What changed in this filing

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Item 1. Business

2021-03-29 compared with 2020-03-20 · 130 added, 135 removed, 205 unchanged (56% of the section changed)

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December 1990, is an environmental and environmental technology know-how company.

have grown through acquisitions and internal growth.

Our goal is to continue to focus on the safe and efficient operation of our

three waste treatment facilities and on-site activities, identify and pursue strategic acquisitions to expand our market base,

and conduct research and development (“R&D”) of innovative technologies to solve complex waste management challenges

providing increased value to our clients.

The Company continues to focus on expansion into both commercial and international markets

to supplement government spending in the United States of America (“USA”), from which a significant portion of the

Company’s revenue is derived.

This includes new services, new customers and increased market share in our current markets.

principal element of our business strategy consists of upgrading our facilities within our Treatment Segment to increase efficiency

and modernize and expand treatment capabilities to meet the changing markets associated with the waste management industry.

our Services Segment, we continue to revitalize and expand our business development programs to further increase competitive procurement

effectiveness and broaden the market penetration within both the commercial and government sectors.

The Company remains focused

on expansion into both commercial and international markets to supplement government spending in the United States of America

(“USA”), from which a significant portion of the Company’s revenue is derived.

This includes new services, new

customers and increased market share in our current markets.

majority-owned subsidiary, Perma-Fix Medical S.A.

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a Delaware corporation) (together known as “PF Medical”

or our “Medical Segment”), has not generated

any revenue but continues on a limited basis to evaluate strategic options to commercialize its medical isotope production.

options require substantial capital to fund R&D requirements, in addition to start-up and production costs.

As a result, the

Medical Segment has substantially reduced its R&D activities and is attempting to raise the necessary capital or to partner

with others willing to finance its activities (see “Medical Segment”

below for further information in connection with

this segment).

or our “Medical Segment”) which is currently

involved on a limited basis in the research and development (“R&D”) of the Company’s medical isotope production

technology, has not generated any revenue and has substantially reduced R&D costs and activities due to the need for capital

to fund these activities.

The Company anticipates that the Medical Segment will not resume full R&D activities until the necessary

capital is obtained through its own credit facility or additional equity raise, or obtains partners willing to provide funding

spread of COVID-19 in early 2020 continues to result in significant volatility in the U.S.

and international markets.

to closely monitor the impact of the COVID-19 pandemic on all aspects of our business.

Since the start of the pandemic, we have

experienced delays in waste shipment from certain customers within our Treatment Segment directly related to the impact of COVID-19

including generator shutdowns and limited sustained operations, along with other factors.

However, we expect to see a gradual

return in waste receipts from these customers starting in the first half of 2021 as they accelerate operations.

Within our Services

Segment, all of the projects that were previously shutdown in late March 2020 due to the pandemic recommenced starting in late

June 2020 as stay-at-home orders and certain other restrictions resulting from the pandemic were lifted.

the outbreak of COVID-19, we have remained focused on keeping our employees working and, at the same time, focusing on protecting

the health and wellbeing of our employees and the communities in which we operate while assuring the continuity of our business

management team has proactively implemented our business continuity and safety plans and has taken a variety of measures to ensure

the ongoing availability of our waste treatment and remediation services, while taking health and safety measures, including separating

employee and customer contact, social distancing between employees, implementing enhanced cleaning and hygiene protocols in all

of our facilities, and implementing remote work policies, when necessary.

situation surrounding COVID-19 continues to remain fluid and volatile.

The potential for a material impact on our business increases

the longer COVID-19 impacts the level of economic activities in the United States and globally as our customers may further continue

to delay waste shipments and projects may shut down again.

For this reason, we cannot reasonably estimate with any degree of certainty

the future impact COVID-19 may have on our results of operations, financial position, and liquidity during the next twelve months.

a more detailed discussion of the impact of COVID-19 on the Company’s results of operations, please see “Item 7.

Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

“Results of Operations”

“Liquidity and Capital Resources.”

Information and Foreign and Domestic Operations and Sales

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low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous

waste treatment, processing and disposal services primarily through three uniquely licensed (Nuclear Regulatory Commission

waste treatment, processing and disposal services primarily through four uniquely licensed (Nuclear Regulatory Commission

or state equivalent) and permitted (U.S.

Environmental Protection Agency (“EPA”) or state equivalent) treatment

and storage facilities held by the following subsidiaries:

and storage facilities as follow:

Perma-Fix of Florida, Inc.

(“PFF”), Diversified Scientific

Services, Inc., (“DSSI”), and Perma-Fix Northwest Richland, Inc.

(“PFNWR”).

The presence of nuclear

and low-level radioactive constituents within the waste streams processed by this segment creates different and unique operational,

processing and permitting/licensing requirements;

(“PFF”), Diversified Scientific Services, Inc., (“DSSI”),

Perma-Fix Northwest Richland, Inc.

(“PFNWR”) and Oak Ridge Environmental Waste Operations Center (“EWOC”

See below for further information of this facility);

activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.

Company completed the closure and decommissioning activities of its East Tennessee Materials and Energy Corporation (“M&EC”)

facility (within our Treatment Segment and in closure status) in accordance with M&EC’s license and permit requirements

2020, we expanded our low-level radioactive waste processing and treatment capability within our Treatment Segment through the

addition of our EWOC facility.

The EWOC facility serves primarily as a multi-disciplinary equipment and component processing center

for large component, size/volume reduction, sort/segregation, waste transload, and system operability testing.

The ultimate objective

of the facility will be receipt, preparation, packaging, and transportation of low-level radioactive waste to final disposal facilities

(landfills, approved radiological waste repositories).

Operations at the facility have been limited to date as we continue to

complete transition of the site.

No revenue was generated at EWOC in 2020.

2020, the Treatment Segment accounted for $30,143,000, or 28.6%, of total revenue, as compared to $40,364,000, or 54.9%, of total

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and engineering;

physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support

to government and private radioactive materials licensees;

Occupational Safety and Health services including industrial hygiene (“IH”) assessments;

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Safety and Health Administration (“OSHA”) citation assistance;

technical services providing consulting, engineering, project management, waste management, environmental, and decontamination

and decommissioning field, technical, and management personnel and services to commercial and government customers;

waste management services to commercial and governmental customers.

technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental),

project management, waste management, environmental, and decontamination and decommissioning (“D&D”) field,

technical, and management personnel and services to commercial and government customers;

management services to commercial and governmental customers.

services, which include:

technology-based

services including engineering, decontamination and decommissioning (“D&D”), specialty services, logistics,

transportation, processing and disposal;

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;

transportation;

and emergency response;

of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering,

technology applications, specialty services, logistics, transportation, processing and disposal;

termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process:

project management, planning, characterization, waste stream identification and delineation, remediation/demolition, final

status survey, compliance demonstration, reporting, transportation, disposal and emergency response.

company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental)

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See “Dependence Upon a Single or Few Customers”

for further details and a discussion as to our

Segments’

for further details and a discussion as to our Segments’

contracts with government clients (domestic and foreign) or with others as a subcontractor to government clients.

SEGMENT reporting includes:

R&D costs for the new medical isotope production technology from our majority-owned Polish subsidiary,

PF Medical, of which we own approximately 60.5% at December 31, 2019.

The Medical Segment has not generated any revenue as it

remains in the R&D stage.

The Company continues to scale down R&D costs for this segment which consist primarily of third

party fees and other administrative related costs associated with the segment.

As previously disclosed, our Medical Segment has

substantially reduced its R&D activities due to the need for capital to fund these activities.

The Company anticipates that

the Medical Segment will not resume full R&D activities until the necessary capital is obtained through its own credit facility

or additional equity raise or obtains partners willing to provide funding for its R&D.

SEGMENT (see a discussion of our Medical Segment above under “Company Overview and Principal Products and Services”).

Treatment and Services Segments provide services to research institutions, commercial companies, public utilities, and governmental

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corporate office is located at 8302 Dunwoody Place, Suite 250, Atlanta, Georgia 30350.

consolidated revenue for 2019 and 2018 included approximately $149,000, or 0.2%, and $98,000, or 0.2%, respectively, from United

Kingdom customers (including revenues generated by our United Kingdom subsidiary, Perma-Fix UK Limited (“PF UK Limited”)).

consolidated revenue for 2020 and 2019 included approximately $5,550,000, or 5.3%, and $5,488,000, or 7.5%, respectively, from

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State of Washington and the EPA.

previously discussed, the Company completed the closure and decommissioning activities of its M&EC facility (within our Treatment

Segment) in accordance with M&EC’s license and permit requirements in 2019.

The Company had previously fully impaired

the permit value for our M&EC facility.

The permits at M&EC have been terminated.

combination of a RCRA Part B hazardous waste permit, TSCA authorization, and a radioactive materials license, as held by our Treatment

Segment are very difficult to obtain for a single facility and make these facilities unique.

located in Oak Ridge, Tennessee, operates a low-level radioactive waste material processing facility.

Radioactive material processing

is authorized under radioactive material licenses issued by the State of Tennessee Department of Environmental and Conservation,

Division of radiological health.

combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by the Company

and its subsidiaries comprising our Treatment Segment is very difficult to obtain for a single facility and make this Segment

believe that the permitting and licensing requirements, and the cost to obtain such permits, are barriers to the entry of hazardous

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believe such would allow companies to enter into these markets and provide greater competition.

Treatment Segment of our Company maintains a backlog of stored waste, which represents waste that has not been processed.

backlog is principally a result of the timing and complexity of the waste being brought into the facilities and the selling price

per container.

At December 31, 2019, our Treatment Segment had a backlog of approximately $8,506,000, as compared to approximately

$11,104,000 at December 31, 2018.

Additionally, the time it takes to process waste from the time it arrives may increase due to

the types and complexities of the waste we are currently receiving.

We typically process our backlog during periods of low waste

receipts, which historically has been in the first or fourth quarters.

Treatment Segment maintains a backlog of stored waste, which represents waste that has not been processed.

The backlog is principally

a result of the timing and complexity of the waste being brought into the facilities and the selling price per container.

31, 2020, our Treatment Segment had a backlog of approximately $7,631,000, as compared to approximately $8,506,000 at December

Additionally, the time it takes to process waste from the time it arrives may increase due to the types and complexities

of the waste we are currently receiving.

We typically process our backlog during periods of low waste receipts, which historically

has been in the first or fourth quarters.

Upon a Single or Few Customers

Treatment and Services Segments have significant relationships with the U.S and Canadian governmental authorities, and continue

to enter into contracts, directly as the prime contractor or indirectly for others as a subcontractor, to government authorities.

The U.S Department of Energy (“DOE”) and U.S.

Department of Defense (“DOD”) represent major customers

for our Treatment and Services Segments which may be a direct contractor for these two major customers or indirectly as a subcontractor

for others to these two major customers.

The contracts that we are a party to with the U.S federal government or with others as

a subcontractor to the U.S federal government generally provide that the government may terminate or renegotiate the contracts

on 30 days’

Treatment and Services Segments have significant relationships with the U.S and Canadian governmental authorities.

A significant

amount of our revenues from our Treatment and Services Segments are generated indirectly as subcontractors for others who are

prime contractors to government authorities, particularly the U.S Department of Energy (“DOE”) and U.S.

of Defense (“DOD”) or directly as the prime contractor to government authorities.

The contracts that we are a party

to with others as subcontractors to the U.S federal government or directly with the U.S federal government generally provide that

the government may terminate or renegotiate the contracts on 30 days’

notice, at the government’s election.

The contracts/task order agreements that we are a party to with

Canadian governmental authorities generally provide that the government authorities may terminate the contracts/task order agreements

at any time for any reason for convenience.

Our inability to continue under existing contracts that we have with the U.S federal

government and Canadian 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.

performed services relating to waste generated by government clients (domestic and foreign (primarily Canadian)), either directly

as a prime contractor or indirectly for others as a subcontractor to government entities, representing approximately $59,985,000,

The contracts/task

order agreements that we are a party to with Canadian governmental authorities generally provide that the government authorities

may terminate the contracts/task order agreements at any time for any reason for convenience.

Our inability to continue under

existing contracts that we have with the U.S federal government and Canadian 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.

performed services relating to waste generated by government clients (domestic and foreign (primarily Canadian)), either indirectly

for others as a subcontractor to government entities or directly as a prime contractor to government entities, representing approximately

$96,582,000, or 91.6%, of our total revenue during 2020, as compared to $59,985,000, or 81.7%, of our total revenue during 2019.

generated by us as a subcontractor to a customer for a remediation project performed for a government entity (the “DOE”)

within our Services Segment in 2020 and 2019 accounted for approximately $41,011,000 or 38.9% and $8,529,000 or 11.6% (included

in revenues generated relating to government clients above) of our total revenue for 2020 and 2019, respectively.

This remediation

project included among other things, decontamination support of a building.

As work progressed throughout stages of this project

in 2020, additional contaminations were regularly discovered which resulted in approvals for additional work to be performed under

this project.

This project is expected to be completed by the first half of 2021.

our revenues are project/event based where the completion of one contract with a specific customer may be replaced by another

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nuclear waste.

The Treatment Segment treats and disposes of DOE generated wastes largely at DOE owned sites.

The Treatment Segment treats and disposes of DOE generated waste largely at DOE owned sites.

Our Treatment Segment

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many from within the country the work is to be performed, making winning work in foreign countries more challenging.

implemented strategic plan, which includes increasing our overall contract bid/win ratio and expansion into commercial and international

markets, has thus far been successful.

Since mid-2019, our wholly-owned subsidiary, PF Canada, entered into two Task Order Agreements

(“TOA”) with the Canadian Nuclear Laboratories, LTD.

(“CNL”), with an aggregate value of approximately

$11,500,000 (U.S dollar), for remediation work at specific sites within Ontario, Canada.

Work under these TOAs are expected to

be completed by 2020.

The TOAs with the Canadian government generally provide that the government may terminate a TOA at any time

for convenience.

If our Services Segment is unable to meet these competitive challenges, it could lose market share and experience

an overall reduction in its profits.

If our Services

Segment is unable to meet these competitive challenges, it could lose market share and experience an overall reduction in its

Environmental Expenditures and Potential Environmental Liabilities

Environmental

have three remediation projects, which are currently in progress at our Perma-Fix of Dayton, Inc.

(“PFD”), Perma-Fix

of Memphis, Inc.

have three remediation projects, which are currently in progress relating to our Perma-Fix of Dayton, Inc.

(“PFD”),

Perma-Fix of Memphis, Inc.

(“PFM”), and Perma-Fix South Georgia, Inc.

(“PFSG”) subsidiaries, which are all included

within our discontinued operations.

These remediation projects principally entail the removal/remediation of contaminated soil

and, in most cases, the remediation of surrounding ground water.

(“PFSG”) subsidiaries, which are

all included within our discontinued operations.

These remediation projects principally entail the removal/remediation of contaminated

soil and, in most cases, the remediation of surrounding ground water.

These remediation activities are closely reviewed and monitored

by the applicable state regulators.

December 31, 2019, we had total accrued environmental remediation liabilities of $927,000, an increase of $40,000 from the December

31, 2018 balance of $887,000.

The net increase represents an increase of approximately $50,000 made to the reserve at our PFM

subsidiary due to reassessment of the remediation reserve and payments of approximately $10,000 on remediation projects for our

PFD subsidiary.

At December 31, 2019, $817,000 of the total accrued environmental remediation liabilities was recorded as current.

insurance or third-party recovery was taken into account in determining our cost estimates or reserves.

December 31, 2020, we had total accrued environmental remediation liabilities of $854,000.

At December 31, 2020, $744,000 of the

total accrued environmental liabilities was recorded as current.

nature of our business exposes us to significant cost to comply with governmental environmental laws, rules and regulations and

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Our competitors also devote resources to R&D and many such competitors have greater resources at their disposal

As previously discussed, our Medical Segment has ceased a substantial portion of its R&D activities due to the

need for substantial capital to fund such activities.

We continue to explore ways to raise this capital.

We anticipate that our

Medical Segment will not restart its full-scale R&D activities until it obtains the necessary funding or find a partner willing

to fund its R&D activities.

During 2019 and 2018, we incurred approximately $750,000 and $1,370,000, respectively, in R&D

activities, of which approximately $314,000 and $811,000, respectively, were spent by our Medical Segment.

our service-driven business, our employees are vital to our success.

We believe we have good relationships with our employees.

At December 31, 2019, we employed approximately 325 employees, of whom 308 are full-time employees and 17 are part-time/temporary

Environmental

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The State of Florida Department of Health

(with the USNRC oversight), Office of Radiation Control, regulates the permitting and radiological program of the PFF facility,

and the State of Tennessee (with the USNRC oversight), Tennessee Department of Radiological Health, regulates permitting and the

radiological program of the DSSI facility.

The State of Washington (with the USNRC oversight) Department of Health, regulates

permitting and the radiological operations of the PFNWR facility.

(with the USNRC oversight), Office of Radiation Control, regulates the licensing and radiological program of the PFF facility;

the State of Tennessee (with the USNRC oversight), Tennessee Division of Radiological Health, regulates licensing and the radiological

program of the DSSI facility and the EWOC facility;

and the State of Washington (with the USNRC oversight) Department of Health,

regulates licensing and the radiological operations of the PFNWR facility.

activities are subject to other federal environmental protection and similar laws, including, without limitation, the Clean Water

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business