Quarterly report pursuant to sections 13 or 15(d)

Subsequent Events

Subsequent Events
3 Months Ended
Mar. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

12. Subsequent Events

Amendment to Amended Loan Agreement
On April 14, 2014, the Company entered into an Amendment to the Company’s Amended Loan Agreement with PNC Bank, our lender under the credit facility.  Pursuant to the Amendment, our lender waived and/or amended the following:
· waived the quarterly fixed charge coverage ratio testing requirement for the first quarter of 2014;
· allowed for the purchase of 80% of a subsidiary in Poland (“CEE Opportunity Partners Poland S.A”  (or “Polish Subsidiary”) on April 4, 2014) and the formation of Perma-Fix Medical Corporation (“PFMedical” which was incorporated on January 21, 2014), neither of which shall be a credit party under our Amended Loan Agreement;
· revised the methodology to be used in calculating the fixed charge coverage ratio in each of the subsequent quarters of 2014 and changed the minimum quarterly fixed charge coverage ratio requirement of 1:25 to 1:00 to 1:15 to 1:00 for each of the subsequent quarters of 2014; and
· reduced our Revolving Credit facility from up to $18,000,000 to up to $12,000,000;
· waived the Company’s failure to meet the minimum quarterly fixed charge coverage ratio requirement for the fourth quarter of 2013; and
· waived the requirement that the Company’s consolidated financial statements for the year ended December 31, 2013 be issued without a going concern qualification;

As a condition of this Amendment, we agreed to pay PNC a fee of $30,000, which is being amortized over the term of the Amended Loan Agreement.  All other terms of the Amended Loan Agreement remain principally unchanged.

Based on these revisions above, we expect to meet our quarterly fixed charge coverage ratio requirement in each of the remaining quarters of 2014. If we fail to meet the minimum quarterly fixed charge coverage ratio requirement in any of the quarters starting with the second quarter in 2014 and PNC does not waive the non-compliance or further revise our covenant so that we are in compliance, our lender could accelerate the repayment of borrowings under our credit facility.  In the event that our lender accelerates the payment of our borrowings, we may not have sufficient liquidity to repay our debt under our credit facility and other indebtedness.

Resignation of Chief Operating Officer
On April 3, 2014, the Company’s Board of Directors approved the appointment by the Company on March 20, 2014 of Mr. John Lash as the Chief Operating Officer (“COO”), upon the Company’s acceptance of Mr. James A. Blankenhorn’s resignation on March 20, 2014 as the COO. Mr. Blakenhorn’s resignation was effective March 28, 2014.  Mr. Blankenhorn’s resignation was not due to a disagreement with the Company.  Upon Mr. Blankenhorn’s resignation, his employment agreement also terminated.  Mr. Lash previously served as Senior Vice President of Operations of the Company’s Treatment Segment for over ten years and has been employed by the Company since 2001 in various management positions.