Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation

Basis of Presentation
3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation

1. Basis of Presentation


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


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


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


Financial Position and Liquidity


The Company’s results of operations in the first quarter of 2024 were impacted by accelerated investments and several events, which included the following:


● Accelerated investments in research and development (“R&D”) on our new technology to treat Per- and Polyfluorinated Substances (“PFAS”);

● Reduced activities by our customers due to poor weather conditions, which resulted in the closure of two of our facilities for a week, including delays in shipments to support backlog;

● Continuing Resolution impacts due to the inability of Congress to pass a Federal Budget through late March 2024, which contributed to delays in procurements, project starts and waste shipment, due to uncertain budget projections by our government clients;

● Completion of two large projects in the Services Segment that were not replaced by new project starts due to delays in mobilization activities until late April; and

● All three primary treatment facilities realized outages in March which impacted revenue as the Company utilized the aforementioned slowdowns for equipment replacement and repairs, program enhancements, and testing to support permit expansion and broader market penetration.


The Company believes that most of these accelerated investments and unanticipated impacts should have limited duration effects to its financial performance. The Company expects that the second quarter will not include material continued impact from these activities. With the passage of the Federal Budget in late March 2024 and improved weather conditions, the Company has begun to see steady improvements in waste receipts, project starts that were delayed and increased procurement activities. The Company’s waste treatment backlog stands at approximately $10,580,000 as of March 31, 2024, an increase of approximately $1,878,000 from the December 31, 2023, balance of $8,702,000.


The Company’s cash flow requirements for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on its debt obligations, remediation projects, and planned capital expenditures which include its PFAS technology. The Company plans to fund these requirements from its operations, credit facility availability, cash on hand (which will include, when received, cash from outstanding receivables due to our Perma-Fix Canada, Inc. subsidiary from a certain customer - See “Note 9 – Commitments and Contingencies - Perma-Fix Canada, Inc. (“PF Canada”)” for a discussion of this outstanding receivables) and possible other methods. The Company’s ability to utilize its credit facility from its lender is subject to meeting our quarterly financial covenant requirements, among other things. The Company continues to explore all sources of increasing its capital and/or liquidity and to improve its revenue and working capital, including, but not limited to entering into equity transactions. There are no assurances that the Company will be successful in increasing its liquidity through its efforts. The Company is continually reviewing operating costs and reviewing the possibility of further reducing operating costs and non-essential expenditures to bring them in line with revenue levels, when necessary. The Company believes that its cash flows from operations, its available liquidity from its credit facility, and its cash on hand (which will include, when received, cash from the outstanding Canadian receivables noted above) should be sufficient to fund our operations for the next twelve months.