What changed in this filing

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Item 1. Business

2022-04-06 compared with 2021-03-29 · 284 added, 299 removed, 36 unchanged (94% of the section changed)

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Environmental Services, Inc.

(the Company, which may be referred to as we, us, or our), a Delaware corporation incorporated in

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

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

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

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

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

The Company remains focused

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

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

This includes new services, new

customers and increased market share in our current markets.

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

and its wholly-owned subsidiary, Perma-Fix Medical Corporation (“PFM Corporation”

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

or our “Medical Segment”) which is currently

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

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

to fund these activities.

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

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

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

and international markets.

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

Since the start of the pandemic, we have

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

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

However, we expect to see a gradual

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

(the Company, which may be referred to as we, us, or our), a Delaware corporation incorporated in December

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

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

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

Within our Services

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

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

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

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

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

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

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

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

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

The potential for a material impact on our business increases

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

to delay waste shipments and projects may shut down again.

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

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

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

Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

“Results of Operations”

“Liquidity and Capital Resources.”

Segment, we continue to increase competitive procurement effectiveness and broaden the market penetration within both the commercial

and government sectors.

The Company remains focused on expansion into both commercial and international markets to supplement government

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

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

previously disclosed, the Company’s Medical Segment (or “PF Medical”) business, conducted through the Company’s

majority-owned Polish subsidiary, Perma-Fix Medical S.A (“PFM Poland”), and PFM Poland’s wholly-owned subsidiary, Perma-Fix

Medical Corporation, a Delaware corporation (“PFMC”), had not generated any revenue and had substantially reduced research

and development (“R&D”) activities of the Company’s medical isotope production technology due to the need for capital

to fund these activities.

During December 2021, the Company made the strategic decision to cease all R&D activities under the Medical

Segment and sold 100% of its interest in PFM Poland for a nominal amount.

As a condition precent to the sale of PFM Poland, the Company

acquired PFMC after its conversion to a Delaware limited liability company.

As a result of the sale of PFM Poland, the Company deconsolidated

PFM Poland from its consolidated financial statements.

2021 financial results continued to be impacted by COVID-19 resulting in continued delays in waste shipments from certain customers within

our Treatment Segment.

Additionally, supply chain challenges delayed the deployment of our new waste treatment technology which also

negatively impacted our revenue in 2021.

Within our Services Segment, we experienced delays in procurement actions and contract awards

in the first half of 2021 and work under certain new projects won in the second half of 2021 was curtailed/delayed from the impact of

COVID-19, among other things (See “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

– COVID-19 Impact” for a full discussion of the impact of COVID-19 on the Company’s results of operations).

Information and Foreign and Domestic Operations and Sales

Company has three reportable segments.

In accordance with Financial Accounting Standards Board (“FASB”) ASC 280, “Segment

Reporting”, we define an operating segment as:

2021, the Company has three reportable segments.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting

Standards Codification (“ASC”) 280, “Segment Reporting”, we define an operating segment as:

business activity from which we may earn revenue and incur expenses;

operating results are regularly reviewed by the chief operating decision maker “(CODM”) to make decisions about

resources to be allocated and assess its performance;

operating results are regularly reviewed by the chief operating decision maker “(CODM”)

to make decisions about resources to be allocated and assess its performance;

which discrete financial information is available.

SEGMENT reporting includes:

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

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

or state equivalent) and permitted (U.S.

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

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

hazardous and non-hazardous waste treatment, processing and disposal services primarily through

four uniquely licensed (Nuclear Regulatory Commission or state equivalent) and permitted

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

and storage facilities as follow:

Perma-Fix of Florida, Inc.

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

Perma-Fix Northwest Richland, Inc.

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

See below for further information of this facility);

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

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

addition of our EWOC facility.

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

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

The ultimate objective

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

(landfills, approved radiological waste repositories).

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

complete transition of the site.

No revenue was generated at EWOC in 2020.

(“PFF”), Diversified

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

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

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

problematic waste streams.

2021, the Treatment Segment accounted for $32,992,000, or 45.7%, of total revenue, as compared to $30,143,000, or 28.6%,, of total

revenue for 2020.

See “Dependence Upon a Single or Few Customers”

for further details and a discussion as to our Segments’

See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our Segments’

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

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services, which include:

radiological measurement and site survey of large government and commercial installations using advanced methods, technology

and engineering;

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

to government and private radioactive materials licensees;

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

hazardous materials surveys,

e.g., exposure monitoring;

lead and asbestos management/abatement oversight;

○ professional

radiological measurement and site survey of large government and commercial installations

using advanced methods, technology and engineering;

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

health physics technicians support to government and private radioactive materials licensees;

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

hazardous materials surveys, e.g., exposure monitoring;

lead and asbestos management/abatement

indoor air quality evaluations;

health risk and

exposure assessments;

health & safety plan/program development, compliance auditing and training services;

health risk and exposure assessments;

safety plan/program development, compliance auditing and training services;

and Occupational

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

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

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

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

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

technical services providing consulting, engineering (civil, nuclear, mechanical, chemical,

radiological and environmental), project management, waste management, environmental, and

decontamination and decommissioning (“D&D”) field, technical, and management

personnel and services to commercial and government customers;

management services to commercial and governmental customers.

services, which include:

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

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

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

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

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

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

health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.

company owned gamma spectroscopy laboratory for the analysis of oil and gas industry solids and liquids.

2020, the Services Segment accounted for $75,283,000, or 71.4%, of total revenue, as compared to $33,095,000, or 45.1%, of total

revenue for 2019.

See “Dependence Upon a Single or Few Customers”

for further details and a discussion as to our Segments’

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

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

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

agencies (domestic and foreign), including the U.S.

Department of Energy (“DOE”) and U.S.

Department of Defense (“DOD”).

of government and commercial facilities impacted with radioactive material and hazardous

constituents including engineering, technology applications, specialty services, logistics,

transportation, processing and disposal;

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

cycle of the termination process:

project management, planning, characterization, waste stream

identification and delineation, remediation/demolition, final status survey, compliance demonstration,

reporting, transportation, disposal and emergency response.

company owned equipment calibration and maintenance laboratory that services, maintains,

calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental,

and occupational safety and health (“NEOSH”) instrumentation.

2021, the Services Segment accounted for $39,199,000, or 54.3%, of total revenue, as compared to $75,283,000, or 71.4%,

of total revenue for 2020.

See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our

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

SEGMENT (see a discussion of the exit of our business under the Medical Segment during the fourth quarter of 2021 under “Company

Overview and Principal Products and Services” above).

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

(domestic and foreign), including the U.S.

Department of Energy (“DOE”) and U.S.

Department of Defense (“DOD”).

The distribution channels for our services are through direct sales to customers or via intermediaries.

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

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

Canadian customers (including revenues generated by our Perma-Fix of Canada, Inc.

(“PF Canada”) subsidiary).

management service companies are subject to extensive, evolving and increasingly stringent federal, state, and local environmental

laws and regulations.

Such federal, state and local environmental laws and regulations govern our activities regarding the treatment,

storage, processing, disposal and transportation of hazardous, non-hazardous and radioactive wastes, and require us to obtain

and maintain permits, licenses and/or approvals in order to conduct our waste activities.

We are dependent on our permits and

licenses discussed below in order to operate our businesses.

Failure to obtain and maintain our permits or approvals would have

a material adverse effect on us, our operations, and financial condition.

The permits and licenses have terms ranging from one

to ten years, and provided that we maintain a reasonable level of compliance, renew with minimal effort, and cost.

that these permit and license requirements represent a potential barrier to entry for possible competitors.

Revenue and Initiative

consolidated revenue for 2021 and 2020 included approximately $9,277,000, or 12.9%, and $5,550,000, or 5.3%, respectively,

from Canadian customers.

During March 2022, we signed a

joint venture term sheet addressing plans to partner with Springfields Fuels Limited (“SFL”), an affiliate of Westinghouse

Electric Company LLC, to develop and manage a nuclear waste-materials treatment facility (the “Facility”) in the United Kingdom.

The Facility is for the purpose of expanding the partners’ waste treatment capabilities for the European nuclear market.

expected that upon finalization of a partnership agreement, SFL will have an ownership interest of fifty-five (55) percent and our interest

will be forty-five (45) percent.

The finalization, form and capitalization of this unpopulated partnership is subject to numerous conditions,

including but not limited to, completion and execution of a definitive agreement and facility design and the granting of required regulatory,

lender or permitting approvals.

Upon finalization of this venture, we will be required to make an investment in this venture.

of our investment, the period of which it is to be made and the method of funding are to be determined.

Factors of our Business

operations are generally subject to seasonal factors.

See “Risk Factors – Risks Related to our Business and Operations –

Our operations are subject to seasonal factors, which causes our revenues to fluctuate” for a discussion of our seasonal factors.

management service companies are subject to extensive, evolving and increasingly stringent federal, state, and local environmental laws

and regulations.

Such federal, state and local environmental laws and regulations govern our activities regarding the treatment, storage,

processing, disposal and transportation of hazardous, non-hazardous and radioactive wastes, and require us to obtain and maintain permits,

licenses and/or approvals in order to conduct our waste activities.

We are dependent on our permits and licenses discussed below in order

to operate our businesses.

Failure to obtain and maintain our permits or approvals would have a material adverse effect on us, our operations,

and financial condition.

The permits and licenses have terms ranging from one to ten years, and provided that we maintain a reasonable

level of compliance, renew with minimal effort, and cost.

We believe that these permit and license requirements represent a potential

barrier to entry for possible competitors.

located in Gainesville, Florida, operates its hazardous, mixed and low-level radioactive waste activities under a Resource Conservation

and Recovery Act (“RCRA”) Part B permit, Toxic Substances Control Act (“TSCA”) authorization, Restricted

RX Drug Distributor-Destruction license, biomedical, and a radioactive materials license issued by the State of Florida.

located in Kingston, Tennessee, conducts mixed and low-level radioactive waste storage and treatment activities under RCRA Part

B permits and a radioactive materials license issued by the State of Tennessee Department of Environment and Conservation.

TSCA Polychlorinated Biphenyl (“PCB”) wastes are also managed for PCB destruction under EPA Approval.

located in Richland, Washington, operates a low-level radioactive waste processing facility as well as a mixed waste processing

Radioactive material processing is authorized under radioactive materials licenses issued by the State of Washington

and mixed waste processing is additionally authorized under a RCRA Part B permit with TSCA authorization issued jointly by the

State of Washington and the EPA.

and Recovery Act (“RCRA”) Part B permit, Toxic Substances Control Act (“TSCA”) authorization, Restricted RX Drug

Distributor-Destruction license, biomedical, and a radioactive materials license issued by the State of Florida.

located in Kingston, Tennessee, conducts mixed and low-level radioactive waste storage and treatment activities under RCRA Part B permits

and a radioactive materials license issued by the State of Tennessee Department of Environment and Conservation.

Co-regulated TSCA Polychlorinated

Biphenyl (“PCB”) wastes are also managed for PCB destruction under EPA Approval.

located in Richland, Washington, operates a low-level radioactive waste processing facility as well as a mixed waste processing facility.

Radioactive material processing is authorized under radioactive materials licenses issued by the State of Washington and mixed waste

processing is additionally authorized under a RCRA Part B permit with TSCA authorization issued jointly by the State of Washington and

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

Radioactive material processing

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

Division of radiological health.

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

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

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

waste and radioactive and mixed waste activities as presently operated by our waste treatment subsidiaries.

If the permit requirements

for hazardous waste treatment, storage, and disposal (“TSD”) activities and/or the licensing requirements for the

handling of low-level radioactive matters are eliminated or if such licenses or permits were made less rigorous to obtain, we

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

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

The backlog is principally

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

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

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

of the waste we are currently receiving.

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

has been in the first or fourth quarters.

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

of radiological health.

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

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

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

and radioactive and mixed waste activities as presently operated by our waste treatment subsidiaries.

If the permit requirements for

hazardous waste treatment, storage, and disposal (“TSD”) activities and/or the licensing requirements for the handling of

low-level radioactive matters are eliminated or if such licenses or permits were made less rigorous to obtain, we believe such would

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

December 31, 2021, we employed approximately 286 employees, of whom 275 are full-time employees and 11 are part-time/temporary employees.

None of our employees are unionized.

Upon a Single or Few Customers

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

A significant

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

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

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

The contracts that we are a party

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

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

notice, at the government’s election.

The contracts/task

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

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

Our inability to continue under

existing contracts that we have with the U.S federal government and Canadian government authorities (directly or indirectly as

a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse

impact on our operations and financial condition.

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

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

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

governmental authorities.

Our Services Segment also had

significant relationships with the Canadian government authorities.

A significant amount of our revenues from our Treatment and Services

Segments are generated indirectly as subcontractors for others who are prime contractors to government authorities, particularly the

DOE and DOD, or directly as the prime contractor to government authorities.

The contracts that we are a party to with others as subcontractors

to the U.S federal government or directly with the U.S federal government generally provide that the government may terminate the contract

at any time for convenience at the government’s option.

The contracts/task order agreements (“TOA”) that we are a party

to with Canadian governmental authorities also generally provide that the government authorities may terminate the contracts/task order

agreements at any time for any reason for convenience.

Project work under TOAs with Canadian government authority has substantially been

Our inability to continue under existing contracts that we have with U.S government authorities (directly or indirectly as

a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact

on our operations and financial condition.

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

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

$60,812,000, or 84.2%, of our total revenue during 2021, as compared to $96,582,000, or 91.6%, of our total revenue during

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

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

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

This remediation

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

As work progressed throughout stages of this project

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

this project.

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

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

contract with a different customer from year to year, we do not believe the loss of one specific customer from one year to the

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

Treatment Segment’s largest competitor is EnergySolutions (“ES”) which operates treatment facilities in Oak

Ridge, TN and Erwin, TN and disposal facilities for low level radioactive waste in Clive, UT and Barnwell, SC.

Waste Control Specialists

(“WCS”), which has licensed disposal capabilities for low level radioactive waste in Andrews, TX, is also a competitor

in the treatment market with increasing market share.

These two competitors also provide us with options for disposal of our treated

nuclear waste.

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

Our Treatment Segment

currently solicits business primarily on a North America basis with both government and commercial clients;

however, we continue

to focus on emerging international markets for additional work.

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 2021 and 2020 accounted for approximately $8,526,000 or 11.8% and $41,011,000 or 38.9% (included in revenues generated

relating to government clients above) of our total revenue for 2021 and 2020, respectively.

This project was completed in the second

quarter of 2021.

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

with a different customer from year to year, we do not believe the loss of one specific customer from one year to the next will generally

have a material adverse effect on our operations and financial condition.

Treatment Segment’s largest competitor is EnergySolutions which operates treatment facilities in Oak Ridge, TN and Erwin, TN and

treatment/disposal facilities for low level radioactive waste in Clive, UT and Barnwell, SC.

Waste Control Specialists, which has licensed

treatment/disposal capabilities for low level radioactive waste in Andrews, TX, is also a competitor in the treatment market with increasing

market share.

These two competitors also provide us with options for disposal of our treated nuclear waste.

The Treatment Segment treats

and disposes of DOE generated waste largely at DOE owned sites.

Our Treatment Segment currently solicits business primarily on a North

America basis with both government and commercial clients;

however, we continue to focus on emerging international markets for additional

Services Segment is engaged in highly competitive businesses in which a number of our government contracts and some of our commercial

contracts are awarded through competitive bidding processes.

The extent of such competition varies according to the industries

and markets in which our customers operate as well as the geographic areas in which we operate.

The degree and type of competition

we face is also often influenced by the project specification being bid on and the different specialty skill sets of each bidder

for which our Services Segment competes, especially projects subject to the governmental bid process.

We also have the ability

to prime federal government small business procurements (small business set asides).

Based on past experience, we believe that

large businesses are more willing to team with small businesses in order to be part of these often-substantial procurements.

are a number of qualified small businesses in our market that will provide intense competition that may provide a challenge to

our ability to maintain strong growth rates and acceptable profit margins.

For international business there are additional competitors,

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

If our Services

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

The extent of such competition varies according to the industries and markets

in which our customers operate as well as the geographic areas in which we operate.

The degree and type of competition we face is also

often influenced by the project specification being bid on and the different specialty skill sets of each bidder for which our Services

Segment competes, especially projects subject to the governmental bid process.

We also have the ability to prime federal government small

business procurements (small business set asides).

Based on past experience, we believe that large businesses are more willing to team

with small businesses in order to be part of these often-substantial procurements.

There are a number of qualified small businesses in

our market that will provide intense competition that may provide a challenge to our ability to maintain strong growth rates and acceptable

profit margins.

For international business there are additional competitors, many from within the country the work is to be performed,

making winning work in foreign countries more challenging.

If our Services Segment is unable to meet these competitive challenges, it

could lose market share and experience an overall reduction in its profits.

Environmental Expenditures and Potential Environmental Liabilities

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

(“PFD”),

Perma-Fix of Memphis, Inc.

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

(“PFSG”) subsidiaries, which are

all included within our discontinued operations.

These remediation projects principally entail the removal/remediation of contaminated

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

These remediation activities are closely reviewed and monitored

by the applicable state regulators.

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

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

total accrued environmental liabilities was recorded as current.

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

risk of liability for damages.

Such potential liability could involve, for example, claims for cleanup costs, personal injury

or damage to the environment in cases where we are held responsible for the release of hazardous materials;

claims of employees,

customers or third parties for personal injury or property damage occurring in the course of our operations;

and claims alleging

negligence or professional errors or omissions in the planning or performance of our services.

In addition, we could be deemed

a responsible party for the costs of required cleanup of properties, which may be contaminated by hazardous substances generated

or transported by us to a site we selected, including properties owned or leased by us.

We could also be subject to fines and

civil penalties in connection with violations of regulatory requirements.

and Development (“R&D”)

(“PFD”), Perma-Fix

of Memphis, Inc.

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

(“PFSG”) subsidiaries, which are all included within

our discontinued operations.

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

cases, the remediation of surrounding ground water.

These remediation activities are closely reviewed and monitored by the applicable

state regulators.

December 31, 2021, we had total accrued environmental remediation liabilities of $876,000, an increase of $22,000 from the December 31,

2020 balance of $854,000.

The net increase represents an increase of $100,000 made to the reserve at our PFSG subsidiary due to reassessment

of the reserve and payments of approximately $78,000 for remediation projects for the three subsidiaries.

At December 31, 2021, $349,000

of the total accrued environmental liabilities was recorded as current.

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

of liability for damages.

Such potential liability could involve, for example, claims for cleanup costs, personal injury or damage to

the environment in cases where we are held responsible for the release of hazardous materials;

claims of employees, customers or third

parties for personal injury or property damage occurring in the course of our operations;

and claims alleging negligence or professional

errors or omissions in the planning or performance of our services.

In addition, we could be deemed a potentially responsible party (“PRP”)

for the costs of required cleanup of properties, which may be contaminated by hazardous substances generated or transported by us to

a site we selected, including properties owned or leased by us.

We could also be subject to fines and civil penalties in connection with

violations of regulatory requirements.

and technical know-how by our operations is very important to the success of our business.

Our goal is to discover, develop and

bring to market innovative ways to process waste that address unmet environmental needs.

We conduct research internally, and also

through collaborations with other third parties.

The majority of our research activities are performed as we receive new and unique

waste to treat.

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

Our goal is to discover, develop and bring

to market innovative ways to process waste that address unmet environmental needs.

We conduct research internally, and also through collaborations

with other third parties.

The majority of our research activities are performed as we receive new and unique waste to treat.

Our competitors

also devote resources to R&D and many such competitors have greater resources at their disposal than we do.

R&D totaled $746,000

and $762,000 for 2021 and 2020, respectively.

See above discussion under “Business – Company Overview and Principal Products

and Services” as to the Company’s decision to cease all R&D activities under its Medical Segment and the sale of PFM

Environmental

companies, such as us, and their customers are subject to extensive and evolving environmental laws and regulations by a number

of federal, state and local environmental, safety and health agencies, the principal of which being the EPA.

These laws and regulations

largely contribute to the demand for our services.

Although our customers remain responsible by law for their environmental problems,

we must also comply with the requirements of those laws applicable to our services.

We cannot predict the extent to which our

operations may be affected by future enforcement policies as applied to existing laws or by the enactment of new environmental

laws and regulations.

Moreover, any predictions regarding possible liability are further complicated by the fact that under current

environmental laws we could be jointly and severally liable for certain activities of third parties over whom we have little or

Although we believe that we are currently in substantial compliance with applicable laws and regulations, we could

be subject to fines, penalties or other liabilities or could be adversely affected by existing or subsequently enacted laws or

The principal environmental laws affecting our customers and us are briefly discussed below.

Resource Conservation and Recovery Act of 1976, as amended (“RCRA”)

and its associated regulations establish a strict and comprehensive permitting and regulatory program applicable to companies,

such as us, that treat, store or dispose of hazardous waste.

The EPA has promulgated regulations under RCRA for new and existing

treatment, storage and disposal facilities including incinerators, storage and treatment tanks, storage containers, storage and

treatment surface impoundments, waste piles and landfills.

Every facility that treats, stores or disposes of hazardous waste must

obtain a RCRA permit or must obtain interim status from the EPA, or a state agency, which has been authorized by the EPA to administer

its program, and must comply with certain operating, financial responsibility and closure requirements.

Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA,”

also referred to as the “Superfund

governs the cleanup of sites at which hazardous substances are located or at which hazardous substances have been released or

are threatened to be released into the environment.

CERCLA authorizes the EPA to compel responsible parties to clean up sites

and provides for punitive damages for noncompliance.

CERCLA imposes joint and several liabilities for the costs of clean up and

damages to natural resources.

companies, such as us, and their customers are subject to extensive and evolving environmental laws and regulations by a number of federal,

state and local environmental, safety and health agencies, the principal of which being the EPA.

These laws and regulations largely contribute

to the demand for our services.

Although our customers remain responsible by law for their environmental problems, we must also comply

with the requirements of those laws applicable to our services.

We cannot predict the extent to which our operations may be affected

by future enforcement policies as applied to existing laws or by the enactment of new environmental laws and regulations.

Moreover, any

predictions regarding possible liability are further complicated by the fact that under current environmental laws we could be jointly

and severally liable for certain activities of third parties over whom we have little or no control.

Although we believe that we are

currently in substantial compliance with applicable laws and regulations, we could be subject to fines, penalties or other liabilities

or could be adversely affected by existing or subsequently enacted laws or regulations.

The principal environmental laws affecting our

customers and us are briefly discussed below.

Resource Conservation and Recovery Act of 1976, as amended (“RCRA”)

and its associated regulations establish a strict and comprehensive permitting and regulatory program applicable to companies, such as

us, that treat, store or dispose of hazardous waste.

The EPA has promulgated regulations under RCRA for new and existing treatment, storage

and disposal facilities including incinerators, storage and treatment tanks, storage containers, storage and treatment surface impoundments,

waste piles and landfills.

Every facility that treats, stores or disposes of hazardous waste must obtain a RCRA permit or must obtain

interim status from the EPA, or a state agency, which has been authorized by the EPA to administer its program, and must comply with

certain operating, financial responsibility and closure requirements.

Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA,” also referred to as the “Superfund

governs the cleanup of sites at which hazardous substances are located or at which hazardous substances have been released or are threatened

to be released into the environment.

CERCLA authorizes the EPA to compel responsible parties to clean up sites and provides for punitive

damages for noncompliance.

CERCLA imposes joint and several liabilities for the costs of clean up and damages to natural resources.

and Safety Regulations

1 unchanged sentence

Regulations promulgated

under OSHA by the Department of Labor require employers of persons in the transportation and environmental industries, including

independent contractors, to implement hazard communications, work practices and personnel protection programs in order to protect

employees from equipment safety hazards and exposure to hazardous chemicals.

under OSHA by the Department of Labor require employers of persons in the transportation and environmental industries, including independent

contractors, to implement hazard communications, work practices and personnel protection programs in order to protect employees from

equipment safety hazards and exposure to hazardous chemicals.

Atomic Energy Act of 1954 governs the safe handling and use of Source, Special Nuclear and Byproduct materials in the U.S.

its territories.

This act authorized the Atomic Energy Commission (now the Nuclear Regulatory Commission “USNRC”)

to enter into “Agreements with states to carry out those regulatory functions in those respective states except for Nuclear

Power Plants and federal facilities like the VA hospitals and the DOE operations.”

The State of Florida Department of Health

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

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

program of the DSSI facility and the EWOC facility;

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

regulates licensing and the radiological operations of the PFNWR facility.

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

Act, the Clean Air Act, the Hazardous Materials Transportation Act and the TSCA.

Many states have also adopted laws for the protection

of the environment which may affect us, including laws governing the generation, handling, transportation and disposition of hazardous

substances and laws governing the investigation and cleanup of, and liability for, contaminated sites.

Some of these state provisions

are broader and more stringent than existing federal law and regulations.

Our failure to conform our services to the requirements

of any of these other applicable federal or state laws could subject us to substantial liabilities which could have a material

adverse effect on us, our operations and financial condition.

In addition to various federal, state and local environmental regulations,

our hazardous waste transportation activities are regulated by the U.S.

Department of Transportation, the Interstate Commerce

Commission and transportation regulatory bodies in the states in which we operate.

We cannot predict the extent to which we may

be affected by any law or rule that may be enacted or enforced in the future, or any new or different interpretations of existing

laws or rules.

and its territories.

This act authorized the Atomic Energy Commission (now the Nuclear Regulatory Commission “USNRC”) to enter into “Agreements

with states to carry out those regulatory functions in those respective states except for Nuclear Power Plants and federal facilities

like the VA hospitals and the DOE operations.” The State of Florida Department of Health (with the USNRC oversight), Office of

Radiation Control, regulates the licensing and radiological program of the PFF facility;

the State of Tennessee (with the USNRC oversight),

Tennessee Division of Radiological Health, regulates licensing and the radiological program of the DSSI facility and the EWOC facility;

and the State of Washington (with the USNRC oversight) Department of Health, regulates licensing and the radiological operations of the

PFNWR facility.

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

the Clean Air Act, the Hazardous Materials Transportation Act and the TSCA.

Many states have also adopted laws for the protection of

the environment which may affect us, including laws governing the generation, handling, transportation and disposition of hazardous substances

and laws governing the investigation and cleanup of, and liability for, contaminated sites.

Some of these state provisions are broader

and more stringent than existing federal law and regulations.

Our failure to conform our services to the requirements of any of these

other applicable federal or state laws could subject us to substantial liabilities which could have a material adverse effect on us,

our operations and financial condition.

In addition to various federal, state and local environmental regulations, our hazardous waste

transportation activities are regulated by the U.S.

Department of Transportation, the Interstate Commerce Commission and transportation

regulatory bodies in the states in which we operate.

We cannot predict the extent to which we may be affected by any law or rule that

may be enacted or enforced in the future, or any new or different interpretations of existing laws or rules.

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

What changed 10-K

Item 1. Business