included amounts attributable to property and equipment additions, and “Purchases of property and equipment” within investing activities did not properly reflect the cash paid during the period for such additions.
Accordingly,
the Company has revised the comparative prior-period Condensed Consolidated Statement of Cash Flows presented herein by reducing the
decrease in “Accounts payable, accrued expenses, unearned revenue and other liabilities” within operating activities by $
| 10 |
| 2. | Summary of Significant Accounting Policies |
Our accounting policies are as set forth in the notes to the December 31, 2025, consolidated financial statements referred to above.
Recently Issued Accounting Standards –Adopted
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 provides the option to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The adoption of ASU 2025-05 by the Company in the first quarter of 2026 on a prospective basis did not have a material impact on its condensed consolidated financial statements.
Recently Issued Accounting Standards – Not Yet Adopted
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the update is to provide clarity about current interim requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this ASU are required to be adopted for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement— Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses,” which enhances the disclosures required for certain expense captions in the Company’s annual and interim consolidated financial statements. ASU 2024-03 is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, “Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed, and the software will be used for its intended purpose. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. The standard allows for prospective, modified, or retrospective transition. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
In May 2026, the FASB issued ASU 2026-02, “Environmental Credits and Environmental Credit Obligations (Topic 818).” ASU 2026-02 improves the financial accounting for and disclosure of activities related to environmental credits and environmental credit obligations. This update provides recognition, measurement, presentation, and disclosure requirements for all entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. The amendments in ASU 2026-02 are effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
| 11 |
| 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 result 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:
| Revenue by Contract Type | ||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| Treatment | Services | Total | Treatment | Services | Total | |||||||||||||||||||
| Fixed price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Time and materials | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenue by Contract Type | ||||||||||||||||||||||||
| (In thousands) | Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| Treatment | Services | Total | Treatment | Services | Total | |||||||||||||||||||
| Fixed price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Time and materials | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenue by generator | ||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| Treatment | Services | Total | Treatment | Services | Total | |||||||||||||||||||
| Domestic government | $ | $ | $ | $ | $ | |||||||||||||||||||
| Domestic commercial | ||||||||||||||||||||||||
| Foreign government | ||||||||||||||||||||||||
| Foreign commercial | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenue by generator | ||||||||||||||||||||||||
| (In thousands) | Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| Treatment | Services | Total | Treatment | Services | Total | |||||||||||||||||||
| Domestic government | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Domestic commercial | ||||||||||||||||||||||||
| Foreign government | ||||||||||||||||||||||||
| Foreign commercial | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Revenues generated from fixed unit rate contracts within the Services Segment are included within the “time and material” caption under the disaggregation table above due to similarity of the revenue recognition methodology.
| 12 |
Contract Balances
The timing of revenue recognition and billings can result in unbilled receivables (contract assets). The Company’s contract liabilities consist of deferred revenues which represent advance payment from customers in advance of the completion of the Company’s performance obligation. The following table represents changes in our contract asset and contract liabilities balances for the periods noted:
| Year-to-date | Year-to-date | |||||||||||||||
| (In thousands) | September 30, 2026 | December 31, 2025 | Change ($) | Change (%) | ||||||||||||
| Contract assets | ||||||||||||||||
| Unbilled receivables - current | $ | $ | $ | % | ||||||||||||
| Contract liabilities | ||||||||||||||||
| Deferred revenue | $ | $ | $ | % | ||||||||||||
| Year-to-date | Year-to-date | |||||||||||||||
| (In thousands) | September 30, 2025 | December 31, 2024 | Change ($) | Change (%) | ||||||||||||
| Contract assets | ||||||||||||||||
| Unbilled receivables - current | $ | $ | $ | % | ||||||||||||
| Contract liabilities | ||||||||||||||||
| Deferred revenue | $ | $ | $ | % | ||||||||||||
During
the three and nine months ended September 30, 2026, the Company recognized revenue of $
Accounts Receivable
The following table represents changes in accounts receivable, net of credit losses, for the periods noted:
| Year-to-date | Year-to-date | |||||||||||||||
| (In thousands) | September 30, 2026 | December 31, 2025 | Change ($) | Change (%) | ||||||||||||
| Accounts Receivable (net) | $ | $ | $ | ( | ) | - | % | |||||||||
| Year-to-date | Year-to-date | |||||||||||||||
| (In thousands) | September 30, 2025 | December 31, 2024 | Change ($) | Change (%) | ||||||||||||
| Accounts Receivable (net) | $ | $ | $ | % | ||||||||||||
Remaining Performance Obligations
The Company applies the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Within our Services Segment, there are service contracts which provide that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. For those contracts, the Company has utilized the practical expedient in ASC 606-10-55-18, which allows the Company to recognize revenue in the amount for which we have the right to invoice; accordingly, the Company does not disclose the value of remaining performance obligations for those contracts.
The Company’s contracts and subcontracts relating to activities at governmental sites generally allow for termination for convenience at any time at the government’s option without payment of a substantial penalty. The Company does not disclose remaining performance obligations on these contracts.
| 13 |
| 4. | Leases |
At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement. Lease classifications, recognition, and measurement are then determined at the lease commencement date.
The Company’s operating lease ROU assets and operating lease liabilities primarily include leases for office and warehouse spaces used to conduct our business. Finance leases primarily consist of lab and processing equipment and motor vehicles used by the Company’s facilities’ operations.
The components of lease cost for the Company’s leases for the three and nine months ended September 30, 2026, and 2025 were as follows (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating Leases: | ||||||||||||||||
| Lease cost | $ | $ | $ | $ | ||||||||||||
| Finance Leases: | ||||||||||||||||
| Amortization of ROU assets | ||||||||||||||||
| Interest on lease liability | ||||||||||||||||
| Short-term lease rent expense | ||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
The weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of September 30, 2026, were:
| Operating Leases | Finance Leases | |||||||
| Weighted average remaining lease terms (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
The weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of September 30, 2025, were:
| Operating Leases | Finance Leases | |||||||
| Weighted average remaining lease terms (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
The following table reconciles the undiscounted cash flows for the operating and finance leases as of September 30, 2026, to the operating and finance lease liabilities recorded on the balance sheet (in thousands):
| Operating Leases | Finance Leases | |||||||
| 2026 (Remaining) | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
| Total undiscounted lease payments | ||||||||
| Less: Imputed interest | ( | ) | ( | ) | ||||
| Present value of lease payments | $ | $ | ||||||
| Current portion of operating lease obligations | $ | $ | N/A | |||||
| Long-term operating lease obligations, less current portion | $ | $ | N/A | |||||
| Current portion of finance lease obligations | $ | N/A | $ | |||||
| Long-term finance lease obligations, less current portion | $ | N/A | $ | |||||
| 14 |
Supplemental cash flow and other information related to our leases were as follows for the three and nine months ended September 30, 2026, and 2025 (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||
| Operating cash flow used in operating leases | $ | $ | $ | $ | ||||||||||||
| Operating cash flow used in finance leases | $ | $ | $ | $ | ||||||||||||
| Financing cash flow used in finance leases | $ | $ | $ | $ | ||||||||||||
| ROU assets obtained in exchange for lease obligations for: | ||||||||||||||||
| Finance liabilities | $ | $ | $ | $ | ||||||||||||
| Operating liabilities | $ | $ | $ | $ | ||||||||||||
| 5. | Intangible Assets |
The following table summarizes information relating to the Company’s definite-lived intangible assets:
| Weighted | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
Average Amortization | Gross | Net | Gross | Net | ||||||||||||||||||||||
| Other Intangibles | Period | Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||
| (amount in thousands) | (Years) | Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
| Patents | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||
| Software | ( | ) | ( | ) | ||||||||||||||||||||||
| Permits | ( | ) | ||||||||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||
The intangible assets noted above are amortized on a straight-line basis over their useful lives.
The permits disclosed above reflect the capitalization of costs associated with the renewal of certain regulatory permits. These costs represent fees paid to secure the Company’s right to operate for a defined ten-year period and are therefore amortized on a straight-line basis over that period.
The following table summarizes the expected amortization over the next five years for our definite-lived intangible assets:
| Amount | ||||
| Year | (In thousands) | |||
| 2026 (Remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
Amortization
expenses relating to the definite-lived intangible assets as discussed above were $
| 15 |
| 6. | Capital Stock, Stock Plans and Stock-Based Compensation |
The Company has certain stock option plans under which it may award ISO and/or NQSOs to employees, officers, outside directors, and outside consultants.
On July 22, 2026, the Company issued an NQSO to each of the Company’s seven reelected outside (non-management) directors for the purchase of up to shares of the Company’s Common Stock under the Company’s 2003 Outside Directors Stock Plan. Dr. Louis Centofanti and Mark Duff, each an executive officer of the Company as well as a director, were not eligible to receive an option under the 2003 Outside Directors Stock Plan. Each NQSO granted has a ten-year term and vests at % per year over a four-year period, commencing on the first anniversary of the grant date. The exercise price of each NQSO is $ per share, which was equal to the fair market value of the Company’s Common Stock on the day preceding the grant date, in accordance with the 2003 Outside Director Stock Plan.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Stock Options | September 30, | September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Employee Stock Options | $ | $ | $ | $ | ||||||||||||
| Director Stock Options | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
As of September 30, 2026, the Company had approximately $ of total unrecognized compensation costs related to unvested options for employees and directors. The weighted average period over which the unrecognized compensation costs are expected to be recognized is approximately years.
The summary of the Company’s stock option plans as of September 30, 2026, and September 30, 2025, and changes during the periods then ended, are presented below. The Company’s plans consist of the 2017 Stock Option Plan and the 2003 Outside Directors Stock Plan:
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (4) | |||||||||||||
| Options outstanding January 1, 2026 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | $ | ||||||||||||
| Forfeited | ( | ) | $ | |||||||||||||
| Options outstanding end of period (1) | $ | $ | ||||||||||||||
| Options exercisable at September 30, 2026 (2) | $ | $ | ||||||||||||||
| 16 |
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (4) | |||||||||||||
| Options outstanding January 1, 2025 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | $ | ||||||||||||
| Forfeited | ( | ) | $ | |||||||||||||
| Options outstanding end of period (2) | $ | $ | ||||||||||||||
| Options exercisable at September 30, 2025(3) | $ | $ | ||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
During the nine months ended September 30, 2026, the Company issued a total of shares of its Common Stock under the 2003 Outside Directors Stock Plan to its outside directors as compensation for serving on the Board. The Company recorded approximately $ in compensation expenses (included in SG&A) in connection with the issuance of shares of its Common Stock to outside directors.
During
the nine months ended September 30, 2026, the Company issued an aggregate shares of its Common Stock from cashless exercises of
options for the purchase of shares of the Company’s Common Stock ranging from $ per share to $ per share. Additionally,
the Company issued an aggregate shares of its Common Stock from cash exercises of options for the purchase of shares of
the Company’s Common Stock ranging from $ per share to $ per share, resulting in proceeds of approximately $
In
connection with the Company’s sales of its Common Stock in May 2024 and December 2024, the Company issued warrants to certain underwriters,
placement agents, and their designees to purchase an aggregate of
| 17 |
| 7. | Loss Per Share |
Basic loss per share is calculated based on the weighted-average number of outstanding common shares during the applicable period. Diluted loss per share is based on the weighted-average number of outstanding common shares plus the weighted-average number of potential outstanding common shares. In periods where they are anti-dilutive, such amounts are excluded from the calculations of dilutive earnings per share. The following table reconciles the loss and average share amounts used to compute both basic and diluted loss per share:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Amounts in Thousands, Except for Per Share Amounts) | (Unaudited) | (Unaudited) | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Loss per common share from continuing operations | ||||||||||||||||
| Loss from continuing operations, net of taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share from discontinued operations, net of taxes | ||||||||||||||||
| Loss from discontinued operations, net of taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic loss per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Diluted loss per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Net loss per common share | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic weighted average shares outstanding | ||||||||||||||||
| Add: dilutive effect of stock options | ||||||||||||||||
| Add: dilutive effect of warrants | ||||||||||||||||
| Diluted weighted average shares outstanding | ||||||||||||||||
For the three and nine months ended September 30, 2026, and weighted average number of shares of common stock underlying options and warrants, respectively, were excluded from the computation of diluted loss per share because the effect would be anti-dilutive.
For the three and nine months ended September 30, 2025, and weighted average number of shares of common stock underlying options and warrants, respectively, were excluded from the computation of diluted loss per share because the effect would be anti-dilutive.
| 8. | Long Term Debt |
Long-term debt consists of the following as of September 30, 2026, and December 31, 2025:
| (Amounts in Thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Revolving Credit facility dated May
8, 2020, subject to monthly borrowing base calculation. Effective interest rates for first nine months of
2026 was | $ | $ | ||||||
| Term Loan dated July 31,
2023, payable in equal monthly installments in principal of approximately $ | ||||||||
| Capital Loan dated May 4, 2021, payable
in equal monthly installments in principal of approximately $ | ||||||||
| Debt Issuance Costs (2) | ( | ) (2) | ( | ) (2) | ||||
| Notes Payable up to 2044,
with annual interest rates ranging from | ||||||||
| Total debt | ||||||||
| Less current portion of long-term debt | ||||||||
| Long-term debt | $ | $ | ||||||
| (1) |
| 18 |
| (2) |
| (3) |
Credit Facility
The
Company’s Credit Facility, established pursuant to its PNC Loan Agreement, consists of a Revolving Credit facility with a maximum
borrowing capacity of $
On
August 10, 2026, the Company entered into an amendment to its PNC Loan Agreement that extended the maturity date of the PNC Loan Agreement
from
Pursuant
to the amendment, the Company may terminate the PNC Loan Agreement upon 90 days’ prior written notice upon payment in full of its
obligations under the PNC Loan Agreement.
In
connection with the amendment, the Company paid its lender a fee of $
| 19 |
After giving effect to the borrowing base limitation,
outstanding standby letters of credit, and discretionary reserves imposed by the lender, the Company’s borrowing availability under the
PNC Credit Facility was approximately $
The PNC Loan Agreement contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, unless waived by the lender, could result in a default under the PNC Loan Agreement allowing its lender to immediately require the repayment of all outstanding debt under the PNC Loan Agreement and terminate all commitments to extend further credit. The Company met all of its financial covenant requirements in the first, second and third quarters of 2026.
Promissory Note
In
April 2026, the Company purchased a parcel of property adjacent to its PFNW facility that provides direct rail access pursuant to a Purchase
and Sale Agreement dated November 17, 2025, for a purchase price of $
| 9. | Commitments and Contingencies |
Hazardous Waste
In connection with our waste management services, the Company processes hazardous, non-hazardous, low-level radioactive and mixed (containing both hazardous and low-level radioactive) waste, which we transport to our own, or other, facilities for destruction or disposal. As a result of disposing of hazardous substances, in the event any cleanup is required at the disposal site, the Company could be a PRP for the costs of the cleanup notwithstanding any absence of fault on our part.
Notice of Non-Compliance
On April 30, 2026, the Company received a notice of non-compliance (the “Notice”) from the Washington State Department of Ecology (the “Department of Ecology”) following a June 24, 2025 inspection of the Company’s PFNW facility in Richland, Washington. The Notice is based on an inspection report identifying alleged non-compliance with certain Department of Ecology waste regulations and permit requirements and requires the Company to implement specified corrective actions and provide documentation of its compliance within prescribed timeframes.
No administrative order has been issued and no monetary penalties have been assessed as of the date of this report. The Company is actively responding to the Notice and implementing corrective measures. Based on information currently available and the Company’s ongoing response, the Company does not expect this matter to result in a material adverse effect on its financial condition, results of operations, or cash flows.
The outcome of this matter remains subject to regulatory review. While the Department of Ecology may pursue escalated enforcement action in accordance with Washington State Dangerous (Hazardous) Waste Regulations, the Company currently expects a favorable resolution of the Notice and does not believe that a loss is probable. Accordingly, the Company has not recorded an accrual for any potential loss related to this matter.
| 20 |
Legal Matters
In the normal course of conducting our business, the Company may be involved in various litigation. The Company is not a party to any litigation or governmental proceeding which our management believes could result in any judgments or fines against us that would have a material adverse effect on our financial position, liquidity or results of future operations.
Michael O’Neill
On November 25, 2024, purported shareholder Michael O’Neill (the “Plaintiff”) filed a complaint in the Court of Chancery of the State of Delaware against the Company and all current directors of the Company (the “Defendants”), asserting individual and class action claims for alleged breach of contract and breach of fiduciary duty. The case is styled Michael O’Neill v. Perma-Fix Environmental Services, Inc., et al., C.A. No. 2024-1211-PAF.
The plaintiff has filed an amended and supplemented complaint (the Amended Complaint”), alleging that certain provisions of the Amended Bylaws violated Delaware law (the “Challenged Bylaws).
The plaintiff is seeking a declaration of the Chancery Court that the Challenged Bylaws are invalid, illegal, and void, or, alternatively, an order of the Chancery Court rescinding or enjoining the Challenged Bylaws.
The Company and the other Defendants are vigorously defending against the Amended Complaint.
The
Company’s insurance carrier is providing a defense in connection with this lawsuit, subject to a reservation of rights, a $
Edwin Monroy Wage and Hour Litigation
On June 26, 2026, Edwin Monroy filed a putative class action complaint in the Superior Court of the State of Washington for Benton County against Perma-Fix Northwest Richland, Inc., Perma-Fix Environmental Services, Inc., Perma-Fix Northwest, Inc., and other, unnamed, defendants. The complaint purports to assert claims on behalf of current and former hourly-paid or non-exempt employees who worked for the defendants in Washington during the three-year period preceding the filing of the complaint through the date of final judgment. The complaint alleges, among other things, failures to provide legally compliant meal and rest periods, pay for all hours worked, pay minimum and overtime wages, properly administer paid sick leave, timely pay wages, provide accurate wage statements, and maintain required payroll and employment records, and reimburse certain business expenses. The plaintiff seeks class certification, recovery of allegedly unpaid wages and other compensation, statutory or enhanced damages, penalties, restitution, injunctive relief, interest, and attorneys’ fees and costs.
The Company intends to vigorously defend this action. The litigation remains in its preliminary stages, and no class has been certified. Given the preliminary status of the proceedings and the uncertainties regarding potential liability and damages, if any, the Company is currently unable to reasonably estimate the amount or range of any potential loss. No loss has been accrued in connection with this matter, as the Company has not determined that a loss is both probable and reasonably estimable.
| 21 |
Insurance
The
Company has a
Letter of Credits and Bonding Requirements
From
time to time, the Company is required to post standby letters of credit and various bonds to support contractual obligations to customers
and other obligations, including facility closures. As of September 30, 2026, the total amount of standby letters of credit outstanding
was approximately $
| 10. | Discontinued Operations |
The Company’s discontinued operations consist of all our subsidiaries included in our former Industrial Segment, which encompasses subsidiaries divested in 2011 and earlier, as well as three previously closed locations.
The
Company’s discontinued operations had net losses of $
During
the second quarter of 2026, the Company recorded a receivable and a corresponding reduction in expense of approximately $
The following table presents the major class of assets of discontinued operations as of September 30, 2026, and December 31, 2025. No assets and liabilities were held for sale at each of the periods noted.
| September 30, | December 31, | |||||||
| (Amounts in Thousands) | 2026 | 2025 | ||||||
| Current assets | ||||||||
| Other assets | $ | $ | ||||||
| Total current assets | ||||||||
| Long-term assets | ||||||||
| Property, plant and equipment, net (1) | ||||||||
| Total long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other liabilities | ||||||||
| Environmental liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Closure liabilities | ||||||||
| Environmental liabilities | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| (1) |
| 22 |
| 11. | Operating Segments |
In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity: (1) from which we may earn revenue and incur expenses; (2) whose operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segment and assess its performance; and (3) for which discrete financial information is available.
The
Company has
TREATMENT SEGMENT includes:
| - | nuclear, low-level radioactive, mixed waste (containing both hazardous and low-level radioactive constituents), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities; and | |
| - | R&D activities to identify, develop and implement innovative waste processing techniques for problematic waste streams. |
SERVICES SEGMENT includes:
| - | Technical services: |
| ○ | professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering; | |
| ○ | integrated occupational safety and health services including 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 OSHA citation assistance; | |
| ○ | global technical services providing consulting, engineering, project management, waste management, environmental, and D&D field, technical, and management personnel and services to commercial and government customers; and | |
| ○ | on-site waste management services to commercial and governmental customers. |
| - | Nuclear services: |
| ○ | technology-based services including engineering, D&D, specialty services and construction, logistics, transportation, processing and disposal; | |
| ○ | remediation of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites. Such services capability includes project investigation; radiological engineering; partial and total plant D&D; facility decontamination, dismantling, demolition, and planning; site restoration; logistics; transportation; and emergency response; and |
| - | A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized NEOSH instrumentation. |
| 23 |
The Company’s CODM is represented by its CEO and COO (or “CODM group”). The CODM group evaluates the performance of the Treatment and Services segments and allocates resources to each reporting segment based on revenue and income (loss) from operations by comparing actual results for these measures to budgeted and forecasted amounts on a monthly, quarterly and year-to-date basis. The Company’s CODM group does not evaluate and allocate resources for the reportable segments using assets, including expenditures for additions to long-lived assets; therefore, the Company does not disclose asset information for its reporting segments.
The Company’s reportable segments exclude corporate headquarters, which support the Company’s two reportable segments through executive management, finance, treasury, human resources, accounting, legal, and other corporate functions. The financial results of corporate headquarters are not included in segment income (loss) from operations, the measure reviewed by the CODM, and are presented as unallocated corporate expenses in the reconciliation of segment income (loss) from operations to consolidated income (loss) from continuing operations before income taxes. The Company’s reportable segments also exclude discontinued operations (see Note 10 – Discontinued Operations), which do not generate revenues.
The table below summarizes segment income (loss) from operations, the measure reviewed by the CODM, and reconciles this measure to consolidated loss from continuing operations before income taxes for the three and nine months ended September 30, 2026 and 2025. Significant segment expense categories included in segment income (loss) from operations include payroll and benefits, materials and supplies, disposal, transportation, and subcontract expenses. These expense categories are presented separately, where applicable. R&D expenses, while not considered a significant segment expense category, are also presented separately because they are regularly provided to the CODM (in thousands).
Segment Reporting for the Three Months Ended September 30, 2026
| Treatment | Services | Consolidated Total | ||||||||||
| Revenue from external customers | $ | $ | $ | |||||||||
| Cost of Goods Sold: | ||||||||||||
| Payroll and benefits expenses | ||||||||||||
| Material and supplies expenses | ||||||||||||
| Disposal expenses | ||||||||||||
| Transportation expenses | ||||||||||||
| Subcontract expenses | ||||||||||||
| Other cost of goods sold (1) | ||||||||||||
| Total cost of goods sold | ||||||||||||
| Gross (loss) profit | ( | ) | ||||||||||
| SG&A: | ||||||||||||
| Payroll and benefits | ||||||||||||
| Other SG&A (2) | ||||||||||||
| Total SG&A | ||||||||||||
| R&D | ||||||||||||
| Gain on disposal of property and equipment | ( | ) | ||||||||||
| (Loss) income from operations | $ | ( | ) | $ | ( | ) | ||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ||||||||||
| Interest expense-financing fees | ( | ) | ||||||||||
| Other income | ||||||||||||
| Unallocated corporate expenses (3) | ( | ) | ||||||||||
| Loss from continuing operations before taxes | $ | ( | ) | |||||||||
| 24 |
Segment Reporting for the Three Months Ended September 30, 2025
| Treatment | Services | Consolidated Total | ||||||||||
| Revenue from external customers | $ | $ | $ | |||||||||
| Cost of Goods Sold: | ||||||||||||
| Payroll and benefits expenses | ||||||||||||
| Material and supplies expenses | ||||||||||||
| Disposal expenses | ||||||||||||
| Transportation expenses | ||||||||||||
| Subcontract expenses | ||||||||||||
| Other cost of goods sold (1) | ||||||||||||
| Total cost of goods sold | ||||||||||||
| Gross profit | ||||||||||||
| SG&A: | ||||||||||||
| Payroll and benefits | ||||||||||||
| Other SG&A (2) | ||||||||||||
| Total SG&A | ||||||||||||
| R&D | ||||||||||||
| Loss on disposal of property and equipment | ||||||||||||
| Income (loss) from operations | $ | $ | ( | ) | ||||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ||||||||||
| Interest expense-financing fees | ( | ) | ||||||||||
| Other expense | ( | ) | ||||||||||
| Unallocated corporate expenses (3) | ( | ) | ||||||||||
| Loss from continuing operations before taxes | $ | ( | ) | |||||||||
Segment Reporting for the Nine Months Ended September 30, 2026
| Treatment | Services | Consolidated Total | ||||||||||
| Revenue from external customers | $ | $ | $ | |||||||||
| Cost of Goods Sold: | ||||||||||||
| Payroll and benefits expenses | ||||||||||||
| Material and supplies expenses | ||||||||||||
| Disposal expenses | ||||||||||||
| Transportation expenses | ||||||||||||
| Subcontract expenses | ||||||||||||
| Other cost of goods sold (1) | ||||||||||||
| Total cost of goods sold | ||||||||||||
| Gross profit | ( | ) | ||||||||||
| SG&A: | ||||||||||||
| Payroll and benefits | ||||||||||||
| Other SG&A (2) | ||||||||||||
| Total SG&A | ||||||||||||
| R&D | ||||||||||||
| Gain on disposal of property and equipment | ( | ) | ||||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ||||||||||
| Interest expense-financing fees | ( | ) | ||||||||||
| Other income | ||||||||||||
| Unallocated corporate expenses (3) | ( | ) | ||||||||||
| Loss from continuing operations before taxes | $ | ( | ) | |||||||||
Segment Reporting for the Nine Months Ended September 30, 2025
| Treatment | Services | Consolidated Total | ||||||||||
| Revenue from external customers | $ | $ | $ | |||||||||
| Cost of Goods Sold: | ||||||||||||
| Payroll and benefits expenses | ||||||||||||
| Material and supplies expenses | ||||||||||||
| Disposal expenses | ||||||||||||
| Transportation expenses | ||||||||||||
| Subcontract expenses | ||||||||||||
| Other cost of goods sold (1) | ||||||||||||
| Total cost of goods sold | ||||||||||||
| Gross profit | ||||||||||||
| SG&A: | ||||||||||||
| Payroll and benefits | ||||||||||||
| Other SG&A (2) | ||||||||||||
| Total SG&A | ||||||||||||
| R&D | ||||||||||||
| Loss (gain) on disposal of property and equipment | ( | ) | ||||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ||||||||||
| Interest expense-financing fees | ( | ) | ||||||||||
| Other income | ||||||||||||
| Unallocated corporate expenses (3) | ( | ) | ||||||||||
| Loss from continuing operations before taxes | $ | ( | ) | |||||||||
| (1) |
Treatment - lab, regulatory, repair and maintenance, depreciation and amortization, travel, outside services and general expenses. Services - material and supplies, disposal, transportation, lab, regulatory, repair and maintenance, depreciation and amortization, travel, outside services and general expenses. |
| (2) |
Treatment- depreciation and amortization, travel, outside services, repair and maintenance and general expenses. Services- travel, outside services, repair and maintenance and general expenses. |
| (3) |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Payroll and benefits | $ | $ | $ | $ | ||||||||||||
| Other | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 25 |
The following table presents depreciation and amortization for the three and nine months ended September 30, (in thousand):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Treatment | $ | $ | $ | $ | ||||||||||||
| Services | ||||||||||||||||
| Total segment | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 12. | Income Taxes |
The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes.
The
Company had income tax expenses for continuing operations for the three and nine months ended September 30, 2026 and 2025. The Company’s
effective tax rate was
| 13. | Sale of Common Stock |
On
May 14, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital
Group, LLC (the “Underwriter”), pursuant to which the Company sold and issued shares of its Common Stock. The shares
of Common stock were sold at a negotiated price to the public of $ per share. The Underwriting Agreement also allowed the Underwriter
a 30-day over-allotment option (the “Option”) to purchase up to an additional shares of the Company’s Common
Stock on the same terms and conditions, which Option was exercised in its entirety on May 15, 2026. The shares were offered and sold
to the public pursuant to the Company’s “universal shelf” registration statement on Form S-3 filed with the SEC on
December 2, 2024 and declared effective by the SEC on December 12, 2024, and a prospectus supplement relating to the May 2026 underwriting
dated May 14, 2026. The aggregate gross proceeds received by the Company from the sale of the shares sold totaled approximately
$
The
Company paid the Underwriter a total cash fee of
After
deducting costs incurred of approximately $
| 14. | Subsequent Events |
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that these condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
| 26 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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; | |
| ● | spending priorities of Congress; | |
| ● | passage of U.S. fiscal year government budgets or enactment of CRs to keep government departments and agencies in operations; | |
| ● | timing of receipts of anticipated Hanford-related waste at our PFNW facility; | |
| ● | investments made to support Hanford-related activity; | |
| ● | the issuance, number, size and timing of task orders to be issued to the Company under the Company’s Master Subcontract award; | |
| ● | improvement in operating results; | |
| ● | demand, pricing, or throughput levels for PFAS waste volumes are sufficient to offset costs incurred from PFAS initiatives; | |
| ● | increase in Hanford waste receipts; | |
| ● | facility upgrades to achieve expanded capacity anticipated in late 2027; | |
| ● | regulatory approvals required for implementation of facility upgrades to achieve expanded capacity; | |
| ● | effect of pricing increases; | |
| ● | delays in anticipated treatment waste volumes and project activity; | |
| ● | ability to meet our quarterly financial covenant requirements under our PNC Loan Agreement; | |
| ● | expansion into international and commercial markets; | |
| ● | cash flow requirements; | |
| ● | sufficient cash flow and liquidity to fund operations for the next twelve months; | |
| ● | projected cash flows from operations subject to timing and uncertainty, including those resulting from ongoing federal spending constraints; | |
| ● | amount and funding of capital expenditures; | |
| ● | funding of operating and capital expenditures from existing cash from operations, PNC Liquidity under our Credit Facility, and/or financing; | |
| ● | ability to continue to operate as a going concern; |
| 27 |
| ● | obtain additional liquidity on acceptable terms, or at all; | |
| ● | adoption and acceptance of our PFAS technology are subject to regulatory and market factors; | |
| ● | limited current treatment destruction options for these materials to eliminate generator liabilities; | |
| ● | commissioning of our second generation PFAS destruction unit in the fourth quarter of 2026, with operations during the first half of 2027; | |
| ● | expectation that the second generation PFAS destruction unit will triple our production capacity; | |
| ● | funding of remediation expenditures for sites from funds generated internally; | |
| ● | compliance with environmental regulations; | |
| ● | remediation of material weakness identified; | |
| ● | potential effect of being a PRP; | |
| ● | material adverse effect on financial condition, results of operations, or cash flow from notice of non-compliance at the PFNW facility; | |
| ● | favorable resolution of the notice of non-compliance at the PFNW facility; 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 process waste at our facilities; | |
| ● | 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; | |
| ● | 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; | |
| ● | material adjustments to environmental remediation reserves; | |
| ● | 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; | |
| ● | changes in the scope of work relating to existing contracts; | |
| ● | occurrence of a health pandemic 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; |
| 28 |
| ● | 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; | |
| ● | supply chain difficulties; | |
| ● | pricing adjustments; | |
| ● | cost reduction measures; | |
| ● | new governmental regulations; and | |
| ● | risk factors and other factors set forth in “Special Note Regarding Forward-Looking Statements” contained in the Company’s 2025 Form 10-K and the “Forward-Looking Statements” contained in the MD&A of the first and second quarters 2026 Form 10-Qs and this third quarter 2026 Form 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
Our overall revenue increased in the third quarter of 2026 compared to the same period of 2025; however, our operating results continued to be impacted by certain customer-related and operational factors. These included customer-directed delays in waste processing activities within our Treatment Segment and the timing of project mobilizations within our Services Segment. The most significant factor affecting our third-quarter results was customer-directed changes in treatment protocols that delayed the processing of shipments of a certain Hanford-related waste stream received beginning in the second quarter of 2026 from the DOE Hanford site until September 2026. In addition, the timing of shipments of certain liquid and solid wastes under the DFLAW program resulted in lower-than-expected waste receipts during the quarter, and temporary downtime of certain processing equipment due to scheduled maintenance and upgrades further impacted Treatment Segment results. The affected processing equipment has since returned to operation.
Despite these challenges, continued waste receipts, combined with delays in processing of certain waste streams, contributed to an increase in our Treatment Segment backlog to approximately $19,608,000 at September 30, 2026, representing an increase of approximately 24.6% from $15,733,000 at June 30, 2026. We believe this growing backlog supports future treatment activities; however, the timing of revenue recognized from our backlog may vary depending on waste complexity, customer requirements, and operational considerations.
Our Services Segment revenue increased during the third quarter of 2026 compared with the corresponding period of 2025, primarily driven by increased project activity, including projects awarded since the beginning of 2026. These awards included a two-year master task agreement awarded in the first quarter of 2026 with an estimated value of approximately $24 million for demolition and disposal services at Lawrence Livermore National Laboratory (“LLNL”). However, revenue growth was partially constrained by customer-related delays in the mobilization of a project awarded during the early part of the second quarter of 2026. The project has since been mobilized.
| 29 |
On August 10, 2026, we were awarded a Master IDIQ Subcontract by Hanford Tank Waste Operations & Closure, LLC (“H2C”) for the treatment and disposal of pretreated liquid mixed low-level waste from DOE’s Hanford Site (the “Company’s Master Subcontract”). H2C also awarded Master IDIQ Subcontracts to two other companies. H2C is the prime contractor to DOE’s Office of Environmental Management for tank waste operations and closure at the Hanford Site in southeastern Washington State. Work awarded to us under future task orders, if any, would be performed at our PFNW facility in Richland, Washington, and would include the receipt and treatment of pretreated mixed low-level waste, with treated waste transported by rail for final disposal at a licensed commercial mixed low-level waste disposal facility outside the State of Washington. Task orders may be issued from January 1, 2027, through December 31, 2041, with performance of task orders issued before the end of the ordering period permitted for up to five years beyond the end of the ordering period. However, the commencement and timing of task orders, if any, are subject to applicable regulatory requirements, operational considerations, and other factors outside of our control. The multiple-award IDIQ procurement provides for a maximum cumulative quantity of 50 million gallons and a maximum cumulative value of approximately $4.4 billion. These amounts represent procurement ceilings shared among all Master IDIQ Subcontract holders and do not represent amounts awarded or committed to us. The number, size, and timing of task orders that might be issued to us under the Company’s Master Subcontract, if any, cannot be determined or assured. Under our Performance Work Statement, we are required to maintain the capability to treat and dispose of pretreated tank waste at a rate of 100,800 gallons per week in accordance with applicable facility license and permit conditions.
Our PFNW facility continues to work with Washington State regulators to expand its existing grouting permit capacity of 1.2 million gallons annually to levels that would support DOE’s objectives for both the East and West tank farms at Hanford. We are advancing the final design and procurement of facility upgrades necessary to achieve the expanded capacity, which we currently anticipate completing in late 2027. Implementation of these upgrades remains subject to continued coordination with Washington State regulators and applicable regulatory approvals. Separately, we have further invested in more advanced processing equipment to enhance our capabilities to process current and anticipated Hanford-related waste streams.
We believe our investments, together with our continued focus on personnel and operational readiness and our acquisition of the rail-line land parcel connecting the PFNW property to the Port of Benton short-line railroad, position us to support increasing Hanford-related activity. See “Note 8 – Long-Term Debt – Promissory Note” to the accompanying Condensed Consolidated Financial Statements for further discussion of the rail-line land parcel.
Looking ahead, we expect improved financial performance in the coming year driven in part by increased project activity within our Services Segment, continued processing of our Treatment Segment backlog, and anticipated waste receipts from Hanford’s cleanup programs including increasing effluent from DFLAW to include both solid and liquid waste streams. We also continue to pursue additional procurement opportunities within DOE and DOW, while expanding our presence in commercial and international markets. In addition, we have negotiated rate increases for certain government and commercial waste streams, including a significant rate increase for a particular government waste stream that will become effective during the fourth quarter of 2026. The commercial rate increases became effective late in the third quarter of 2026. We expect these increases to favorably impact Treatment Segment revenue and margins. While the timing and volume of waste receipts and processing activities remain subject to customer requirements and operational considerations, we believe these developments and ongoing activities position us for improved operating results in the coming year.
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 2026 and 2027.
Financial Results Overview
As a result of the factors discussed above, revenue increased by $494,000, or 2.8%, to $17,948,000 for the three months ended September 30, 2026, compared with $17,454,000 for the same period in 2025. The increase was attributable entirely to the Services Segment, in which revenue increased by $2,007,000, or 46.2%, to $6,347,000 from $4,340,000 in the prior-year period. Treatment Segment revenue declined by $1,513,000, or 11.5%, to $11,601,000 from $13,114,000 in the prior-year period. Cost of goods sold increased by $2,499,000, or 16.8%, to $17,396,000 for the three months ended September 30, 2026, compared with $14,897,000 for the same period in 2025. As a result, gross profit decreased by $2,005,000 to $552,000 for the three months ended September 30, 2026, compared with $2,557,000 in the prior-year period. SG&A expenses decreased by $85,000 to $3,998,000 for the three months ended September 30, 2026, from $4,083,000 in the same period in 2025.
| 30 |
For the nine months ended September 30, 2026, revenue decreased by $4,000,000, or 8.7%, to $41,959,000 from $45,959,000 for the same period in 2025. The decrease was attributable entirely to our Treatment Segment, in which revenue declined by $5,928,000, or 17.6%. Services Segment revenue increased by $1,928,000, or 15.7%, to $14,191,000 for the nine months ended September 30, 2026, from $12,263,000 for the same period in 2025. Cost of goods sold increased by $5,594,000, or 13.6%, to $46,792,000 for the nine months ended September 30, 2026, from $41,198,000 in the same period in 2025. As a result, gross profit decreased by $9,594,000, resulting in a gross loss of $4,833,000 for the nine months ended September 30, 2026, compared with a gross profit of $4,761,000 in the prior-year period. SG&A expenses decreased by $181,000, or 1.5%, to $12,047,000 from $12,228,000 for the same period in 2025.
See below “Results of Operations” for a discussion of our financial results for the three and nine months ended September 30, 2026 as compared to the corresponding period of 2025.
Management concluded that substantial doubt continues to exist about our ability to continue as a going concern within one year after the date the accompanying Condensed Consolidated Financial Statements are issued (see “Liquidity and Capital Resources” within this MD&A for a discussion of the factors and conditions underlying this conclusion).
Business Environment
Our Treatment and Services Segments’ business continue 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. 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, government shutdown 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, liquidity and cash flows.
Results of Operations
The reporting of financial results and pertinent discussions are tailored to our two reportable segments: The Treatment Segment and Services Segment.
| 31 |
Summary – Three and Nine Months Ended September 30, 2026, and 2025
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||
| Consolidated (amounts in thousands) | 2026 | % | 2025 | % | 2026 | % | 2025 | % | ||||||||||||||||||||||||
| Net revenues | $ | 17,948 | 100.0 | $ | 17,454 | 100.0 | $ | 41,959 | 100.0 | $ | 45,959 | 100.0 | ||||||||||||||||||||
| Cost of goods sold | 17,396 | 96.9 | 14,897 | 85.4 | 46,792 | 111.5 | 41,198 | 89.6 | ||||||||||||||||||||||||
| Gross profit (loss) | 552 | 3.1 | 2,557 | 14.6 | (4,833 | ) | (11.5 | ) | 4,761 | 10.4 | ||||||||||||||||||||||
| Selling, general and administrative | 3,998 | 22.3 | 4,083 | 23.4 | 12,047 | 28.7 | 12,228 | 26.6 | ||||||||||||||||||||||||
| Research and development | 225 | 1.3 | 342 | 2.0 | 781 | 1.9 | 1,037 | 2.3 | ||||||||||||||||||||||||
| (Gain) loss on disposal of property and equipment | (5 | ) | (.1 | ) | 4 | — | (5 | ) | — | (2 | ) | — | ||||||||||||||||||||
| Loss from operations | (3,666 | ) | (20.4 | ) | (1,872 | ) | (10.8 | ) | (17,656 | ) | (42.1 | ) | (8,502 | ) | (18.5 | ) | ||||||||||||||||
| Interest income | 240 | 1.3 | 266 | 1.5 | 624 | 1.5 | 901 | 1.9 | ||||||||||||||||||||||||
| Interest expense | (80 | ) | (.4 | ) | (116 | ) | (.6 | ) | (213 | ) | (.5 | ) | (351 | ) | (.8 | ) | ||||||||||||||||
| Interest expense-financing fees | (16 | ) | (.1 | ) | (22 | ) | (.1 | ) | (59 | ) | (.1 | ) | (63 | ) | (.1 | ) | ||||||||||||||||
| Other | 114 | .6 | (18 | ) | (.1 | ) | 258 | .6 | 171 | .4 | ||||||||||||||||||||||
| Loss from continuing operations before taxes | (3,408 | ) | (19.0 | ) | (1,762 | ) | (10.1 | ) | (17,046 | ) | (40.6 | ) | (7,844 | ) | (17.1 | ) | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Loss from continuing operations, net of taxes | $ | (3,408 | ) | (19.0 | ) | $ | (1,762 | ) | (10.1 | ) | $ | (17,046 | ) | (40.6 | ) | $ | (7,844 | ) | (17.1 | ) | ||||||||||||
Revenues
Consolidated revenues increased $494,000 for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, as follows:
| (In thousands) | 2026 | % Revenue | 2025 | % Revenue | Change | % Change | ||||||||||||||||||
| Treatment | ||||||||||||||||||||||||
| Government waste | $ | 7,335 | 40.8 | $ | 9,503 | 54.4 | $ | (2,168 | ) | (22.8 | ) | |||||||||||||
| Hazardous/non-hazardous (1) | 1,680 | 9.4 | 1,375 | 7.9 | 305 | 22.2 | ||||||||||||||||||
| Other nuclear waste | 2,586 | 14.4 | 2,236 | 12.8 | 350 | 15.7 | ||||||||||||||||||
| Total | 11,601 | 64.6 | 13,114 | 75.1 | (1,513 | ) | (11.5 | ) | ||||||||||||||||
| Services | ||||||||||||||||||||||||
| Nuclear services | 4,009 | 22.4 | 2,422 | 13.9 | 1,587 | 65.5 | ||||||||||||||||||
| Technical services | 2,338 | 13.0 | 1,918 | 11.0 | 420 | 21.9 | ||||||||||||||||||
| Total | 6,347 | 35.4 | 4,340 | 24.9 | 2,007 | 46.2 | ||||||||||||||||||
| Total | $ | 17,948 | 100.0 | $ | 17,454 | 100.0 | $ | 494 | 2.8 | |||||||||||||||
(1) Includes waste generated by government clients of $685,000 and $560,000 for the three months ended September 30, 2026, and the corresponding period of 2025, respectively.
Treatment Segment revenue decreased by $1,513,000, or 11.5%, for the three months ended September 30, 2026, compared with the same period in 2025. The decline was primarily due to lower waste volume as discussed in the “Overview” section.
The increase in revenue in our Services Segment was primarily attributable to a higher volume of project work during the period compared with the same period in 2025. Revenue in our Services Segment is project-based and is influenced by the scope, duration, timing, and completion of individual projects. As a result, revenue may fluctuate significantly between reporting periods based on the timing, scope, and mix of projects performed.
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Consolidated revenues decreased $4,000,000 for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, as follows:
| (In thousands) | 2026 | % Revenue | 2025 | % Revenue | Change | % Change | ||||||||||||||||||
| Treatment | ||||||||||||||||||||||||
| Government waste | $ | 17,262 | 41.1 | $ | 23,715 | 51.6 | $ | (6,453 | ) | (27.2 | ) | |||||||||||||
| Hazardous/non-hazardous (1) | 4,735 | 11.3 | 3,848 | 8.4 | 887 | 23.1 | ||||||||||||||||||
| Other nuclear waste | 5,771 | 13.8 | 6,133 | 13.3 | (362 | ) | (5.9 | ) | ||||||||||||||||
| Total | 27,768 | 66.2 | 33,696 | 73.3 | (5,928 | ) | (17.6 | ) | ||||||||||||||||
| Services | ||||||||||||||||||||||||
| Nuclear services | 8,387 | 20.0 | 7,478 | 16.3 | 909 | 12.2 | ||||||||||||||||||
| Technical services | 5,804 | 13.8 | 4,785 | 10.4 | 1,019 | 21.3 | ||||||||||||||||||
| Total | 14,191 | 33.8 | 12,263 | 26.7 | 1,928 | 15.7 | ||||||||||||||||||
| Total | $ | 41,959 | 100.0 | $ | 45,959 | 100.0 | $ | (4,000 | ) | (8.7 | ) | |||||||||||||
(1) Includes waste generated by government clients of $1,899,000 and $1,569,000 for the nine months ended September 30, 2026, and the corresponding period of 2025, respectively.
Treatment Segment revenue decreased by $5,928,000, or 17.6%, for the nine months ended September 30, 2026, compared with the same period in 2025. The decline was primarily due to lower waste volumes and a less favorable revenue mix. The less favorable revenue mix reflected lower average pricing, which was impacted in part by the processing of certain previously stored waste inventories that carried lower average pricing. These previously stored waste inventories were processed as part of our preparation for anticipated increases in Hanford-related waste volumes and were substantially processed by the end of the second quarter of 2026.
The increase in revenue in our Services Segment was primarily attributable to a higher volume of project activity beginning in the second quarter of 2026, partially offset by lower project activity during the first quarter of 2026. The lower project activity in the first quarter reflected, in part, seasonal factors, including typical winter weather conditions and post-holiday slowdowns that reduced field activity. Revenue in our Services Segment is project-based, with the scope, duration, timing, and completion of individual projects varying from period to period. As a result, revenue may fluctuate significantly between reporting periods depending on the timing, scope, and mix of projects performed.
Cost of Goods Sold
Cost of goods sold increased $2,499,000 for the quarter ended September 30, 2026, as compared to the quarter ended September 30, 2025, as follows:
| % | % | |||||||||||||||||||
| (In thousands) | 2026 | Revenue | 2025 | Revenue | Change | |||||||||||||||
| Treatment | $ | 11,826 | 101.9 | $ | 10,848 | 82.7 | $ | 978 | ||||||||||||
| Services | 5,570 | 87.8 | 4,049 | 93.3 | 1,521 | |||||||||||||||
| Total | $ | 17,396 | 96.9 | $ | 14,897 | 85.4 | $ | 2,499 | ||||||||||||
Cost of goods sold for the Treatment Segment increased by approximately $978,000, or 9.0%. Treatment Segment fixed costs increased by approximately $1,094,000. Fixed salaries and payroll-related expenses increased by approximately $756,000, primarily due to increased headcount. Maintenance costs increased by approximately $196,000 due to scheduled equipment maintenance and facility security enhancements. Depreciation expense increased by approximately $66,000 due to additional capitalized equipment, including our prototype PFAS reactor. Regulatory expenses increased by approximately $49,000 due to increased regulatory activities and higher fees assessed by regulatory agencies. The remaining increases were from higher travel and general expenses totaling approximately $27,000. Treatment Segment variable costs decreased by approximately $116,000, primarily due to lower materials and supplies, transportation, and outside services costs totaling approximately $312,000, partially offset by higher disposal costs of approximately $29,000 and higher overtime expenses of approximately $167,000. Within our Treatment Segment, the composition and level of variable costs can fluctuate based on the waste mix.
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Services Segment cost of goods sold increased by $1,521,000, or 37.6%, primarily reflecting the higher volume of project work during the period. The increase was primarily attributable to higher subcontract and outside services costs of approximately $736,000 and higher salaries and payroll-related expenses of approximately $362,000, reflecting increased labor requirements from higher volume of project work. Additional increases included materials and supplies, laboratory services, disposal, and regulatory costs totaling approximately $464,000. These increases were partially offset by lower travel expenses of approximately $41,000. Within our Services Segment, the composition and level of cost of goods sold are influenced by the type, scope, and timing of projects performed during the period. Certain projects require greater reliance on subcontractors, specialized materials, regulatory compliance activities, or travel, while others are more labor-intensive or utilize primarily in-house resources. As a result, the mix of project work can significantly affect the composition and level of costs incurred, which may not change proportionately with revenue.
Cost of goods sold increased $5,594,000 for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, as follows:
| % | % | |||||||||||||||||||
| (In thousands) | 2026 | Revenue | 2025 | Revenue | Change | |||||||||||||||
| Treatment | $ | 33,479 | 120.6 | $ | 29,614 | 87.9 | $ | 3,865 | ||||||||||||
| Services | 13,313 | 93.8 | 11,584 | 94.5 | 1,729 | |||||||||||||||
| Total | $ | 46,792 | 111.5 | $ | 41,198 | 89.6 | $ | 5,594 | ||||||||||||
Cost of goods sold for the Treatment Segment increased by approximately $3,865,000, or 13.1%. Variable costs increased by approximately $1,571,000, primarily due to higher disposal, materials and supplies, transportation, and laboratory costs totaling approximately $1,170,000, as well as higher overtime expenses of approximately $401,000 incurred in processing previously stored waste inventories in preparation for anticipated increases in Hanford-related waste volumes. Within our Treatment Segment, the composition and level of variable costs can fluctuate based on the mix of waste processed. Treatment Segment fixed costs increased by approximately $2,294,000, primarily due to higher salaries and payroll-related expenses of approximately $1,567,000, resulting from COLA implemented in July 2025 and increased headcount. Maintenance costs increased by approximately $323,000 due to scheduled maintenance, general equipment upkeep, and facility security enhancements. Depreciation expense increased by approximately $199,000 due to additional capitalized equipment, including our prototype PFAS reactor. Regulatory expenses increased by approximately $241,000 due to increased regulatory activities and higher fees assessed by regulatory agencies. These increases were partially offset by a decrease of approximately $36,000 in general expenses, primarily due to lower utility costs.
Services Segment cost of goods sold increased by $1,729,000, or 14.9%. The increase was primarily driven by higher salaries and payroll-related expenses of approximately $897,000, reflecting COLA implemented in July 2025, as well as increased labor required by the higher volume of project work. Additional increases included higher subcontract and outside services costs of approximately $461,000, higher travel expenses of approximately $193,000, and higher materials and supplies, laboratory services, disposal, and regulatory costs totaling approximately $299,000. These increases were partially offset by lower general expenses of approximately $88,000 across various categories and lower depreciation expenses of approximately $33,000 as certain equipment became fully depreciated in 2025. Within our Services Segment, the composition and level of cost of goods sold are influenced by the type, scope, and timing of projects performed during the period. Certain projects require greater reliance on subcontractors, specialized materials, regulatory compliance activities, or travel, while others are more labor-intensive or utilize primarily in-house resources. As a result, the mix of project work can significantly affect the composition and level of costs incurred, which may not change proportionately with revenue.
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Gross Profit (Loss)
Gross profit for the quarter ended September 30, 2026, decreased $2,005,000 over the same period of 2025, as follows:
| % | % | |||||||||||||||||||
| (In thousands) | 2026 | Revenue | 2025 | Revenue | Change | |||||||||||||||
| Treatment | $ | (225 | ) | (1.9 | ) | $ | 2,266 | 17.3 | $ | (2,491 | ) | |||||||||
| Services | 777 | 12.2 | 291 | 6.7 | 486 | |||||||||||||||
| Total | $ | 552 | 3.1 | $ | 2,557 | 14.6 | $ | (2,005 | ) | |||||||||||
Treatment Segment incurred a gross loss of $225,000 for the three months ended September 30, 2026, compared with a gross profit of $2,266,000 for the same period in 2025. Gross margin declined to (1.9%) from 17.3%. The decline in gross profit and gross margin was primarily due to lower revenue resulting from reduced waste volumes and higher fixed operating costs, which were spread over a lower revenue base, further adversely impacting gross margin.
Services Segment gross profit increased by approximately $486,000, and gross margin improved to 12.2% from 6.7% in the prior-year period, primarily due to higher revenue and a more favorable mix of projects performed. Gross margins within our Services Segment are influenced by the type, scope, and mix of projects performed, which are generally competitively bid and have varying margin structures. As a result, gross margins may fluctuate from period to period based on the timing and mix of projects completed.
Gross profit for the nine months ended September 30, 2026, decreased $9,594,000 over the same period in 2025, as follows:
| % | % | |||||||||||||||||||
| (In thousands) | 2026 | Revenue | 2025 | Revenue | Change | |||||||||||||||
| Treatment | $ | (5,711 | ) | (20.6 | ) | $ | 4,082 | 12.1 | $ | (9,793 | ) | |||||||||
| Services | 878 | 6.2 | 679 | 5.5 | 199 | |||||||||||||||
| Total | $ | (4,833 | ) | (11.5 | ) | $ | 4,761 | 10.4 | $ | (9,594 | ) | |||||||||
The Treatment Segment incurred a gross loss of $5,711,000 for the nine months ended September 30, 2026, compared with a gross profit of $4,082,000 for the same period in 2025. Gross margin declined to (20.6%) from 12.1%, primarily due to lower revenue resulting from reduced waste volumes and a less favorable revenue mix. In addition, higher fixed operating costs, which were spread over a lower revenue base, further reduced gross margin and contributed to the gross loss.
Services Segment gross profit increased by $199,000, and gross margin improved to 6.2% from 5.5% in the prior-year period, primarily due to higher revenue from increased project work. Gross margins within our Services Segment are influenced by the type, scope, and mix of projects performed, which are generally competitively bid and have varying margin structures. As a result, gross margins may fluctuate from period to period based on the timing and mix of projects completed.
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SG&A
SG&A expenses decreased $85,000 for the three months ended September 30, 2026, as compared to the corresponding period for 2025, as follows:
| (In thousands) | 2026 | %
Revenue | 2025 | %
Revenue | Change | |||||||||||||||
| Administrative | $ | 2,088 | — | $ | 2,004 | — | $ | 84 | ||||||||||||
| Treatment | 1,332 | 11.5 | 1,333 | 10.2 | (1 | ) | ||||||||||||||
| Services | 578 | 9.1 | 746 | 17.2 | (168 | ) | ||||||||||||||
| Total | $ | 3,998 | 22.3 | $ | 4,083 | 23.4 | $ | (85 | ) | |||||||||||
Administrative SG&A expenses increased primarily due to higher outside services costs of approximately $56,000 associated with increased legal and business activities, higher travel expenses of approximately $14,000 resulting from increased executive travel, and higher general expenses of approximately $14,000 across various categories.
Treatment Segment SG&A expenses decreased slightly, primarily due to lower salaries and payroll-related expenses of approximately $31,000, reflecting fewer employee hours required to support administrative and marketing functions. This decrease was substantially offset by higher general expenses of approximately $30,000 across various categories.
Services Segment SG&A expenses decreased primarily due to lower salaries and payroll-related expenses of approximately $148,000, reflecting fewer employee hours required to support marketing functions, partially offset by higher outside services costs associated with business-related activities.
SG&A expenses decreased $181,000 for the nine months ended September 30, 2026, as compared to the corresponding period for 2025, as follows:
| (In thousands) | 2026 | %
Revenue | 2025 | %
Revenue | Change | |||||||||||||||
| Administrative | $ | 6,188 | — | $ | 5,884 | — | $ | 304 | ||||||||||||
| Treatment | 4,056 | 14.6 | 4,039 | 12.0 | 17 | |||||||||||||||
| Services | 1,803 | 12.7 | 2,305 | 18.8 | (502 | ) | ||||||||||||||
| Total | $ | 12,047 | 28.7 | $ | 12,228 | 26.6 | $ | (181 | ) | |||||||||||
Administrative SG&A expenses increased primarily due to higher outside services costs of approximately $240,000 associated with increased legal and business activities. The remaining increase was primarily attributable to higher salaries and payroll-related expenses resulting from COLA implemented in July 2025 for employees and January 2026 for executives.
Treatment Segment SG&A expenses increased primarily due to higher outside services costs of approximately $62,000 associated with increased consulting and business activities and higher travel expenses of approximately $36,000 incurred by information technology personnel. These increases were partially offset by lower salaries and payroll-related expenses, reflecting fewer employee hours required to support administrative and marketing functions.
Services Segment SG&A expenses decreased primarily due to a decrease in provision for credit losses of approximately $283,000 resulting from the settlement of a receivable previously determined to be uncollectible. The remaining decrease was primarily attributable to lower travel expenses of approximately $30,000 and reduced salaries and payroll-related expenses due to fewer employee hours devoted to marketing activities.
Interest Income
Interest income decreased by approximately $26,000 and $277,000 for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods of 2025. The decreases were primarily attributable to lower average balances maintained in our MMDA and lower interest rates earned on our finite risk sinking fund. The higher average MMDA balances in 2025 were primarily attributable to proceeds received from two equity offerings completed in May and December 2024.
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Interest Expense
Interest expense decreased by approximately $36,000 and $138,000 for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods of 2025. The decreases were primarily attributable to capitalization of approximately $33,000 and $107,000 of interest expense during the three and nine months ended September 30, 2026, respectively, associated with debt incurred for construction projects, including our second PFAS reactor.
Income Taxes
We had no income tax expense for continuing operations for the three and nine months ended September 30, 2026 and 2025. Our effective tax rate was 0% for each period as a result of the full valuation allowance recognized against its U.S. federal and state deferred tax assets during the quarter ended September 30, 2024.
Liquidity and Capital Resources
Our cash flow requirements during the nine months ended September 30, 2026, were funded primarily from available PNC Liquidity. Our PNC Liquidity includes cash held in our MMDA, which includes net proceeds from the sale of 2,628,571 shares of our Common Stock completed in May 2026 (see “Financing Activities” below within this MD&A and “Note 13—Sale of Common Stock” to the accompanying Condensed Consolidated Financial Statements for further discussion of the equity offering).
As of September 30, 2026, we had no outstanding borrowings under our Revolving Credit. PNC Liquidity is provided by two sources: cash, the substantial majority of which is held in our MMDA with our lender and borrowing availability under our Revolving Credit. As of September 30, 2026, cash held in our MMDA was approximately $14,331,000, compared to approximately $11,529,000 as of December 31, 2025, with the increase reflecting the net proceeds of approximately $21,114,000 from our May 2026 equity offering, substantially offset by cash used in operations and for capital expenditures during the first nine months of 2026. Borrowing availability under our Revolving Credit, which is determined by a borrowing base of eligible receivables and reduced by outstanding standby letters of credit ($3,420,000) and lender-imposed discretionary reserves ($750,000), was approximately $5,533,000 as of September 30, 2026, compared to approximately $6,597,000 as of December 31, 2025, primarily reflecting lower eligible receivables. As a result, our PNC Liquidity was approximately $19,864,000 as of September 30, 2026, compared to approximately $18,126,000 as of December 31, 2025. Our PNC Liquidity declined from approximately $25,584,000 as of June 30, 2026, reflecting continued operating losses and capital expenditures during the third quarter. Because availability under our Revolving Credit depends on the level of our eligible receivables, reductions in eligible receivables, or continued use of cash to fund operating losses and capital expenditures, could further reduce our PNC Liquidity.
We incurred losses from continuing operations before tax of $15,134,000 during 2024, $10,665,000 during 2025, and $17,046,000 during the first nine months of 2026. We also experienced cash used in continuing operations of $14,146,000 during 2024, $10,311,000 during 2025, and $10,796,000 during the first nine months of 2026. Our operating results and liquidity were impacted in part by delays in the enactment of federal appropriations and Congress’s continued use of CRs, increased investments in PFAS destruction technology (see “Known Trends and Uncertainties – New Processing Technology” within this MD&A for a discussion of our new technology), expansion of treatment capacity, workforce growth, equipment upgrades, and infrastructure enhancements intended to support anticipated waste treatment volumes, including anticipated Hanford-related waste volumes. In addition, during the first nine months of 2026, delays in the mobilization of a recently awarded project within our Services Segment, temporary downtime of certain processing equipment due to scheduled maintenance and upgrades, processing delays resulting from customer-directed changes in treatment protocols, and the processing of previously stored waste inventories to prepare for anticipated increases in certain Hanford-related waste volumes negatively impacted our revenues and results of operations. Certain of these previously stored waste inventories carried lower margins, which adversely affected our results of operations in 2026. These lower-margin previously stored waste inventories were substantially processed by the end of the second quarter.
Our expected cash requirements over the next twelve months include working capital needs, scheduled principal payments on debt, costs associated with the administration and monitoring of discontinued operations, R&D expenditures related to PFAS technology, and capital expenditures.
A significant portion of our projected revenues and cash flows underlying our forecast depends on the timing and volume of waste shipments and project activity directed by U.S. government customers. Because these customers do not provide binding assurances regarding the timing or volume of future work, and such activity is subject to appropriations, procurement processes, operational considerations, and other factors outside our control, we could not conclude that our plans are probable of effectively mitigating the conditions giving rise to substantial doubt. Accordingly, substantial doubt continues to exist about our ability to continue as a going concern for one year following the date the accompanying Condensed Consolidated Financial Statements are issued.
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Our plans to address these conditions include utilizing existing cash and borrowing availability; pursuing operating improvements supported by the Company’s Treatment and Services Segment backlogs; continuing to pursue additional government, commercial, and international project opportunities; managing capital expenditures and operating costs; and, if necessary, seeking additional liquidity through equity or other financing arrangements or potential asset dispositions. There can be no assurance that these plans, or any component thereof, can be achieved. In addition, on August 10, 2026, we extended the maturity of our PNC Credit Facility from May 2027 to May 2030, among other things (see “Liquidity and Capital Resources—Financing Activities—Credit Facility” for a discussion of this extension).
Although the May 2026 equity offering discussed elsewhere in this Report strengthened our liquidity, continued operating losses since the offering and significant capital expenditures, including investments made to support anticipated waste treatment volumes and improve operational capabilities, have reduced our liquidity position. Therefore, we concluded that substantial doubt has not been alleviated. We expect to fund our operations during the assessment period with our existing liquidity, anticipated operating cash flows and borrowing availability. However, the ability of our plans to mitigate the conditions giving rise to substantial doubt depends in part on the timing and volume of government-directed waste shipments and project activity, as well as other matters outside our control. In addition, our borrowing availability is subject to compliance with applicable financial covenants and other conditions. There can be no assurance that additional liquidity, if needed, will be available on acceptable terms or at all.
The following table reflects the cash flow activities during the first nine months of 2026 and 2025.
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| (In thousands) | 2026 | 2025 | ||||||
| Cash used in operating activities of continuing operations | $ | (10,796 | ) | $ | (8,286 | ) | ||
| Cash used in operating activities of discontinued operations | (215 | ) | (317 | ) | ||||
| Cash used in investing activities of continuing operations | (6,041 | ) | (2,709 | ) | ||||
| Cash used in investing activities of discontinued operations | (45 | ) | (36 | ) | ||||
| Cash provided by (used in) financing activities of continuing operations | 20,442 | (832 | ) | |||||
| Effect of exchange rate changes in cash | (10 | ) | 21 | |||||
| Increase (decrease) in cash and finite risk sinking fund (restricted cash) | $ | 3,335 | $ | (12,159 | ) | |||
As of September 30, 2026, we had cash on hand of approximately $14,743,000.
Operating Activities
Cash used in operating activities from continuing operations during the first nine months of 2026 primarily reflected our net loss from continuing operations of approximately $17,046,000, adjusted for non-cash items, including stock-based compensation expense of approximately $631,000 and depreciation and amortization expense of approximately $1,469,000. Changes in operating assets and liabilities provided approximately $3,993,000 of cash, primarily reflecting a decrease in accounts receivable (net of provision for credit losses) of approximately $1,204,000, a net decrease in prepaid expenses, inventories and other assets of approximately $246,000, and a net increase in accounts payable, accrued expenses, deferred revenue, and other accrued liabilities of approximately $5,660,000. These favorable changes were partially offset by an increase in unbilled receivables of approximately $3,117,000. Accounts receivable balances are affected by the timing of customer invoicing and collections, while cash receipts are influenced by the payment terms and conditions of our customer contracts.
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Cash used in operating activities of our continuing operations during the first nine months of 2025 consisted mostly of the net loss from continuing operations of approximately $7,844,000, adjusted for certain non-cash items, such as $597,000 of stock-based compensation expenses and $1,299,000 of depreciation and amortization expenses. Cash flow decrease of approximately $2,812,000 resulting from net change in assets and liabilities reflects increases in unbilled and accounts receivable (net of provision for credit losses) totaling approximately $3,771,000, a net decrease in accounts payables, accrued expenses, deferred revenue and other accruals totaling approximately $719,000, offset by a net decrease in prepaids, inventories and other assets totaling approximately of $1,678,000.
Cash used in operating activities from discontinued operations during the first nine months of 2026 and 2025 consisted primarily of costs incurred in connection with the management of administrative and regulatory matters related to our remediation projects. For the first nine months of 2026, operating cash outlay for our discontinued operations was partially offset by approximately $130,000 received in the third quarter of 2026 related to a member-approved reimbursement of contributions and expenses in connection with our participation in an association of PRP (see “Note 10 – Discontinued Operations” to the accompanying Condensed Consolidated Financial Statements for further discussion of reimbursement).
We had working capital of $11,394,000 (which included working capital of our discontinued operations) as of September 30, 2026, compared to $13,803,000 as of December 31, 2025. The decrease in working capital was primarily attributable to significant losses incurred during the nine months ended September 30, 2026, partially offset by net proceeds received from our equity offering completed in May 2026. In addition, working capital was negatively impacted by the reclassification of approximately $1,091,000 of remediation liabilities in the third quarter of 2026 associated with one of our discontinued operations from long-term liabilities to current liabilities.
Investing Activities
Cash used in investing activities from continuing operations during the first nine months of 2026 consisted primarily of approximately $5,184,000 in purchases of property and equipment, $481,000 in advance payments for capital equipment and $381,000 in expenditures for operating permits and certain intangible assets, partially offset by $5,000 in proceeds from the sale of idle equipment.
Cash used in investing activities of our continuing operations in the first nine months of 2025 consisted primarily of approximately $2,634,000 in purchases of property and equipment and $103,000 in expenditures for operating permits and certain intangible assets, partially offset by $28,000 in proceeds from the sale of idle equipment.
We anticipate making capital expenditures for the remainder of 2026 of approximately $4,600,000, which include expenditures for our second-generation reactor for our PFAS technology, continuing facility upgrades and capacity enhancements to support anticipated increases in waste volumes associated with the Hanford waste program, and equipment to improve operational capabilities. We plan to fund our capital expenditures for the remainder of 2026 from cash from operations, available PNC Liquidity (which includes proceeds from the May 2026 equity raise) and/or financing. The initiation, timing, and amount of these capital expenditures are subject to a number of factors, including, among other things, cost/benefit analysis, the pace of our strategic project initiatives, operating performance, project timing, and management’s continuing evaluation of liquidity. Continuing losses may require us to seek additional liquidity through equity or other financing arrangements, potential asset dispositions, or other strategic alternatives. We may also be required to reduce certain operating expenditures, including, but not limited to, reduction in R&D activities.
Under the August 2026 amendment to our PNC Loan Agreement, the annual $6,000,000 capital expenditure limitation (as defined under the PNC Loan Agreement) does not apply as long as we maintain minimum daily PNC Liquidity of at least $5,000,000. If our PNC Liquidity falls below $5,000,000, the annual capital expenditure limitation will be reinstated. As of September 30, 2026, our capital expenditures for 2026 had exceeded $6,000,000. Accordingly, a decline in PNC Liquidity below the required threshold would result in noncompliance with the capital expenditure covenant under our PNC Loan Agreement, unless a waiver or other relief is obtained from PNC. Our ability to make additional planned capital expenditures will depend, in part, on maintaining sufficient PNC Liquidity and compliance with the terms of our PNC Loan Agreement.
Cash used in investing activities of our discontinued operations in the first nine months of 2026 and 2025 consisted of payments made in connection with a certain regulatory permit at our PFSG subsidiary.
Financing Activities
Cash provided by financing activities during the first nine months of 2026 consisted primarily of net proceeds of approximately $21,114,000 received from the sale of 2,628,571 shares of our Common Stock in May 2026 to fund certain capital investments and general working capital needs (see “Note 13 – Sale of Common Stock” to the accompanying Condensed Consolidated Financial Statements for further discussion of this equity offering). The net proceeds reflect gross proceeds of approximately $23,000,000, less $1,886,000 of offering costs incurred in connection with the offering, all of which were paid as of September 30, 2026. Cash provided by financing activities also included approximately $164,000 in proceeds from stock option exercises. These cash inflows were partially offset by principal payments of approximately $820,000 on our Term Loan, Capital Loan, and finance lease obligations.
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Our cash used in financing during the first nine months of 2025 consisted mostly of principal payments of approximately $470,000 primarily for our Term and Capital Loans under our Credit Facility, principal payments of $228,000 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 $79,000.
Credit Facility
Our Credit Facility, established pursuant to our PNC Loan Agreement, consists of a Revolving Credit facility with a maximum borrowing capacity of $12,500,000. Availability under the Revolving Credit facility is subject to a borrowing base comprised of eligible receivables (as defined in the agreement) and is reduced by (i) outstanding standby letters of credit ($3,420,000 as of September 30, 2026) and (ii) discretionary reserves imposed by the lender ($750,000 as of September 30, 2026). After giving effect to the borrowing base limitation and these reductions, our borrowing availability under the Revolving Credit was approximately $5,533,000 as of September 30, 2026 (see the discussion of our sources of liquidity at the beginning of this “Liquidity and Capital Resources” section). The Credit Facility also includes a Term Loan and a Capital Loan with outstanding balances of approximately $958,000 and $70,000, respectively, as of September 30, 2026.
On August 10, 2026, we entered into an amendment to our PNC Loan Agreement with our lender that extended the maturity date of the PNC Loan Agreement from May 15, 2027 to May 15, 2030. The amendment also eliminated the annual capital expenditure limitation of $6,000,000, provided that we maintain a minimum daily PNC Liquidity of $5,000,000. If PNC Liquidity falls below $5,000,000, the annual capital expenditure limitation of $6,000,000 becomes applicable.
Pursuant to the amendment, we may terminate the PNC Loan Agreement upon 90 days’ prior written notice upon payment in full of its obligations under the PNC Loan Agreement. We also agreed to pay PNC 0.25% of the total financing in the event we pay off our obligations on or before May 15, 2027. No early termination fee shall apply if we pay off our obligations under the PNC Loan Agreement after May 15, 2027.
In connection with the amendment, we paid our lender a fee of $12,500. All other terms of the PNC Loan Agreement remain unchanged.
Our PNC Loan Agreement contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, unless waived by our lender, could result in a default under our PNC Loan Agreement allowing our lender to immediately require the repayment of all outstanding debt under our PNC Loan Agreement and terminate all commitments to extend further credit. We met all of our financial covenant requirements in the first, second and third quarters of 2026, including maintenance of a minimum of $5,000,000 in daily PNC Liquidity. As of September 30, 2026, our PNC Liquidity of approximately $19,864,000 exceeded the $5,000,000 minimum requirement by approximately $14,864,000. We expect to meet our financial covenant requirements 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 September 30, 2026, the total amount of standby letters of credit outstanding totaled approximately $3,420,000 and the total amount of bonds outstanding totaled approximately $19,315,000. We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through AIG. As of September 30, 2026, the closure and post-closure requirements for these facilities were approximately $24,953,000.
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, 2025.
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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 nine months of 2026 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 directly as a prime contractor or indirectly for others as a subcontractor to federal government entities, representing approximately $11,975,000 or 66.7% and $27,621,000 or 65.8% of our total revenues generated during the three and nine months ended September 30, 2026, respectively, as compared to $11,666,000 or 66.8% and $29,275,000 or 63.7% of our total revenues generated during the three and nine months ended September 30, 2025, respectively.
Federal Funding. 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. The timeliness of annual appropriations for U.S. government departments and agencies remains a recurrent risk for us. Uncertainties exist regarding how future federal government budgets and program and policy decisions will unfold, which include, the spending priorities of Congress, passage of federal government fiscal year annual budgets and potential for enactment of CRs to keep government departments and agencies in operations. 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.
Market Trends and Uncertainties. Macroeconomic conditions, including government and policy changes, government budget issues, tariff actions and uncertainties related to trade wars, ambiguity surrounding interest rates, inflationary pressures, softening labor markets, and geopolitical instability, including ongoing conflicts and unrest in the Middle East, have created significant uncertainty in the global economy and volatility in the capital markets. Inflationary pressures, including volatility in oil and fuel prices, have increased certain production-related variable costs, adversely impacting our gross margins. We continue to monitor the potential effects of these conditions on our revenue and profitability, including supply chain challenges, volatility in the cost of the goods and services we utilize in generating revenue, and economic pressures on our customers that may result in reduced and/or delayed spending. We continue to evaluate and implement strategic initiatives that we believe will assist us in managing the potential impacts of these factors, including supply chain optimization, pricing strategies, sourcing adjustments, and cost reduction measures designed to minimize the impact on our financial results.
New Processing Technology. With significant upgrades to our prototype Perma-FAS system (“System”) for PFAS destruction substantially completed in the latter part of 2025, our System has achieved commercial operational status at our Perma-Fix of Florida, Inc. facility. PFAS, commonly known as “forever chemicals,” is 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.
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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. However, as we work to expand commercialization of our PFAS technology, we continue to incur operating, R&D and capital costs associated with scaling, market development, regulatory acceptance, and further development of our technology. While we have filed patent applications relating to our technology for PFAS destruction and have processed limited commercial quantities of PFAS-containing waste materials with our System, there can be no assurance that demand, pricing, or throughput levels will be sufficient in the near term to offset these costs. Still, we believe that there are limited treatment options currently available that are intended to permanently destroy these materials, as opposed to managing them through storage or containment, which may be important to waste generators seeking to address potential long-term environmental liability. We believe that our patent-pending technology exceeds the performance of other current destruction-based methods; however, adoption and acceptance of any such technology remain subject to regulatory and market factors.
Some of the sizable markets for PFAS include Aqueous Film-Foaming Foam (“AFFF”) 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.
With our System commercially operational, we expect to begin commissioning our second-generation unit in the fourth quarter of 2026, with operations anticipated to commence during the first half of 2027 at our EWOC facility in Oak Ridge, Tennessee. We believe our second-generation will allow us to triple our production capacity. We continue to market our System technology through various channels.
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.
On April 30, 2026, we received a notice of non-compliance (the “Notice”) from the Washington State Department of Ecology (the “Department of Ecology”) following a June 24, 2025 inspection of our PFNW facility in Richland, Washington. The Notice is based on an inspection report identifying alleged non-compliance with certain Department of Ecology waste regulations and permit requirements and requires us to implement specified corrective actions and provide documentation of its compliance within prescribed timeframes.
No administrative order has been issued and no monetary penalties have been assessed as of the date of this report. We are actively responding to the Notice and implementing corrective measures. Based on information currently available and our ongoing response, we do not expect this matter to result in a material adverse effect on our financial condition, results of operations, or cash flows.
The outcome of this matter remains subject to regulatory review. While the Department of Ecology may pursue escalated enforcement action in accordance with Washington State Dangerous (Hazardous) Waste Regulations, we currently expect a favorable resolution of the Notice and do not believe that a loss is probable. Accordingly, the Company has not recorded an accrual for any potential loss related to this matter.
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 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 September 30, 2026, we had total environmental remediation liabilities of $3,413,000, a decrease of approximately $72,000 from the December 31, 2025, balance of $3,485,000. The decrease reflects payments for our PFSG remediation project. As of September 30, 2026, approximately $1,138,000 of the total environmental remediation liabilities were recorded as current.
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| Item 3. | Quantitative and Qualitative Disclosures about Market Risks |
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 SEC is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC 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 Exchange Act) were not effective as of September 30, 2026 due to a material weakness in our internal controls over financial reporting identified for the year ended December 31, 2025, as set forth below.
Material Weakness
For the Treatment Segment, management did not have a completeness check control that was effectively designed and implemented to provide assurance that revenue for waste disposal was appropriately accounted for as part of the period-end revenue reconciliation process. The material weakness identified resulted in errors in our books and records which led to identified adjustments during the year ended December 31, 2025. The errors arising from the underlying revenue adjustments were not material to the financial statements previously reported in any interim or annual period.
Remediation of Material Weakness in Internal Control Over Financial Reporting
We are committed to maintaining effective internal control over financial reporting. For the material weakness identified, we have implemented our remediation plan that includes completeness checks and additional reconciliation procedures related to processed waste and our inventory waste management systems at our Treatment Segment. However, additional time is required to evaluate and validate the operating effectiveness of these controls through testing. We expect to complete this validation by December 31, 2026. Until sufficient testing has been performed to demonstrate that the controls are operating effectively and the material weakness has been remediated, the material weakness described above will continue to exist.
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| (b) | Changes in internal control over financial reporting. |
| Other than the implementation of the remediation controls discussed above, there were 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. |
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PART II – OTHER INFORMATION
| Item 1. | Legal Proceedings |
There are no material legal proceedings pending against us and/or our subsidiaries not previously reported by us in Part I - Item 3 of our Form 10-K for the year ended December 31, 2025 and Part II - Item 1 of our Form 10-Q for the quarter ended June 30, 2026. In addition, there has been no material change in the legal proceedings previously disclosed by us in the “Michael O’Neill” and “Edwin Monroy Wage and Hour” under “Legal Matters” within “Note 9 - Commitments and Contingencies” of the Condensed Consolidated Financial Statements of our Form 10-Q for the quarter ended June 30, 2026.
| Item 1A. | Risk Factors |
There has been no material change from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2025 and Form 10-Qs for the quarters ended March 31, 2026 and June 30, 2026, except as follows:
Risks Relating to our Financial Performance and Position and Need for Financing:
We have sustained losses during 2024, 2025, and the first nine months of 2026.
The Company sustained significant losses during 2024, 2025, and the first nine months of 2026. We believe that our results of operations should improve in the coming twelve months. If, however, we fail to become profitable on an annualized basis in the foreseeable future, this could have a material adverse effect on our operations, credit facility, liquidity and potential growth. Continuing losses may require us to seek additional liquidity through equity or other financing arrangements, potential asset dispositions, or other strategic alternatives. We may also be required to reduce certain operating expenditures, including, but not limited to, reduction in R&D activities.
Our recurring losses and negative operating cash flows continue to raise substantial doubt about our ability to continue as a going concern, and our expected improvement depends substantially on government-directed waste shipments and project activity that are outside our control.
Our recurring operating losses and negative cash flows from continuing operations, including continued losses during the third quarter of 2026, have contributed to the ongoing substantial doubt about our ability to continue as a going concern within one year after the date those financial statements are issued. Although the May 2026 equity offering significantly increased our liquidity, continued operating losses since the offering and significant capital expenditures have reduced our liquidity. Management concluded that substantial doubt about our ability to continue as a going concern has not been alleviated because a significant portion of the revenues and cash flows underlying our forecast depends on the timing and volume of waste shipments and project activity directed by U.S. government customers. Those customers do not provide binding assurances regarding the timing or volume of future work, and such activity is subject to appropriations, procurement processes, operational considerations and other factors outside our control. We anticipate that the operational developments and backlog discussed in this report may result in improved operating results in the coming twelve months; however, the timing and amount of any improvement remain subject to significant uncertainty.
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| Item 6. | Exhibits |
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| # Certain schedules, exhibits, and attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A list briefly identifying the contents of all omitted schedules, exhibits, and attachments is included in the exhibit. The Company agrees to furnish supplementally a copy of any omitted schedule, exhibit, or attachment to the Securities and Exchange Commission upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| PERMA-FIX ENVIRONMENTAL SERVICES | ||
| Date: November 5, 2026 | By: | /s/ Mark Duff |
| Mark Duff | ||
| President and Chief (Principal) Executive Officer | ||
| Date: November 5, 2026 | By: | /s/ Ben Naccarato |
| Ben Naccarato | ||
| Chief (Principal) Financial Officer | ||
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