What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-03-29 compared with 2020-03-20 · 595 added, 715 removed, 192 unchanged (87% of the section changed)

5 unchanged sentences

quotations and information is the NASDAQ online trading history reports.

February 18, 2020, there were approximately 170 stockholders of record of our Common Stock, including brokerage firms and/or clearing

houses holding shares of our Common Stock for their clientele (with each brokerage house and/or clearing house being considered

as one holder).

However, we have been advised that the total number of beneficial stockholders at February 18, 2020 was approximately

February 12, 2021, there were approximately 137 stockholders of record of our Common Stock.

The actual number of our stockholders

is greater than this number, and includes beneficial owners whose shares are held in “street name”

by banks, brokers,

and other nominees.

our inception, we have not paid any cash dividends on our Common Stock and have no dividend policy.

Our Revised Loan Agreement

Our loan agreement dated May

8, 2020 prohibits us from paying any cash dividends on our Common Stock without prior approval from our lender.

We do not anticipate paying

cash dividends on our outstanding Common Stock in the foreseeable future.

We do not anticipate

paying cash dividends on our outstanding Common Stock in the foreseeable future.

were no purchases made by us or on behalf of us or any of our affiliated members of shares of our Common Stock during 2020.

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and Supplementary Data”

and “Equity Compensation Plan”

and “Equity Compensation Plans”

in Part III, Item 12, “Security Ownership of Certain

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discussion and analysis is based, among other things, upon our audited consolidated financial statements and includes our accounts,

the accounts of our wholly-owned subsidiaries and the accounts of our majority-owned Polish subsidiary, after elimination of all

significant intercompany balances and transactions.

the accounts of our wholly-owned subsidiaries, the accounts of our majority-owned Polish subsidiary, and the account of a variable

interest entity for which we are the primary beneficiary, after elimination of all significant intercompany balances and transactions.

following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto

included in Item 8 of this report.

the outbreak of COVID-19 in early part of 2020, 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 operations.

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.

COVID-19 pandemic presents potential new risks to our business and results in significant volatility in the U.S.

and international

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

Starting in late March

2020, our operations were impacted by the shutdown of a number of projects and the delays of certain waste shipments.

latter part of the second quarter of 2020, all of the projects that were previously shutdown within our Services Segment restarted

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

Despite the shutdown of certain

projects for part of 2020, revenues generated within our Services Segment in 2020 exceeded our revenue generated in 2019 by approximately

We continue to experience delays in waste shipments 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.

we expect to see a gradual return in waste receipts from these customers starting in the first half of 2021 as they accelerate

As the impact of COVID-19 remains fluid, the uncertainty in waste receipt shipments may impact our results of operations

for the first quarter of 2021 and potentially the second quarter of 2021.

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

continue to delay waste shipments and project work 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.

this time, we believe we have sufficient liquidity on hand to continue business operations during the next twelve months.

31, 2020, our borrowing availability under our revolving credit facility was approximately $14,220,000 which was based on a percentage

of eligible receivables and subject to certain reserves and included our cash on hand of approximately $7,924,000.

In April 2020,

we entered into a promissory note (“PPP Loan”) with our credit facility lender in the amount of approximately $5,666,000

under the Paycheck Protection Program (“PPP”) that was established under the Coronavirus Aid, Relief, and Economic

Security Act (the “CARES Act”

- see “CARES Act –

PPP Loan”

under “Liquidity and Capital Resources”

below for a discussion of the PPP Loan).

During the third quarter of 2020, we repaid approximately $348,000 of the PPP Loan resulting

from clarification in the loan calculation at the time of the loan origination.

On October 5, 2020, we applied for forgiveness

on the entire PPP Loan balance as permitted under the program, which is subject to the review and approval of our lender and Small

Business Administration (“SBA”).

Proceeds from the PPP Loan have allowed us to avoid having to furlough or layoff

certain eligible employees as a result of the COVID-19 pandemic, although there are no assurances that such will not be required

going forward.

We continue to assess reducing operating costs during this volatile time, which include curtailing capital expenditures,

eliminating non-essential expenditures and implementing a hiring freeze as needed.

We elected to defer payment of our share of

social security taxes as permitted under the CARES Act, as amended (see “CARES Act –

Deferral of Employment Tax Deposits”

within this MD&A for a discussion of this deferral).

Based on our current projection, we believe that we will be able to meet

the current covenant requirements under our loan agreement for the next twelve months despite the impact of COVID-19.

are closely monitoring our customers’

payment performance.

However, since a significant portion of our revenues is derived

from government related contracts, we do not expect our accounts receivable collections to be materially impacted due to COVID-19.

increased $31,967,000 or 43.5% to $105,426,000 for the twelve months ended December 31, 2020 from $73,459,000 for the corresponding

period of 2019.

The revenue increase was primarily in the Services Segments where revenue increased approximately $19,827,000

The increase in revenue within our Services Segment was primarily due to awards of several contracts/task orders for

project work since the latter part of the first quarter of 2019, the result of successful implementation of our strategic plan

in winning contract bids.

Treatment Segment revenue increased $4,093,000 or 11.3%.

Total gross profit increased $7,123,000 or

Gross profit for the twelve months of 2019 and 2018 included closure costs recorded in the amount of approximately $330,000

and $3,323,000, respectively, in connection with the closure of our East Tennessee Materials and Energy Corporation (“M&EC”)

facility in 2019 which we have completed in accordance with M&EC’s license and permit requirements.

SG&A expenses

increased $1,121,000 or 10.4% for the twelve months ended December 31, 2019 as compared to the corresponding period of 2018.

a result of the closure of our M&EC facility in 2019 as discussed above, on July 22, 2019, we received a release of $5,000,000

of finite risk sinking funds held as collateral under our financial assurance closure policy dated June 2003 from AIG Specialty

Insurance Company (“AIG”) (see “Liquidity and Capital Resources –

Insurance”

within this MD&A

for a discussion of the release of this finite risk sinking funds).

Additionally, on April 1, 2019, we consummated a lending transaction

Robert Ferguson resulting in the receipt of $2,500,000 in loan proceeds (see “Liquidity and Capital Resources –

Financing Activities”

within this MD&A for a discussion of this loan transaction).

Both of these transactions, along

with our operation, have significantly improved our working capital.

At December 31, 2019, we had working capital of approximately

$26,000 as compared to working capital deficit of $6,753,000 at December 31, 2018.

The increase was entirely within our Services Segment where revenue increased $42,188,000 or 127.5% from increased

projects and the sizable value of certain projects.

Our Treatment Services revenue decreased by $10,221,000 or 25.3% primarily

due to delays in waste shipments from certain customers resulting from the impact of COVID-19 as discussed above.

The delays in

waste shipments were also partly attributed to the transition of new prime contractors at certain DOE sites which resulted in

delays in waste shipments to us as subcontractors under certain contracts.

Additionally, lower averaged price waste from revenue

mix contributed to the decrease in revenue within the Treatment Segment.

Gross profit increased $309,000 or 2.0% due to the increase

in revenues in the Services Segment.

Selling, General, and Administrative (“SG&A”) expenses decreased by approximately

$88,000 or 0.7% for the twelve months ended December 31, 2020 as compared to the corresponding period of 2019.

At December 31,

2020, we had working capital of approximately $3,672,000 as compared to working capital of $26,000 at December 31, 2019.

capital at December 31, 2020 included the classification of approximately $3,191,000 of the outstanding PPP Loan balance of $5,318,000

as “Current portion of long-term debt”

on our Consolidated Balance Sheets.

As previously discussed, we have applied

for forgiveness on repayment of the entire PPP Loan balance which is subject to the review and approval of our lender and the

Environment and Outlook

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in which the applicable government will be required to spend funding to remediate various sites, and/or the impact resulting from

the Coronavirus.

COVID-19 as discussed above.

In addition, our governmental contracts and subcontracts relating to activities at governmental sites

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financial position, results of operations and cash flows.

As previously disclosed, our Medical Segment continues to evaluate strategic

options to commercialize its medical isotope production technology.

These options generally require substantial capital to fund

research and development (“R&D”) requirements, in addition to start-up and production costs.

The Company’s

Medical Segment has substantially reduced its R&D costs and activities due to the need for capital to fund such activities.

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

through obtaining its own credit facility or additional equity raise or obtaining new partners willing to fund its R&D activities.

If the Medical Segment is unable to raise the necessary capital, the Medical Segment could be required to further reduce, delay

or eliminate its R&D program.

As previously disclosed, our Medical Segment has substantially reduced

its R&D costs and activities due to the need for capital to fund such activities.

We anticipate that our Medical Segment will

not resume full R&D activities until it obtains the necessary funding through obtaining its own credit facility or additional

equity raise or obtaining new partners willing to fund its R&D activities.

If the Medical Segment is unable to raise the necessary

capital, the Medical Segment could be required to further reduce, delay or eliminate its R&D program.

are continually reviewing methods to raise additional capital to supplement our liquidity requirements, when needed, and reducing

our operating costs.

We are committed to further reducing operating costs to bring them in line with revenue levels, when needed.

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

both commercial and international markets to increase revenues in our Treatment and Services Segments to offset the uncertainties

of government spending in the United States, has thus far been successful.

Since May 2019, our wholly-owned subsidiary, Perma-Fix

(within our Services Segment) entered into two Task Order Agreements (“TOAs”) with the Canadian Nuclear

Laboratories, LTD.

(“CNL”), with a total value of approximately $11,500,000 (U.S dollar), for remediation work at

specific sites within Ontario, Canada.

Remediation work under these two TOAs are expected to be completed within 2020.

that the full implementation of our strategic plan should be accomplished over the next few years, and when fully implemented,

we believe it should further improve our revenue and liquidity and increase our shareholder values.

We continue to aggressively bid on various contracts, including potential contracts within the international

of Operations

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(Consolidated)

Cost of goods sold

Selling, general and administrative

Research and development

Loss (gain) on disposal of property and equipment

Loss from operations

Interest income

Interest expense

Interest expense –

of goods sold

general and administrative

and development

on disposal of property and equipment

from operations

expense –

financing fees

Net gain on exchange offer of Series B Preferred Stock

Income (loss) from continuing operations before taxes

Income tax expense (benefit)

Income (loss) from continuing operations

on extinguishment of debt

from continuing operations before taxes

tax (benefit) expense

from continuing operations

revenues increased $31,967,000 for the year ended December 31, 2020 compared to the year ended December 31, 2019, as follows:

(In thousands)

Government waste

Hazardous/non-hazardous

Other nuclear waste

nuclear waste

Includes wastes generated by government clients of $1,976,000 and $2,422,000 for the twelve months ended December 31, 2020

and 2019, respectively.

Segment revenue increased $4,093,000 or 11.3 % for the twelve months ended December 31, 2019 over the same period in 2018.

revenue increase was primarily due to higher revenue generated from government clients due to higher averaged price waste resulting

from revenue mix.

The increase in hazardous/non-hazardous waste revenue was also primarily due to higher revenue generated from

higher averaged price waste.

Services Segment revenue increased by $19,827,000 or 149.4% in the twelve months ended December 31,

2019 from the corresponding period of 2018.

As previously discussed, the increase in our Services Segment revenue was primarily

due to awards of several contracts/task orders for project work since the latter part of the first quarter of 2019 resulting from

the success of our implemented strategic plan in winning contract bids.

Segment revenue decreased $10,221,000 or 25.3 % for the twelve months ended December 31, 2020 over the same period in 2019.

revenue decrease was primarily due to lower revenue generated from lower waste volume resulting from waste shipment delays since

late March 2020 from certain of our customers due to the impact of COVID-19 including generator shutdowns and limited sustained

The delays in waste shipments were also partly attributed to the transition of new prime contractors at certain DOE

sites which resulted in delays in waste shipments to us as subcontractors under certain contracts.

Additionally, lower averaged

price waste from revenue mix contributed to the decrease in revenue.

Our Services Segment revenue increased $42,188,000 or 127.1%

due to the increase in number of projects and the sizeable value of certain projects.

Our Services Segment experienced this increase

in revenue despite a number of our projects being shut down starting in late March 2020 due to COVID-19.

These projects did not

restart until the latter part of the second quarter of 2020.

Our Services Segment revenues are project based;

the scope, duration and completion of each project vary.

As a result, our Services Segment revenues are subject to differences

relating to timing and project value.

as such, the scope,

duration and completion of each project vary.

As a result, our Services Segment revenues are subject to differences relating to

timing and project value.

of Goods Sold

of goods sold increased $31,658,000 for the year ended December 31, 2020, as compared to the year ended December 31, 2019, as

(In thousands)

of goods sold for the Treatment Segment decreased by $958,000 or approximately 3.3%.

of goods sold for the Treatment Segment decreased approximately $3,464,000 or 12.3%.

Treatment Segment costs of goods sold for

the twelve months ended December 31, 2019 and 2018 included additional closure costs recorded in the amount of approximately $330,000

and $3,323,000, respectively, for our M&EC facility in connection with the closure of the facility.

Excluding the closure

costs recorded in both periods, Treatment Segment costs increased $2,035,000 or 7.9% due to higher revenue.

Excluding the closure

costs recorded, Treatment Segment’s variable costs increased by approximately $1,543,000 which included primarily higher

disposal, transportation and material and supplies costs.

Treatment Segment overall fixed costs were higher by approximately $492,000

resulting from the following:

salaries and payroll related expenses were higher by approximately $1,029,000 resulting from higher

travel expenses were higher by $66,000;

depreciation expenses were higher by $62,000;

general expenses were lower by

approximately $505,000 in various categories;

regulatory expenses were lower by $54,000;

and maintenance expense was lower by

approximately $106,000.

Services Segment cost of goods sold increased $17,755,000 or 147.9% primarily due to higher revenue as

discussed above.

The increase in Services Segment’s cost of goods sold was primarily from the following:

salaries and payroll

related expenses, travel, and outside services expenses were higher by a total of approximately $16,726,000;

material and supply

expenses were higher by $781,000;

regulatory expenses were higher by approximately $441,000 primarily due to bonding requirements

on certain projects;

general expenses were higher by $191,000 in various categories;

disposal/transportation expenses were lower

and depreciation expenses were lower by approximately $139,000 as a number of assets became fully depreciated by

Included within cost of goods sold is depreciation and amortization expense of $1,301,000 and $1,378,000 for the

twelve months ended December 31, 2019, and 2018, respectively.

the twelve months ended December 31, 2019 included additional closure costs recorded in the amount of $330,000 for our East Tennessee

Materials and Energy Corporation (“M&EC”) facility due to finalization of closure requirements in connection with

the closure of the facility.

Excluding the closure costs recorded in 2019, Treatment Segment cost of goods sold decreased $3,134,000

or 11.3% primarily due to the decrease in revenue.

Excluding the closure costs recorded in 2019, Treatment Segment variable costs

decreased by approximately $3,516,000 primarily due to lower disposal, transportation, material and supplies and outside services

Our overall fixed costs were higher by approximately $382,000 resulting from the following:

maintenance expenses were higher

regulatory expenses were higher by approximately $190,000;

depreciation expenses were higher by approximately $219,000

primarily due to more financed leases;

general expenses were lower by approximately $61,000 in various categories;

payroll costs were lower by approximately $175,000;

and travel expenses were lower by approximately $71,000 due to restrictions

implemented resulting from COVID-19.

Services Segment cost of goods sold increased $35,122,000 or 118.0% primarily due to increased

revenue as discussed above.

The increase in cost of goods sold within our Services Segment was primarily due to higher salaries

and payroll costs, travel, and outside services expenses totaling approximately $31,068,000, higher material and supplies, regulatory

and disposal costs totaling approximately $3,312,000, and higher general expenses of $742,000 in various categories.

Payroll costs

within our Services Segment included higher expenses for project related incentives.

Included within cost of goods sold is depreciation

and amortization expense of $1,555,000 and $1,301,000 for the twelve months ended December 31, 2020, and 2019, respectively.

profit for the year ended December 31, 2020 was $309,000 higher than 2019 as follows:

(In thousands)

discussed previously, Treatment Segment’s cost of goods sold for the twelve months ended December 31, 2019 and 2018 included

$330,000 and $3,323,000 in closure costs recorded in connection with the closure of the M&EC facility, respectively.

the closure costs recorded in each of the periods, our Treatment Segment had a gross profit increase of $2,058,000 or 19.6% and

gross margin increased to 31.2% from 29.0% primarily due to higher revenue, revenue mix and the reduction in the segment’s

In the Services Segment, gross profit increased $2,072,000 or 163.9% and gross margin increased to 10.1% from 9.5%

primarily due to the increase in revenue.

Our overall Services Segment gross margin is impacted by our current projects which

are competitively bid on and will therefore, have varying margin structures.

expenses increased $1,121,000 for the year ended December 31, 2019 as compared to the corresponding period for 2018 as

(In thousands)

Segment gross profit decreased $6,757,000 or 55.2% and gross margin decreased to 18.2% from 30.3%.

Excluding the additional closure

costs of $330,000 recorded in the twelve months ended December 31, 2019 in connection with the closure of our M&EC facility

as discussed above, gross profit decreased $7,087,000 or 56.3% and gross margin decreased to 18.2% from 31.2% primarily due to

lower revenue from lower waste volume and lower averaged price waste from revenue mix.

In the Services Segment, gross profit increased

$7,066,000 or 211.8% and gross margin increased from 10.1% to 13.8% primarily due to the increase in revenue.

Our overall Services

Segment gross margin is impacted by our current projects which are competitively bid on and will therefore, have varying margin

expenses decreased $88,000 for the year ended December 31, 2020 as compared to the corresponding period for 2019 as follows:

Administrative

increase in Administrative SG&A was primarily due to the following:

salary/payroll related/healthcare

costs were higher by approximately $398,000 which included accrual of approximately $332,000 related to the Company’s

incentive plans (no accrual was recorded in the prior year);

general expenses were higher

by $113,000 in various categories ;

travel expenses were slightly higher by $9,000;

depreciation expenses were lower by

and outside services costs were lower by approximately $49,000 from fewer consulting and business matters.

SG&A was higher primarily due to the following:

salaries and payroll related expenses were higher by approximately $185,000;

travel expenses were higher by approximately $63,000;

bad debt expenses were higher by $10,000;

general expenses were higher by

approximately $42,000 in various categories;

and outside services expenses were lower by approximately $85,000 resulting from

fewer consulting/subcontract matters.

Services Segment SG&A increased by $458,000 primarily due to the following:

expenses were higher by approximately $132,000 in various categories;

bad debt expenses were higher by $314,000 resulting primarily

from the additional bad debt expense of $241,000 that we recorded in the fourth quarter of 2019 as a certain account receivable

was determined not to be collectible at December 31, 2019;

outside services expenses were higher by approximately $99,000 resulting

from more consulting matters;

and salaries and payroll related expenses were lower by approximately $87,000.

Services Segment’s

general expenses for the year ended 2018 included a reduction in rent expense recorded in the second quarter of 2018 resulting

from the end of our lease term for our business center office in Knoxville, Tennessee (which was not renewed with the same lessor).

Included in SG&A expenses is depreciation and amortization expense of $41,000 and $77,000 for the twelve months ended December

31, 2019 and 2018, respectively.

expenses decreased $620,000 for the year ended December 31, 2019 as compared to the corresponding period of 2018 as follows:

(In thousands)

general expenses were higher by approximately $84,000

in various categories;

director stock option expenses were higher by approximately $75,000 due to options granted to new directors

in addition to higher fair value of options granted to re-elected directors;

outside services expenses were higher by approximately

$16,000 resulting from more consulting/subcontract matters;

depreciation expenses were higher by approximately $14,000;

and payroll costs were higher by approximately $13,000;

and travel expenses were lower by approximately $60,000 due to restrictions

implemented resulting from the impact of COVID-19.

Treatment SG&A was lower primarily due to the following:

travel expenses

were lower by approximately $109,000 due to restrictions implemented resulting from the impact of COVID-19;

general expenses were

lower by $123,000 in various categories which included lower trade show expenses of $122,000 resulting from the cancellation of

certain trade shows due to impact of COVID-19;

and salaries and payroll costs were higher by approximately $96,000.

Services Segment

SG&A was lower primarily due to the following:

travel expenses were lower by approximately $119,000 due to restrictions implemented

resulting from the impact of COVID-19;

bad debt expenses were lower by approximately $432,000 as certain customer accounts which

we had previously reserved for were collected in 2020 and additional bad debt expenses were recorded in 2019 for a certain account

receivable which was determined not to be collectible at December 31, 2019 ;

and payroll costs were higher by approximately $457,000.

Included in SG&A expenses is depreciation and amortization expense

of $41,000 and $41,000 for the twelve months ended December 31, 2020 and 2019, respectively.

expenses increased $12,000 for the year ended December 31, 2020 as compared to the corresponding period of 2019 as follows:

Administrative

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costs associated with the development of new technologies and technological enhancement of new potential waste treatment processes.

The decrease in R&D costs for 2019 as compared to 2018 was primarily due to reduced R&D costs within our PF Medical Segment.

The Company continues to scale down its R&D costs for this segment which consist primarily of third party fees and other administrative

related costs associated with the segment.

As discussed previously, our Medical Segment has ceased a substantial portion of its

R&D costs and activities due to the need for substantial capital to fund such activities and we anticipate that our Medical

Segment will not resume any substantial R&D activities until it obtains the necessary funding.

income increased $42,000 for the twelve months ended December 31, 2019 as compared to the corresponding period of 2018 primarily

due to higher interest earned on the finite risk sinking funds resulting from higher interest rates;

however, the higher interest

income earned from higher interest rates was partially reduced by the lower finite risk sinking fund balance resulting from the

release of $5,000,000 in finite risk sinking funds in July 2019 in connection with the M&EC facility closure.

expense increased approximately $181,000 for the twelve months ended December 31, 2019 as compared to the corresponding period

of 2018 primarily due to interest on new finance leases which we entered into in 2019 and interest incurred from the April 1,

2019 loan that we entered into with Robert Ferguson in the amount of $2,500,000 (see “Liquidity and Capital Resources –

income decreased by approximately $197,000 for the twelve months ended December 31, 2020 as compared to the corresponding period

The decrease was primarily due to lower interest earned on the finite risk sinking funds from lower interest rate.

decrease in interest income was also attributed to lower interest earned from lower finite risk sinking fund balance resulting

from the release of $5,000,000 in finite risk sinking funds by AIG Specialty Insurance Company (“AIG”) to us at the

end of July 2019 in connection with the closure of our M&EC facility.

The $5,000,000 in finite sinking funds represented a

partial release of the total collateral held under our finite risk insurance policy.

expense decreased by approximately $34,000 for the twelve months ended December 31, 2020 as compared to the corresponding period

of 2019 primarily due to lower interest expense from our declining term loan balance outstanding and lower interest rate.

interest expense was lower from accelerated declining loan balance outstanding resulting from payments of principal on the $2,500,000

loan that we entered into with Robert Ferguson on April 1, 2019.

This loan was paid-in-full by us by the end December 2020.

overall decrease in interest expense was partially offset by higher interest expense from more finance leases and interest accrued

for the PPP Loan (see “Liquidity and Capital Resources –

Financing Activities”

for further information of this loan).

and “The CARES Act –

PPP Loan”

for further information of these loans).

Expense- Financing Fees

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The increase was primarily due to debt discount/debt issuance costs amortized as financing fees in connection

with the issuance of our Common Stock and a purchase Warrant as consideration for the Company receiving the $2,500,000 loan from

Robert Ferguson (See “Liquidity and Capital

Resources –

Financing Activities”

for further information of this debt discount).

had income tax expense of $157,000 and income tax benefit of $936,000 for continuing operations for the years ended December 31,

with the issuance of our Common Stock and a purchase Warrant as consideration for us receiving the $2,500,000 loan from Robert

Ferguson which was paid off early by us at the end of December 2020.

had income tax benefit of $189,000 and income tax expense of $157,000 for continuing operations for the years ended December 31,

2020 and 2019, respectively.

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December 31, 2020 and 2019, respectively.

Our tax benefit for 2018 included a tax benefit of approximately $1,235,000 recorded

in 2018 resulting from the release of a portion of the valuation allowance on deferred tax assets related to indefinite-lived

net operating losses generated due to the closure of our M&EC facility.

The tax expense for 2019 was comprised of state tax

expense for separate company filing states and the increase in the deferred tax liability related to the amortization of indefinite

lived intangible assets.

discontinued operations consist of all our subsidiaries included in our Industrial Segment which were divested in 2011 and prior,

previously closed locations, and our Perma-Fix of South Georgia, Inc.

(“PFSG”) facility which is in closure status,

which final closure is subject to regulatory approval of necessary plans and permits.

The tax benefit for the year ended December 31, 2020 resulted primarily from state tax

true-ups related to our amended tax returns and a reduction in the naked credit deferred tax liabilities (“DTL”) resulting

from a reduction in estimated state apportionment percentage.

discontinued operations consist of all our subsidiaries included in our Industrial Segment which encompasses subsidiaries divested

in 2011 and prior and three previously closed locations.

discontinued operations had no revenue for the twelve months ended December 31, 2020 and 2019.

2 unchanged sentences

of $0 for each period).

Our net loss for the year ended December 31, 2019 and 2018 included an increase of approximately $50,000

in each period in remediation reserve for our Perma-Fix of Memphis (“PFM”) and Perma-Fix of Dayton (“PFD”)

subsidiaries, respectively, due to reassessment of the remediation reserve, with the remaining loss incurred primarily due to

costs incurred in the administration and continued monitoring of our discontinued operations.

The losses incurred for each period were primarily due to the administration and continued monitoring

of our discontinued operations.

Our net loss for the year ended December 31, 2019 also included an increase of approximately $50,000

in remediation reserve for our Perma-Fix of Memphis (“PFM”) subsidiary due to reassessment of the remediation reserve.

and Capital Resources

cash flow requirements during 2019 were primarily financed by our operations, credit facility availability, loan proceeds of $2,500,000

from a loan that we consummated on April 1, 2019 (see “Financing Activities”

below for further information of the

agreement and note), and the receipt of the $5,000,000 in finite risk sinking funds in July 2019 from AIG resulting from the closure

of our M&EC facility (see a discussion of this finite risk sinking in “Insurance”

Our cash flow requirements

cash flow requirements during 2020 were primarily financed by our operations, credit facility availability, and the PPP Loan that

we received under the CARES Act as discussed below (see “CARES Act –

PPP Loan”).

We generated approximately

$7,867,000 of cash from our continuing operations.

Subject to the impact of COVID-19 as discussed above, our cash flow requirements

for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on our debt obligations,

1 unchanged sentence

We plan to fund these requirements from our operations, credit facility

availability, and cash on hand.

We continue to explore all sources of increasing our capital to supplement our liquidity requirements,

when needed, and to improve our revenue and working capital.

We are continually reviewing operating costs and are committed to

further reducing operating costs to bring them in line with revenue levels, when necessary.

Although there are no assurances,

we believe that our cash flows from operations, our available liquidity from our credit facility, and our cash on hand should

be sufficient to fund our operations for the next twelve months.

As previously discussed, our recently implemented strategic plan,

which includes expansion into international markets and increasing our contract bid/win ratio, has thus far been successful, which

we believe will continue to help improve our results and liquidity.

We further anticipate that over the next few years, we should

be able to fully implement our strategic plan.

As previously disclosed, our Medical Segment substantially reduced its R&D

costs and activities due to the need for capital to fund such activities.

We continue to seek various sources of potential funding

for our Medical Segment.

We anticipate that our Medical Segment will not resume full R&D activities until it obtains the necessary

funding through obtaining its own credit facility or additional equity raise or obtaining new partners willing to fund its R&D

If the Medical Segment is unable to raise the necessary capital, the Medical Segment could be required to further

reduce, delay or eliminate its R&D program.

availability, and cash on hand which was approximately $7,924,000 at December 31, 2020.

We continue to explore all sources of

increasing our capital to supplement our liquidity requirements, when needed, and to improve our revenue and working capital.

We are 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.

At this time, we believe that our cash flows from operations,

our available liquidity from our credit facility, and our cash on hand should be sufficient to fund our operations for the next

twelve months.

However, due to the uncertainty of COVID-19, there are no assurances such will be the case in the events that certain

of our customers continue to delay waste shipments and/or elect to shut down projects again due to COVID-19.

As previously disclosed,

our Medical Segment substantially reduced its R&D costs and activities due to the need for capital to fund such activities.

We continue to seek various sources of potential funding for our Medical Segment.

We anticipate that our Medical Segment will

not resume full R&D activities until it obtains the necessary funding through obtaining its own credit facility or additional

equity raise or obtaining new partners willing to fund its R&D activities.

If the Medical Segment is unable to raise the necessary

capital, the Medical Segment could be required to further reduce, delay or eliminate its R&D program.

following table reflects the cash flow activity for the year ended December 31, 2020 and the corresponding period of 2019:

(In thousands)

Cash (used in) provided by operating activities of continuing operations

Cash used in operating activities of discontinued operations

Cash used in investing activities of continuing operations

Cash provided by investing activities of discontinued operations

Cash provided by (used in) financing activities of continuing operations

Effect of exchange rate changes on cash

(Decrease) increase in cash and finite risk sinking fund (restricted cash)

December 31, 2019, we were in a net borrowing position (revolving credit) of approximately $321,000.

At December 31, 2019, we

had cash on hand of approximately $390,000, which reflects primarily account balances of our foreign subsidiaries totaling approximately

At December 31, 2019, we have finite risk sinking funds (restricted cash) of approximately $11,307,000, which represents

cash held as collateral under the Company’s financial assurance policy (see “Insurance”

below for a discussion

of this restricted cash).

receivable, net of allowances for doubtful accounts, totaled $13,178,000 at December 31, 2019, an increase of $5,443,000 from

the December 31, 2018 balance of $7,735,000.

The increase was primarily due to higher revenue and the timing of invoicing and

timing of accounts receivable collection.

provided by (used in) operating activities of continuing operations

used in operating activities of discontinued operations

used in investing activities of continuing operations

provided by investing activities of discontinued operations

provided by financing activities of continuing operations

of exchange rate changes on cash

(decrease) in cash and finite risk sinking fund (restricted cash)

December 31, 2020, we were in a positive cash position with no revolving credit balance.

At December 31, 2020, we had cash on

hand of approximately $7,924,000, which included account balances of our foreign subsidiaries totaling approximately $377,000.

At December 31, 2020, we had finite risk sinking funds (restricted cash) of approximately $11,446,000, which represents cash held

as collateral under our financial assurance policy.

receivable, net of allowances for doubtful accounts, totaled $9,659,000 at December 31, 2020, a decrease of $3,519,000 from the

December 31, 2019 balance of $13,178,000.

The decrease was primarily due to timing of invoicing which was reflective of the increase

in our unbilled receivables and timing of our accounts receivable collection.

We provide a variety of payment terms to our customers;

therefore, our accounts receivable

are impacted by these terms and the related timing of accounts receivable collections.

therefore, our accounts receivable are impacted by these terms and the related timing of accounts receivable collections.

amount of our accounts receivables and collection could be materially impacted the longer COVID-19 persists.

payable, totaled $15,382,000 at December 31, 2020, an increase of $6,105,000 from the December 31, 2019 balance of $9,277,000.

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had working capital of $3,672,000 (which included working capital of our discontinued operations) at December 31, 2020, as compared

to working capital deficit of $6,753,000 at December 31, 2018.

The improvement in our working capital was primarily the result

of the receipt of $5,000,000 of finite risk sinking funds on July 22, 2019 previously held as collateral under our 2003 Closure

Policy resulting from the closure of our M&EC facility (see “Liquidity and Capital Resources –

Insurance”

below for a discussion of this finite risk sinking funds) and the $2,500,000 loan proceeds received from the consummation of the

Robert Ferguson loan on April 1, 2019 (see “Financing Activities”

below for a discussion of this loan).

increases in our unbilled and accounts receivables resulting from the significant increase in our revenue have positively impacted

our working capital.

Additionally, the reduction in the monthly principal term loan payment from approximately $101,600 to $35,547

resulting from an amendment that we entered into with our lender on June 20, 2019 has improved our working capital (Liquidity

and Capital Resources –

Financing Activities”

below for a discussion of this amendment to our loan agreement).

working capital was negatively impacted by the reclassification of approximately $726,000 in remediation reserves for our PFSG

subsidiary from long-term to current and an increase in current remediation reserves recorded in the fourth quarter of 2019 for

our PFM subsidiary within our discontinued operations for anticipated spending within the next twelve months.

Additionally, our

working capital was negatively impacted by the current portion of principal payments due within the next twelve months on the

Robert Ferguson loan.

2019, our purchases of capital equipment totaled approximately $1,928,000, of which $393,000 was financed, with the remaining

funded from cash from operations and our credit facility.

These expenditures were made primarily for our Treatment Segment.

have budgeted approximately $2,000,000 for 2020 capital expenditures for our Treatment and Services Segments to maintain operations

and regulatory compliance requirements and support revenue growth.

Certain of these budgeted projects may either be delayed until

later years or deferred altogether.

We plan to fund our capital expenditures from cash from operations and/or financing.

The initiation

and timing of projects are also determined by financing alternatives or funds available for such capital projects.

to working capital of $26,000 at December 31, 2019.

The improvement in our working capital was primarily due to the proceeds that

we received from the PPP Loan under the Paycheck Protection Program (see “PPP Loan”

under “CARES Act”

below for a discussion of this loan) and the increase in our unbilled receivables from the significant increase in revenues within

our Services Segment.

The improvement in our working capital was partially offset by the increase in our accounts payable.

Additionally,

at December 31, 2020, we classified approximately $3,191,000 of the outstanding PPP Loan balance of $5,318,000 as “Current

portion of long-term debt”

on our Consolidated Balance Sheets.

We have applied for forgiveness on repayment of the entire

PPP Loan balance which is subject to the review and approval of our lender and the SBA.

2020, our purchases of capital equipment totaled approximately $2,598,000, of which $883,000 was subject to financing, with the

remaining funded from cash from operations and our credit facility.

We have budgeted approximately $2,000,000 for 2021 capital

expenditures primarily for our Treatment and Services Segments to maintain operations and regulatory compliance requirements and

support revenue growth.

Certain of these budgeted projects may either be delayed until later years or deferred altogether.

plan to fund our capital expenditures from cash from operations and/or financing.

The initiation and timing of projects are also

determined by financing alternatives or funds available for such capital projects.

entered into an Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated October 31, 2011 (“Amended

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The Amended Loan Agreement

as subsequently amended (“Revised Loan Agreement”), provides us with the following credit facility with a maturity

date of March 24, 2021:

(a) up to $12,000,000 revolving credit (“revolving credit”) and (b) a term loan (“term

loan”) of approximately $6,100,000, which requires monthly installments of approximately $101,600 (based on a seven-year

amortization).

The maximum that we can borrow under the revolving credit is based on a percentage of eligible receivables (as

defined) at any one time reduced by outstanding standby letters of credit and borrowing reductions that our lender may impose

had been amended from time to time since the execution of the Amended Loan Agreement.

The Amended Loan Agreement, as subsequently

amended (“Revised Loan Agreement”), provided us with the following credit facility with a maturity date of March 24,

(a) up to $12,000,000 revolving credit (“revolving credit”) and (b) a term loan (“term loan”) of

approximately $6,100,000.

The maximum that we can borrow under the revolving credit was based on a percentage of eligible receivables

(as defined) at any one time reduced by outstanding standby letters of credit and borrowing reductions that our lender may impose

from time to time.

March 29, 2019, we entered into an amendment to our Revised Loan Agreement with our lender under the credit facility which provided

the following:

our failure to meet the minimum quarterly fixed charge coverage ratio (“FCCR”) requirement for the fourth quarter

the quarterly FCCR testing requirement for the first quarter of 2019;

the methodology to be used in calculating the FCCR in each of the second and third quarters of 2019 (with continued requirement

to maintain a minimum 1.15:1 ratio in each of the quarters);

the minimum Tangible Adjusted Net Worth requirement (as defined in the Revised Loan Agreement) from $26,000,000 to $25,000,000;

the London Inter Bank Offer Rate (“LIBOR”) interest payment option of paying annual rate of interest due on our

term loan and revolving credit until we become compliant with our FCCR requirement again.

Prior to this amendment, we had

the option of paying annual rate of interest due on the revolving credit at prime (4.75% at December 31, 2019) plus 2% or

LIBOR plus 3% and the term loan at prime plus 2.5% or LIBOR plus 3.5%;

consent for the $2,500,000 loan that we entered into with Robert Ferguson as discussed below.

No principal prepayment on this

loan was allowed until we received the restricted finite risk sinking funds of approximately $5,000,000 held as collateral

by AIG under our financial assurance policy (see “Insurance”

below for a discussion of the receipt of this $5,000,000

finite risk sinking funds below);

the annual rate used to calculate the Facility Fee (as defined in the Revised Loan Agreement) (unused revolving credit line

fee) from 0.250% to 0.375%.

June 20, 2019, we entered into another amendment to our Revised Loan Agreement with our lender under the credit facility which

provided the following, among other things:

of the FCCR calculation requirement for the second, third and fourth quarter of 2019.

Starting in the first quarter of 2020,

we will again be required to maintain a minimum FCCR of not less than 1.15 to 1.0 for the four quarter period ending March

31, 2020 and for each fiscal quarter thereafter;

us to maintain a minimum Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”

as defined in the Amendment) of at least (i) $475,000 for the one quarter period ending June 30, 2019;

(ii) $2,350,000 for

the two quarter period ending September 30, 2019;

and (iii) $3,750,000 for the three quarter period ending December 31, 2019;

release of $450,000 of the $1,000,000 indefinite reduction in borrowing availability that PNC had previously imposed;

release of another $300,000 of the remaining $550,000 reduction in borrowing availability if we meet our minimum Adjusted

EBITDA requirement for the quarter ending September 30, 2019 as discussed above (which our lender released in November 2019),

in addition to us having received no less than $4,000,000 of the restricted finite risk sinking funds held as collateral by

AIG under our financial assurance policy (see “Insurance”

below for a discussion of the receipt of this finite

risk sinking funds below);

and the release of the final $250,000 reduction in borrowing availability if we meet our Adjusted

EBITDA requirement for the three quarter period ending December 31, 2019;

the term loan monthly principal payment starting July 1, 2019 from $101,600 to approximately $35,547, with the remaining balance

of the term loan due at the maturity of the Revised Loan Agreement which is March 24, 2021.

of the other terms of the Revised Loan Agreement, as amended, remain principally unchanged.

In connection with amendment dated

March 29, 2019 and June 20, 2019, we paid our lender a fee of $20,000 and $50,000, respectively.

to the Revised Loan Agreement, as amended, we may terminate the Revised Loan Agreement, as amended, upon 90 days’

written notice upon payment in full of its obligations under the Revised Loan Agreement, as amended.

No early termination fee

shall apply if we pay off our obligations after March 23, 2019.

December 31, 2019, the borrowing availability under our revolving credit was approximately $8,714,000, based on our eligible receivables

and includes an indefinite reduction of borrowing availability of $250,000 that our lender has imposed.

This $8,714,000 in borrowing

availability under our revolving credit also included a reduction in borrowing availability of approximately $2,639,000 from outstanding

standby letters of credit.

credit facility with our lender contains certain financial covenants, along with customary representations and warranties.

of any of these financial covenants, unless waived by our lender, could result in a default under our credit facility allowing

our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments

to extend further credit.

As discussed above, our lender waived/removed our FCCR testing requirement for each of the quarters

We met our “Adjusted EBITDA”

minimum requirement in the second, third and fourth quarters of 2019 in accordance

to the amendment dated June 20, 2019 as discussed above.

Additionally, we met our remaining financial covenant requirements in

each of the quarters of 2019.

As a result of us meeting the “Adjusted EBITDA”

minimum requirement for the fourth quarter

of 2019, our lender is expected to release the remaining $250,000 reduction in borrowing availability subsequent to the filing

of our 2019 Form 10-K.

of annual rate of interest due on the revolving credit under the Revised Loan Agreement was at prime (3.25% at December 31, 2020)

plus 2% and the term loan at prime plus 2.5%.

May 8, 2020, we entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “New

Loan Agreement”) with PNC, replacing our previous Revised Loan Agreement with PNC.

The New Loan Agreement provides us with

the following credit facility:

to $18,000,000 revolving credit facility, subject to the amount of borrowings based on a percentage of eligible receivables

and subject to certain reserves;

term loan of $1,741,818, which requires monthly installments of $35,547.

New Loan Agreement terminates as of May 15, 2024, unless sooner terminated.

to our Revised Loan Agreement, the New Loan Agreement requires us to meet certain customary financial covenants, including, among

other things, a minimum Tangible Adjusted Net Worth requirement of $27,000,000 at all times;

maximum capital spending of $6,000,000

and a minimum fixed charge coverage ratio (“FCCR”) requirement of 1.15:1.

the New Loan Agreement, payment of annual rate of interest due on the credit facility is as follows:

credit at prime plus 2.50% or London InterBank Offer Rate (“LIBOR”) plus 3.50% and the term loan at prime plus

3.00% or LIBOR plus 4.00%.

We can only elect to use the LIBOR interest payment option after we become compliant with meeting

the minimum FCCR of 1.15:1;

the achievement of a FCCR of greater than 1.25:1, we have the option of paying an annual rate of interest due on the revolving

credit at prime plus 2.00% or LIBOR plus 3.00% and the term loan at prime plus 2.50% or LIBOR plus 3.50%.

We met this FCCR

in each of the quarters of 2020.

Upon meeting the FCCR of 1.25:1, this interest payment option will remain in place in the

event that our future FCCR falls below 1.25:1.

the LIBOR option of interest payment noted above, a LIBOR floor of 0.75% shall apply in the event that LIBOR falls below 0.75%

at any point in time.

to the New Loan Agreement, we may terminate the New Loan Agreement upon 90 days’

prior written notice upon payment in full

of our obligations under the New Loan Agreement.

We have agreed to pay PNC 1.0% of the total financing in the event we pay off

our obligations on or before May 7, 2021 and 0.5% of the total financing if we pays off our obligations after May 7, 2021 but

prior to or on May 7, 2022.

No early termination fee shall apply if we pay off our obligations under the New Loan Agreement after

December 31, 2020, the borrowing availability under our revolving credit was approximately $14,220,000, based on our eligible

receivables and includes a reduction in borrowing availability of approximately $3,026,000 from outstanding standby letters of

credit facility under our Revised and New Loan Agreement with PNC contains certain financial covenant requirements, along with

customary representations and warranties.

A breach of any of these financial covenant requirements, unless waived by PNC, could

result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt

under our credit facility and terminate all commitments to extend further credit.

We met our financial covenant requirements in

2020, including our quarterly FCCR requirements.

We expect to meet our financial covenant requirements in the next twelve months;

however, if we fail to

meet any of our financial covenant requirements and our lender does not further waive the non-compliance or revise our covenant

so that we are in compliance, our lender could accelerate the repayment of borrowings under our credit facility.

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.

April 1, 2019, we completed a lending transaction with Robert Ferguson (the “Lender”), whereby we borrowed from the

Lender the sum of $2,500,000 pursuant to the terms of a Loan and Security Purchase Agreement and promissory note (the “Loan”).

The Lender is a shareholder of the Company.

The Lender also currently serves as a consultant to the Company in connection with

the Test Bed Initiatives at our Perma-Fix Northwest Richland, Inc.

The proceeds from the Loan were used for general

working capital purposes.

The Loan is unsecured, with a term of two years with interest payable at a fixed interest rate of 4.00%

The Loan provides for monthly payments of accrued interest only during the first year of the Loan, with the first interest

payment due May 1, 2019 and monthly payments of approximately $208,333 in principal plus accrued interest starting in the second

year of the Loan.

The Loan also provides for prepayment of principal payments over the term of the Loan without penalty with such

prepayment of principal payments to be applied to the second year of the loan payments at our discretion.

In 2019, we made total

prepayments in principal of $520,000.

In connection with the above Loan, the Lender agreed under the terms of the Loan and a Subordination

Agreement with our credit facility lender, to subordinate payment under the Loan, and agreed that the Loan will be junior in right

of payment to the credit facility in the event of default or bankruptcy or other insolvency proceeding by us.

In connection with

this capital raise transaction described above and consideration for us receiving the Loan, we issued a Warrant (the “Warrant”)

to the Lender to purchase up to 60,000 shares of our Common Stock at an exercise price of $3.51 per share, which was the closing

bid price for a share of our Common Stock on NASDAQ.com immediately preceding the execution of the Loan and Warrant.

is exercisable six months from April 1, 2019 and expires on April 1, 2024 and remains outstanding at December 31, 2019.

value of the Warrant was estimated to be approximately $93,000 using the Black-Scholes option pricing model with the following

50.76% volatility, risk free interest rate of 2.31%, an expected life of five years and no dividends.

consideration for this capital raise transaction relating to the Loan, we also issued 75,000 shares of our Common Stock to the

We determined the fair value of the 75,000 shares of Common Stock to be approximately $263,000 which was based on the

closing bid price for a share of our Common Stock on NASDAQ.com immediately preceding the execution of the Loan, pursuant to the

Loan and Securities Purchase Agreement.

The fair value of the Warrant and Common Stock and the related closing fees incurred totaling

approximately $398,000 from the transaction was recorded as debt discount/debt issuance costs, which is being amortized over the

term of the loan as interest expense –

however, if we fail to meet any of our financial covenant requirements and our lender does not waive the non-compliance or revise

our covenant so that we are in compliance, our lender could accelerate the repayment of borrowings under our credit facility and

terminate our credit facility.

In the event that our lender accelerates the payment of our borrowings and terminate our credit

facility, we may not have sufficient liquidity to repay our debt under our credit facility and other indebtedness.

previously disclosed, on April 1, 2019, we completed a lending transaction with Robert Ferguson (the “Lender”), whereby

we borrowed from the Lender the sum of $2,500,000 pursuant to the terms of a Loan and Security Purchase Agreement and promissory

note (the “Loan”).

The Lender is a shareholder of ours and also serves as a consultant to us in connection with our

Test Bed Initiative (“TBI”) at our Perma-Fix Northwest Richland, Inc.

(“PFNWR”) subsidiary.

from the Loan were used for general working capital purposes.

The Loan is unsecured, with a term of two years with interest payable

at a fixed interest rate of 4.00% per annum.

The Loan provides for monthly payments of accrued interest only during the first

year of the Loan, with the first interest payment due May 1, 2019 and monthly payments of approximately $208,333 in principal

plus accrued interest starting in the second year of the Loan.

The Loan also allows for prepayment of principal payments over

the term of the Loan without penalty with such prepayment of principal payments to be applied to the second year of the loan payments

at our discretion.

In December 2020, the Loan was paid-in-full.

In connection with this capital raise transaction described above

and consideration for us receiving the Loan, we issued a Warrant (the “Warrant”) to the Lender to purchase up to 60,000

shares of our Common Stock at an exercise price of $3.51 per share, which was the closing bid price for a share of our Common

Stock on NASDAQ.com immediately preceding the execution of the Loan and Warrant.

The Warrant expires on April 1, 2024 and remains

outstanding at December 31, 2020.

As further consideration for this capital raise transaction relating to the Loan, we also issued

75,000 shares of its Common Stock to the Lender.

The fair value of the Warrant and Common Stock and the related closing fees incurred

from the transaction totaled approximately $398,000 and was recorded as debt discount/debt issuance costs which has been fully

amortized as interest expense –

financing fees.

The 75,000 shares of Common Stock, the Warrant and the 60,000 shares

of Common Stock that may be purchased under the Warrant were and will be issued in a private placement that was and will be exempt

The 75,000 shares of Common Stock, the Warrant and the 60,000 shares of

Common Stock that may be purchased under the Warrant were and will be issued in a private placement that was and will be exempt

from registration under Rule 506 and/or Sections 4(a)(2) and 4(a)(5) of the Securities Act of 1933, as amended (the “Act”)

1 unchanged sentence

registration thereunder.

default, the Lender will have the right to elect to receive in full and complete satisfaction of our obligations under the Loan

(a) the cash amount equal to the sum of the unpaid principal balance owing under the loan and all accrued and unpaid interest

thereon (the “Payoff Amount”) or (b) upon meeting certain conditions, the number of whole shares of our Common Stock

(the “Payoff Shares”) determined by dividing the Payoff Amount by the dollar amount equal to the closing bid price

of our Common Stock on the date immediately prior to the date of default, as reported or quoted on the primary nationally recognized

exchange or automated quotation system on which our Common Stock is listed;

provided however, that the dollar amount of such closing

bid price shall not be less than $3.51, the closing bid price for our Common Stock as disclosed on NASDAQ.com immediately preceding

the signing of this loan agreement.

issued, the Payoff Shares will not be registered and the Lender will not be entitled to registration rights with respect to the

Payoff Shares.

The aggregate number of shares, warrant shares, and Payoff Shares that are or will be issued to the Lender pursuant

to the Loan, together with the aggregate shares of our Common Stock and other voting securities owned by the Lender or which may

be acquired by the Lender as of the date of issuance of the Payoff Shares, shall not exceed the number of shares of our Common

Stock equal to 14.9% of the number of shares of our Common Stock issued and outstanding as of the date immediately prior to the

default, less the number of shares of our Common Stock owned by the Lender immediately prior to the date of such default plus

the number of shares of our Common Stock that may be acquired by the Lender under warrants and/or options outstanding immediately

prior to the date of such default.

May 13, 2019, we filed a shelf registration statement on Form S-3 with the U.S.

Securities and Exchange Commission (the “Commission”),

which was declared effective by the Commission on May 22, 2019 at 4:00 p.m.

The shelf registration statement gives us the ability

to sell up to 2,500,000 shares of our Common Stock from time to time and through one or more methods of distribution, subject

to market conditions and the Company’s capital needs at that time.

The terms of any offering under the registration statement

will be established at the time of the offering and be set forth in an accompanying prospectus or prospectus supplement relating

to the offering.

At this time, the Company does not have any immediate plans or current commitments to issue shares under the

registration statement.

This is not an offer to sell or a solicitation of an offer to buy, nor shall there be a sale of securities

in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification

under the securities laws of such state or jurisdiction.

have a 25-year finite risk insurance policy entered into in June 2003 (“2003 Closure Policy”) with AIG, which provides

financial assurance to the applicable states for our permitted facilities in the event of unforeseen closure.

The 2003 Closure

Policy, as amended, provided for a maximum allowable coverage of $39,000,000 which included available capacity to allow for annual

inflation and other performance and surety bond requirements.

As a result of the closure of the Company’s M&EC facility,

on July 22, 2019, AIG released $5,000,000 of the finite risk sinking funds held as collateral under the 2003 Closure Policy to

The finite risk sinking funds received by us are to be used for general working capital needs.

In conjunction with the release

of the finite risk sinking funds by AIG, total coverage under the 2003 Closure Policy was amended from $30,549,000 to $19,314,000.

Additionally, the maximum allowable coverage under the 2003 Closure Policy was amended from $39,000,000 to approximately $28,177,000

which includes available capacity to allow for annual inflation and other performance and surety bond requirements.

31, 2019 and December 31, 2018, finite risk sinking funds contributed by us to the 2003 Closure Policy which is included in other

long term assets on the accompanying Consolidated Balance Sheets totaled $11,307,000 and $15,971,000, respectively, which included

interest earned of $1,836,000 and $1,500,000 on the finite risk sinking funds as of December 31, 2019 and December 31, 2018, respectively.

Interest income for the years ended 2019 and 2018 was approximately $336,000 and $295,000, respectively.

If we so elect, AIG is

obligated to pay us an amount equal to 100% of the finite risk sinking fund account balance in return for complete release of

liability from both us and any applicable regulatory agency using this policy as an instrument to comply with financial assurance

requirements.

April 14, 2020, we entered into a promissory note with PNC, our credit facility lender, in the amount of approximately $5,666,000

under the PPP (the “PPP Loan”).

The PPP was established under the CARES Act and is administered by the SBA.

5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”) was signed into law which amended

the CARES Act.

The note evidencing the PPP Loan contains events of default relating to, among other things, payment defaults,

breach of representations and warranties, and provisions of the promissory note.

During the third quarter of 2020, we repaid approximately

$348,000 of the PPP Loan to PNC resulting from clarification in the loan calculation at the time of the loan origination.

the terms of the Flexibility Act, we can apply for and be granted forgiveness for all or a portion of the PPP Loan.

Such forgiveness

will be determined, subject to limitations, based on the use of loan proceeds by us for eligible payroll costs, mortgage interest,

rent and utility costs and the maintenance of employee and compensation levels for the covered period (which is defined as a 24

week period, beginning April 14, 2020, the date in which proceeds from the PPP Loan was disbursed to us by PNC).

of such forgiven amount must be used for eligible payroll costs.

On October 5, 2020, we applied for forgiveness on repayment of

the loan balance as permitted under the program, which is subject to the review and approval of our lender and the SBA.

or a portion of the PPP Loan is not forgiven, all or the remaining portion of the loan will be for a term of two years but can

be prepaid at any time prior to maturity without any prepayment penalties.

The annual interest rate on the PPP Loan is 1.0% and

no payments of principal or interest are due until the date that the SBA remits the loan forgiveness amount to our lender.

our PPP Loan currently has a two year maturity, the Flexibility Act permits us to request a five year maturity with our lender.

At December 31, 2020, we have not received a determination on potential forgiveness on any portion of the PPP Loan balance;

therefore, we have classified approximately $3,191,000 of the PPP Loan balance as “Current portion of long-term debt,”

on our Consolidated Balance Sheets, which was based on payment of the PPP Loan starting in July 2021 (10 months from end of our

covered period) in accordance with the terms of our PPP Loan agreement.

of Employment Tax Deposits

CARES Act, as amended by the Flexibility Act, provides employers the option to defer the payment of an employer’s share

of social security taxes beginning on March 27, 2020 through December 31, 2020, with 50% of the amount of social security taxes

deferred to become due on December 31, 2021 with the remaining 50% due on December 31, 2022.

We elected to defer such taxes starting

in mid-April 2020.

At December 31, 2020, we deferred payment of approximately $1,252,000 in our share of social security taxes,

of which approximately $626,000 is included in “Other long-term liabilities,”

with the remaining balance included

in “Accrued expenses”

within current liabilities in the Company’s Consolidated Balance Sheets.

Balance Sheet Arrangements

2 unchanged sentences

At December 31, 2020, the total amount of standby letters of credit outstanding

was approximately $2,639,000 and the total amount of bonds outstanding was approximately $28,937,000.

We also provide closure

and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through AIG

(See a discussion of this financial assurance policy above).

totaled approximately $3,026,000 and the total amount of bonds outstanding totaled approximately $46,388,000.

We also provide

closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through

At December 31, 2020, the closure and post-closure requirements for these facilities were approximately $19,651,000.

Accounting Policies and Estimates

preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States

of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as, the reported

amounts of revenues and expenses during the reporting period.

We believe the following critical accounting policies affect the

more significant estimates used in preparation of the consolidated financial statements:

Recognition Estimates.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No.

2014-09, “Revenue from Contracts with Customers”

followed by a series of related accounting

standard updates (collectively referred to as “Topic 606”).

Topic 606 provides a single, comprehensive revenue recognition

model for all contracts with customers.

Under Topic 606, a five-step process is utilized in order to determine revenue recognition,

depicting the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in

exchange for those goods or services.

Under Topic 606, a performance obligation is a promise in a contract to transfer a distinct

good or service to the customer and is the unit of account.

A contract transaction price is allocated to each distinct performance

obligation and recognized as revenues as the performance obligation is satisfied.

Segment Revenues:

in our Treatment Segment have a single performance obligation as the promise to receive, treat and dispose of waste is not separately

identifiable in the contract and, therefore, not distinct.

Performance obligations are generally satisfied over time using the

input method.

Under the input method, the Company uses a measure of progress divided into major phases which include receipt (generally

ranging from 9.0% to 33%), treatment/processing (generally ranging from 15% to 79%) and shipment/final disposal (generally ranging

from 9% to 52%).

As major processing phases are completed and the costs are incurred, the proportional percentage of revenue is

Transaction price for Treatment Segment contracts are determined by the stated fixed rate per unit price as stipulated

in the contract.

Segment Revenues:

for our Services Segment are generated from time and materials, cost reimbursement or fixed price arrangements:

primary obligation to customers in time and materials contracts relate to the provision of services to the customer at the direction

of the customer.

This provision of services at the request of the customer is the performance obligation, which is satisfied over

Revenue earned from time and materials contracts is determined using the input method and is based on contractually defined

billing rates applied to services performed and materials delivered.

primary performance obligation to customers in cost reimbursement contracts is to complete certain tasks and work streams.

specified work stream or task within the contract is considered to be a separate performance obligation.

The transaction price

is calculated using an estimated cost to complete the various scope items to achieve the performance obligation as stipulated

in the contract.

An estimate is prepared for each individual scope item in the contract and the transaction price is allocated

on a time and materials basis as services are provided.

Revenue from cost reimbursement contracts is recognized over time using

the input method based on costs incurred, plus a proportionate amount of fee earned.

fixed price contracts, the objective of the project is not attained unless all scope items within the contract are completed and

all of the services promised within fixed fee contracts constitute a single performance obligation.

Transaction price is estimated

based upon the estimated cost to complete the overall project.

Revenue from fixed price contracts is recognized over time using

the output or input method.

For the output method, revenue is recognized based on milestone attained on the project.

For the input

method, revenue is recognized based on costs incurred on the project relative to the total estimated costs of the project.

for Doubtful Accounts .

The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, which

is a valuation allowance that reflects management’s best estimate of the amounts that are uncollectible.

We regularly review all

accounts receivable balances that exceed 60 days from the invoice date and, based on an assessment of current credit worthiness,

estimate the portion, if any, of the balances that are uncollectible.

Specific accounts that are deemed to be uncollectible are

reserved at 100% of their outstanding balance.

The remaining balances aged over 60 days have a percentage applied by aging category

(5% for balances 61-90 days, 20% for balances 91-120 days and 40% for balances over 120 days aged), based on a historical collection

patterns, that allows us to calculate the total allowance required.

This analysis excludes government related receivables due

to our past successful experience in their collectability.

Our allowance for doubtful accounts at December 31, 2019 was approximately

0.7% of revenue for 2019 and 3.6% of accounts receivable at December 31, 2019.

Additionally, our allowance for doubtful accounts

at December 31, 2018 was approximately 0.2% of revenue for 2018 and 1.3% of accounts receivable at December 31, 2018.

consolidated financial statements are prepared based upon the selection and application of accounting principles generally accepted

in the United States of America (“US GAAP”), which may require us to make estimates, judgments and assumptions that

affect amounts reported in our financial statements and accompanying notes.

The accounting policies below are those we believe

affect the more significant estimates and judgments used in preparation of our financial statements.

Our other accounting policies

are described in the accompanying notes to our consolidated financial statements of this Form 10-K (see “Item 8 –

Financial Statements and Supplementary Data”

“Notes to Consolidated Financial Statements”

Summary of Significant Accounting Policies”):

Intangible assets consist primarily of the recognized value of the permits required to operate our business.

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asset valuation review as of October 1.

We had one definite-lived permit which was excluded from our annual impairment review

as noted above.

This definite-lived permit which had a net carrying value of approximately $7,000 at December 31, 2018 was fully

amortized in the first quarter of 2019.

Intangible assets with definite useful lives are also tested for impairment whenever events

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liability to clean up our facilities as required by our permits, in the event of closure.

ASC 410, “Asset Retirement and

Environmental Obligations”

requires that the discounted fair value of a liability for an ARO be recognized in the period

in which it is incurred with the associated ARO capitalized as part of the carrying cost of the asset.

The recognition of an ARO

requires that management make numerous estimates, assumptions and judgments regarding such factors as estimated probabilities,

timing of settlements, material and service costs, current technology, laws and regulations, and credit adjusted risk-free rate

This estimate is inflated, using an inflation rate, to the expected time at which the closure will occur, and then

discounted back, using a credit adjusted risk free rate, to the present value.

ARO’s are included within buildings as part

of property and equipment and are depreciated over the estimated useful life of the property.

In periods subsequent to initial

measurement of the ARO, we must recognize period-to-period changes in the liability resulting from the passage of time and revisions

to either the timing or the amount of the original estimate of undiscounted cash flow.

Increases in the ARO liability due to passage

of time impact net income as accretion expense and are included in cost of goods sold in the Consolidated Statements of Operations.

Changes in the estimated future cash flows costs underlying the obligations (resulting from changes or expansion at the facilities)

require adjustment to the ARO liability calculated and are capitalized and charged as depreciation expense, in accordance with

our depreciation policy.

Environmental Liabilities .

We have three remediation projects in progress (all within discontinued operations).

and long-term accrual amounts for the projects are our best estimates based on proposed or approved processes for clean-up.

circumstances that could affect the outcome range from new technologies that are being developed every day to reduce our overall

costs, to increased contamination levels that could arise as we complete remediation which could increase our costs, neither of

which we anticipate at this time.

In addition, significant changes in regulations could adversely or favorably affect our costs

to remediate existing sites or potential future sites, which cannot be reasonably quantified (See “Environmental Contingencies”

below for further information of these liabilities).

Disposal/Transportation

We accrue for waste disposal based upon a physical count of the waste at each facility at the end of each accounting

Current market prices for transportation and disposal costs are applied to the end of period waste inventories to calculate

the disposal accrual.

Costs are calculated using current costs for disposal, but economic trends could materially affect our actual

costs for disposal.

As there are limited disposal sites available to us, a change in the number of available sites or an increase

or decrease in demand for the existing disposal areas could significantly affect the actual disposal costs either positively or

Compensation.

We account for stock-based compensation granted to employees in accordance with ASC 718, “Compensation

Stock Compensation.”

Stock-based payment transactions for acquiring goods and services from nonemployees (consultants)

are also accounted for under ASC 718 resulting from the adoption of ASU No.

2018-07, “Compensation —

Stock Compensation

Improvements to Nonemployee Share-Based Payment Accounting.”

by the Company effective January 1, 2019.

718 requires stock-based payments to employees and nonemployees, including grant of options, to be recognized in the Statement

of Operations based on their fair values.

The Company uses the Black-Scholes option-pricing model to determine the fair-value

of stock-based awards which requires subjective assumptions.

Assumptions used to estimate the fair value of stock-based awards

include the exercise price of the award, the expected term, the expected volatility of our stock over the stock-based award’s

expected term, the risk-free interest rate over the award’s expected term, and the expected annual dividend yield.

accounts for forfeitures when they occur.

The provision for income tax is determined in accordance with ASC 740, “Income Taxes.”

We are required

to estimate our income taxes in each of the jurisdictions in which we operate.

We record this amount as a provision or benefit

This process involves estimating our actual current tax exposure, including assessing the risks associated with

tax audits, and assessing temporary differences resulting from different treatment of items for tax and accounting purposes.

differences result in deferred tax assets and liabilities.

We assess the likelihood that our deferred tax assets will be recovered

from future taxable income and, to the extent that we believe recovery is not likely, we establish a valuation allowance.

As of December 31, 2019, we had net deferred

tax assets of approximately $9,106,000 (which excludes a deferred tax liability relating to goodwill and indefinite lived

intangible assets) which were primarily related to federal and state net NOL carryforwards, impairment charges, and closure costs.

As of December 31, 2019, we concluded that it was more likely than not that $9,106,000 of our deferred income tax assets

would not be realized, and as such, a full valuation allowance was applied against those deferred income tax assets.

Our net operating

losses are subject to audit by the Internal Revenue Services, and, as a result, the amounts could be reduced.

of December 31, 2019, we have approximately $20,548,000 and $57,809,000 in NOL carryforwards for federal and state income tax

purposes, respectively, which will expire in various amounts starting in 2021 if not used against future federal and state income

tax liabilities, respectively.

Approximately $12,199,000 of our federal NOL carryforwards were generated after December 31, 2017

and thus do not expire.

Our net loss carryforwards are subject to various limitations.

Our ability to use the net loss carryforwards

depends on whether we are able to generate sufficient income in the future years.

Accounting Standards Codification (“ASC”)

410, “Asset Retirement and Environmental Obligations”

requires that the discounted fair value of a liability for an

ARO be recognized in the period in which it is incurred with the associated ARO capitalized as part of the carrying cost of the

The recognition of an ARO requires that management make numerous estimates, assumptions and judgments regarding such factors

as estimated probabilities, timing of settlements, material and service costs, current technology, laws and regulations, and credit

adjusted risk-free rate to be used.

This estimate is inflated, using an inflation rate, to the expected time at which the closure

will occur, and then discounted back, using a credit adjusted risk free rate, to the present value.

ARO’s are included within

buildings as part of property and equipment and are depreciated over the estimated useful life of the property.

In periods subsequent

to initial measurement of the ARO, we must recognize period-to-period changes in the liability resulting from the passage of time

and revisions to either the timing or the amount of the original estimate of undiscounted cash flow.

Increases in the ARO liability

due to passage of time impact net income as accretion expense and are included in cost of goods sold in the Consolidated Statements

of Operations.

Changes in the estimated future cash flows costs underlying the obligations (resulting from changes or expansion

at the facilities) require adjustment to the ARO liability calculated and are capitalized and charged as depreciation expense,

in accordance with our depreciation policy.

Accounting Pronouncements

“Item 8 –

Financial Statements and Supplementary Data”

“Notes to Consolidated Financial Statements”

“Note 2 –

Summary of Significant Accounting Policies”

for the recent accounting pronouncements that

have been adopted during the year ended December 31, 2020, or will be adopted in future periods.

Trends and Uncertainties

Our business continues to be heavily dependent on services that we provide to governmental clients (including

Department of Energy (“DOE”) and U.S.

Department of Defense (“DOD”)) directly as the prime contractor

or indirectly for others as a subcontractor to government authorities.

We believe demand for our services will continue to be

subject to fluctuations due to a variety of factors beyond our control, including the economic conditions and the manner in which

the government entity will be required to spend funding to remediate various sites.

Our business continues to be heavily dependent on services that we provide to governmental clients, primarily

as subcontractors for others who are prime contractors to government authorities (particularly the U.S Department of Energy and

Department of Defense) 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, including the economic conditions and the manner in which the

government entity will be required to spend funding to remediate various sites.

In addition, our U.S.

governmental contracts

and subcontracts relating to activities at governmental sites are generally subject to termination or renegotiation on 30 days

notice at the government’s option.

The TOAs with the Canadian government generally provide that the government may terminate

a TOA at any time for convenience.

Significant reductions in the level of governmental funding or specifically mandated levels

for different programs that are important to our business could have a material adverse impact on our business, financial position,

governmental contracts and

subcontracts relating to activities at governmental sites are generally subject to termination or renegotiation on 30 days notice

at the government’s option.

The TOAs with the Canadian government generally provide that the government may terminate a

TOA at any time for convenience.

Significant reductions in the level of governmental funding 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 and cash flows.

Our 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

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.

through contracts entered into indirectly as subcontractors for others who are prime contractors or directly as the prime contractor

to government authorities.

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

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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 revenue 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 approval 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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next will generally have a material adverse effect on our operations and financial condition.

As a result of the Coronavirus, we have been informed that certain

field projects for remediation work are being suspended until further notice due to precautions associated with the risk of potential

virus spread among staff and client.

Additionally, at this time, certain customers have delayed waste shipments to us into the

second quarter of 2020 that were originally scheduled for the first quarter of 2020.

In the event that work is suspended or halted

on further remediation projects and/or waste shipments from our clients are further suspended or halted, such impact could have a material impact to our results of operation.

Additionally, the Company may, among other things, temporarily cease/limit

waste treatment operations and/or temporarily cease/limit field project operations due to the Coronavirus.

Accounting Pronouncements

“Note 2 –

Summary of Significant Accounting Policies”

in the “Notes to Consolidated Financial Statements”

for the recent accounting pronouncements that have been adopted during the year ended December 31, 2019, or will be adopted in

future periods.

The extent of the impact of the COVID-19 pandemic on our business is uncertain and difficult to predict, as the responses

to the pandemic continue to evolve rapidly.

Since the latter part of the second quarter of 2020, all of the projects within our

Services Segment that were previously shutdown have restarted as stay-at-home orders and certain other restrictions resulting

from the pandemic were lifted.

Within our Treatment Segment, we continue to experience delays in waste shipment from certain customers

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

COVID-19 disruption could have a material adverse effect on our business as our customers could curtail and reduce

capital and overall spending.

severity of the impact the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to,

the duration and severity of the pandemic, the extent and severity of the impact on our customers, the impact on governmental

programs and budgets, distribution of COVID-19 vaccines, the rate at which people are inoculated with the vaccines, and how quickly

and to what extent normal economic and operating conditions resume, all of which are uncertain and cannot be predicted with any

accuracy or confidence at this time.

Our future results of operations and liquidity could be adversely impacted by continued delays

in waste shipments and/or the recurrence of project work shut downs as well as potential partial/full shutdown of any of our facilities

due to COVID-19.

Environmental

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a potentially responsible party (“PRP”) at a remedial action site, which could have a material adverse effect.

have three remediation projects, which are currently in progress at our PFD, PFM (closed location), and PFSG (in closure status)

subsidiaries.

We divested PFD in 2008;

however, the environmental liability of PFD was retained by us upon the divestiture of

These remediation projects principally entail the removal/remediation of contaminated soil and, in most cases, the remediation

of surrounding ground water.

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

(“PFD”),

PFM and Perma-Fix of South Georgia, Inc.

(“PFSG”) subsidiaries, all within our discontinued operations.

These remediation

projects principally entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground

The remediation activities are closely reviewed and monitored by the applicable state regulators.

While no assurances can be made that we will be able to do so, we expect to fund the expenses to remediate these sites from funds

generated internally.

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

While no assurances can

be made that we will be able to do so, we expect to fund the expenses to remediate these sites from funds generated internally.

December 31, 2020, we had total accrued environmental remediation liabilities of $854,000, a decrease of $73,000 from the December

31, 2019 balance of $927,000.

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.

The decrease represents payments made on remediation projects for our PFSG and PFD subsidiaries.

At December 31, 2020, $744,000 of the total accrued environmental liabilities was recorded as current.

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Louis Centofanti, our Executive Vice President

(“EVP”) of Strategic Initiatives and a Board of Director (“Board”) member.

(“EVP”) of Strategic Initiatives and a member of our Board of Directors (“Board”).

We believe the compensation

1 unchanged sentence

we would have to pay to an unaffiliated third party with the same technical expertise.

entered into employment agreements with each of Mark Duff (President and Chief Executive Officer (“CEO”)), Ben Naccarato

(Chief Financial Officer (“CFO”)), and Dr.

Louis Centofanti, (EVP of Strategic Initiatives), with each employment

dated September 8, 2017.

Each of the employment agreements is effective for three years from September 8, 2017 (the “Initial

Term”) unless earlier terminated by us or by the executive officer.

At the end of the Initial Term of each employment agreement,

each employment agreement will automatically be extended for one additional year, unless at least six months prior to the expiration

of the Initial Term, we or the executive officer provides written notice not to extend the terms of the employment agreement.

Each employment agreement provides for annual base salaries, performance bonuses (as provided in the Management Incentive Plan

(“MIP”) as approved by our Board, and other benefits commonly found in such agreements.

In addition, each employment

agreement provides that in the event the executive officer terminates his employment for “good reason”

in the agreements) or is terminated by us without cause (including the executive officer terminating his employment for “good

reason”

or is terminated by us without cause within 24 months after a Change in Control (as defined in the agreement)),

we will pay the executive officer the following:

(a) a sum equal to any unpaid base salary;

(b) accrued unused vacation time and

any employee benefits accrued as of termination but not yet been paid (“Accrued Amounts”);

and (d) two times the performance compensation (under the MIP) earned with respect to the fiscal year immediately preceding

the date of termination provided the performance compensation earned with respect to the fiscal year immediately preceding the

date of termination has not been paid.

If performance compensation earned with respect to the fiscal year immediately preceding

the date of termination has been made to the executive officer, the executive officer will be paid an additional year performance

entered into an employment agreement with each of Mark Duff, President and Chief Executive Officer (“CEO”), Dr.

Centofanti, EVP of Strategic Initiatives, Ben Naccarato, Chief Financial Officer (“CFO”), Andrew Lombardo, EVP of

Nuclear and Technical Services, and Richard Grondin, EVP of Waste Treatment Operations, with each employment agreement dated July

22, 2020 (each employment agreement referred to as the “New Employment Agreement”).

We had entered into an employment

agreement with each of Mark Duff, Dr.

Louis Centofanti and Ben Naccarato on September 8, 2017 which each of the employment agreement

was terminated effective July, 22, 2020 upon the execution of the New Employment Agreement with Mark Duff, Dr.

Louis Centofanti

and Ben Naccarato.

New Employment Agreement is effective for three years from July 22, 2020 (the “Initial Term”) unless earlier terminated

by the Company or by the executive officer.

At the end of the Initial Term of each New Employment Agreement, each New Employment

Agreement will automatically be extended for one additional year, unless at least six months prior to the expiration of the Initial

Term, we or the executive officer provides written notice not to extend the terms of the New Employment Agreement.

Each New Employment

Agreement provides for annual base salary, performance bonuses (as provided in the Management Incentive Plan (“MIP”)

as approved by our Compensation and Stock Option Committee (the “Compensation Committee”) and Board) and other benefits

commonly found in such agreement.

to each New Employment Agreement, if the executive officer’s employment is terminated due to death/disability or for cause

(as defined in the agreements), we will pay to the executive officer or to his estate an amount equal to the sum of any unpaid

base salary and accrued unused vacation time through the date of termination and any benefits due to the executive officer under

any employee benefit plan (the “Accrued Amounts”) plus any performance compensation payable pursuant to the MIP with

respect to the fiscal year immediately preceding the date of termination.

the executive officer terminates his employment for “good reason”

(as defined in the agreements) or is terminated

by us without cause (including any such termination for “good reason”

or without cause within 24 months after a Change

in Control (as defined in the agreement)), we will pay the executive officer the Accrued Amounts, two years of full base salary,

and two times the performance compensation (under the MIP) earned with respect to the fiscal year immediately preceding the date

of termination provided the performance compensation earned with respect to the fiscal year immediately preceding the date of

termination has not been paid.

If performance compensation earned with respect to the fiscal year immediately preceding the date

of termination has been made to the executive officer, the executive officer will be paid an additional year of the performance

compensation earned with respect to the fiscal year immediately preceding the date of termination.

If the executive terminates

his employment for a reason other than for good reason, we will pay to the executive the amount equal to the Accrued Amounts plus

any performance compensation payable pursuant to the MIP.

there is a Change in Control (as defined in the agreements), all outstanding stock options to purchase our Common Stock held by

the executive officer will immediately become exercisable in full commencing on the date of termination through the original term

his employment for a reason other than for good reason, we will pay to the executive an amount equal to the Accrued Amounts plus

any performance compensation payable pursuant to the MIP with respect to the fiscal year immediately preceding the date of termination.

there is a Change in Control (as defined in the agreements), all outstanding stock options to purchase common stock held by the

executive officer will immediately become exercisable in full commencing on the date of termination through the original term

of the options.

In the event of the death of an executive officer, all outstanding stock options to purchase our Common Stock

held by the executive officer will immediately become exercisable in full commencing on the date of death, with such options exercisable

In the event of the death of an executive officer, all outstanding stock options to purchase common stock held

by the executive officer will immediately become exercisable in full commencing on the date of death, with such options exercisable

for the lesser of the original option term or twelve months from the date of the executive officer’s death.

of an executive officer terminating his employment for “good reason”

or is terminated by us without cause, all outstanding

stock options to purchase our Common Stock held by the executive officer will immediately become exercisable in full commencing

an executive officer terminates his employment for “good reason”

or is terminated by the Company without cause, all

outstanding stock options to purchase common stock held by the executive officer will immediately become exercisable in full commencing

on the date of termination, with such options exercisable for the lesser of the original option term or within 60 days from the

date of the executive’s date of termination.

January 17, 2019, our Board and the Compensation and Stock Option Committee (the “Compensation Committee”) approved

individual MIP for the CEO, CFO, and EVP of Strategic Initiatives.

Each MIP is effective January 1, 2019 and applicable for the

year ended December 31, 2019.

Each MIP provides guidelines for the calculation of annual cash incentive-based compensation, subject

to Compensation Committee oversight and modification.

Each MIP awards cash compensation based on achievement of performance thresholds,

with the amount of such compensation established as a percentage of the executive’s annual 2019 base salary on the approval

date of the MIP.

The potential target performance compensation ranges from 5% to 150% of the 2019 base salary for the CEO ($14,350

to $430,500), 5% to 100% of the 2019 base salary for the CFO ($11,762 to $235,231), and 5% to 100% of the 2019 base salary for

the EVP of Strategic Initiatives ($11,449 to $228,985).

The amount payable under the 2019 MIP was approximately $110,700, $81,100,

and $78,900, for the CEO, CFO, and EVP of Strategic Initiatives, respectively, which we anticipate will be paid in April 2020.

Severance benefits payable with respect to a termination (other than Accrued

Amounts) shall not be payable until the termination constitutes a “separation from service”

(as defined under Treasury

Regulation Section 1.409A-1(h)).

January 16, 2020, our Board and the Compensation Committee approved individual MIP for each Mark Duff, CEO and President, Ben

Naccarato, CFO, and Dr.

Louis Centofanti, EVP of Strategic Initiatives.

Additionally, the Board and the Compensation Committee

approved a MIP for Andy Lombardo, who was elected EVP of Nuclear and Technical Services and an executive officer of the Company.

Lombardo previously held the position of Senior Vice President (“SVP”) of Nuclear and Technical Services.

MIPs are effective January 1, 2020 and applicable for year ended December 31, 2020.

Each MIP provides guidelines for the calculation

of annual cash incentive-based compensation, subject to Compensation Committee oversight and modification.

Each MIP awards cash

compensation based on achievement of performance thresholds, with the amount of such compensation established as a percentage

of the executive’s 2020 annual base salary (see below for salary of each executive officers for 2020).

The potential target

performance compensation ranges from 5% to 150% of the base salary for the CEO ($17,220 to $516,600), 5% to 100% of the base salary

for the CFO ($14,000 to $280,000), 5% to 100% of the base salary for the EVP of Strategic Initiatives ($11,667 to $233,336) and

5% to 100% of the base salary for the EVP of Nuclear and Technical Services ($14,000 to $280,000).

Naccarato, EVP and CFO, Dr.

Louis Centofanti, EVP of Strategic Initiatives and Andy Lombardo, who was appointed by our Board to

the position of EVP of Nuclear and Technical Services and an executive officer of the Company on January 16, 2020.

previously held the position of Senior Vice President (“SVP”) of Nuclear and Technical Services.

Additionally, on

July 22, 2020, our Board and our Compensation Committee approved a MIP for Richard Grondin who was appointed by our Board to the

position of EVP of Waste Treatment Operations and an executive officer of the Company.

Grondin previously held the position

of Vice President of Western Operations within our Treatment Segment.

Each of the MIPs is effective January 1, 2020 and applicable

for year ended December 31, 2020.

Each MIP provides guidelines for the calculation of annual cash incentive-based compensation,

subject to Compensation Committee oversight and modification.

Each MIP awards cash compensation based on achievement of performance

thresholds, with the amount of such compensation established as a percentage of the executive’s 2020 annual base salary.

The potential target performance compensation ranges from 5% to 150% of the base salary for the CEO ($17,220 to $516,600), 5%

to 100% of the base salary for the CFO ($14,000 to $280,000), 5% to 100% of the base salary for the EVP of Strategic Initiatives

($11,667 to $233,336), 5% to 100% of the base salary for the EVP of Nuclear and Technical Services ($14,000 to $280,000) and 5%

to 100% ($12,000 to $240,000) of the base salary for the EVP of Waste Treatment Operations.

The total incentive compensation earned

under the 2020 MIPs for the executive officers was approximately $419,000 and is payable on or about 90 days after year-end, or

sooner, based on finalization of our audited financial statements for 2020 in accordance to the MIPs.

January 21, 2021, our Board and the Company Compensation Committee approved individual MIP for the calendar year 2021 for each

CEO, EVP and CFO, EVP of Strategic Initiatives, EVP of Nuclear and Technical Services and EVP of Waste Treatment Operations.

of the MIPs is effective January 1, 2021 and applicable for year 2021.

Each MIP provides guidelines for the calculation of annual

cash incentive-based compensation, subject to Compensation Committee oversight and modification.

Each MIP awards cash compensation

based on achievement of performance thresholds, with the amount of such compensation established as a percentage of the executive’s

2021 annual base salary at the time of the approval of the MIP.

The potential target performance compensation ranges from 5% to

150% of the base salary for the CEO ($17,220 to $516,600), 5% to 100% of the base salary for the CFO ($14,000 to $280,000), 5%

to 100% of the base salary for the EVP of Strategic Initiatives ($11,667 to $233,336), 5% to 100% of the base salary for the EVP

of Nuclear and Technical Services ($14,000 to $280,000) and 5% to 100% ($12,000 to $240,000) of the base salary for the EVP of

Waste Treatment Operations.

January 16, 2020, the Board, with the approval of the Compensation Committee approved the following salary increase for the Company’s

NEO effective January 1, 2020:

executive officers effective January 1, 2020:

base salary for Mark Duff, CEO and President, was increased to $344,400 from $287,000.

base salary for Ben Naccarato, who was promoted to EVP and CFO from VP and CFO, was increased to $280,000 from $235,231;

base salary for Andy Lombardo, who was elected to EVP of Nuclear and Technical Services as discussed above, was increased

to $280,000 from $258,662, which was the annual base salary that Mr.

Lombardo was paid as SVP of Nuclear and Technical Services

and prior to his election as an executive officer of the Company by the Board.

base salary for Andy Lombardo, who was appointed to the position of EVP of Nuclear and Technical Services as discussed above,

was increased to $280,000 from $258,662, which was the annual base salary that Mr.

Lombardo earned as SVP of Nuclear and Technical

Services and prior to his appointment as an executive officer of the Company by the Board.

Additionally,

as a result of Richard Grondin’s appointment by the Board to the position of EVP of Waste Treatment and an executive officer

on July 22, 2020, his annual salary was increased from $208,000 as Vice President of Western Operations within our Treatment Segment

to $240,000, effective July 22, 2020.

February 2021, the Compensation Committee approved an annual salary cost of living adjustment of approximately 2.3% to take into

effect April 1, 2021 for each of our executive officers.

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 5. Market for Registrant’s Common Equity