What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-13 compared with 2023-03-23 · 974 added, 1097 removed, 730 unchanged (74% of the section changed)

5 unchanged sentences

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2022 and 2021

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023 and 2022

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023 and 2022

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subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations,

comprehensive (loss) income, stockholders’ equity, and cash flows for the years then ended, and the related notes

comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended, and the related notes

(collectively referred to as the “financial statements”).

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financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

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reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

audit matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

recognition for certain revenue contracts

described further in note 2 to the financial statements, the Company has certain fixed price contracts that are long term in nature

with non-standard terms.

These terms and contract modifications impact revenue recognition and require significant effort and

judgement by management.

We have identified revenue recognition for these contracts as a critical audit matter.

principal considerations for our determination that revenue recognition for these contracts is a critical audit matter are that there

is a considerable auditor effort and judgement required to analyze and evaluate contracts for the types of terms and conditions that

impact revenue recognition.

audit procedures related to the revenue recognition for these contracts included the following, among others.

We obtained and inspected a selection of long-term, non-standard contracts and modifications and amendments to understand the terms and conditions and the related impact on revenue recognition, specifically the identification of:

obligations, and

determination

of the measure of progress.

We obtained the detail of underlying costs for each project and tested the underlying accuracy of the data by agreeing to supporting documentation.

We utilized the cost data to recalculate management’s measure of completion for selected projects under the input method.

We performed a retrospective review using contracts, which were tested through prior year procedures and completed during the current year, to evaluate management’s ability to accurately budget for input method contracts.

We evaluated the appropriateness of the recording of revenue for both billed and unbilled amounts related to these contracts.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was

communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

Realizability

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described further in Note 13 to the financial statements, deferred tax assets are reduced by a valuation allowance if, based on the evaluation

of positive and negative evidence, in management’s judgment it is more likely than not that some portion or all, of the deferred

of positive and negative evidence, in management’s judgement it is more likely than not that some portion or all, of the deferred

tax assets will not be realized.

During the year ended

December 31, 2022, management concluded that sufficient positive evidence exists to ensure the realizability of the US federal

During the year ended December 31, 2023, management concluded that sufficient positive evidence exists

to ensure the realizability of the net deferred tax assets that are recorded on the balance sheet.

principal consideration for our determination that the realizability of the net deferred tax assets is a critical audit matter is

that the projected financial information related to the profitability of the Company, which is primarily reliant on the ability to

predict future revenue, subject to significant management judgement in determining whether the net deferred tax assets are more

likely than not to be realized in the future.

This, in turn, led to a high degree of auditor judgement and effort in performing

procedures and evaluating audit evidence related to management’s assessment of the realization of the net deferred tax

audit procedures related to the realizability of the net deferred tax assets included the following, among others .

evaluated the positive and negative evidence available to support management’s assessment of the realizability of the net

deferred tax assets

principal considerations for our determination that the realizability of US federal deferred tax assets is a critical audit matter

are that the projected financial information related to the profitability of the Company which is reliant on the ability to predict

future revenue is subject to significant management judgments in determining whether the net deferred tax assets are more likely

than not to be realized in the future, which in turn led to a high degree of auditor judgement and effort in performing procedures

and evaluating audit evidence related to management’s assessment of the realization of deferred tax assets.

audit procedures related to the realizability of US federal deferred tax assets included the following, among others.

We evaluated the positive and negative evidence available to support management’s assessment of the realizability of the assets

We tested the completeness and accuracy of the underlying data used in management’s assessment

We evaluated the prospective financial information related to future profitability including consideration of:

tested the completeness and accuracy of the underlying data used in management’s assessment

evaluated the prospective financial information related to future profitability including consideration of:

current and past performance of the Company

the consistency with external market and industry data

the consistency with evidence obtained in other areas.

consistency with external market and industry data

consistency with evidence obtained in other areas of the audit

GRANT THORNTON LLP

have served as the Company’s auditor since 2014.

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of December 31,

(Amounts in Thousands, Except for Share and Per Share Amounts)

(Amounts in Thousands, Except

for Share and Per Share Amounts)

Current assets:

Accounts receivable, net of allowance for credit losses of $ 57 and $ 85 ,

receivable, net of allowance for credit losses of $ 30

Unbilled receivables

Prepaid and other assets

Current assets related to discontinued operations

assets related to discontinued operations

Total current assets

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Net property and equipment

Property and equipment related to discontinued operations

Property and equipment related to discontinued

Operating lease right-of-use assets

Intangibles and other long term assets:

Other intangible assets - net

Finite risk sinking fund (restricted cash)

Other intangible assets

Finite risk sinking fund

(restricted cash)

Deferred tax assets

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of December 31,

(Amounts in Thousands, Except for Share and per Share Amounts)

(Amounts in Thousands, Except

for Share and per Share Amounts)

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Accrued expenses

Disposal/transportation accrual

Disposal/transportation

Deferred revenue

Accrued closure costs - current

Current portion of long-term debt

Current portion of operating lease liabilities

Current portion of finance lease liabilities

Current liabilities related to discontinued operations

Accrued closure costs -

Current portion of long

Current portion of operating

lease liabilities

Current portion of finance

lease liabilities

liabilities related to discontinued operations

Total current liabilities

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Long-term debt, less current portion

Long-term operating lease liabilities, less current portion

Long-term finance lease liabilities, less current portion

Long-term liabilities related to discontinued operations

Total long-term liabilities

Long-term operating lease liabilities, less

current portion

Long-term finance lease liabilities, less current

Long-term liabilities

related to discontinued operations

long-term liabilities

Total liabilities

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Preferred Stock, $ .001 par value;

2,000,000 shares authorized, no shares issued and outstanding

shares authorized,

no shares issued and outstanding

Common Stock, $ .001

shares authorized;

13,654,201 and 13,332,398

shares issued, respectively;

13,646,559 and 13,324,756

shares outstanding, respectively

Common Stock, $.001 par value;

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Accumulated deficit

Accumulated other comprehensive loss

Less Common Stock in treasury, at cost;

Total stockholders’ equity

Total liabilities and stockholders’ equity

Accumulated other comprehensive

Common Stock in treasury, at cost;

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

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the years ended December 31,

(Amounts in Thousands, Except for Per Share Amounts)

(Amounts in Thousands, Except

for Per Share Amounts)

Cost of goods sold

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Research and development

Loss on disposal of property and equipment

Loss from operations

Loss on disposal of

property and equipment

Income (loss) from operations

Other income (expense):

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Other (Note 10)

Gain on extinguishment of debt (Note 11)

Loss on deconsolidation of subsidiary (Note 15)

Loss from continuing operations before taxes

Income tax benefit

(Loss) income from continuing operations, net of taxes

Loss from discontinued operations (Note 9)

Net (loss) income

Net loss attributable to non-controlling interest

Net (loss) income attributable to Perma-Fix Environmental Services, Inc.

common stockholders

Net (loss) income per common share attributable to Perma-Fix Environmental Services,

stockholders - basic and diluted:

Income (loss) from continuing operations before

Income tax expense (benefit)

Income (loss) from continuing operations, net

Loss from discontinued

operations (Note 8)

income (loss)

Net income (loss) per common share - basic

Continuing operations

Discontinued operations

Net (loss) income per common share

Number of common shares used in computing net (loss) income per share:

income (loss) per common share

Number of common shares used in computing

net income (loss) per share:

Number of common shares used in computing net income (loss) per share:

accompanying notes are an integral part of these consolidated financial statements.

ENVIRONMENTAL SERVICES, INC.

STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

the years ended December 31,

(Amounts in Thousands)

Net (loss) income

Other comprehensive (loss) income:

Foreign currency translation reclass to loss on deconsolidation of subsidiary (Note 15)

Foreign currency translation adjustments

Total other comprehensive (loss) income

Comprehensive (loss) income

Comprehensive loss attributable to non-controlling interest

Comprehensive (loss) income attributable to Perma-Fix Environmental Services, Inc.

common stockholders

in Thousands)

Other comprehensive income (loss):

currency translation adjustments

Total other comprehensive

income (loss)

Comprehensive income

accompanying notes are an integral part of these consolidated financial statements.

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in Thousands, Except for Share Amounts)

Common Stock Held In

Stock Held In

Accumulated Other

Comprehensive

Non-controlling

Stockholders’

Balance at December 31, 2020

Net (loss) income

at December 31, 2021

Foreign currency translation

Deconsolidation of subsidiary (Note 15)

Issuance of Common Stock for services

Stock-Based Compensation

Issuance of Common Stock upon exercise of options

Sale of Common Stock, net of offering costs (Note 7)

Issuance of Common Stock

upon exercise of options

Balance at December

Net income (loss)

Foreign currency translation

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Issuance of Common Stock upon exercise of options

Issuance of Common Stock

upon exercise of warrant

Balance at December

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(Amounts in Thousands)

Cash flows from operating activities:

Net (loss) income

loss on discontinued operations (Note 9)

(Loss) income from continuing operations

Adjustments to reconcile net (loss) income from continuing operations to cash provided by (used in) operating activities:

Net income (loss)

loss on discontinued

operations (Note 8)

Income (loss) income from

continuing operations

Adjustments to reconcile

net income (loss) income from continuing operations to cash provided by operating activities:

Depreciation and amortization

Interest on finance lease with purchase option

Loss on deconsolidation of subsidiary (Note 15)

Gain on extinguishment of debt (Note 11)

Amortization of debt issuance costs

Amortization of debt issuance

Deferred tax benefit

(Recovery of) provision for credit losses on accounts receivable

Loss on disposal of property and equipment

Issuance of common stock for services

Provision for (recovery

of) credit losses on accounts receivable

Loss on disposal of property

and equipment

Issuance of common stock

Stock-based compensation

Changes in operating assets and liabilities of continuing operations:

Changes in operating assets

and liabilities of continuing operations:

Accounts receivable

Unbilled receivables

Prepaid expenses, inventories and other assets

Accounts payable, accrued expenses and unearned revenue

Cash provided by (used in) provided by continuing operations

Cash used in discontinued operations

Cash used in operating activities

Prepaid expenses, inventories

and other assets

payable, accrued expenses and unearned revenue

Cash provided by continuing

used in discontinued operations

Cash provided by (used

in) operating activities

Cash flows from investing activities:

Purchases of property and equipment (net)

Proceeds from sale of property and equipment

Deconsolidation of subsidiary - cash

Cash used in investing activities of continuing operations

Purchases of property and

equipment (net of financed amount)

from sale of property and equipment

Cash used in investing

activities of continuing operations

Cash flows from financing activities:

Borrowing on revolving credit

Repayments of revolving credit borrowings

Proceeds from capital line

Principal repayment of finance lease liabilities

Principal repayments of long term debt

Payment of debt issuance costs

(Offering costs paid)/ proceeds from sale of Common Stock, net of offering costs

paid (Note 7)

Proceeds from issuance of Common Stock upon exercise of options

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

Effect of exchange rate changes on cash

Decrease in cash and finite risk sinking fund (restricted cash) (Note 2)

Cash and finite risk sinking fund (restricted cash) at beginning of period (Note 2)

Cash and finite risk sinking fund (restricted cash) at end of period (Note 2)

Borrowing on revolving

Repayments of revolving

credit borrowings

Proceeds from long term

debt (Term Loan 2/Capital Line) (Note 9)

Principal repayment of

finance lease liabilities

Principal repayments of

long term debt

Payment of debt issuance

Offering costs paid from

sale of Common Stock in 2021

from issuance of Common Stock upon exercise of options/warrant

provided by (used in) financing activities of continuing operations

Effect of exchange rate

changes on cash

Increase (decrease) in cash and finite risk

sinking fund (restricted cash) (Note 2)

Cash and finite risk

sinking fund (restricted cash) at beginning of period (Note 2)

Cash and finite risk

sinking fund (restricted cash) at end of period (Note 2)

Supplemental disclosure:

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Non-cash investing and financing activities:

Equipment purchase subject to finance lease

Equipment purchase subject to financing

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31, 2023, and 2022

1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

OF BUSINESS AND BASIS OF PRESENTATION

Environmental Services, Inc.

(the Company, which may be referred to as we, us, or our), an environmental and technology know-how company,

is a Delaware corporation, engaged through its subsidiaries, in three reportable segments:

is a Delaware corporation, engaged through its subsidiaries, in two reportable segments:

SEGMENT, which includes:

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Safety & Ecology Corporation (“SEC”), Perma-Fix Environmental Services UK Limited (“PF UK Limited”), Perma-Fix

of Canada, Inc.

(“PF Canada”) and Oak Ridge Environmental Waste Operations Center (“EWOC”).

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During the fourth quarter of 2022, project work under the JV was completed

As of December 31, 2022, total assets and liabilities under the VIE were each $ 0 .

Company’s discontinued operations (see “Note 8 – Discontinued Operations”) consist of operations of all our subsidiaries

included in our Industrial Segment which encompasses subsidiaries divested in 2011 and prior and three previously closed locations.

2021, the Company’s segment also included the Medical Segment.

The Medical Segment entailed the R&D of the Company’s

medical isotope production technology by 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 (“PFMC”).

The Company’s Medical Segment

(or “PF Medical”) had not generated any revenue.

During the fourth quarter of 2021, the Company made the strategic decision

to cease all R&D activities under the Medical Segment which resulted in the sale of 100 % of PFM Poland (See “Note 15 –

PF Medical” for a discussion of this sale).

included in our Industrial Segment which encompasses subsidiaries divested in 2011 and earlier, as well as three previously closed locations.

December 18, 2023, a JV where the Company and Campoverde Srl (“JV partner”) each owns 50 % of the partnership, was awarded

a multi-year contract valued up to approximately EUR 50 million by the European Commission (the “Contracting Authority”)

for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy.

Work under this JV has not started as of December

The scope of work to be performed in the initial phases of this contract will be performed predominately by our JV partner.

Revenue generated by the Company under the initial phases will be limited to project management support through 2025.

The Company expects

to generate an increase in revenue under this contract starting in 2026 when the waste treatment phases begin.

The Contracting Authority

may terminate the contract under certain conditions as set forth in the contract.

Once activities commence under this JV, the Company

will consolidate the operations of this JV into its financial statements.

Positions and Liquidity

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

The Company’s 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 the Company’s facilities.

In early part of 2022, the Company’s 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.

2022, the Company 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, the Company expects 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

impact of COVID-19 and economic impacts.

Company’s cash flow requirements during the twelve months ended December 31, 2022 were primarily financed by its operations, cash

on hand and credit facility availability.

The Company’s cash flow requirements for the next twelve months will consist primarily

of general working capital needs, scheduled principal payments on its debt obligations, remediation projects, and planned capital expenditures.

The Company plans to fund these requirements from its operations, credit facility availability, cash on hand and a refund that it expects

to receive under the Employee Retention Credit program under the CARES Act (see a discussion of this expected refund in “Note 11

– The Coronavirus Aid, Relief, and Economic Security Act (“CARES ACT) – Employee Retention Credit (“ERC”)”).

The Company continues to explore all sources of increasing its capital and/or liquidity and to improve its revenue and working capital,

including either amending our existing lines of credit, obtaining new term loans or entering into equity transactions.

Company experienced significant improvement in its 2023 financial results as the lingering effects of COVID-19 began to subside starting

in the early part of 2022.

The Company’s Treatment Segment continued to see steady improvements in waste receipts from certain

customers who had previously delayed waste shipments due, in part, from the impact of COVID-19.

Within the Company’s Services

Segment, certain projects which were delayed/curtailed in first part of 2022 due, in part, from the lingering effects of the COVID-19,

achieved full operational status and improved productivity in 2023 which positively impacted revenue.

Revenues from both of the

Company’s Segments were also positively impacted from contracts won in 2023 as procurement and planning on behalf of our government

clients continued to progress as the lingering effects of COVID-19 pandemic subsided.

into 2024, the

Company expects to see overall continue steady improvements in waste receipts and increases in project work from certain

existing contracts, contracts won in 2023, and bids submitted in both segments that are awaiting awards.

However, due to our

operations which is subject to seasonal factor, the

Company generally experiences lower revenue in the first quarter due to overall reduced

activities by our customers from the usual slowdown in operations due, in part, from returning from the holiday periods and poorer

weather conditions.

Additionally, due to Congress’s inability to timely approve FY 2024 budget and the extension of the

continuing resolution, certain of our government related customers have informed us that waste shipments will likely be delayed.

Company expects to see overall improvements in revenue in 2024 as disclosed above, if Congress is unable to enact the full FY

2024 appropriation bills or further extend the continuing resolutions to fund government spending by the late March deadline, the

government will enter into a partial shutdown.

The full impact of any additional continued resolution beyond March or a partial

government shutdown is uncertain.

If a partial government shutdown were to occur and were to continue an extended period,

our financial results of operations could be negatively impacted by delays in procurement actions, waste shipments and project

delays on newly awarded projects.

Company’s cash flow requirements during the twelve-months ended December 31, 2023, were primarily financed by its operations,

credit facility availability and cash on hand (which included the ERC, along with interest, that the Company received in March 2023

(See “Note 10 – Employee Retention Credit (“ERC”) and proceeds from a new term loan dated July 31, 2023, in

the amount of $ 2,500,000

provided to us under an amendment to the Company’s existing credit facility (See “Note 9 – Long Term

The Company’s cash flow requirements for the next twelve months will consist primarily of general working

capital needs, scheduled principal payments on our debt obligations, remediation projects, and planned capital expenditures.

Company plans to fund these requirements from its operations, cash on hand, credit facility availability, and collections of unpaid

receivables (See “Note 14 – Commitments and Contingencies - Perma-Fix Canada, Inc.

(“PF Canada”)” and

“Note 19 – Subsequent Events – Perma-Fix Canada, Inc.

(“PF Canada”)” for a discussion of a

settlement agreement relating to unpaid receivables due to the Company from Canadian Nuclear Laboratories (“CNL”)).

Company’s ability to utilize its credit facility from its lender is subject to meeting its quarterly financial covenant

requirements, among other things.

The Company continues to explore all sources of increasing its capital and/or liquidity and to

improve its revenue and working capital, including, but not limited to entering into equity transactions.

There are no assurances

that we will be successful in increasing our liquidity though these efforts.

The Company is continually reviewing operating costs and

reviewing the possibility of further reducing operating costs and non-essential expenditures to bring them in line with revenue levels,

when necessary.

At this time, the Company believes that its cash flows from operations, available liquidity from its credit facility,

cash on hand and the expected refund from the ERC program should be sufficient to fund its operations for the next twelve months.

Company continues to closely monitor any potential impact from the countries’ economic conditions and COVID-19 pandemic on all

aspects of our business.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

that the Company will be successful in increasing our liquidity through our efforts.

The Company is continually reviewing operating

costs and reviewing the possibility of further reducing operating costs and non-essential expenditures to bring them in line with

revenue levels, when necessary.

At this time, the Company believes that its cash flows from operations, our available liquidity from

our credit facility, and our cash on hand should be sufficient to fund our operations for the next twelve months.

OF SIGNIFICANT ACCOUNTING POLICIES

of Consolidation

Company’s consolidated financial statements include our accounts, those of our wholly-owned subsidiaries, and Perma-Fix ERRG, a

VIE for which we were the primary beneficiary as discussed above, after elimination of all significant intercompany accounts and transactions.

The consolidated financial statements for 2021 also included the accounts of the Company’s Medical Segment which was divested in

December 2021 as discussed above.

Company’s consolidated financial statements include our accounts and those of our wholly-owned subsidiaries.

The Company’s

consolidated financial statements for 2022 also included the accounts of Perma-Fix ERRG, a VIE for which we were the primary beneficiary

as discussed above, after elimination of all significant intercompany accounts and transactions.

Company prepares financial statements in conformity with accounting standards generally accepted in the United States (“U.S.

4 unchanged sentences

and Finite Risk Sinking Fund (Restricted Cash)

December 31, 2022, the Company had cash on hand of approximately $ 1,866,000 .

At December 31, 2021, the Company had cash on hand of approximately

$ 4,440,000 .

At December 31, 2022 and 2021, the Company had finite risk sinking funds of approximately $ 11,570,000 and $ 11,471,000 , respectively,

which represented cash held as collateral under the Company’s financial assurance policy (see “Note 16 – Commitment

and Contingencies – Insurance” for a discussion of this finite risk sinking fund).

the fourth quarter of 2022, the Company adopted ASU 2016-13, “Credit Losses (Topic 326) Measurement of Credit Losses on Financial

Instruments.” This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial

instruments, including accounts receivable.

Accounts receivable are customer obligations due under normal trade terms requiring payment

within 30 or 60 days from the invoice date based on the customer type (government, broker, or commercial).

The new standard requires

entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivbles

that are current or not yet due, which were not considered under the previous accounting guidance.

In accordance with ASU 2016-13, the

Company’s expected loss allowance methodology for receivables is developed using historical collection experience, current and

future economic and market conditions that may affect customers’ ability to pay, and a review of the current status of customers’

accounts receivables.

The Company does not apply a credit loss allowance to government related receivables due to our past successful

experience in their collectability.

The Company’s monitoring activities include routine follow-up on past due accounts and consideration

of customers’ financial conditions.

Once the Company has exhausted all options in the collection of a delinquent accounts receivable

balance, which includes collection letters, demands for payment, collection agencies and attorneys, the account is deemed uncollectible

and subsequently written off.

The write off process involves approvals from senior management based on required approval thresholds.

of December 31, 2023, and 2022, the Company had cash on hand of approximately $ 7,500,000 and $ 1,866,000 , respectively.

Starting in late

2023, the Company maintained an interest bearing money account with its lender.

At December 31, 2023, and 2022, the Company had finite

risk sinking funds of approximately $ 12,074,000 and $ 11,570,000 , respectively, which represented cash held as collateral under the Company’s

financial assurance policy (see “Note 14 – Commitment and Contingencies – Insurance” for a discussion of this

finite risk sinking fund).

receivable are customer obligations due under normal trade terms generally requiring payment within 30 or 60 days from the invoice date

based on the customer type (government, broker, or commercial).

The carrying amount of accounts receivables is reduced by a credit loss

determined in accordance with Accounting Standards Update (“ASU”) 2016-13 “Credit Losses (Topic 326) Measurement of

Credit Losses on Financial Instruments.” which requires the Company to consider forward-looking information in estimating the expected

loss and is developed using historical collection experience, current and future economic and market conditions that may affect customers’

ability to pay, and a review of the current status of customers’ accounts receivables.

The Company does not apply a credit loss

allowance to government related receivables due to our past successful experience in their collectability.

The Company’s monitoring

activities include routine follow-up on past due accounts and consideration of customers’ financial conditions.

Once the Company

has exhausted all options in the collection of a delinquent accounts receivable balance, which includes collection letters, demands for

payment, collection agencies and attorneys, the account is deemed uncollectible and subsequently written off.

The write off process involves

approvals from senior management based on required approval thresholds.

following table sets forth the activity in the allowance for credit losses for the years ended December 31, 2023, and 2022 (in thousands):

SCHEDULE OF CREDIT LOSSES FOR FINANCING RECEIVABLES, CURRENT

Year Ended December 31,

Allowance for credit losses - beginning of year

(Recovery of) provision charges

Allowance for credit losses - end of year

OF ALLOWANCE FOR CREDIT LOSSES

Ended December 31,

Allowance for credit losses - beginning

Provision charges (Recovery of)

Allowance for credit

losses - end of year

receivables are generated by differences between invoicing timing and our over time revenue recognition methodology used for revenue

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The timing differences occur for several reasons which

partially from delays in the final processing of all wastes associated with certain work orders and partially from delays for

analytical testing that is required after the facilities have processed waste but prior to our release of waste for disposal.

relating to these delays can take months to complete but are generally completed within twelve months.

delays in the final processing of all wastes associated with certain work orders and delays for analytical testing that is required

after the facilities have processed waste but prior to our release of waste for disposal.

The tasks relating to these delays can take

months to complete but are generally completed within twelve months.

receivables within our Services Segment can result from work performed under contracts but invoice milestones have not yet been met and/or

contract claims and pending change orders, including requests for equitable adjustments (“REA”) when work has been performed

contract claims and pending change orders, including requests for equitable adjustments (“REA”) for which work has been performed

and collection of revenue is reasonably assured.

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method over the estimated useful lives of the assets.

At December 31, 2022, assets recorded under finance leases were $ 1,201,000 less

As of December 31, 2023, assets recorded under finance leases were $ 1,608,000 less

accumulated depreciation of $ 545,000 , resulting in net fixed assets under finance leases of $ 1,063,000 .

At December 31, 2021, assets recorded

under finance leases were $ 2,409,000 less accumulated depreciation of $ 475,000 , resulting in net fixed assets under finance leases of

$ 1,934,000 .

As of December 31, 2022, assets

recorded under finance leases were $ 1,201,000 less accumulated depreciation of $ 549,000 , resulting in net fixed assets under finance

leases of $ 652,000 .

These assets are recorded within net property and equipment on the Consolidated Balance Sheets.

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depreciation expense totaled approximately $ 2,370,000 and $ 1,872,000 in 2023 and 2022, respectively.

Company accounts for leases in accordance with FASB’s ASU 2016-02, “Leases (Topic 842).” At the inception of an arrangement,

the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement.

classifications, recognition, and measurement are then determined at the lease commencement date.

Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent primarily leases for

Company accounts for leases in accordance with FASB’s

ASU 2016-02, “Leases (Topic 842).” At the inception of an arrangement, the Company determines

if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement.

Lease classifications, recognition,

and measurement are then determined at the lease commencement date.

Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities include primarily leases for

office and warehouse spaces used to conduct our business.

These leases have remaining terms of approximately one to seven years which

include additional options to renew.

The Company includes renewal options in valuing its ROU assets and liabilities when it determines

that it is reasonably certain to exercise these renewal options.

As most of our operating leases do not provide an implicit rate, the

Company uses its incremental borrowing rate as the discount rate when determining the present value of the lease payments.

The incremental

borrowing rate is determined based on the Company’s secured borrowing rate, lease terms and current economic environment.

of our operating leases include both lease (rent payments) and non-lease components (maintenance costs such as cleaning and landscaping

The Company has elected the practical expedient to account for lease component and non-lease component as a single component

for all leases under ASU 2016-02.

Lease expense for operating leases is recognized on a straight-line basis over the lease term.

The Company’s operating leases also include the lease of a building with

land utilized for our waste treatment operations which includes a purchase option.

These leases have remaining terms of approximately

one to six years .

The Company includes renewal options in valuing its ROU assets and liabilities when it determines that it is reasonably

certain to exercise these renewal options;

however, at December 31, 2023, none of our operating leases has remaining renewal options.

As most of our operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate

when determining the present value of the lease payments.

The incremental borrowing rate is determined based on the Company’s secured

borrowing rate, lease terms and current economic environment.

Some of our operating leases include both lease (rent payments) and non-lease

components (maintenance costs such as cleaning and landscaping services).

The Company has elected the practical expedient to account

for lease component and non-lease component as a single component for all leases under ASU 2016-02.

Lease expense for operating leases

is recognized on a straight-line basis over the lease term.

leases primarily consist of processing and transport equipment used by our facilities’ operations.

The Company’s finance

leases also included a building with land utilized for our waste treatment operations which included a purchase option.

During the third

quarter of 2021, the Company concluded that it was more likely than not that it would not exercise this purchase option but will continue

to lease the property.

Accordingly, a reassessment of this lease was performed which resulted in reclassification of this lease to an

operating lease.

The Company’s finance leases have remaining terms of approximately one to three years.

See “Property and

Equipment” above for assets recorded under financed leases.

Company’s finance leases have remaining terms of approximately one to six years .

See “Property

and Equipment” above for assets recorded under financed leases.

Borrowing rates for our finance leases are either explicitly stated

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The impairment loss, if any, is measured as the excess of the carrying value of the asset over its fair

Judgments and estimates are inherent in these analyses and include assumptions for, among other factors, forecasted revenue, gross

margin, growth rate, operating income, timing of expected future cash flows, and the determination of appropriate long-term discount

Impairment testing of our indefinite-lived permits related to our Treatment reporting unit as of October 1, 2022 and 2021 resulted

in no impairment charges.

J udgments and estimates are inherent in these analyses and include assumptions for, among other factors,

forecasted revenue, gross margin, growth rate, operating income, timing

of expected future cash flows, and the determination of appropriate long-term discount rates.

Impairment testing of our indefinite-lived

permits related to our Treatment reporting unit as of October 1, 2023 and 2022 resulted in no impairment charges.

assets that have definite useful lives are amortized using the straight-line method over the estimated useful lives (with the exception

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impairment might exist.

Research and Development (“R&D”)

innovation and technical know-how are very important to the success of our business.

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and Development.”

Closure Costs and ARO

Closure Costs and Asset Retirement Obligations (“ARO”)

closure costs represent our estimated environmental liability to clean up our facilities, as required by our permits, in the event of

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or circumstances have arisen that might cause us to change our judgment regarding the likelihood of a tax position’s sustainability

Company’s foreign subsidiaries include PF UK Limited and PF Canada and also included PF Medical.

Assets and liabilities are translated

dollars at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the

Foreign currency translation adjustments for these subsidiaries are accumulated as a separate component of accumulated other

comprehensive income (loss) in stockholders’ equity.

Gains and losses resulting from foreign currency transactions are recognized

in the Consolidated Statements of Operations.

Company’s foreign subsidiaries include PF UK Limited and PF Canada.

Assets and liabilities are translated to U.S.

dollars at the

exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period.

Foreign currency

translation adjustments for these subsidiaries are accumulated as a separate component of accumulated other comprehensive income (loss)

in stockholders’ equity.

Gains and losses resulting from foreign currency transactions are recognized in the Consolidated Statements

of Operations.

Concentration

Company 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, representing approximately $ 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.

Company performed services relating to waste generated by government clients (domestic), either indirectly for others as a subcontractor

to government entities or directly as a prime contractor, representing approximately $ 70,642,000 , or 78.8 %, of our total revenue during

2023, as compared to $ 59,658,000 , or 84.5 %, of our total revenue during 2022.

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

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(“FDIC”) insured amounts from time to time.

Concentration of credit risk with respect to accounts receivable is limited due

to the Company’s large number of customers and their dispersion throughout the United States as well as with the significant amount

of work that we perform for government entities.

Company had two government related customers whose total unbilled and net outstanding receivable balances represented 12.5 % and 23.0 %

The Company has not experienced any losses due to such cash concentration.

Concentration

of credit risk with respect to accounts receivable is limited due to the Company’s large number of customers and their dispersion

throughout the United States as well as with the significant amount of work that we perform for government entities.

Company had two government related customers whose total unbilled and net outstanding receivable balances each represented 13.2 %

of the Company’s total consolidated unbilled and net accounts receivable at December 31, 2023.

The Company had two government related

customers whose total unbilled and net outstanding receivable balances represented 18.2 % and 23.5 % of the Company’s total consolidated

unbilled and net accounts receivable at December 31, 2021.

The Company had two government

related customers whose total unbilled and net outstanding receivable balances represented 12.5 %

of the Company’s total consolidated unbilled and net accounts receivable at December 31, 2022.

Recognition and Related Policies

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Comprehensive

(Loss) Income

components of comprehensive (loss) income are net (loss) income and the effects of foreign currency translation adjustments.

Income Per Share

(loss) income per share is calculated based on the weighted-average number of outstanding common shares during the applicable period.

Diluted (loss) income per share is based on the weighted-average number of outstanding common shares plus the weighted-average number

Income (Loss)

components of comprehensive income (loss) are net income (loss) and the effects of foreign currency translation adjustments.

(Loss) Per Share

income (loss) per share is calculated based on the weighted-average number of outstanding common shares during the applicable period.

Diluted income (loss) per share is based on the weighted-average number of outstanding common shares plus the weighted-average number

of potential outstanding common shares.

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earnings per share.

(Loss) income per share is computed separately for each period presented.

Income (loss) per share is computed separately for each period presented.

Value of Financial Instruments

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instruments include cash (Level 1), accounts receivable, accounts payable, and debt obligations (Level 3).

Credit is extended to customers

based on an evaluation of a customer’s financial condition and, generally, collateral is not required.

At December 31, 2022 and

December 31, 2021, the fair value of the Company’s financial instruments approximated their carrying values.

The fair value of

the Company’s revolving credit and term loan approximate its carrying value due to the variable interest rate.

Adopted Accounting Standards

May 2021, the FASB issued Accounting Standards Update (“ASU”) No.

2021-04, “Earnings Per Share (Topic 206), Debt-Modifications

and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s

Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written

Call Options (a consensus of the FASB Emerging Issues Task Force).” ASU 2021-04 addresses issuer’s accounting for certain

modifications or exchanges of freestanding equity-classified written call options.

This ASU is effective for all entities, for fiscal

years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted.

of this ASU by the Company effective January 1, 2022 did not have a material impact on its financial statements.

March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform

on Financial Reporting,” which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships

and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference

rate expected to be discontinued because of reference rate reform.

The guidance was effective beginning March 12, 2020 and can be applied

prospectively through December 31, 2022.

In January 2021, the FASB issued ASU No.

2021-01, “Reference Rate Reform (Topic 848):

Scope,” which clarified the scope and application of the original guidance.

The Company determined that only its obligations under

its credit facility were impacted by these ASUs.

During the third quarter of 2022, the Company entered into an amendment dated August

29, 2022 to its loan agreement which replaced the LIBOR option with the Secured Overnight Finance Rate (“SOFR”) option under

its credit facility.

The adoption of these aforementioned ASUs by the Company during the third quarter of 2022 did not have a material

impact to its financial statements (see “Note 10 – Long Term Debt” for a discuss of the Company’s credit facility

and the amendment dated August 29, 2022).

On December 21, 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

of the Sunset Date of Topic 848,” which extends the period of time entities can utilize the reference rate reform relief guidance

under ASU 2020-04 from December 31, 2022 to December 31, 2024.

June 2016, the FASB issued ASU No.

2016-13, “Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments,”

and various subsequent amendments to the initial guidance (collectively, “Topic 326”).

Topic 326 introduces an approach,

based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale

debt securities.

The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most

financial assets measured at amortized cost and certain other instruments, including trade and other receivables and loans.

are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the

first reporting period in which the guidance is adopted.

In November 2019, FASB issued ASU 2019-10, “Financial Instruments –

Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date of ASU

2016-13 for public companies that are considered smaller reporting companies (“SRC”) as defined by the Commission to fiscal

years beginning after December 15, 2022, including interim periods within those fiscal years.

The adoption of these ASUs by the Company

during the fourth quarter of 2022 did not have a material impact to its financial statements.

is extended to customers based on an evaluation of a customer’s financial condition and, generally, collateral is not required.

As of December 31, 2023, and December 31, 2022, the fair value of the Company’s financial instruments approximated their

carrying values.

The fair value of the Company’s revolving credit, term loans and capital loan approximate its carrying value due

to the variable interest rate.

Issued Accounting Standards – Not Yet Adopted

August 2020, the FASB issued ASU No.

2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging – Contracts in Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments

by removing major separation models and removing certain settlement condition qualifiers for the derivatives scope exception for contracts

in an entity’s own equity, and simplifies the related diluted net income per share calculation for both Subtopics.

is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, for the Company as an

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within

those fiscal years.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

August 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60):

and Initial Measurement.” ASU 2023-05 applies to the formation of a “joint venture” or a “corporate joint venture”

and requires a joint venture to initially measure all contributions received upon its formation at fair value.

The guidance does not

impact accounting by the venturers.

The new guidance is applicable to joint venture entities with a formation date on or after January

1, 2025 on a prospective basis.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,”

which expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are

regularly provided to the CODM and included within each reported measure of a segment’s profit or loss.

The ASU also requires disclosure

of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a

segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

Additionally, ASU 2023-07 requires

all segment profit or loss and assets disclosures to be provided on an annual and interim basis.

The amendments in this ASU are required

to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15,

2024 with early adoption permitted, and should be applied on a retrospective basis.

ASU 2023-07 will be effective for the Company’s

financial statements for the year ended December 31, 2024.

This ASU will not have impact on the Company’s consolidated financial

condition or results of operations.

The Company is evaluating the impact to the related segment reporting disclosures.

December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”

(“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories

in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between

domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among

other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

ASU 2023-09 should be applied on a prospective

basis, but retrospective application is permitted.

This ASU will not have impact on the Company’s consolidated financial condition

or results of operations.

The Company is evaluating the impact to its income taxes reporting disclosures.

Disaggregation

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of our revenues by different categories for our Services and Treatment Segments:

SCHEDULE OF DISAGGREGATION OF REVENUE

OF DISAGGREGATION OF REVENUE

Revenue by Contract Type

(In thousands)

Twelve Months Ended

December 31, 2022

December 31, 2021

Time and materials

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(In thousands)

Twelve Months Ended

December 31, 2022

December 31, 2021

Domestic government

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The following table represents changes in our contract asset and contract liabilities balances:

SCHEDULE OF CONTRACT LIABILITIES

Our deferred revenue as of December 31,

2023, included a remaining prepayment of approximately $ 2,031,000 by a certain customer for a waste treatment project which is expected

to be completed in 2024.

OF CONTRACT BALANCES

(In thousands)

December 31, 2022

December 31, 2021

Contract assets

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Deferred revenue

decrease in unbilled receivables was primarily due to invoicing in connection with the Company’s Canadian projects within the Services

decrease in deferred revenue was attributed primarily to revenue recognized in connection with a Services Segment contract.

the twelve-months ended December 31, 2023, and 2022, the Company recognized revenue of $ 6,759,000 and $ 6,576,000 , respectively, related

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Revenue recognized in each period

related to performance obligations satisfied within the respective period.

relates to performance obligations satisfied within the respective period.

components of lease cost for the Company’s leases were as follows (in thousands):

SCHEDULE OF COMPONENTS OF LEASE COST

Twelve Months Ended

OF COMPONENTS OF LEASE COST

Months Ended December 31,

Operating Leases:

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Amortization of ROU assets

Interest on lease liability

Finance leases

on lease liability

Finance lease

Short-term lease rent expense

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Finance Leases

Weighted average remaining lease terms (years)

Weighted average remaining lease

terms (years)

Weighted average discount rate

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Finance Leases

Weighted average remaining lease terms (years)

Weighted average remaining lease

terms (years)

Weighted average discount rate

following table reconciles the undiscounted cash flows for the operating and finance leases at December 31, 2022 to the operating and

finance lease liabilities recorded on the balance sheet (in thousands):

SCHEDULE OF OPERATING AND FINANCE LEASE LIABILITY MATURITY

following table reconciles the undiscounted cash flows for the operating and finance leases as of December 31, 2023, to the operating

and finance lease liabilities recorded on the balance sheet (in thousands):

OF OPERATING AND FINANCE LEASE LIABILITY MATURITY

Operating Leases

Finance Leases

2029 and thereafter

Total undiscounted lease

Total undiscounted lease payments

Imputed interest

value of lease payments

Current portion of operating

lease obligations

Long-term operating lease

obligations, less current portion

Current portion of finance

lease obligations

Long-term finance lease obligations,

less current portion

Present value of lease

Current portion of operating lease

Long-term operating lease obligations, less

current portion

Current portion of finance lease obligations

Long-term finance lease obligations, less current

cash flow and other information related to our leases were as follows (in thousands):

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Twelve Months Ended December

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flow from operating leases

Operating cash flow from finance leases

Financing cash flow from finance leases

ROU assets obtained in exchange for lease obligations for:

Twelve Months Ended December

Cash paid for amounts included in the measurement

of lease liabilities:

Operating cash

flow from operating leases

Operating cash flow from

finance leases

Financing cash flow from

finance leases

ROU assets obtained in exchange for lease obligations

Finance liabilities

Operating liabilities

Reduction to ROU assets resulitng from reassessment for

Finance liabilities

5 PERMIT AND OTHER INTANGIBLE ASSETS

AND OTHER INTANGIBLE ASSETS

following table summarizes changes in the carrying value of permits, which exist only in our Treatment Segment.

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Balance as of December 31, 2021

Permit renewal

Permit in progress

Balance as of December 31, 2022

Permit in progress

Balance as of December 31, 2023

following table summarizes information relating to the Company’s definite-lived intangible assets:

OF DEFINITE LIVED INTANGIBLE ASSETS

SCHEDULE OF DEFINITE LIVED INTANGIBLE ASSETS

Weighted Average

December 31, 2022

December 31, 2021

Other Intangibles

(amount in thousands)

Amortization Period

Other Intangibles (amount in

Customer relationships

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following table summarizes the expected amortization over the next five years for our definite-lived intangible assets:

OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

(In thousands)

SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

expense recorded for definite-lived intangible assets was approximately $ 198,000 and $ 237,000 , for the years ended December 31, 2023,

and 2022, respectively.

6 CAPITAL STOCK, STOCK PLANS, WARRANTS AND STOCK BASED COMPENSATION

Company’s 2003 Outside Directors Stock Plan (the “2003 Plan”) provides for the grant of Non-Qualified Stock Options

(“NQSOs”) to member of the Company’s Board of Directors (the “Board”) who is not an employee of the Company

or its subsidiaries (“Eligible Director”).

On July 20, 2021, the Company’s stockholders approved an amendment (the

“Amendment”) to the 2003 Plan which provided the following, among other things:

i) authorized an additional 500,000 shares

of the Company’s Common Stock for issuance under the 2003 Plan, (ii) increased (a) the number of shares of Common Stock subject

to the automatic option grant made to each Eligible Director upon initial election, from 6,000 to 20,000 shares, and (b) the number of

shares of Common Stock subject to the automatic option grant made to each Eligible Director upon reelection, from 2,400 to 10,000 shares,

(iii) amended the vesting period of options granted under the 2003 Plan, from a six-month vesting period to 25 % per year, beginning on

the first anniversary date of the grant, and (iv) provided for acceleration of vesting under certain conditions.

The exercise price of

options to be granted under the 2003 Plan continued to equal to the closing trade price on the date prior to the grant date.

Plan continued to provide for the issuance to each Eligible Director a number of shares of the Company’s Common Stock in lieu of

65% or 100% (based on option elected by each director) of the fee payable to the Eligible Director for services rendered as a member

of the Board.

STOCK, STOCK PLANS, WARRANTS AND STOCK BASED COMPENSATION

Company’s 2003 Outside Directors Stock Plan, as amended (the “2003 Plan”) provides for the grant of Non-Qualified

Stock Options (“NQSOs”) to member of the Company’s Board of Directors (the “Board”) who is not an

employee of the Company or its subsidiaries (“Eligible Director”).

The 2003 Plan also provides for the grant of an NQSO

to purchase up to 10,000

shares of the Company’s Common Stock for each Eligible Director upon each re-election to the Board, and the grant of an NQSO

to purchase up to 20,000

shares of the Company’s Common Stock upon initial election.

NQSOs granted prior to July 20, 2021 have a vesting period of six

months from the date of grant and a term of 10

years, with an exercise price equal to the closing trade price on the date prior to grant date.

NQSOs granted on and after July 20,

2021 vest 25 %

per year, beginning on the first anniversary date of the grant and also have a term of 10

years, with an exercise price equal to the closing trade price on the date prior to grant date.

Additionally, the

2003 Plan provides for the issuance to each Eligible Director a number of shares of the Company’s Common Stock in lieu of 65%

or 100% (based on option elected by each director) of the fee payable to the Eligible Director for services rendered as a member of

The number of shares issued is determined at 75% of the market value as defined in the plan (the Company recognizes 100%

of the market value of the shares issued).

The number of shares of the Company’s Common Stock authorized under the 2003 Plan

is 1,600,000 .

At December 31, 2022, the 2003 Plan had available for issuance 448,534 shares.

Company’s 2017 Stock Option Plan authorizes the grant of options to officers and employees of the Company, including any employee

who is also a member of the Board, as well as to consultants of the Company.

The 2017 Stock Option Plan, as amended (the “2017

Plan”), authorizes an aggregate grant of 1,140,000 NQSOs and Incentive Stock Options (“ISOs”).

Consultants of the Company

can only be granted NQSOs.

The term of each stock option granted under the 2017 Plan shall be fixed by the Compensation and Stock Option

Committee (the “Compensation Committee”), but no stock options will be exercisable more than ten years after the grant date,

or in the case of an ISO granted to a 10% stockholder, five years after the grant date.

The exercise price of any ISO granted under the

2017 Plan to an individual who is not a 10% stockholder at the time of the grant shall not be less than the fair market value of the

shares at the time of the grant, and the exercise price of any ISO granted to a 10% stockholder shall not be less than 110% of the fair

market value at the time of grant.

The exercise price of any NQSOs granted under the plan shall not be less than the fair market value

of the shares at the time of grant.

At December 31, 2022, the 2017 Plan had available for issuance 353,000 shares.

At December 31, 2023, the 2003 Plan had available for issuance 318,680

Company’s 2017 Stock Option Plan, as amended (the “2017 Plan”), authorizes the grant of options to officers and employees

of the Company, including any employee who is also a member of the Board, as well as to consultants of the Company.

The 2017 Plan authorizes

an aggregate grant of 1,740,000 NQSOs and Incentive Stock Options (“ISOs”), which included an increase of 600,000 additional

authorized shares approved by the Company’s Stockholders at the Company’s 2023 Annual Meeting of Stockholders held on July

Consultants of the Company can only be granted NQSOs.

The term of each stock option granted under the 2017 Plan shall be fixed

by the Compensation and Stock Option Committee (the “Compensation Committee”), but no stock options will be exercisable more

than ten years after the grant date, or in the case of an ISO granted to a 10% stockholder, five years after the grant date.

price of any ISO granted under the 2017 Plan to an individual who is not a 10% stockholder at the time of the grant shall not be less

than the fair market value of the shares at the time of the grant, and the exercise price of any ISO granted to a 10% stockholder shall

not be less than 110% of the fair market value at the time of grant.

The exercise price of any NQSOs granted under the plan shall not

be less than the fair market value of the shares at the time of grant.

At December 31, 2023, the 2017 Plan had available for issuance

720,500 shares.

Options to Employees and Outside Director

July 21, 2022, the Company issued a NQSO to each of the Company’s seven reelected outside directors for the purchase, under the

Company’s 2003 Plan, of up to 10,000 shares of the Company’s Common Stock.

The Company’s Executive Vice President (“EVP”)

of Strategic Initiatives and also a member of the Company’s Board, was not eligible to receive an option under the 2003 Plan as

an employee of the Company.

Each NQSO granted is for a contractual term of ten years with one-fourth vesting annually over a four-year

The exercise price of the NQSO is $ 5.15 per share, which was equal to the fair market value of the Company’s Common Stock

the day preceding the grant date, pursuant to the 2003 Plan.

July 21, 2022, the Company granted ISOs to certain employees for purchase under the Company’s 2017 Plan, of up to an aggregate

of 24,000 shares of the Company’s Common Stock.

Each ISO granted is for a contractual term of six years with one-fifth vesting

annually over a five-year period.

The exercise price of the ISO is $ 5.34 per share, which was equal to the fair market value of the Company’s

Common Stock on the date of grant.

October 14, 2021, the Company granted ISOs to certain employees for the purchase, under the Company’s 2017 Plan, of up to an aggregate

305,000 shares of the Company’s Common Stock.

The total ISOs granted included an ISO for each of the Company’s executive

officers for the purchase set forth in his respective ISO Agreement, as follows:

50,000 shares for the CEO;

25,000 shares for the CFO;

20,000 shares for the EVP of Strategic Initiatives;

January 19, 2023, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate 295,000 shares

of the Company’s Common Stock.

The total ISOs granted included an ISO for each of the Company’s executive officers for the

purchase set forth in his respective ISO Agreement, as follows:

70,000 shares for the Chief Executive Officer (“CEO”);

shares for the Chief Financial Officer (“CFO”);

30,000 shares for the Executive Vice President (“EVP”) of Strategic

30,000 shares for the EVP of Waste Treatment Operations;

and 25,000 shares for the

EVP of Nuclear and Technical Services.

Each of the ISOs granted has a contractual term of six years with one-fifth yearly vesting over

a five-year period.

The exercise price of the ISO is $ 7.005 per share, which was equal to the fair market value of the Company’s

Common Stock on the date of grant.

July 20, 2021, the Company issued a NQSO to each of the Company’s seven reelected outside directors for the purchase, under the

Company’s 2003 Plan, of up to 10,000 shares of the Company’s Common Stock.

Each NQSO granted has for a contractual term of

ten years with one-fourth vesting annually over a four-year period.

The exercise price of the NQSO is $ 5.93 per share, which was equal

to the fair market value of the Company’s Common Stock the day preceding the grant date, pursuant to the 2003 Plan.

May 4, 2021, the Company issued a NQSO to a new director elected by the Company’s Board, for the purchase, under the Company’s

2003 Plan, of up to 6,000 shares of the Company’s Common Stock.

The NQSO granted has a contractual term of ten years with a vesting

period of six months .

The exercise price of the NQSO is $ 7.50 per share, which was equal to the fair market value of the Company’s

Common Stock the day preceding the grant date, pursuant to the 2003 Plan.

and 30,000 shares for the EVP of Nuclear and Technical Services.

Each of the ISOs granted has a contractual term of six years with one-fifth yearly vesting over a five-year period.

The exercise price

of each ISO is $ 3.95 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant.

July 20, 2023, the Company issued a NQSO to each of the Company’s seven reelected outside (non-management) directors under the

2003 Plan, for the purchase of up to 10,000 shares of the Company’s Common Stock.

The CEO and EVP of Strategic Initiatives, each

an executive officer of the Company as well as a director, were not eligible to receive an option under the 2003 Plan.

Each NQSO granted

is for a contractual term of ten years with one-fourth vesting annually over a four-year period .

The exercise price of each NQSO is $ 9.81

per share, which was equal to the fair market value of the Company’s Common Stock on the day preceding the grant date, in accordance

with the 2003 Plan.

October 19, 2023, the Company granted an ISO to an employee under the 2017 Plan, for the purchase of up to 5,000 shares of the Company’s

Common Stock.

The ISO granted is for a contractual term of six years with one-fifth vesting annually over a five-year period .

price of the ISO is $ 9.62 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant.

July 21, 2022, the Company issued a NQSO to each of the Company’s seven reelected outside directors under the 2003 Plan, for the

purchase of up to 10,000 shares of the Company’s Common Stock.

The Company’s EVP of Strategic Initiatives and also a member

of the Company’s Board, was not eligible to receive an option under the 2003 Plan as an employee of the Company.

Each NQSO granted

is for a contractual term of ten years with one-fourth vesting annually over a four-year period .

The exercise price of the NQSO is $ 5.15

per share, which was equal to the fair market value of the Company’s Common Stock the day preceding the grant date, pursuant to

the 2003 Plan.

July 21, 2022, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate of 24,000 shares

of the Company’s Common Stock.

Each ISO granted is for a contractual term of six years with one-fifth vesting annually over a five-year

The exercise price of the ISO is $ 5.34 per share, which was equal to the fair market value of the Company’s Common Stock

on the date of grant.

2023, the Company issued an aggregate 185,549 shares of its Common Stock from cashless exercises of options for the purchases of 280,000

shares of the Company’s Common Stock, at exercise prices ranging from $ 3.60 per share to $ 7.005 per share.

Additionally, the Company

issued 40,400 shares of its Common Stock from the cash exercise of options for the purchase of 40,400 shares of the Company’s Common

Stock, at exercise prices ranging from at $ 2.785 per share to $ 7.005 per share resulting in proceeds of approximately $ 164,000 .

tax benefit associated with stock options exercised with cash during 2023 was approximately $ 25,000 .

2022, the Company issued 16,526 shares of its Common Stock from a cashless exercise of an option for the purchase of 50,000 shares of

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of an option for the purchase of 2,400 shares of the Company’s Common Stock at $ 5.50 per share resulting in proceeds of approximately

During 2021, the Company issued 290 shares of its Common Stock from a cashless exercise of an option for the purchase of 500

shares of the Company’s Common Stock at $ 3.15 per share.

Income tax benefit associated with the stock option exercised with cash during 2022 was approximately $ 3,000 .

Company estimates fair value of stock options using the Black-Scholes valuation model.

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used to value the options granted were as follows:

SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS

Employee Stock

Options Granted

OF STOCK OPTIONS VALUATION ASSUMPTIONS

Stock Options Granted

Weighted-average fair value per share

Risk -free interest rate (1)

3.48 %- 4.98 %

Expected volatility of stock

55.19 %- 58.78 %

Dividend yield (3)

Expected option life (3)

Outside Director Stock

Options Granted

Expected option life (years)

Director Stock Options Granted

Weighted-average fair value per share

Risk -free interest rate (1)

1.23 % - 1.61 %

Expected volatility of stock

55.84 % - 55.91 %

Dividend yield (3)

Expected option life (3)

The risk-free interest rate is based on the U.S.

Treasury yield

in effect at the grant date over the expected term of the option.

The expected volatility is based on historical volatility from

our traded Common Stock over the expected term of the option.

The expected option life is based on historical exercises and

post-vesting data.

following table summarizes stock-based compensation recognized for fiscal years 2022 and 2021.

SCHEDULE OF SHARE-BASED COMPENSATION, ALLOCATION OF RECOGNIZED PERIOD COSTS

Expected option life (years)

(1) The risk-free interest

rate is based on the U.S.

Treasury yield in effect at the grant date over the expected term of the option.

(2) The expected volatility

is based on historical volatility from our traded Common Stock over the expected term of the option.

(3) The Company has never paid any dividends on its Common Stock.

Our Loan Agreement prohibits the Company from paying

any cash dividends without prior approval from our lender.

(4) The expected option

life is based on historical exercises and post-vesting data.

following table summarizes stock-based compensation recognized (within SG&A expenses) for fiscal years 2023 and 2022.

OF SHARE-BASED COMPENSATION, ALLOCATION OF RECOGNIZED PERIOD COSTS

Employee Stock Options

Director Stock Options

December 31, 2022, the Company has approximately $ 1,293,000 of total unrecognized compensation costs related to unvested options for

tax benefits associated with stock-based compensation expense were approximately $ 45,000 and $ 23,000 , respectively, for the years ended

December 31, 2023, and 2022.

December 31, 2023, the Company had approximately $ 1,809,000 of total unrecognized compensation costs related to unvested options for

employee and directors.

1 unchanged sentence

Options to Consultant

Company granted a NQSO to Robert Ferguson on July 27, 2017 from the Company’s 2017 Plan for the purchase of up to 100,000 shares

of the Company’s Common Stock (“Ferguson Stock Option”) in connection with his work as a consultant to the Company’s

Test Bed Initiative (“TBI”) at our PFNWR facility at an exercise price of $ 3.65 per share, which was the fair market value

of the Company’s Common Stock on the date of grant.

The term of the Ferguson Stock Option is seven years from the grant date.

vesting of the Ferguson Stock Option is subject to the achievement of three separate milestones by certain dates.

The first milestone

was met and the 10,000 shares under the first milestone were issued to Robert Ferguson in May 2018.

The Company had previously entered

into amendments whereby the vesting dates for the second and third milestones for the purchase of up to 30,000 and 60,000 shares of the

Company’s Common Stock were extended to December 31, 2022 and December 31, 2023, respectively.

The 30,000 shares under the second

milestone failed to vest by December 31, 2022 and therefore were forfeited.

The Company has not recognized compensation costs (fair value

of approximately $ 39,000 at December 31, 2022) for the remaining 60,000 Ferguson Stock Option under the remaining final milestone since

achievement of the performance obligation under the remaining final milestone is uncertain at December 31, 2022.

death, the remaining Ferguson Stock Option is now held by Mr.

Ferguson’s estate.

July 27, 2017, the Company granted a NQSO from the 2017 Plan to Robert Ferguson, for the purchase of up to 100,000 shares of the Company’s

Common Stock (“Ferguson Stock Option”), at an exercise price of $ 3.65 per share, which was the fair market value of the Company’s

Common Stock on the date of grant.

The Ferguson Stock Option was granted in connection with Mr.

Ferguson’s work as a consultant

to the Company’s Test Bed Initiative (“TBI”) at our PFNWR facility.

The term of the Ferguson Stock Option was seven

years from the grant date, with vesting subject to the achievement of three separate milestones by certain dates, the achievement of

which would entitle Mr.

Ferguson to purchase, respectively, 10,000 , 30,000 , and 60,000 shares of the Company’s Common Stock issuable

under the Ferguson Stock Option.

Ferguson previously achieved the first milestone during the first vesting period.

Upon the death

Ferguson, the balance of the shares issuable under the Ferguson Stock Option was forfeited in accordance with the terms of the

of Stock Option Plans

summary of the Company’s total plans as of December 31, 2022 and 2021, and changes during the period then ended are presented as

SCHEDULE OF STOCK OPTIONS ROLL FORWARD

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (2)

summary of the Company’s total plans as of December 31, 2023, and 2022, and changes during the period then ended are presented

OF STOCK OPTIONS ROLL FORWARD

Average Exercise Price

Average Remaining Contractual Term (years)

Intrinsic Value (4)

Options outstanding January 1, 2023

Forfeited/expired

Options outstanding end of period (1)

Options exercisable at December 31, 2022 (1)

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (2)

Options outstanding end

of period (1)

Options exercisable at

December 31, 2023 (2)

Average Exercise Price

Average Remaining Contractual Term (years)

Intrinsic Value (4)

Options outstanding January 1, 2022

Forfeited/expired

Options outstanding end of period (1)

Options exercisable at December 31, 2021 (1)

Options outstanding end

of period (3)

Options exercisable at

December 31, 2022 (3)

with exercise prices ranging from $ 3.15 to $ 9.81

with exercise prices ranging from $ 3.15 to $ 7.50

with exercise prices ranging from $ 2.79 to $ 7.50

intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price

summary of the Company’s nonvested options as of December 31, 2023, and changes during the period then ended are presented as follows:

SCHEDULE OF NON VESTED OPTIONS

OF NON VESTED OPTIONS

Weighted Average

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Non-vested options at December 31, 2023

connection with a $ 2,500,000 loan that the Company entered into with Mr.

connection with a $ 2,500,000 loan that the Company received from Mr.

Robert Ferguson (the “Ferguson Loan”) on April 1, 2019,

the Company issued a warrant to Mr.

Ferguson for the purchase of up to 60,000 shares of our Common Stock at an exercise price of

$ 3.51 per share.

The warrant expires on April 1, 2024 and remains outstanding at December 31, 2022.

Ferguson’s death,

the warrant is now held by Mr.

Ferguson’s estate.

Ferguson (the “Ferguson Warrant”) for the purchase of up to 60,000 shares of our Common

Stock at an exercise price of $ 3.51 per share.

The Ferguson Loan was paid in full in December 2020.

Ferguson’s death,

the Ferguson Warrant was transferred equally to Mr.

Ferguson’s two heirs with each holding a Warrant for the purchase of up to

30,000 shares of the Company’s Common Stock, as permitted under the Ferguson Warrant.

On December 12, 2023, one of Warrant was

exercised by Mr.

Ferguson’s heir for the purchase of 30,000 shares of the Company’s Common Stock, resulting in proceeds received

by the Company of approximately $ 105,000 .

As of December 31, 2023, the remaining Warrant remains outstanding and will expire on April

Stock Issued for Services

7 unchanged sentences

director’s fee, if any, is payable in cash.

The Company recorded approximately $ 477,000 and $ 467,000 in compensation expense (included

in SG&A expenses) for the twelve months ended December 31, 2022 and 2021, respectively, for the portion of director fees earned in

the Company’s Common Stock.

of Common Stock

September 30, 2021, the Company entered into subscription agreements with certain institutional and retail investors in a registered

direct offering, for the sale and issuance of 1,000,000 shares of the Company’s Common Stock (See “Note 7 – Common

Stock Subscription Agreements” for a discussion of the issuance of the shares from this direct offering).

December 31, 2022, the Company has reserved approximately 1,018,400 shares of our Common Stock for future issuance under all of the option

arrangements.

7 COMMON STOCK SUBSCRIPTION AGREEMENTS

September 30, 2021, the Company entered into subscription agreements (the “Subscription Agreements”) with certain institutional

and retail investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue, in a registered direct offering,

an aggregate of 1,000,000 shares (the “Shares”) of our Common Stock, at a negotiated purchase price per share of $ 6.20 (the

“Shares”), for aggregate gross proceeds to us of approximately $ 6,200,000 .

The offering price per share was negotiated based

on the average closing price of our Common Stock as quoted on Nasdaq over the three-week period immediately preceding the date of the

Subscription Agreements, less a five percent discount.

Shares were offered and sold by the Company through a prospectus supplement pursuant to the Company’s “shelf” registration

statement on Form S-3, which was previously filed with the Commission on May 13, 2019 and subsequently declared effective on May 22,

2019 (the “Registration Statement”).

Shields & Co., LLC (“Wellington”) served as the exclusive placement agent in connection with the Offering, pursuant to

a placement agency agreement dated as of September 23, 2021 (the “Placement Agency Agreement”), between the Company and Wellington.

The Company paid Wellington a cash fee of 6.00 % of the aggregate gross proceeds in the Offering which totaled $ 372,000 .

The Company also

reimbursed Wellington for certain expenses in connection with the Offering in an aggregate amount not to exceed $ 50,000 .

After deducting

costs incurred directly in connection with the offering of approximately $ 496,000 which were recorded as deduction to equity, net proceeds

to the Company totaled approximately $ 5,704,000 .

Approximately $ 61,000 of the offering costs were paid in 2022.

aggregate net proceeds from the offering were primarily used for working capital and general corporate purposes, including for certain

facility expansion and upgrades.

8 INCOME (LOSS) PER SHARE

following table reconciles the (loss) income and average share amounts used to compute both basic and diluted (loss) income per share:

SCHEDULE OF EARNINGS PER SHARE

(Amounts in Thousands, Except for Per Share Amounts)

Net (loss) income attributable to Perma-Fix Environmental Services, Inc., common stockholders:

(Loss) income from continuing operations, net of taxes

Net loss attributable to non-controlling interest

(Loss) income from continuing operations attributable to Perma-Fix Environmental Services, Inc.

common stockholders

Loss from discontinuing operations attributable to Perma-Fix Environmental Services, Inc.

common stockholders

Net (loss) income attributable to Perma-Fix Environmental Services, Inc.

common stockholders

Basic (loss) income per share attributable to Perma-Fix Environmental Services, Inc.

common stockholders

Diluted (loss) income per share attributable to Perma-Fix Environmental Services, Inc.

common stockholders

The Company recorded approximately $ 477,000 in each of the years 2023 and 2022 in compensation

expense (included in SG&A expenses) for the for the portion of director fees earned in the Company’s Common Stock.

of December 31, 2023, the Company has reserved approximately 994,500 shares of our Common Stock for future issuance under all of the

option arrangements.

(LOSS) PER SHARE

following table reconciles the income (loss) and average share amounts used to compute both basic and diluted income (loss) per share:

OF EARNINGS PER SHARE

(Amounts in Thousands, Except

for Per Share Amounts)

Income (loss) per

common share from continuing operations

Income (Loss)

from continuing operations, net of taxes

Basic income (loss)

Diluted income (loss)

Loss per common

share from discontinued operations,

Loss from discontinued

operations, net of taxes

Basic loss per share

Diluted loss per share

Net income (loss)

per common share

Net income (loss)

Basic income (loss)

Diluted income (loss)

Weighted average shares outstanding:

Basic weighted average shares outstanding

dilutive effect of stock options

dilutive effect of

stock options

dilutive effect of warrants

Diluted weighted average shares outstanding

Potential shares excluded from above weighted average share calculations due to their anti-dilutive effect include:

Potential shares excluded from above weighted

average share calculations due to their anti-dilutive effect include:

Stock options

9 DISCONTINUED OPERATIONS

Company’s discontinued operations consist of all our subsidiaries included in our Industrial Segment which encompasses subsidiaries

divested in 2011 and prior and three previously closed locations.

divested in 2011 and earlier, as well as three previously closed locations.

Company incurred losses from discontinued operations of $ 433,000 (net of tax benefit of $ 117,000 ) and $ 605,000 (net of tax benefit of

$ 199,000 ) for the years ended December 31, 2023, and 2022, respectively.

The increase in net losses in 2022 as compared to 2021 was primarily

due to costs incurred in connection with management of administrative and regulatory matters for the Company’s remediation projects

as discussed below.

following table presents the major class of assets of discontinued operations at December 31, 2022 and December 31, 2021.

No assets and

liabilities were held for sale at each of the periods noted.

In 2022, the Company incurred additional costs in connection

with management of administrative and regulatory matters for the Company’s remediation projects as discussed below.

following table presents the major class of assets of discontinued operations as of December 31, 2023, and December 31, 2022.

and liabilities were held for sale at each of the periods noted.

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATION BALANCE SHEET

3 unchanged sentences

Long-term assets

Property, plant and equipment, net (1)

Total long-term assets

plant and equipment, net (1)

long-term assets

Current liabilities

6 unchanged sentences

Environmental liabilities

Total long-term liabilities

Total liabilities

net of accumulated depreciation of $ 10,000 for each period

long-term liabilities

(1) net of accumulated

depreciation of $ 10,000 for each period presented.

Environmental

Company has three remediation projects, which are currently in progress relating to our PFD, PFM and PFSG (closed locations) subsidiaries,

all within our discontinued operations.

Company has three remediation projects, which are currently in progress relating to our PFD, PFM and PFSG subsidiaries, all within our

discontinued operations.

The Company divested PFD in 2008;

however, the environmental liability of PFD was retained by

the Company upon the divestiture of PFD.

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

in most cases, the remediation of surrounding ground water.

The remediation activities are closely reviewed and monitored by the applicable

state regulators.

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

31, 2021 balance of $ 876,000 .

however, the environmental liability of PFD was retained by the Company upon

the divestiture of PFD.

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

the remediation of surrounding ground water.

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

of December 31, 2023, the Company had total accrued environmental remediation liabilities of $ 845,000 , a decrease of $ 16,000 from the

December 31, 2022 balance of $ 861,000 .

The decrease represents payments for remediation projects.

At December 31, 2022, $ 112,000 of the total

accrued environmental liabilities was recorded as current.

current and long-term accrued environmental liabilities at December 31, 2022 are summarized as follows (in thousands).

As of December 31, 2023, $ 61,000 of

the total accrued environmental liabilities was recorded as current.

current and long-term accrued environmental liabilities as of December 31, 2023, are summarized as follows (in thousands).

SCHEDULE OF CURRENT AND LONG TERM ACCRUED ENVIRONMENTAL LIABILITY

Total liability

10 LONG-TERM DEBT

debt consists of the following at December 31, 2022 and December 31, 2021:

debt consists of the following as of December 31, 2023, and December 31, 2022:

SCHEDULE OF LONG TERM DEBT

Revolving Credit facility

dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due

on May 15, 2024.

Effective interest rate for 2022 and 2021 was 0% and 5.3%, respectively (1)

Revolving Credit facility

dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due

on May 15, 2024 .

(Amounts in Thousands)

Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2027.

Effective interest rate for 2023 and 2022 was 9.7% and 8.9%, respectively.

Term Loan dated

May 8, 2020, payable in equal monthly installments of principal, balance due on May 15, 2024 .

Revolving Credit facility dated May 8, 2020, borrowings based

upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May

Effective interest rate

for 2023 and 2022 was 9.7 %

respectively.

dated May 8, 2020, payable in equal monthly installments of principal, balance due on May

Effective interest rate for 2023

and 2021 was 5.6 % and was 4.5 % , respectively (1)

and 2022 was 9.2 %

respectively (1)

Term Loan 2 dated July 31, 2023, payable

in equal monthly installments of principal, balance due on May

Effective interest rate for 2023 was 9.9 %

Capital Line dated

May 4, 2021, payable in equal monthly installments of principal, balance due on May

Effective interest rate for 2022 was

Payable to 2023 and 2025, annual interest rate of 5.6 % and 9.1 % .

current portion of long-term debt

Our revolving credit facility is collateralized by our accounts

receivable and our term loan and capital line are collateralized by our property, plant, and equipment.

Net of debt issuance costs of ($ 88,000 ) and ($ 112,000 ) at December

31, 2022 and December 31, 2021, respectively.

Credit, Term Loan and Capital Line Agreement

Effective interest rate for 2023

and 2022 was was 8.6 %

respectively (1)

Debt Issuance Costs

Payable to 2023 and 2025, annual interest rate of 5.6 %

Less current portion

of long-term debt

Long-term debt

(1) Our revolving credit

facility is collateralized by our accounts receivable, and our term loans and capital line are collateralized by our property, plant,

and equipment.

(2) Aggregate unamortized

debt issuance costs in connection with the Company’s credit facility, which consists of the revolving credit, Term loan 1, Term

loan 2 and Capital Line, as applicable.

Credit and Term Loan Agreement

Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020 (“Loan

Agreement”), with PNC National Association (“PNC”), acting as agent and lender.

The Loan Agreement provides the Company

with the following credit facility with a maturity date of March 15, 2024 :

Agreement”), with PNC National Association (“PNC” and “lender”), acting as agent and lender.

The Loan Agreement,

as amended from time to time and including the March 21, 2023, and the July 31, 2023, amendments as discussed below, provides the Company

with the following credit facility with a maturity date of May 15, 2027 :

(a) up to $ 12,500,000 revolving credit (“revolving credit”),

see “Note 20 – Subsequent Events – Credit Facility” for a discussion of an amendment that the Company entered

into with its lender on March 21, 2023 which reduced the maximum revolving credit to $ 12,500,000 ) and (b) a term loan (“term loan”)

of approximately $ 1,742,000 , requiring monthly installments of $ 35,547 .

The maximum that the Company can borrow under the revolving credit

is based on a percentage of eligible receivables (as defined) at any one time reduced by outstanding standby letters of credit and borrowing

reductions that the Company’s lender may impose from time to time.

The Loan Agreement, as amended (the “Amended Loan Agreement”),

also provides a capital expenditure line of up to $ 1,000,000 with advances on the line, subject to certain limitations, permitted for

up to twelve months starting May 4, 2021 (the “Borrowing Period”).

Only interest is payable on advances during the Borrowing

At the end of the Borrowing Period, the total amount advanced under the line will amortize equally based on a five-year amortization

schedule with principal payment due monthly plus interest.

At the maturity date of the Amended Loan Agreement, any unpaid principal balance

plus interest, if any, will become due.

Amount advanced under the capital line totaled approximately $ 524,000 which requires monthly

installments in principal of approximately $ 8,700 plus interest, starting June 1, 2022.

The advance was used to purchase the underlying

asset under a previous finance lease.

2022, the Company entered into further amendments to the Amended Loan Agreement with its lender, which provided the following, among

other things (with the amended terms set forth in a Revised Loan Agreement):

the Company’s failure to meet the minimum quarterly FCCR requirement for the fourth

quarter of 2021 and second quarter of 2022;

the quarterly FCCR testing requirement for the first and third quarters of 2022;

the quarterly FCCR testing requirement starting for the fourth quarter of 2022 and revised

the methodology in calculating the FCCR for the quarter ended December 31, 2022 and the methodology

to be used in calculating the FCCR for the quarter ending March 31, 2023 (with no change

to the minimum 1.15:1 ratio requirement for each quarter) ;

with the maximum that the Company can borrow under the revolving credit based on a percentage of eligible receivables (as defined) at

any one time reduced by outstanding standby letters of credit and borrowing reductions that the Company’s lender may impose from

time to time;

(b) a term loan (“Term Loan 1”) of approximately $ 1,742,000 , requiring monthly installments of $ 35,547 ;

a term loan (“Term Loan 2”) of $ 2,500,000 , requiring monthly installments of $ 41,667 ;

and (d) a capital expenditure line

(“Capital Line”) of up to $ 1,000,000 with advances on the line, subject to certain limitations, permitted for up to twelve

months starting May 4, 2021 (the “Borrowing Period”), with interest only payable on advances during the Borrowing Period.

Amounts advanced under the Capital Line at the end of the Borrowing Period totaled approximately $ 524,000 , requiring monthly installments

of principal of approximately $ 8,700 plus interest, commencing June 1, 2022.

March 21, 2023, the Company entered into an amendment to its Loan Agreement, as amended, with its lender which provided, among other

things, the following:

the quarterly FCCR testing requirement for the fourth quarter of 2022 and removed the FCCR

testing requirement for the first quarter of 2023;

the maximum revolving credit line under the credit facility from $ 18,000,000 to $ 12,500,000 ;

the quarterly FCCR testing requirement starting in the second quarter of 2023 using a trailing

twelve-months period (with no change to the minimum 1.15:1 ratio requirement for each quarter) ;

maintenance of a minimum of $ 3,000,000 in borrowing availability under the revolving credit

until the minimum FCCR requirement for the quarter ended December 31, 2022 has been met and

certified to the lender;

the annual rate used to calculate the Facility Fee (as defined in the Loan Agreement) on

the revolving credit, with addition of the capital expenditure line, from 0.375 % to 0.500 % .

Upon meeting the minimum FCCR requirement of 1.15:1 on a twelve-month trailing basis, the

Facility Fee rate of 0.375 % will be reinstated;

certain additional anti-terrorism provisions to the covenants;

the LIBOR based interest rate benchmark with the SOFR.

As a result of this new provision,

payment of annual rate of interest due on the revolving credit is at prime (7.50% at December

31, 2022) plus 2% or Term SOFR Rate (as defined in the Revised Loan Agreement) plus 3.00%

plus an SOFR Adjustment applicable for an interest period selected by us and payment of annual

rate of interest due on the term loan and the capital expenditure line is at prime plus 2.50%

or Term SOFR Rate plus 3.50% plus an SOFR Adjustment applicable for an interest period selected

A SOFR Adjustment rates of 0.10% and 0.15% are applicable for a one-month interest

period and three-month period, respectively, that may be selected by us

connection with the amendments, the Company paid its lender fees totaling $ 30,000 which is being amortized over the remaining term of

the Revised Loan Agreement as interest expense-financing fees.

Company’s credit facility under its Revised Loan Agreement with PNC contains certain financial covenants, along with customary

until the minimum FCCR requirement for the quarter ended June 30, 2023 has been met and certified

to the lender (the Company met its FCCR in the second quarter of 2023 which was certified

to its lender and therefore, this requirement is no longer applicable under the Loan Agreement,

connection with the March 21, 2023, amendment, the Company paid its lender a fee of $ 25,000 which is being amortized over the remaining

term of the Loan Agreement, as amended, as interest expense-financing fees.

July 31, 2023, the Company entered into a further amendment to its Loan Agreement, as amended, which provided, among other things, the

the maturity date of the Loan Agreement, as amended, to May 15, 2027 , from May 15, 2024 ;

additional term loan (“Term Loan 2”) to the Company in the amount of $ 2,500,000 ,

requiring monthly installments of approximately $ 41,667 .

The annual rate of interest due

on Term Loan 2 is at prime ( 8.50 % at December 31, 2023) plus 3.00 % or SOFR (as defined in

the Loan Agreement, as amended) plus 4.00 % plus an SOFR Adjustment applicable for an interest

period selected by the Company.

A SOFR Adjustment rate of 0.10 % and 0.15 % is applicable for

a one-month interest period and three-month period, respectively, that may be selected by

the minimum Tangible Adjusted Net Worth (as defined in the Loan Agreement) covenant requirement;

an indefinite reduction in borrowing availability of $ 750,000 ;

for up to $ 2,500,000 in capital expenditure made in fiscal year 2023 and thereafter to be

treated as financed capital expenditure in the Company’s quarterly FCCR covenant calculation

maturity of the Loan Agreement, as amended, any unpaid principal balance plus interest, if any, will become due.

to the amendment dated July 31, 2023, as discussed above, the Company agreed to pay PNC 1.0% of the total financing under the Loan Agreement,

as amended, in the event the Company pays off its obligations on or before July 31, 2024, and 0.5% of the total financing if the Company

pays off its obligations after July 31, 2024, to and including July 31, 2025.

No early termination fee shall apply if the Company pays

off its obligations under Loan Agreement, as amended, after July 31, 2025.

connection with the amendment dated July 31, 2023, the Company paid its lender a fee of $ 100,000 which is being amortized over the remaining

term of the Loan Agreement, as amended, as interest expense-financing fees.

to the Loan Agreement, as amended, the annual rate of interest due on the revolving credit is at prime plus 2% or SOFR plus 3.00% plus

an SOFR Adjustment applicable for an interest period selected by the Company.

The annual rate of interest due on Term Loan 1 and the

Capital Line is at prime plus 2.50% or SOFR plus 3.50% plus an SOFR Adjustment applicable for an interest period selected by the Company.

SOFR Adjustment rates of 0.10% and 0.15% are applicable for a one-month interest period and three-month period, respectively, that may

be selected by the Company.

See payment of annual rate of interest due on Term Loan 2 as provided under the amendment dated July 31,

Company’s credit facility under its Loan Agreement, as amended, with PNC contains certain financial covenants, along with customary

representations and warranties.

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all commitments to extend further credit.

The Company’s Revised Loan Agreement prohibits us from paying cash dividends on our Common

Stock without prior approval from our lender.

The Company was not required to perform testing of the FCCR requirement in the first and

third quarters of 2022 pursuant to amendments as discussed above.

Based on an amendment that the Company entered into with its lender

on March 21, 2023, the Company was not required to perform testing of the FCCR requirement in the fourth quarter of 2022 (see “Note

20 – Subsequent Events – Credit Facility” for a discussion of this amendment which provided for this provision, among

other things).

The Company failed to meet its FCCR requirement in the second quarter of 2022;

however, this non-compliance was waived

by our lender pursuant to an amendment that we entered into with our lender in 2022 as discussed above.

Other than the above discussion

pertaining to the Company’s FCCR requirements, the Company met all of its other financial covenant requirements in each of the

quarters of 2022.

May 7, 2022, the Company may terminate its Revised Loan Agreement upon 90 days’ prior written notice upon payment in full of our

obligations under the Revised Loan Agreement with no early termination fees.

December 31, 2022, the borrowing availability under the Company’s revolving credit was approximately $ 4,290,000 based on our eligible

receivables and is net of approximately $ 3,016,000 in outstanding standby letters of credit.

The Company’s 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.

following table details the amount of the maturities of long-term debt maturing in future years at December 31, 2022 (excludes debt issuance

costs of $88,000).

The Company’s Loan Agreement, as amended, prohibits us from paying cash dividends on

our Common Stock without prior approval from our lender.

The Company was not required to perform testing of the FCCR requirement in the

first quarter of 2023 pursuant to the March 21, 2023, amendment as discussed above.

It otherwise met all of its other financial covenant

requirements.

The Company met all of its covenant requirements in each of the second to fourth quarters of 2023.

December 31, 2023, the borrowing availability under the Company’s credit facility was approximately $ 10,622,000 which included

our cash (deposited with the Company’s lender) and was based on our eligible receivables and is net of approximately $ 3,950,000

in outstanding standby letters of credit and net of the $ 750,000 indefinite reduction in borrowing availability imposed by the Company’s

lender pursuant to the amendment dated July 31, 2023, as discussed above.

following table details the amount of the maturities of long-term debt maturing in future years as of December 31, 2023 (excludes unamortized

debt issuance costs of $170,000).

SCHEDULE OF MATURITIES OF LONG-TERM DEBT

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(In thousands)

11 CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (“CARES ACT”)

RETENTION CREDIT (“ERC”)

CARES Act, which was enacted on March 27, 2020, provides an Employee Retention Credit (“ERC”) for qualifying businesses keeping

employees on their payroll during the COVID-19 pandemic.

The ERC was subsequently amended by the Taxpayer Certainty and Disaster Tax

Relief Act of 2020, the Consolidated Appropriation Act of 2021, and the American Rescue Plan Act of 2021, all of which amended and extended

the ERC availability and guidelines under the CARES Act.

Following these amendments, the Company determined that it was eligible for

the ERC, and as a result of the foregoing legislations, is eligible to claim a refundable tax credit against the Company’s share

of certain payroll taxes equal to 70 % of the qualified wages paid to employees between July 1, 2021 and September 30, 2021.

wages are limited to $ 10,000 per employee per calendar quarter in 2021 for a maximum allowable ERC per employee of $ 7,000 per calendar

quarter in 2021.

For purposes of the amended ERC, an eligible employer is defined as having experienced a significant (20% or more) decline

in gross receipts during one or more of the first three 2021 calendar quarters when compared to 2019.

Coronavirus Aid, Relief and Economic Securities Act (“CARES Act”), which was enacted on March 27, 2020, provided an Employee

Retention Credit (“ERC”) for qualifying businesses keeping employees on their payroll during the COVID-19 pandemic.

was subsequently amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, the Consolidated Appropriation Act of 2021, and

the American Rescue Plan Act of 2021, all of which amended and extended the ERC availability and guidelines under the CARES Act.

these amendments, the Company determined that it was eligible for the ERC, and as a result of the foregoing legislations, was eligible

to claim a refundable tax credit against the Company’s share of certain payroll taxes equal to 70 % of the qualified wages paid

to employees between July 1, 2021 and September 30, 2021.

Qualified wages were limited to $ 10,000 per employee per calendar quarter in

2021 for a maximum allowable ERC per employee of $ 7,000 per calendar quarter in 2021.

For purposes of the amended ERC, an eligible employer

was defined as having experienced a significant (20% or more) decline in gross receipts during one or more of the first three 2021 calendar

quarters when compared to 2019.

the third quarter of 2022, the Company determined it was eligible for the ERC and amended its third quarter 2021 employer payroll tax

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As there is no authoritative guidance under

GAAP on accounting for government assistance to for-profit business entities, we account for the ERC by analogy to International

Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance.

In accordance with

IAS 20, management determined it has reasonable assurance for receipt of the ERC and recorded the expected refund as other income (within

“Other income (expense)”) on the Company’s Consolidated Statements of Operations and other receivables (within “Prepaid

and other assets”) on the Company’s Consolidated Balance Sheets.

For federal income tax purposes, this item was treated as

a reduction in payroll costs for 2021, the year in which the costs originated.

This resulted in a timing difference for the benefit between

financial statement inclusion and tax inclusion between 2021 and 2022.

This timing difference does not impact the Company’s effective

Protection Program (“PPP”) Loan

April 2020, the Company received a PPP Loan in the amount of approximately $ 5,318,000 under the CARES Act, as amended.

The PPP Loan was

administered by the SBA.

Proceeds from the promissory note was used by the Company for eligible payroll costs, mortgage interest, rent

and utility costs as permitted by the CARES Act, as amended.

The annual interest rate on the PPP Loan was 1.0 % .

In late 2020, the Company

applied for forgiveness on repayment of the PPP Loan and effective June 15, 2021, the entire balance of the PPP Loan of approximately

$ 5,318,000 , along with accrued interest of approximately $ 63,000 was forgiven by the SBA.

Accordingly, the Company recorded the entire

forgiven PPP Loan balance, along with accrued interest, totaling approximately $ 5,381,000 as “Gain on extinguishment of debt”

on its Consolidated Statement of Operations for the year ended 2021.

of Employment Tax Deposits

CARES Act, as amended, provided employers the option to defer the payment of an employer’s share of social security taxes beginning

on March 27, 2020 through December 31, 2020 with 50 % of the amount of social security taxes deferred to become due on December 31, 2021

with the remaining 50 % due on December 31, 2022.

The Company’s deferment of such taxes totaled approximately $ 1,252,000 of which

approximately $ 626,000 was paid in December 2021 with the remaining paid in December 2022 (previously included in “Accrued expenses”

within current liabilities in our Consolidated Balance Sheets).

12 ACCRUED EXPENSES

GAAP on accounting for government assistance to for-profit business entities, the Company accounted for the ERC by analogy to International

Accounting Standard (“IAS”) 20, “Accounting for Government Grants and Disclosure of Government Assistance.” In

accordance with IAS 20, management determined it had reasonable assurance for receipt of the ERC and recorded the expected refund as

other income (within “Other income (expense)”) on the Company’s Consolidated Statements of Operations and other receivables

(within “Prepaid and other assets”) on the Company’s Consolidated Balance Sheets.

On March 30, 2023, the Company received

the ERC refund of $ 1,975,000 and approximately $ 60,000 in interest (recorded within “Interest Income” on the Company’s

Consolidated Statements of Operations for the quarter ended March 31, 2023), totaling approximately $ 2,035,000 .

expenses include the following (in thousands) at December 31:

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Insurance payable

Total accrued expenses

13 ACCRUED CLOSURE COSTS AND ARO

accrued expenses

expenses for 2023 included a total of approximately $ 750,000 in compensation expenses accrued under the 2023 Management Incentive Plans

(“MIPs”) for our executives (See “Note 18 – Employment Agreements and MIPs” for further discussion

of the 2023 MIPs) in addition to a remaining $ 25,000 in discretionary bonus approved by the Company’s Compensation Committee payable

to the Company’s EVP of Nuclear and Technical Services.

CLOSURE COSTS AND ARO

closure costs represent our estimated environmental liability to clean up our fixed-based regulated facilities as required by our permits,

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Accretion expense

Addition to closure liability

Balance as of December 31, 2023

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due to changes in estimated closure costs.

At December 31, 2022, current portion of the closure liabilities totaled approximately $ 682,000

which reflects primarily closure liabilities for our EWOC facility.

The spending made in 2022 was primarily for our EWOC facility.

addition to closure liabilities for 2021 reflected primarily estimated costs for decommissioning activities required to restore the leased

property at our EWOC facility back to its original condition at the end of its lease term.

As of December 31, 2021, current portion of

the closure liabilities totaled approximately $ 578,000 which consists primarily of the closure liabilities for our EWOC facility.

of December 31, 2023, and December 31, 2022, the current portion of the closure liabilities totaled approximately $ 79,000 and $ 682,000 ,

respectively, which reflect closure liabilities for our EWOC facility.

The spending made in each of the years 2023 and 2022 was primarily

for our EWOC facility.

reported closure asset or ARO, is reported as a component of “Net Property and equipment” in the Consolidated Balance Sheets

at December 31, 2022 and 2021 with the following activity for the years ended December 31, 2022 and 2021:

as of December 31, 2023, and 2022 with the following activity for the years ended December 31, 2023, and 2022:

OF ASSET RETIREMENT OBLIGATIONS

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Addition to closure and post-closure asset

Amortization of closure and post-closure asset

Amortization of closure

and post-closure asset

Balance as of December 31, 2022

Addition to closure and post-closure asset

Amortization of closure and post-closure asset

Amortization of closure

and post-closure asset

Balance as of December 31, 2023

addition to ARO reflects closure obligations as discussed above.

14 INCOME TAXES

components of (loss) income before income tax benefits by jurisdiction for continuing operations for the years ended December 31, consisted

of the following (in thousands):

addition to ARO in 2022 reflects closure obligations as discussed above.

components of income (loss) before income tax expense (benefit) by jurisdiction for continuing operations for the years ended December

31, consisted of the following (in thousands):

OF INCOME (LOSS) BEFORE INCOME TAX (BENEFIT) EXPENSE

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United Kingdom

loss before tax benefit

components of current and deferred federal and state income tax (benefits) expense for continuing operations for the years ended December

income (loss) before tax benefit

components of current and deferred federal and state income tax expense (benefit) for continuing operations for the years ended December

31, consisted of the following (in thousands):

OF COMPONENTS OF INCOME TAX (BENEFIT) EXPENSE

Federal income

tax benefit - deferred

State income tax expense (benefit)

Foreign income tax expense

income tax benefit - deferred

income tax benefit

overall reconciliation between the expected tax benefit using the federal statutory rate of 21% for each of the years ended 2022 and

2021 and the benefit for income taxes from continuing operations as reported in the accompanying Consolidated Statement of Operations

is provided below (in thousands).

Federal income tax expense - current

Federal income tax benefit - deferred

State income tax expense - current

State income tax benefit

income tax expense (benefit)

overall reconciliation between the expected tax expense (benefit) using the federal statutory rate of 21% for each of the years ended

2023 and 2022 and the expense (benefit) for income taxes from continuing operations as reported in the accompanying Consolidated Statement

of Operations is provided below (in thousands).

OF EFFECTIVE INCOME TAX RATE RECONCILIATION

Federal tax benefit at statutory rate

State tax expense (benefit), net of federal benefit

Change in deferred tax rates

Permanent items

PPP Loan forgiveness

Debt forgiveness (PFM Poland)

Federal tax expense (benefit) at

statutory rate

State tax expense, net of federal benefit

Difference in foreign rate

True-up of deferred tax items

Increase (decrease) in valuation allowance

Income tax benefit

the fourth quarter of 2021, the Company sold PFM Poland resulting from its decision to cease all R&D activities under its Medical

Prior to the sale, the Company purchased Perma-Fix Medical LLC which was converted from PFMC, a wholly-owned subsidiary of PFM

Perma-Fix Medical LLC was treated as a disregarded entity for tax purposes, resulting in a realized tax loss of $ 2,466,000 from

uncollected payables.

As a condition of the sale of PFM Poland, the Company forgave its receivables from PFM Poland resulting in a $ 3,089,000

capital loss on the sale of 100 % interest of PFM Poland stock (see “Note 15 – PF Medical for a discussion on the sale of

Company regularly assesses the likelihood that the deferred tax asset will be recovered from future taxable income.

In conducting this

assessment, the Company considers projected future taxable income and ongoing tax planning strategies, then records a valuation allowance

to reduce the carrying value of the net deferred income taxes to an amount that is more likely than not to be realized.

As of September

30, 2021, the Company determined that it was more likely than not that it would be able to realize a portion of the deferred income tax

As a result, a deferred income tax benefit in the amount of approximately $ 2,351,000 attributable to the valuation allowance

release on beginning of year deferred tax assets primarily related to U.S.

Federal income taxes was realized in the three months ended

September 30, 2021.

The Company had previously maintained a full valuation allowance against its net deferred income tax assets.

Company continues to maintain a valuation allowance against certain state and foreign tax attributes that may not be realizable along

with the capital loss carryover generated during 2021 that it does not expect to realize.

As of December 31, 2022, the Company assessed whether its deferred tax asset will more likely than not to be realized.

This assessment

included both positive and negative available evidences, which included the Company’s current contracts, cumulative loss, future

reversal of existing taxable differences, and overall prospect of future business and earnings.

Based on the weight of these available

evidences, the Company concluded that it will more likely than not utilize its Federal and certain state net operating losses.

Permanent items

Change in deferred tax rates

Reserve for uncertain tax positions

Stock-based compensation

Provision-to-return adjustments

(Decrease) increase

in valuation allowance

Income tax expense (benefit)

global intangible low-taxed income (“GILTI”) provisions under the Tax Cuts and Jobs Act of 2017 (the “TCJA”)

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entities for the current year.

In addition, the aforementioned sale of PFM Poland in 2021 did not result in any GILTI inclusion.

March 27, 2020, the CARES Act was enacted and signed into law.

The CARES Act included a number of income tax law changes, including modifications

to the interest limitation under Internal Revenue Code (“IRC”) §163(j) and reinstatement of the ability to carry back

net operating losses.

The Company received forgiveness of its PPP Loan effective June 15, 2021 which was included in its Consolidated

Statement of Operations as “Gain on extinguishment of debt” but was exempt from income taxes.

Company had temporary differences and net operating loss carry forwards from both our continuing and discontinued operations, which gave

rise to deferred tax assets and liabilities at December 31, 2022 and 2021 as follows (in thousands):

rise to deferred tax assets as of December 31, 2023, and 2022 as follows (in thousands):

OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

Net operating losses

Environmental and closure reserves

Net operating

Environmental and closure

Lease liability

Capital loss carryforward

Accrued expenses

R&D cost capitalization

Deferred tax liabilities:

Depreciation and amortization

Indefinite lived intangible assets

Indefinite lived intangible

Right-of-use lease asset

481(a) adjustment

Prepaid expenses

tax assets, gross

Valuation allowance

Net deferred income tax asset

Net deferred income

of December 31, 2023, the Company assessed whether its deferred tax asset will more likely than not to be realized.

This assessment included

both positive and negative available evidences, which included the Company’s current contracts, cumulative loss, future reversal

of existing taxable differences, and overall prospect of future business and earnings.

Based on the weight of these available evidences,

the Company concluded that it will more likely than not utilize its Federal and certain state net operating losses.

Company has estimated net operating loss carryforwards (“NOLs”) for federal and state income tax purposes of approximately

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income, if any, and expire in various amounts starting in 2023 .

Approximately $ 25,296,000 of our federal NOLs were generated after December

31, 2017 and thus do not expire.

All of our federal NOLs were generated after December 31, 2017 and thus

do not expire.

The Company accounts for uncertainties in income tax pursuant to ASC 740.

A reconciliation of the beginning and ending

amount of our recognized tax expense is summarized as follows (in thousands):

SCHEDULE OF RECOGNIZED TAX EXPENSES

Balances at beginning of year

Addition related to R&D tax credit

Balances at end of the year

tax years 2020 through 2022 remain open to examination by taxing authorities in the jurisdictions in which the Company operates.

uncertain tax positions were identified by the Company for the years currently open under statute of limitations.

Company had no federal income tax payable for the years ended December 31, 2022 and 2021.

in 2022, the TCJA amended Section 174 to eliminate current-year deductibility of research and experimentation (“R&E”)

expenditures and software development costs (collectively, “R&E expenditures”) and instead require taxpayers to charge

their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable to R&E activity

performed outside the United States).

For the 2022 tax year, the Company has capitalized $ 303,000 of research and development expenses.

While Management believes this estimate to be materially accurate, the Company plans to complete a formal IRC Section 174 analysis in

advance of filing the tax return for the year ended December 31, 2022.

15 PF MEDICAL

Company made the strategic decision during the fourth quarter of 2021 to cease all R&D activities under its Medical Segment.

Medical Segment conducted its activities through the Company’s majority-owned Polish subsidiary, PFM Poland and PFM Poland’s

wholly-owned subsidiary PFMC, a Delaware corporation.

On December 30, 2021, the Company entered into a Sales of Shares Agreement (the

“sales agreement”) for its entire stock ownership ( 60.54 % ) of PFM Poland for notes receivable of approximately $ 47,000 (USD)

which was paid by the buyer in 2022.

As condition precedent to the sales agreement, the Company released PFM Poland from unsatisfied

trade payables owed by PFM Poland to the Company totaling approximately $ 2,537,000 (USD).

The Company ceased to have any continuing involvement

with PFM Poland.

before the sales agreement was executed, the Company converted PFMC from a S Corporation to a limited liability company (Perm-Fix Medical

LLC or “PFM LLC”) and acquired the entire ownership from the majority-owned Polish subsidiary for $ 10 .

The transaction was

deemed to be a common control transaction and all assets and liabilities were transferred using the historical carrying values in accordance

with guidance in ASC 805-50-25, “Business Combinations, Related Issues, Recognition.” The carrying amount of the non-controlling

interest was adjusted to reflect the change in the ownership of the subsidiary.

As a result, approximately $ 1,004,000 of the non-controlling

interest related to the cumulative loss of PFM LLC was recognized as additional paid-in capital on the Company’s Consolidated Statements

of Stockholders’ Equity and approximately $ 902,000 was recognized as a component within “Loss on deconsolidation of subsidiary”

recorded on the Company’s Consolidated Statement of Operations.

a result, effective December 30, 2021, PFM Poland was no longer a subsidiary of the Company and the Company deconsolidated the entity

from its consolidated financial statements in accordance with guidance in ASC 810-10-40, “Consolidation, Overall, Derecognition.

Accordingly, the December 31, 2021 Consolidated Balance Sheet did not in include balances for PFM due to the sale and deconsolidation

of PFM Poland.

The Company’s Consolidated Statements of Operations included results of its majority-owned Polish subsidiary for

the period through December 30, 2021.

Company recognized a non-cash “Loss on deconsolidation of subsidiary” of approximately $ 1,062,000 on its Consolidated Statements

of Operation from the above transaction.

The loss included approximately $ 94,000 in legal and accounting costs incurred for the transaction.

OF LOSS ON DECONSOLIDATION

(In thousands)

Note receivable consideration received

Carrying amount of non-controlling interest

Carrying amount of accumulated other comprehensive loss

Net liabilities

Transaction costs

Loss on deconsolidation of subsidiary

16 COMMITMENTS AND CONTINGENCIES

Company had $ 76,000 and $ 0 federal income tax payable for the years ended December 31, 2023 and 2022, respectively.

in 2022, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) amended Section 174 to eliminate current-year deductibility of research

and experimentation (“R&E”) expenditures and software development costs (collectively, “R&E expenditures”)

and instead require taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures

attributable to R&E activity performed outside the United States).

For each tax year 2023 and 2022, the Company has capitalized $ 2,059,000

of research and development expenses.

While Management believes the estimate for 2023 to be materially accurate, the Company plans to

complete a formal IRC Section 174 analysis in advance of filing the tax return for the year ended December 31, 2023.

AND CONTINGENCIES

connection with our waste management services, the Company processes hazardous, non-hazardous, low-level radioactive and mixed (containing

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July 2020, Tetra Tech EC, Inc.

(“Tetra Tech”) filed a complaint in the United States District Court for the Northern District

(“Tetra Tech”) filed a complaint in the U.S.

District Court for the Northern District

of California (the “Court”) against CH2M Hill, Inc.

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and the Company to assist with the review, according to the complaint.

insurance carrier is providing a defense on our behalf in connection with this lawsuit, subject to a $ 100,000 self-insured retention

and the terms and limitations contained in the insurance policy.

Company’s insurance carrier is providing a defense on our behalf in connection with this lawsuit, subject to a $ 100,000 self-insured

retention and the terms and limitations contained in the insurance policy.

majority of Tetra Tech’s claims have been dismissed by the Court.

Remaining claims include:

(1) Intentional Interference with

Contractual Relations;

(1) intentional interference with contractual

and (2) inducing a breach of contract.

The Company continues to believe it has no liability exposure to

the fourth quarter of 2021, PF Canada received a Notice of Termination (“NOT”) from Canadian Nuclear Laboratories, LTD.

on a Task Order Agreement (“TOA”) that PF Canada entered into with CNL in May 2019 for remediation work within Ontario, Canada

(“Agreement”).

The NOT was received after work under the TOA was substantially completed and work under the TOA has since

been completed.

CNL may terminate the TOA at any time for convenience.

As of December 31, 2022, PF Canada has approximately $ 1,853,000

in unpaid receivables due from CNL as a result of work performed under the TOA.

Additionally, CNL has approximately $ 1,060,000 in contractual

holdback under the TOA that is payable to PF Canada.

CNL also established a bond securing approximately $ 1,900,000 (CAD) to cover certain

issues raised in connection with the TOA.

Under the TOA, CNL may be entitled to set off certain costs and expenses incurred by CNL in

connection with the termination of the TOA, including the bond as discussed above, against amounts owed to PF Canada for work performed

by PF Canada or its subcontractors.

PF Canada continues to be in discussions with CNL to finalize the amounts due to PF Canada under

the TOA and continues to believe these amounts are due and payable to PF Canada.

The Company continues to believe it has no liability exposure to Tetra Tech.

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

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Total coverage under the 2003 Closure Policy, as amended, was $ 22,461,000 at December

At December 31, 2022 and December 31, 2021, finite risk sinking funds contributed by the Company related to the 2003 Closure

As of December 31, 2023, and December 31, 2022, finite risk sinking funds contributed by the Company related to the 2003 Closure

Policy which is included in other long term assets on the accompanying Consolidated Balance Sheets totaled $ 12,074,000 and $ 11,570,000 ,

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Interest income for the year ended 2023 and 2022 was approximately $ 504,000 and $ 99,000 , respectively.

If the Company so elects, AIG is obligated to pay us an amount equal to 100 % of the finite risk sinking fund account balance in return

for complete release of liability from both us and any applicable regulatory agency using this policy as an instrument to comply with

financial assurance requirements.

If the Company so elects, AIG is obligated to pay the Company an amount equal to 100 % of the finite risk sinking fund account balance

in return for complete release of liability from both the Company and any applicable regulatory agency using this policy as an instrument

to comply with financial assurance requirements.

Perma-Fix Canada Inc.

(“PF Canada”)

During the fourth quarter of 2021, PF Canada received a Notice of Termination (“NOT”) from CNL on a Task

Order Agreement (“TOA”) that PF Canada entered into with CNL in May 2019 for remediation work within Ontario, Canada (“Agreement”).

The NOT was received after work under the TOA was substantially completed and work under the TOA has since been completed.

CNL may terminate

the TOA at any time for convenience.

As of December 31, 2023, PF Canada has approximately $ 2,389,000 in unpaid receivables due from CNL

as a result of work performed under the TOA.

CNL and PF Canada have reached a settlement agreement on payment of the aforementioned receivables

to PF Canada by CNL, subject to certain conditions/terms precedents being met, including release of certain liens.

(see “Note 19

- Subsequent Event – PF Canada” for a discussion of a partial payment made by CNL in January 2024 on the receivables and the

remaining receivables to be paid by CNL).

of Credits and Bonding Requirements

3 unchanged sentences

approximately $ 3,950,000 and the total amount of bonds outstanding was approximately $ 36,674,000 .

17 PROFIT SHARING PLAN

Company adopted a 401(k) Plan in 1992, which is intended to comply with Section 401 of the Internal Revenue Code and the provisions of

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contributed approximately $ 576,000 and $ 575,000 in 401(k) matching funds, respectively.

18 RELATED PARTY TRANSACTIONS

PARTY TRANSACTIONS

Centofanti serves as our Vice President of Information Systems.

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David Centofanti is the son of our EVP of Strategic Initiatives and a Board member.

Company entered into an employment agreement dated July 22, 2020 with each of our executive officers (each employment agreement referred

to as “Employment Agreement”).

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

Company or by the executive officer.

At the end of the Initial Term of each Employment Agreement, each Employment Agreement will automatically

be extended for one additional year, unless at least six months prior to the expiration of the Initial Term, we or the executive officer

provides written notice not to extend the terms of the Employment Agreement.

Each Employment Agreement provides for annual base salary,

performance bonuses (as provided in the Management Incentive Plan (“MIP”) as approved by the Company’s Compensation

Committee and Board) and other benefits commonly found in such agreement.

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

in the agreement), the Company will pay to the executive officer or to his estate an amount equal to the sum of any unpaid base salary

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

plan (the “Accrued Amounts”) plus any performance compensation payable pursuant to the MIP with respect to the fiscal year

immediately preceding the date of termination.

the executive officer terminates his employment for “good reason” (as defined in the agreement) or is terminated by the Company

without cause (including any such termination for “good reason” or without cause within 24 months after a Change in Control

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

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

provided the performance compensation earned with respect to the fiscal year immediately preceding the date of termination has not been

If performance compensation earned with respect to the fiscal year immediately preceding the date of termination has been made

to the executive officer, the executive officer will be paid an additional year of the performance compensation earned with respect to

the fiscal year immediately preceding the date of termination.

If the executive terminates his employment for a reason other than for

good reason, the Company will pay to the executive an amount equal to the Accrued Amounts plus any performance compensation payable pursuant

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

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

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

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

will immediately become exercisable in full commencing on the date of death, with such options exercisable for the lesser of the original

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

In the event an executive officer terminates his employment

for “good reason” or is terminated by the Company without cause, all outstanding stock options to purchase common stock held

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

for the lesser of the original option term or within 60 days from the date of the executive’s date of termination.

Severance benefits

payable with respect to a termination (other than Accrued Amounts) shall not be payable until the termination constitutes a “separation

from service” (as defined under Treasury Regulation Section 1.409A-1(h)).

January 20, 2022, the Board and the Compensation Committee also approved individual MIP for the calendar year 2022 for each of our executive

Each MIP was effective January 1, 2022 and applicable for year 2022.

Each MIP provided guidelines for the calculation of annual

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

The performance compensation under each

of the MIPs was based upon meeting certain of the Company’s separate target objectives during 2022.

Assuming each target objective

was achieved under the same performance threshold range under each MIP, the total potential target performance compensation payable ranged

from 25 % to 150 % of the 2022 base salary for the CEO ($ 93,717 to $ 562,304 ), 25 % to 100 % of the 2022 base salary for the CFO ($ 76,193

to $ 304,772 ), 25 % to 100 % of the 2022 base salary for the EVP of Strategic Initiatives ($ 63,495 to $ 253,980 ), 25 % to 100 % of the 2022

base salary for the EVP of Nuclear and Technical Services ($ 76,193 to $ 304,772 ) and 25 % to 100 % ($ 65,308 to $ 261,233 ) of the 2022 base

salary for the EVP of Waste Treatment Operations.

No compensation was earned under each of the MIPs.

SEGMENT REPORTING

accordance with ASC 280, “Segment Reporting”, we define an operating segment as a business activity:

In accordance with ASC 280, “Segment Reporting”,

we define an operating segment as a business activity:

from which we may earn revenue and incur expenses;

whose operating results are regularly reviewed by the

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

whose operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segment and assess its performance;

for which discrete financial information is available.

have two reporting segments, consisting of the Treatment and Services Segments, which are based on a service offering approach.

The Company’s

segment in 2021 also included the Medical Segment which primary purpose was the R&D of a medical isotope production technology.

Medical Segment had not generated any revenues.

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

under the Medical Segment which resulted in the sale of 100 % of its interest of PFM Poland (see “Note 15 – PF Medical”

for a discussion of this transaction).

Our reporting segments exclude our corporate headquarter, business center and our discontinued

operations (see “Note 9 – Discontinued Operations”) which do not generate revenues.

table below shows certain financial information of our reporting segments as of and for the years ended December 31, 2022 and 2021 (in

SCHEDULE OF SEGMENT REPORTING INFORMATION

Reporting as of and for the year ended December 31, 2022

Corporate (2)

We have two reporting segments, consisting of the

Treatment and Services Segments, which are based on a service offering approach.

Our reporting segments exclude our corporate headquarter,

business center and our discontinued operations (see “Note 8 – Discontinued Operations”) which do not generate revenues.

The table below shows certain financial information

of our reporting segments as of and for the years ended December 31, 2023, and 2022 (in thousands).

Segment Reporting as of and for the year ended December 31, 2023

OF SEGMENT REPORTING INFORMATION

Segments Total

Consolidated Total

Revenue from external customers

7 unchanged sentences

Segment income (loss) before income taxes

( 3,589 ) (13)

Income tax benefit

Income tax (benefit) expense

Segment income (loss)

1 unchanged sentence

Expenditures for segment assets (net)

Segment Reporting as of and for the year ended

December 31, 2021

Reporting as of and for the year ended December 31, 2022

Segments Total

Corporate (2)

Consolidated Total

Revenue from external customers

8 unchanged sentences

( 3,589 ) (8)

( 561 ) (9)(11)

Income tax (benefit) expense

( 3,890 ) (10)

Income tax benefit

Segment income (loss)

1 unchanged sentence

Expenditures for segment assets (net)

Segment assets have been adjusted for intercompany accounts

to reflect actual assets for each segment.

Amounts reflect the activity for corporate headquarters not

included in the segment information.

The Company performed services relating to waste generated

by government clients (domestic and foreign (primarily Canadian)), either directly as a prime contractor or indirectly for others as

a subcontractor to government entities, representing approximately 60,030,000 or 85.0 % of total revenue for 2022 and 60,812,000 or 84.2 %

of total revenue for 2021.

Segment assets have been adjusted for intercompany accounts to reflect actual assets for each segment.

Amounts reflect the activity for corporate headquarters not included in the segment information.

The Company performed services relating to waste generated by government clients (domestic), either directly as a prime contractor or indirectly for others as a subcontractor to government entities, representing approximately $ 70,642,000 or 78.7 % of total revenue for 2023 and $ 59,658,000 or 84.5 % of total revenue for 2022.

The following reflects such revenue generated by our two segments:

following table reflects revenue based on customer location:

includes assets from our discontinued operations of $ 96,000 and $ 96,000 at December 31, 2022

and 2021, respectively.

of debt issuance costs of ($ 88,000 ) and ($ 112,000 ) for 2022 and 2021, respectively (see “Note

10 – “Long-Term Debt” for additional information).

of financed amount of $ 114,000 and $ 585,000 for the year ended December 31, 2022 and 2021,

The following table reflects revenue based on customer location:

Amount includes assets from our discontinued operations of $ 94,000 and $ 96,000 as of December 31, 2023, and 2022,

respectively.

long-lived asset (net) for our PF Canada, Inc.

subsidiary of $ 0 and $ 25,000 for the year

ended December 31, 2022 and 2021, respectively.

includes approximately $ 5,381,000 of “Gain on extinguishment of debt” recorded

in connection with the Company’s PPP Loan which was forgiven by the SBA effective June

15, 2021 (see “Note 11 – Coronavirus Aid, Relief and Economic Securities Act

(“CARES ACT”) – Paycheck Protection Program (“PPP”) Loan”

for information of this loan forgiveness).

(10) Includes

tax benefit recorded in amount of approximately $ 2,351,000 resulting from release of valuation

allowance on the Company’s deferred tax assets.

(11) Includes

elimination of gain/loss of $ 2,537,000 in debt forgiveness between PFM Poland and the Company

(see “Note 15 – PF Medical” for a discussion of this debt forgiveness).

includes a “Loss on deconsolidation of subsidiary” recorded in the amount of

approximately $ 1,062,000 resulting from the sale of PFM Poland (see “Note 15 –

PF Medical” for a discussion of this loss).

(13) Includes

approximately $ 1,975,000 recorded as other income under the Employee Retention Credit program

under the CARES Act, as amended (see “Note 11 – Coronavirus Aid, Relief and Economic

Securities Act (“CARES ACT”) – Employee Retention Credit (“ERC”)”

for a discussion of this expected refund amount).

Net of debt issuance costs of ($ 170,000 ) and ($ 88,000 ) for 2023 and 2022, respectively (see “Note 9 –

Long-Term Debt” for additional information).

Net of financed amount of $ 784,000 and $ 114,000 for the year ended December 31, 2023, and 2022, respectively.

Includes approximately $ 1,975,000 recorded as other income under the ERC program under the CARES Act, as amended

(see “Note 10 –Employee Retention Credit (“ERC”)” for a discussion of this refund amount).

Includes long-lived assets for continued operations as follows:

SCHEDULE OF REVENUE BY MAJOR CUSTOMERS BY REPORTING SEGMENTS

Domestic government

Foreign government

following table reflects revenue based on customer location:

The following table reflects revenue based on customer location:

OF REVENUE BASED ON CUSTOMER LOCATION

1 unchanged sentence

United Kingdom

includes assets from our discontinued operations of $ 96,000 and $ 96,000 at December 31, 2022

and 2021, respectively.

of debt issuance costs of ($ 88,000 ) and ($ 112,000 ) for 2022 and 2021, respectively (see “Note

10 – “Long-Term Debt” for additional information).

of financed amount of $ 114,000 and $ 585,000 for the year ended December 31, 2022 and 2021,

Amount includes assets from our discontinued operations of $ 94,000 and $ 96,000 as of December 31, 2023, and 2022,

respectively.

long-lived asset (net) for our PF Canada, Inc.

subsidiary of $ 0 and $ 25,000 for the year

ended December 31, 2022 and 2021, respectively.

includes approximately $ 5,381,000 of “Gain on extinguishment of debt” recorded

in connection with the Company’s PPP Loan which was forgiven by the SBA effective June

15, 2021 (see “Note 11 – Coronavirus Aid, Relief and Economic Securities Act

(“CARES ACT”) – Paycheck Protection Program (“PPP”) Loan”

for information of this loan forgiveness).

(10) Includes

tax benefit recorded in amount of approximately $ 2,351,000 resulting from release of valuation

allowance on the Company’s deferred tax assets.

(11) Includes

elimination of gain/loss of $ 2,537,000 in debt forgiveness between PFM Poland and the Company

(see “Note 15 – PF Medical” for a discussion of this debt forgiveness).

includes a “Loss on deconsolidation of subsidiary” recorded in the amount of

approximately $ 1,062,000 resulting from the sale of PFM Poland (see “Note 15 –

PF Medical” for a discussion of this loss).

(13) Includes

approximately $ 1,975,000 recorded as other income under the Employee Retention Credit program

under the CARES Act, as amended (see “Note 11 – Coronavirus Aid, Relief and Economic

Securities Act (“CARES ACT”) – Employee Retention Credit (“ERC”)”

for a discussion of this expected refund amount).

20 SUBSEQUENT EVENTS

evaluated events occurring subsequent to December 31, 2022 through March 23, 2023, the date these consolidated financial statements were

available for issuance, and other than as noted below determined that no material recognizable subsequent events occurred.

January 19, 2023, the Board and the Compensation Committee approved individual MIP for the calendar year 2023 for each of our executive

Net of debt issuance costs of ($ 170,000 ) and ($ 88,000 ) for 2023 and 2022, respectively (see “Note 9 –

Long-Term Debt” for additional information).

Net of financed amount of $ 784,000 and $ 114,000 for the year ended December 31, 2023, and 2022, respectively.

Includes approximately $ 1,975,000 recorded as other income under the ERC program under the CARES Act, as amended

(see “Note 10 –Employee Retention Credit (“ERC”)” for a discussion of this refund amount).

Includes long-lived assets for continued operations as follows:

OF LONG-LIVED ASSETS FOR CONTINUED OPERATIONS

United States

Foreign Subsidiaries

EMPLOYEMENT AGREEMENTS AND MIPS

April 20, 2023, the Company entered into employment agreements with each of its executive officers:

Mark Duff, President and CEO;

Naccarato, EVP and CFO;

Louis Centofanti, EVP of Strategic Initiatives;

Andrew Lombardo, EVP of Nuclear and Technical Services;

Richard Grondin, EVP of Waste Treatment Operations (collectively the “New Employment Agreements” and each, individually,

the “New Employment Agreement”).

The Company had previously entered into employment agreements with each of the aforementioned

executive officers on July 22, 2020, all five of which agreements were due to expire on July 22, 2023, but which were terminated effective

April 20, 2023, upon the execution of the New Employment Agreements.

of the New Employment Agreements are substantially identical except for compensation.

Under the New Employment Agreements, each of these

executive officers is provided an annual salary, which annual salary may be increased from time to time, but not reduced, as determined

by the Compensation Committee.

In addition, each of these executive officers is entitled to participate in the Company’s broad-based

benefits plans and to certain performance compensation payable under separate Management Incentive Plan (“MIP”) as approved

by the Company’s Compensation Committee and the Company’s Board.

of the New Employment Agreements is effective for three years from April 20, 2023 (the “Initial Term”) unless earlier terminated

by the Company or by the executive officer.

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

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

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

Andrew Lombardo retired

from the position of EVP of Nuclear and Technical Services effective January 1, 2024.

Lombardo’s retirement from the position

of EVP of Nuclear and Technical Services, he no longer was an executive officer of the Company and his employment agreement dated April

20, 2023, was terminated effective January 1, 2024.

Lombardo remains employed by the Company at a reduced capacity, and assists with

the transition of his former responsibilities as well as contributing to certain business development matters.

to the New Employment Agreements, if the executive officer’s employment is terminated due to death, disability or for cause (as

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

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

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

year immediately preceding the date of termination.

In the event that an executive officer’s employment is terminated due to death,

the Company will also pay a lump-sum payment (the “Cash Medical Continuation Benefit”) equal to eighteen times the monthly

premium that would be required to be paid, pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),

to continue group health coverage for the executive officer’s eligible covered dependents in effect on the date of the executive

officer’s termination of employment, based on the premium for the first month of COBRA coverage.

Such cash payment will be taxable

and will be made regardless of whether the executive officer’s eligible covered dependents elect COBRA continuation coverage.

the executive officer terminates his employment for “good reason” (as defined in the agreements) or is terminated by the

Company without cause (including any such termination for “good reason” or without cause within 24 months after a Change

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

plus (b) (i) two times the performance compensation (under the executive officer’s MIP) earned with respect to the fiscal year

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

preceding the date of termination has not yet been paid, or (ii) if performance compensation earned with respect to the fiscal year immediately

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

of the performance compensation earned with respect to the fiscal year immediately preceding the date of termination, and (c) the Cash

Medical Continuation Benefit.

If the executive officer terminates his employment for a reason other than for good reason, the Company

will pay to the executive officer an amount equal to the Accrued Amounts plus any performance compensation payable pursuant to the MIP

applicable to such executive officer.

Additionally,

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

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

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

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

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

In the event an executive officer terminates

his employment for “good reason” (as defined in the agreements) or is terminated by the Company without cause, all outstanding

stock options to purchase common stock held by the officer will immediately become exercisable in full commencing on the date of termination,

with such options exercisable for the lesser of the original option term or within 60 days from the date of the executive officer’s

date of termination.

Severance benefits payable with respect to a termination (other than Accrued Amounts) shall not be payable until

the termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)).

January 19, 2023, the Board and the Compensation Committee approved individual MIP for the calendar year 2023 for each of the Company’s

executive officers.

Each MIP was effective January 1, 2023, and applicable for year 2023.

Each MIP provided guidelines for the calculation

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

The performance compensation

under each of the MIPs was based upon meeting certain of the Company’s separate target objectives during 2023.

The total potential

target performance compensation payable ranged from 25 % to 150 % of the 2023 base salary for the CEO ($ 93,717 to $ 562,304 ), 25 % to 100 %

of the 2023 base salary for the CFO ($ 76,193 to $ 304,772 ), 25 % to 100 % of the 2023 base salary for the EVP of Strategic Initiatives ($ 63,495

to $ 253,980 ), 25 % to 100 % of the 2023 base salary for the EVP of Nuclear and Technical Services ($ 76,193 to $ 304,772 ), and 25 % to 100 %

($ 65,308 to $ 261,233 ) of the 2023 base salary for the EVP of Waste Treatment Operations.

Total compensation earned under the five 2023

MIPs were approximately $ 750,000 , which is to be paid on or about 90 after year-end, or sooner, based on the Company’s filing of

its 2023 Form 10-K.

As disclosed above, Mr.

Lombardo retired from the position of EVP of Nuclear and Technical Services effective January

He is entitled to compensation earned under his 2023 MIP as EVP of Nuclear and Technical Services.

Company evaluated subsequent events and transactions that occurred after the balance sheet date through March 13, 2024, the date that

these consolidated financial statements were available to be issued.

Based upon this review, the Company did not identify any subsequent

events that would have required adjustment or disclosure in the consolidated financial statements other than the below.

January 18, 2024, the Board (with Mr.

Mark Duff and Dr.

Louis Centofanti abstaining) and the Compensation Committee approved individual

MIP for the calendar year 2024 for each of our executive officers.

Each MIP is effective January 1, 2024 and applicable for year 2024.

Each MIP provides guidelines for the calculation of annual

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

The performance compensation under each

of the MIPs is based upon meeting certain of the Company’s separate target objectives during 2023.

Assuming each target objective

is achieved under the same performance threshold range under each MIP, the total potential target performance compensation payable ranges

from 25 % to 150 % of the 2023 base salary for the CEO ($ 93,717 to $ 562,305 ), 25 % to 100 % of the 2023 base salary for the CFO ($ 76,193

to $ 304,772 ), 25 % to 100 % of the 2023 base salary for the EVP of Strategic Initiatives ($ 63,495 to $ 253,980 ), 25 % to 100 % of the 2023

base salary for the EVP of Nuclear and Technical Services ($ 76,193 to $ 304,772 ) and 25 % to 100 % ($ 65,308 to $ 261,233 ) of the 2023 base

salary for the EVP of Waste Treatment Operations.

January 19, 2023, the Company granted ISOs to certain employees for the purchase, under the Company’s 2017 Plan, of up to an aggregate

295,000 shares of the Company’s Common Stock.

The total ISOs granted included an ISO for each of the Company’s executive

officers for the purchase set forth in his respective ISO Agreement, as follows:

70,000 shares for the CEO;

40,000 shares for the CFO;

30,000 shares for the EVP of Strategic Initiatives;

30,000 shares for the EVP of Waste Treatment Operations;

and 30,000 shares for the

EVP of Nuclear and Technical Services.

Each of the ISOs granted has a contractual term of six years with one-fifth yearly vesting over

a five-year period .

The exercise price of the ISO is $ 3.95 per share, which was equal to the fair market value of the Company’s

Common Stock on the date of grant.

March 21, 2023, the Company entered into an amendment to its Revised Loan Agreement with its lender which provides, among other things,

the following:

the quarterly FCCR testing requirement for the fourth quarter of 2022 and removes the FCCR

testing requirement the first quarter of 2023;

the maximum revolving credit line under the credit facility from $ 18,000,000 to $ 12,500,000 ;

the quarterly FCCR testing requirement starting in the second quarter of 2023 using a trailing

twelve months period (with no change to the minimum 1.15:1 ratio requirement for each quarter) ;

maintenance of 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 the lender.

connection with the amendment, the Company paid its lender a fee of $ 25,000 .

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

and modification.

The performance compensation under each of the MIPs is based upon meeting certain of the Company’s separate target

objectives during 2024.

The total potential target performance compensation payable ranges from 25 % to 150 % of the 2024 base salary for

the CEO ($ 104,287 to $ 625,733 ), 29 % to 100 % of the 2024 base salary for the CFO ($ 95,681 to $ 332,811 ), 25 % to 100 % of the 2024 base salary

for the EVP of Strategic Initiatives ($ 69,337 to $ 277,346 ), and 25 % to 100 % ($ 71,317 to $ 285,267 ) of the 2024 base salary for the EVP

of Waste Treatment Operations.

discussed in “Note 14 – Commitment and Contingencies - Perma-Fix Canada Inc.

(“PF Canada”),” the Company’s subsidiary, PF Canada.

has unpaid receivables due from CNL for a previous TOA that PF Canada entered into with CNL in May 2019 for remediation work within Ontario,

Canada in which a settlement agreement on the payment of the receivables by CNL was reached, subject to certain conditions/terms precedents

being met, including release of certain liens.

On January 22, 2024, the Company received approximately $ 741,000 of the $ 2,389,000 in

unpaid receivables, with the remaining receivables to be paid by CNL upon completion of the settlement conditions/terms, which the Company

believes should occur during 2024.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data