What changed in this filing

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Item 1. Business

2023-03-23 compared with 2022-04-06 · 82 added, 70 removed, 250 unchanged (38% of the section changed)

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Within our Services

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.

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

the commercial and government sectors.

The Company continues to remain 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).

and Other Impacts

2022 financial results continued to be impacted by COVID-19, among other things.

Our Treatment Segment began to see steady improvements

in waste receipts starting in the second quarter of 2022 from certain customers who had previously delayed waste shipments due, in part,

from the impact of COVID-19.

This positive trend was negatively impacted by occurrences of severe weather conditions which resulted in

temporary delays in waste shipments from certain customers and a temporary shortage in skilled production personnel which peaked through

the fourth quarter of 2022 at one of our facilities.

In early part of 2022, our Services Segment continued to experience delays/curtailments

in project work by certain customers since the award of projects to us late in the second quarter of 2021 due to COVID-19 impact and/or

administrative delays.

However, starting in the second quarter of 2022, work under these projects had resumed/increased as the pandemic

impacts began to subside and has since reached full operational status.

In 2022, we continued to realize delays in procurement and planning

on behalf of our government clients that saw easing through the second half of the year.

Heading into 2023, we expect to see continued

improvements in waste receipts and continued increases in project work from contracts recently won and bids submitted in both segments

that are awaiting awards, subject to potential COVID-19 and economic impacts.

(See “Item 7.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations – COVID-19 and Other Impact” for a full discussion of COVID-19 and other

impacts on the Company’s results of operations).

Information and Foreign and Domestic Operations and Sales

2021, the Company has three reportable segments.

2022, the Company has two reportable segments.

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

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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.

& Development (“R&D”) activities to identify, develop and implement innovative

waste processing techniques for problematic waste streams.

2022, the Treatment Segment accounted for $33,358,000, or 47.2%, of total revenue, as compared to $32,992,000, or 45.7%, of total revenue

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

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management services to commercial and governmental customers.

services, which include:

- Nuclear services, which include:

of government and commercial facilities impacted with radioactive material and hazardous

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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).

2022, the Services Segment accounted for $37,241,000, or 52.8%, of total revenue, as compared to $39,199,000, or 54.3%, of total revenue

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.

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

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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.

consolidated revenue for 2022 and 2021 included approximately $406,000, or 0.6%, and $9,277,000, or 12.9%, respectively, from Canadian

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.

It is 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, winning a certain contract, completion and execution of a definitive agreement

and facility design, granting of required regulatory, lender or permitting approvals and updated cost and profitability analysis based

on current and forecast future economic conditions.

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

The amount 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

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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.

and a radioactive materials license issued by the State of Tennessee Department of Environment and Conservation, Division of radiological

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.

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None of our employees are unionized.

Environmental,

Social and Governance (“ESG”)

2022, we continued to improve our ESG performance.

Our ESG subcommittee under our Corporate Governance and Nominating Committee continues

to provide guidance on ESG management.

Our executive team is responsible for the development of a strategic roadmap for ESG efforts with

support from management from key functional areas.

The key areas of focus under our ESG initiatives continue to be health and safety,

environmental performance, DEI (diversity, equality and inclusion), talent retention and development, corporate governance and climate-forward

service development that support our customers’ transition to low carbon economy.

Our executive team is involved in policy planning

and coordination of corporate-wide ESG efforts.

See our website at https://www.perma-fix.com/esg.aspx for some highlights of our

ESG initiatives as well as our policies under our ESG as we continue to improve our ESG initiatives.

The information on our website is

not part of, or incorporated by reference in this Form 10-K.

Upon a Single or Few Customers

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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.

A significant account receivable due to our Perma-Fix Canada, Inc.

(“PF Canada”) is subject to continuing negotiations.

See “Known Trends and Uncertainties – Perma-Fix Canada, Inc.

(“PF Canada”)” in Part II – Item 7 –

“Management’s Discussion and Analysis of financial Condition and Results of Operations” for additional discussion as

to a terminated Canadian TOA.

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

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$60,030,000, or 85.0%, of our total revenue during 2022, as compared to $60,812,000, or 84.2%, of our total revenue during 2021.

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.

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.

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

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state regulators.

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

December 31, 2022, we had total accrued environmental remediation liabilities of $861,000, a decrease of $15,000 from the December 31,

2021 balance of $876,000.

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.

The decrease represents payments for remediation projects.

At December 31, 2022, $112,000 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

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and $746,000 for 2022 and 2021, 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

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

What changed 10-K

Item 1. Business