What changed in this filing

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Item 1A. Risk Factors

2023-03-23 compared with 2022-04-06 · 125 added, 155 removed, 379 unchanged (42% of the section changed)

6 unchanged sentences

Exchange Commission (the “Commission”).

Related to COVID-19

could result in material adverse effects on our business, financial position, results of operations and cash flows.

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.

Our Treatment Segment’s revenue has been negatively impacted by continued waste shipment delays from

certain customers since the latter part of the first quarter of 2020 at the start of the pandemic.

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.

At this time, we expect waste shipment receipts to improve

starting in the second quarter of 2022 as certain of our customers reinstates return-to-work schedules and activities under project to

start ramping up as the impact of COVID-19 starts to ease up.

However, the 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, impact from emergence of

potential new variants of the virus, the extent and severity of the impact on our customers, the impact on governmental programs and

budgets, 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 from

the continued impact of COVID-19, including continued delays in waste shipments and contract awards, and/or occurrence of project work

shut downs by our customers or us.

Relating to our Business and Operations

to maintain our financial assurance coverage that we are required to have in order to operate our

permitted treatment, storage and disposal facilities could have a material adverse effect on us.

to maintain our financial assurance coverage that we are required to have in order to operate our permitted treatment, storage and

disposal facilities could have a material adverse effect on us.

maintain finite risk insurance policies and bonding mechanisms which provide financial assurance to the applicable states for our permitted

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operations and our permits which we are required to have in order to operate our treatment, storage, and disposal facilities.

supply chain constraints may negatively impact our operations and our financial results.

use various commercially available materials and supplies which include among other things chemicals, containers/drums and personal protection

equipment (“PPE”) in our operations.

We generally source these items from various suppliers in order to take advantage of

competitive pricing.

also utilize various types of equipment, which include among other things trucks, flatbeds, lab equipment, heavy machineries, in carrying

out our business operations.

Our equipment may be obtained through direct purchase, rental option or leases.

Within our Services Segment,

equipment required for projects are often provided by our subcontractors as part of our contract agreement with the subcontractor.

to some of our specialized waste treatment processes, certain equipment that we utilize are designed and built to our specifications.

We rely on various commercial equipment suppliers for the construction of these equipment.

Due to recent supply chain constraints, we

experienced a delay in the delivery of a new waste processing unit to us by our supplier due to shortage of parts required for the construction

of the unit, among other things.

Delivery of this unit was expected during the third quarter of 2021 but did not occur until the first

quarter of 2022.

The supply chain interruption delayed deployment of our new technology which negatively impacted our revenue for 2021

as associated revenue was not able to be generated.

Continued increases in pricing and/or potential delays in procurements of material

and supplies and equipment required for our operations resulting from further tightening supply chain could further adversely affect

our operations and profitability.

disasters and/or public health events, including COVID-19 and their direct and indirect macroeconomic impacts, could continue to negatively

impact our business and results of operations.

health threats and outbreaks such as COVID-19 and natural disasters such as hurricanes and severe weather conditions have negatively

impacted our results of operations.

The direct impacts of these such events resulted in delayed waste shipments from certain of our customers

and delays in procurement, contract awards and planning on behalf of our government clients which negatively impacted our revenue.

and lingering macroeconomic effects from these such events could continue to impact supply chain, workforce availability, and/or increased

costs which could have a downward effect on our business, financial condition and results of operations.

We may attempt to increase our

sales prices in order to maintain satisfactory margin;

however, competitive pressures in our industry may have the effect of inhibiting

our ability to reflect these increased costs in the prices of our services that we provide to our customers and therefore reduce our

profitability.

we cannot maintain adequate insurance coverage, we will be unable to continue certain operations.

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material amount of our Treatment and Services Segments’ revenues are generated through various government contracts or subcontracts.

(domestic and foreign (primarily Canadian)).

Our revenues from governmental contracts and subcontracts relating to governmental facilities

within our segments were approximately $60,812,000, or 84.2%, and $96,582,000, or 91.6%, of our consolidated revenues for

2021 and 2020, respectively.

Project work under contracts/task order agreements with Canadian government authorities has substantially

been completed.

Most of our government contracts or our subcontracts granted under government contracts are awarded through a regulated

competitive bidding process.

Some government contracts are awarded to multiple competitors, which increase overall competition and pricing

pressure and may require us to make sustained post-award efforts to realize revenues under these government contracts.

Contracts with,

or subcontracts involving, the U.S federal government are generally terminable for convenience at any time at the option of the governmental

The contracts/TOAs that we are a party to with Canadian governmental authorities also generally provide that the government authorities

may terminate the contracts/TOAs at any time for any reason for convenience.

If we fail to maintain or replace these relationships, or

if a material contract is terminated or renegotiated in a manner that is materially adverse to us, our revenues and future operations

could be materially adversely affected.

Our revenues from governmental contracts and subcontracts relating to governmental facilities within our segments were approximately

$60,030,000, or 85.0%, and $60,812,000, or 84.2%, of our consolidated revenues for 2022 and 2021, respectively.

Most of our government

contracts or our subcontracts granted under government contracts are awarded through a regulated competitive bidding process.

Some government

contracts are awarded to multiple competitors, which increase overall competition and pricing pressure and may require us to make sustained

post-award efforts to realize revenues under these government contracts.

Contracts with, or subcontracts involving, the U.S federal government

are generally terminable for convenience at any time at the option of the governmental agency.

The contracts/TOAs that we are a party

to with Canadian governmental authorities also generally provide that the government authorities may terminate the contracts/TOAs at

any time for any reason for convenience.

If we fail to maintain or replace these relationships, or if a material contract is terminated

or renegotiated in a manner that is materially adverse to us, our revenues and future operations could be materially adversely affected.

existing and future customers may reduce or halt their spending on hazardous waste and nuclear services with outside vendors, including

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threatened property damage or personal injury.

downturns, reductions in government funding or other events beyond our control (such as the continued impact of COVID-19) could have

a material negative impact on our businesses.

downturns, reductions in government funding or other events (including COVID-19) beyond our control could have a material negative impact

on our businesses.

for our services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors

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due to numerous reasons including, without limitation, the substantial deficits that the federal government has and is continuing to

incur, and/or the continued impact resulting from COVID-19.

During economic downturns, large budget deficits that the federal government

and many states are experiencing, and other events beyond our control, including, but not limited to the impact from COVID-19, the ability

of private and government entities to spend on waste services, including nuclear services, may decline significantly.

Our operations

depend, in large part, upon governmental funding (for example, the annual budget of the DOE) 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 flow.

During economic downturns, large budget deficits that the federal government and many states are experiencing, and other events

beyond our control, including, but not limited to the impact from COVID-19, the ability of private and government entities to spend on

waste services, including nuclear services, may decline significantly.

Our operations depend, in large part, upon governmental funding

(for example, the annual budget of the DOE) 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 flow.

loss of one or a few customers could have an adverse effect on us.

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Currently, there are only four commercial disposal

sites for our low-level radioactive waste and four commercial disposal sites for our very low-level activity waste we receive from non-governmental

sites for our low-level radioactive waste and six commercial disposal sites for our very low-level activity waste we receive from non-governmental

sites, allowing us to take advantage of the pricing competition between these sites.

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held responsible for the release of hazardous or radioactive materials;

of employees, customers, or third parties for personal injury

or property damage occurring in the course of our operations;

alleging negligence or professional errors or omissions in

the planning or performance of our services.

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

● claims alleging

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

operations are subject to numerous environmental laws and regulations.

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Relating to our Financial Performance and Position and Need for Financing

sustained a loss in 2022, and if we are unable to improve our results of operations in 2023, it could have a material adverse effect

on the Company.

2022, we sustained a loss in our results of operations.

We believe that we will be able to improve our results of operations in 2023.

If we are unable to substantially improve our results in 2023, it could have a material adverse effect on the Company and our operations.

any of our permits, other intangible assets, and tangible assets becomes impaired, we may be required to record significant charges to

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We failed to meet our quarterly fixed charge coverage ratio (“FCCR”) requirement for

the second and fourth quarters of 2021;

however, our lender waived these instances of non-compliance.

We were not required to perform

testing of our FCCR in the third quarter of 2021.

As a result of a recent amendment to our credit facility, our lender has removed the

FCCR testing requirement for the first quarter of 2022 and revised the methodology to be used in calculating the FCCR for the second

to the fourth quarters of 2022.

Additionally, in the past, when we also failed to meet our minimum FCCR requirement, our lender has either

waived these instances of non-compliance or provided certain amendments to our FCCR requirements which enabled us to meet our quarterly

FCCR requirements.

Additionally, our lender has in the past approved that testing of the FCCR is not required in certain quarters.

we fail to meet any of our financial covenants going forward, including the minimum quarterly FCCR requirement, and our lender does not

further waive the non-compliance or further revise our covenant requirement so that we are in compliance, our lender could accelerate

the payment of our borrowings under our credit facility and terminate our credit facility.

In such event, we may not have sufficient

liquidity to repay our debt under our credit facility and other indebtedness and/or operate our business.

the second quarter of 2022;

however, our lender waived this non-compliance.

We were not required to perform testing of our FCCR in the

first and third quarters of 2022.

As a result of a recent amendment that we entered into with our lender in March 2023, we were not required

to perform testing our FCCR for the fourth quarter of 2022.

Additionally, in the past, when we also failed to meet our minimum FCCR requirement

in certain instances, our lender has either waived these instances of non-compliance or provided certain amendments to our FCCR requirements

which enabled us to meet our quarterly FCCR requirements.

Also, our lender has in the past waived our FCCR testing requirement in certain

If we fail to meet any of our financial covenants going forward, including the minimum quarterly FCCR requirement, and our

lender does not further waive the non-compliance or further revise our covenant requirement so that we are in compliance, our lender

could accelerate the payment of our borrowings under our credit facility and terminate our credit facility.

In such event, we may not

have sufficient liquidity to repay our debt under our credit facility and other indebtedness and/or operate our business.

debt and borrowing availability under our credit facility could adversely affect our operations.

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Our Second Amended and Restated Revolving Credit, Term

Loan and Security Agreement dated May 8, 2020 provides for a total credit facility commitment of approximately $19,742,000, consisting

of a $18,000,000 revolving line of credit and a term loan balance of approximately $1,742,000.

The maximum we can borrow under the revolving

part of the credit facility is based on a percentage of the amount of our eligible receivables outstanding at any one time reduced by

outstanding standby letters of credit and any borrowing reduction that our lender has or may impose from time to time.

At December 31,

2021, we had no borrowing under the revolving part of our credit facility and borrowing availability of up to an additional $8,692,000.

As a result of a recent amendment to our credit facility, we are required to maintain a minimum of $3,000,000 in borrowing availability

under the revolving credit until the minimum FCCR requirement for the quarter ended June 30, 2022 has been met and certified to our lender.

A lack of positive operating results could have material adverse consequences on our ability to operate our business.

Our ability to

make principal and interest payments, to refinance indebtedness, and borrow under our credit facility will depend on both our and our

subsidiaries’ future operating performance and cash flow.

Prevailing economic conditions, interest rate levels, and financial,

competitive, business, and other factors affect us.

Many of these factors are beyond our control, including the impact of COVID-19.

Loan and Security Agreement dated May 8, 2020, as amended, provides for a total credit facility commitment consisting of a $18,000,000

revolving line of credit, a term loan balance of approximately $1,742,000 and a capital line of $1,000,000, with advances available through

As a result of a recent amendment to our credit facility that we entered into with our lender in March 2023, the revolving

line of credit was reduced to $12,500,000.

The maximum we can borrow under the revolving part of the credit facility is based on a percentage

of the amount of our eligible receivables outstanding at any one time reduced by outstanding standby letters of credit and any borrowing

reduction that our lender has or may impose from time to time.

At December 31, 2022, we had no borrowing under the revolving part of

our credit facility and borrowing availability of up to an additional $4,290,000.

The borrowing availability of $4,290,000 at December

31, 2022 included a requirement from our lender that we maintain a minimum of $3,000,000 in borrowing availability.

As a result of the

amendment to our credit facility that we entered into with our lender as discussed above, we are required to continue to maintain a minimum

of $3,000,000 in borrowing availability under the revolving credit until the minimum FCCR requirement for the quarter ended June 30,

2023 has been met and certified to our lender.

A lack of positive operating results could have material adverse consequences on our ability

to operate our business.

Our ability to make principal and interest payments, to refinance indebtedness, and borrow under our credit

facility will depend on both our and our subsidiaries’ future operating performance and cash flow.

Prevailing economic conditions,

interest rate levels, and financial, competitive, business, and other factors affect us.

Many of these factors are beyond our control,

including the impact of COVID-19.

indebtedness could limit our financial and operating activities, and adversely affect our ability to incur additional debt to fund future

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may be unable to utilize loss carryforwards in the future.

have approximately $19,920,000 and $72,767,000 in net operating loss carryforwards for federal and state income tax purposes,

respectively and expires in various amounts starting in 2021 if not used against future federal and state income tax liabilities, respectively.

Approximately $19,725,000 of our federal net operating loss carryforwards were generated after December 31, 2017 and thus do not

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.

Further, our net loss carryforwards have not been audited or approved

by the Internal Revenue Service.

have approximately $25,413,000 and $78,400,000 in net operating loss carryforwards for federal and state income tax purposes, respectively

and expires in various amounts starting in 2022 if not used against future federal and state income tax liabilities, respectively.

Approximately

$25,296,000 of our federal net operating loss carryforwards were generated after December 31, 2017 and thus do not expire.

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.

Further, our net loss carryforwards have not been audited or approved by the Internal Revenue

Relating to our Common Stock

of substantial amounts of our Common Stock could depress our stock price or dilute the percentage ownership of our Common Stockholders.

of substantial amounts of our common stock, par value $0.001 per share (the “Common Stock”) could depress our stock price

or dilute the percentage ownership of our Common Stockholders.

sales of substantial amounts of our Common Stock in the public market could cause an adverse effect on the market price of our Common

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among other things, management to assess annually the effectiveness of our internal control over financial reporting.

of this assessment for the year ending December 31, 2021, management concluded that a material weakness existed in internal control over financial reporting related to the application of ASC 606, “Revenue from Contracts with Customers,”

specifically to contracts that contain nonstandard terms and conditions (see “Item 9A – Controls and Procedures” for

a discussion of this material weakness and our remediation plan).

If we fail to remediate this material weakness, there is a reasonable possibility that a misstatement of our annual or interim financial

statements will not be prevented or detected in a timely manner.

If we cannot produce reliable financial reports, investors could lose

confidence in our reported financial information, the market price of our common stock could decline significantly, and our business,

financial condition, and reputation could be harmed.

For the year ended

December 31, 2021, management concluded that a material weakness existed in internal control over financial reporting related to our

application of ASC 606, “Revenue from Contracts with Customers,” specifically to contracts that contain nonstandard terms

and conditions.

This material weakness has been remediated (see “Item 9A.

Controls and Procedures” for a discussion of this

material weakness and the remediation plan that were implemented).

If we are unable to maintain adequate internal control over financial

reporting at any time going forward, there is a reasonable possibility that a misstatement of our annual or interim financial statements

will not be prevented or detected in a timely manner.

If we cannot produce reliable financial reports, investors could lose confidence

in our reported financial information, the market price of our common stock could decline significantly, and our business, financial

condition, and reputation could be harmed.

law, certain of our charter provisions, our stock option plans, outstanding warrants and our Preferred Stock may inhibit a change of

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more difficult for, and thereby discourage, an attempt to acquire control of us.

party expectations relating to Environment, Social and Governance (“ESG”) factors may impose additional costs and expose

us and our clients to new risks.

have renewed our commitment and focus on sustainability and ESG efforts.

There is an increasing focus from certain investors and certain

of our customers, and other stakeholders concerning corporate responsibility, specifically related to ESG factors.

Some investors may

use these factors to guide their investment strategies and, in some cases, may choose not to invest in us, or otherwise do business with

us, if they believe our policies relating to corporate responsibility are inadequate or do not align with theirs.

Third party providers

of corporate responsibility ratings and reports on companies have increased in number, resulting in varied standards.

In addition, the

criteria by which companies’ corporate responsibility practices are assessed are evolving, which could result in greater expectations

of us and cause us to undertake costly initiatives to satisfy such new criteria.

Alternatively, if we elect not to or are unable to satisfy

such new criteria or do not meet the criteria of a specific third party provider, some investors may conclude that our policies with

respect to corporate responsibility are inadequate.

We may face reputational damage in the event that our corporate responsibility procedures

or standards do not meet the standards set by various constituencies.

If we fail to satisfy the expectations of investors, our customers

and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely affected

and our revenues, results of operations and ability to grow our business may be negatively impacted.

Additionally, new legislative or

regulatory initiatives related to ESG could adversely affect our business.

profitability is vulnerable to inflation and cost increases.

in any of our operating costs, including changes in fuel prices (which impacts our transportation cost), wage rates, supplies, and utility

costs, may increase our overall cost of goods sold or operating expenses.

These cost increases may be the result of inflationary pressures

that could further reduce profitability.

Competitive pressures in our industry may have the effect of inhibiting our ability to reflect

these increased costs in the prices of our services provided to our customers and therefore reduce our profitability.

party expectations relating to ESG factors may impose additional costs and expose us and our clients to new risks.

is an increasing focus from certain investors and certain of our customers, and other stakeholders concerning corporate responsibility,

specifically related to ESG factors.

Some investors may use these factors to guide their investment strategies and, in some cases, may

choose not to invest in us, or otherwise do business with us, if they believe our policies relating to corporate responsibility are inadequate

or do not align with theirs.

Third party providers of corporate responsibility ratings and reports on companies have increased in number,

resulting in varied standards.

In addition, the criteria by which companies’ corporate responsibility practices are assessed are

evolving, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.

Alternatively, if we elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party provider,

some investors may conclude that our policies with respect to corporate responsibility are inadequate.

We may face reputational damage

in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies.

fail to satisfy the expectations of investors, our customers and other stakeholders or our initiatives are not executed as planned, our

reputation and financial results could be adversely affected and our revenues, results of operations and ability to grow our business

may be negatively impacted.

Additionally, new legislative or regulatory initiatives related to ESG could adversely affect our business.

STAFF COMMENTS

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 1A. Risk Factors