What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-13 compared with 2024-03-13 · 944 added, 940 removed, 764 unchanged (71% of the section changed)

STATEMENTS AND SUPPLEMENTARY DATA

to Consolidated Financial Statements

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Financial Statements

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Consolidated Statements of Operations for the years ended December 31, 2024, and 2023

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

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2024, and 2023

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, and 2023

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have audited the accompanying consolidated balance sheets of Perma-Fix Environmental Services, Inc.

(a Delaware corporation) and

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

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

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

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and

its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

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.

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

(a Delaware corporation) and subsidiaries

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss)

income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended,

in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated 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.

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

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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

of deferred tax assets

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 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, 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

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

consistency with external market and industry data

consistency with evidence obtained in other areas of the audit

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.

Fixed Price Service Revenue

described further in Note 2 to the financial statements, the Company recognizes revenue over time using an input measure of progress

for certain fixed priced service arrangements.

Under this method, revenue is recorded proportionally based on

project costs incurred relative to the estimated total project costs.

Auditing the Company’s in-process fixed price

arrangements was complex given the judgment required in determining the estimated total project costs.

We identified the estimated

total project costs for in-process fixed price service arrangements as a critical audit matter.

principal consideration for our determination that the estimated total project costs for in-process fixed price service arrangements

at year-end is a critical audit matter is due to management’s significant judgments when determining such estimated total project

Auditing the estimate of total project costs requires a high degree of auditor judgment and increased audit effort due to the

judgement involved in management’s estimation of total project costs, which impacts revenue recognition.

audit procedures related to the estimated total project costs for in-process fixed price service arrangements included the following,

among others.

obtained an understanding of how management ensures the estimated total project costs of

in-process fixed price service arrangements are complete and accurate at year-end.

a sample of in-process fixed fee arrangements, we obtained and tested the underlying assumptions

used by the Company to develop the estimate of total project costs at year-end.

evaluating management’s estimation process, we performed a retrospective review by

assessing prior estimates against actual outcomes.

GRANT THORNTON LLP

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Current assets:

receivable, net of allowance for credit losses of $ 30

Accounts receivable, net

of allowance for credit losses of $ 202 and $ 30 ,

Unbilled receivables

Prepaid and other assets

assets related to discontinued operations

Current assets related

to discontinued operations

Total current assets

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for Share and per Share Amounts)

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

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Accrued closure costs -

Current portion of long

Current portion of long-term

Current portion of operating

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Accrued closure costs

Long-term debt, less current portion

Long-term operating lease liabilities, less

current portion

Long-term finance lease liabilities, less current

Long-term liabilities

related to discontinued operations

Long-term debt, less current

Long-term operating lease

liabilities, less current portion

Long-term finance lease

liabilities, less current portion

liabilities related to discontinued operations

long-term liabilities

Total liabilities

Commitments and Contingencies (Note 14 )

Commitments and Contingencies

Stockholders’ Equity:

Preferred Stock, $ .001 par value;

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;

Preferred Stock, $ .001

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

Common Stock, $ .001 par

30,000,000 shares authorized;

18,384,879 and 13,654,201 shares issued, respectively;

13,646,559 and 13,324,756 shares outstanding, respectively

18,377,237 and 13,646,559 shares outstanding,

Additional paid-in capital

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for Per Share Amounts)

Cost of goods sold

Selling, general and administrative expenses

of goods sold

Selling, general and administrative

Research and development

Loss on disposal of

property and equipment

Income (loss) from operations

on disposal of property and equipment

(Loss) income from operations

Other income (expense):

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Interest expense

Interest expense-financing fees

Other (Note 10)

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

Interest expense-financing

(Loss) income from continuing

operations before taxes

(Loss) income from continuing

operations, net of taxes

from discontinued operations (Note 8)

(loss) income

Net income (loss) per

common share - basic and diluted:

Continuing operations

Discontinued operations

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:

Weighted average number

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

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

ENVIRONMENTAL SERVICES, INC.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

the years ended December 31,

in Thousands)

Other comprehensive income (loss):

(Amounts in Thousands)

Other comprehensive (loss) income:

currency translation adjustments

Total other comprehensive

income (loss)

Comprehensive income

(loss) income

Comprehensive (loss)

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

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in Thousands, Except for Share Amounts)

Stock Held In

Accumulated Other

Comprehensive

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Stock-Based Compensation

Issuance of Common Stock

upon exercise of options

Issuance of Common Stock upon exercise of options

Issuance of Common Stock upon exercise of warrant

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

Common Stock upon exercise of warrant

of Common Stock, net of offering costs (Note 17)

Issuance of warrants from sale of Common Stock (Note 17)

Balance at December

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Cash flows from operating activities:

Net income (loss)

Net (loss) income

loss on discontinued

operations (Note 8)

Income (loss) income from

continuing operations

(Loss) income from continuing

Adjustments to reconcile

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

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

Depreciation and amortization

Amortization of debt issuance

Deferred tax benefit

Provision for (recovery

of) credit losses on accounts receivable

Deferred tax expense (benefit)

Provision for credit losses

on accounts receivable

Loss on disposal of property

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payable, accrued expenses and unearned revenue

Cash provided by continuing

Cash (used in) provided

by continuing operations

used in discontinued operations

Cash provided by (used

in) operating activities

Cash (used in) provided

by operating activities

Cash flows from investing activities:

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equipment (net of financed amount)

Addition to permits and

other intangible assets

from sale of property and equipment

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activities of continuing operations

used in discontined operations

Cash used in investing activities

Cash flows from financing activities:

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Proceeds from long term

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

debt (Term Loan 2)

Proceeds from sale of Common

Stock, net of offering costs paid (Note 17)

Principal repayment of

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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

Cash provided by 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)

Increase 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

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SEGMENT, which includes:

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

waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities;

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

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

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

four uniquely licensed and permitted treatment and storage facilities;

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

problematic waste streams.

SEGMENT, which includes:

services, which include:

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

○ professional

radiological measurement and site survey of large government and commercial installations

using advanced methods, technology and engineering;

Occupational Safety and Health services including IH assessments;

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

asbestos management/abatement oversight;

indoor air quality evaluations;

hazardous materials surveys,

e.g., exposure monitoring;

lead and asbestos management/abatement oversight;

indoor air quality

health risk and exposure assessments;

health & safety

plan/program development, compliance auditing and training services;

health & safety plan/program development,

compliance auditing and training services;

and OSHA citation assistance;

technical services providing consulting, engineering, project management, waste management, environmental, and D&D field, technical,

and management personnel and services to commercial and government customers;

technical services providing consulting, engineering, project management, waste management,

environmental, and D&D field, technical, and management personnel and services to commercial

and government customers;

waste management services to commercial and governmental customers.

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○ technology-based

services including engineering, D&D, specialty services and construction, logistics, transportation, processing and disposal;

of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites.

services including engineering, D&D, specialty services and construction, logistics,

transportation, processing and disposal;

○ remediation

of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy

Such services capability includes:

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partial and total plant D&D;

facility decontamination, dismantling, demolition,

and planning;

facility decontamination, dismantling, demolition, and planning;

site restoration;

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and emergency response;

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

physics, IH and customized NEOSH instrumentation.

Company’s continuing operations consist of the operations of our subsidiaries/facilities as follow:

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

calibrates, and sources (i.e., rental) health physics, IH and customized NEOSH instrumentation.

Company’s continuing operations consist of the operations of its subsidiaries/facilities as follow:

Diversified Scientific Services,

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

Company’s continuing operations also consisted of Perma-Fix ERRG, a variable interest entity (“VIE”) for which we were

the primary beneficiary.

The VIE was an unpopulated joint venture (“JV”) entered between the Company and Engineering/Remediation

Resources Group, Inc.

(“ERRG”) for a specific project under the Services Segment in which the Company and ERRG had a 51 %

and 49 % partnership interest in the joint venture, respectively.

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

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 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 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 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.

Company’s cash flow requirements during the twelve-months ended December 31, 2024, were primarily financed by its Liquidity (defined

as borrowing availability under the revolving credit plus cash in its Money Market Deposit Account (“MMDA”) maintained with

its lender) under its Credit Facility.

The Company’s Liquidity included net proceeds of approximately $ 41,664,000 received from

the sales of an aggregate 4,581,282 shares of its Common Stock pursuant to certain Securities Purchase and Underwriting Agreements executed

in May 2024 and December 2024 (see “Note 17 – Sales of Common Stock” for a discussion of these offerings).

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, R&D on its PFAS technology and capital expenditures (which include its PFAS technology).

The Company plans to fund these requirements from its operations and Liquidity under its Credit Facility.

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.

As of December 31, 2024, the Company had no outstanding borrowing under its revolving credit and Liquidity

under its Credit Facility was approximately $ 33,905,000 .

The Company believes that its cash flows from operations and Liquidity should

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

If the Company continues to incur losses, this could cause a reduction

in its Liquidity.

Reclassification

Certain amounts in “Note 12 – Income taxes” for the year ended December 31, 2023, have been reclassified to conform

with current presentation.

The reclassification had no effect on the consolidated statements of operations, balance sheets and stockholders’

Immaterial Correction of an Error

The Company reclassified $ 324,000 of cash outlay for permits and other

intangible assets, which was included in “Prepaid expenses, inventories and other assets” within cash provided by operating

activities to cash used in investing activities for the year ended December 31, 2023, in its consolidated statement of cash flows.

correction of an error was immaterial and had no effect on the consolidated statements of operations, balance sheets and stockholders’

OF SIGNIFICANT ACCOUNTING POLICIES

of Consolidation

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.

which may require estimates of future cash flows and assumptions that affect the reported amounts of assets and liabilities and disclosures

of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses

during the reporting period.

Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.

and Finite Risk Sinking Fund (Restricted Cash)

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

consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States

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

All intercompany accounts and transactions have been eliminated in consolidation.

Company prepares financial statements in conformity with U.S.

GAAP, which may require estimates of future cash flows and assumptions

that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial

statements, as well as the reported amounts of revenues and expenses during the reporting period.

Due to the inherent uncertainty involved

in making estimates, actual results could differ from those estimates.

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

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

Credit is extended to customers based on an evaluation of a customer’s

financial condition and, generally, collateral is not required.

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

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The write off process involves

approvals from senior management based on required approval thresholds.

approvals from management based on required approval thresholds.

following table sets forth the activity in the allowance for credit losses for the years ended December 31, 2024, and 2023 (in thousands):

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Ended December 31,

Allowance for credit losses - beginning

Provision charges (Recovery of)

Allowance for credit

losses - end of year

for credit losses - beginning of year

Provision charges

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 complexity of the documentation that is required for invoicing, as well as the difference between completion of revenue recognition

milestones and agreed upon invoicing terms, which results in unbilled receivables.

The timing differences occur for several reasons which

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”) for which work has been performed

and collection of revenue is reasonably assured.

consist of treatment chemicals, saleable used oils, and certain supplies.

Additionally, the Company has replacement parts in inventory,

which are deemed critical to the operating equipment and may also have extended lead times should the part fail and need to be replaced.

Inventories are valued at the lower of cost or net realizable value with cost determined by the first-in, first-out method.

and agreed upon invoicing terms, which could result in unbilled receivables.

The timing differences occur for several reasons which include,

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, based on the executed

contract, have not yet been met and/or 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.

consist of treatment chemicals and certain supplies.

Additionally, the Company has replacement parts in inventory, which are deemed critical

to the operating equipment and may also have extended lead times should the part fail and need to be replaced.

Inventories are valued

at the lower of cost or net realizable value with cost determined by the first-in, first-out method.

and Transportation Costs

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Current market prices for

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

transportation and disposal costs are applied to the end of period waste inventories to estimate the transportation and disposal accruals.

and Equipment

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the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.

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.

Lease classifications, recognition,

and measurement are then determined at the lease commencement date.

expense totaled approximately $ 1,646,000 and $ 2,370,000 in 2024 and 2023, 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 include primarily leases for

office and warehouse spaces used to conduct our business.

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.

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

in the lease agreements or implicitly determined from available terms in the lease agreements.

As of December 31, 2024, the Company’s operating leases have remaining

terms of approximately one to five 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.

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.

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

The Company’s finance

leases have remaining terms of approximately one to five years.

See “Property and Equipment” above for assets recorded under

financed leases.

Borrowing rates for our finance leases are either explicitly stated in the lease agreements or implicitly determined

from available terms in the lease agreements.

Company adopted the policy to not recognize ROU assets and liabilities for short term leases.

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that the carrying value may be impaired.

If the fair value of the asset is less than the carrying amount, a quantitative test is performed

to determine the fair value.

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

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

of customer relationships which are amortized using an accelerated method) and are excluded from our annual intangible asset valuation

review as of October 1.

Definite-lived intangible assets are also tested for impairment whenever events or changes in circumstances suggest

impairment might exist.

Research and Development (“R&D”)

The Company performs a quantitative test to determine if the fair value of the assets is less

than the carrying value.

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

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 rates.

testing of our indefinite-lived permits related to our Treatment reporting unit as of October 1, 2024, and 2023 resulted in no impairment

assets that have definite useful lives are amortized using the straight-line method over the estimated useful lives and are excluded

from our annual intangible asset valuation review as of October 1.

Definite-lived intangible assets are tested for impairment whenever

events or changes in circumstances suggest impairment might exist.

and Development (“R&D”)

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

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benefits, laboratory costs, third party fees, and other related costs associated with the development and enhancement of new potential

waste treatment processes and new technology and are charged to expense when incurred in accordance with ASC Topic 730, “Research

and Development.”

waste treatment processes and new technology and are charged to expense when incurred in accordance with Accounting Standards Codification

(“ASC”) Topic 730, “Research and Development.”

Closure Costs and Asset Retirement Obligations (“ARO”)

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in stockholders’ equity.

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

of Operations.

Gains and losses resulting from foreign currency transactions, which are immaterial, are recognized in

the Consolidated Statements of Operations.

Concentration

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.

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

to federal government entities or directly as a prime contractor, representing approximately $ 40,550,000 , or 68.6 %, of our total revenue

during 2024, as compared to 68,595,000 or 76.4 %, of our total revenue during 2023.

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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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.

Company had two government related customers whose total unbilled and net outstanding receivable balances represented 14.3 % and 11.5 %

% of the Company’s total consolidated unbilled and net accounts receivable as of December 31, 2024.

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.

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 as of December 31, 2023.

Recognition and Related Policies

Company recognizes revenue in accordance with FASB’s ASC 606, “Revenue from Contracts with Customers.” ASC 606 provides

a single, comprehensive revenue recognition model for all contracts with customers.

Under ASC 606, a five-step process is utilized in

order to determine revenue recognition, depicting the transfer of goods or services to a customer at an amount that reflects the consideration

Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” ASC 606 provides a single,

comprehensive revenue recognition model for all contracts with customers.

Under ASC 606, a five-step process is utilized in order to

determine revenue recognition, depicting the transfer of goods or services to a customer at an amount that reflects the consideration

it expects to receive in exchange for those goods or services.

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Segment Revenues:

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

separately identifiable in the contract and, therefore, not distinct.

Performance obligations are generally satisfied over time using

the input method.

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

from 9.0 % to 33 %), treatment/processing (ranging from 40 % to 87 %) and shipment/final disposal (ranging from 2.0 % to 27 %).

As major processing

phases are completed and the costs are incurred, the proportional percentage of revenue is recognized.

Transaction price for Treatment

Segment contracts are determined by the stated fixed rate per unit price as stipulated in the contract.

Company periodically enter into arrangements with customers for transportation of wastes to either our facility or to non-company owned

Contracts in our Treatment Segment primarily have a single performance obligation as the promise to receive, treat and dispose of waste

is not separately identifiable in the contract and, therefore, not distinct.

Revenue for Treatment Segment performance obligations are

generally satisfied over time using the input method.

For the input method, revenue is recognized based on the costs incurred.

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

Some of our contracts have multiple performance obligations, most commonly when we provide additional services to the customer under a

waste treatment contract.

For contract with multiple performance obligations, the contract’s transaction price is allocated to each

performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

we use the observable selling prices from an observable price list, but when a price list is not available, the standalone selling price

is determined by the cost plus margin approach.

Company periodically enters into arrangements with customers for transportation of wastes to either our facility or to non-company owned

disposal sites.

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

Transaction price is estimated based

upon the estimated cost to complete the overall project.

Revenue from fixed price contracts is recognized over time primarily using the

input method.

For the input method, revenue is recognized based on costs incurred on the project relative to the total estimated costs

of the project.

Transaction price is determined based

on fixed price outline within the contract.

Revenue from fixed price contracts is recognized over time primarily using the input method.

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

discussed above for the Treatment and Services Segments, the Company’ revenue is generally recognized using the input method.

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

award, the expected term, the expected volatility of our stock over the stock-based award’s expected term, the risk-free interest

rate over the award’s expected term, and the expected annual dividend yield.

The Company accounts for forfeitures when they occur.

award, the expected term, the expected volatility of the Company’s stock over the stock-based award’s expected term, the

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

The Company accounts for forfeitures

when they occur.

Comprehensive

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

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 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.

As of December 31, 2024, and

December 31, 2023, 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 –Adopted

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

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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.

The Company adopted ASU 2023-07 during

the fourth quarter of 2024.

ASU 2023-07 only impacted the Company’s disclosures related to segment reporting and did not have impact

on the Company’s consolidated financial condition or results of operations (see “Note 16 – Segment Reporting”

for disclosure in connection with the adoption of ASU 2023-07).

Issued Accounting Standards – Not Yet Adopted

November 2024, the FASB issued ASU 2024-03, “Income Statement— Reporting Comprehensive Income—Expense Disaggregation

Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses,” which enhances the disclosures required for certain

expense captions in the Company’s annual and interim consolidated financial statements.

ASU 2024-03 is effective prospectively

or retrospectively for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

adoption is permitted.

The Company is currently evaluating the impact of this standard on its disclosures.

December 2023, the FASB issued Accounting Standards Update No.

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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.

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).

ASU 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.

The adoption of this ASU will result in additional disclosures but will not impact the Company’s consolidated

financial statements.

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;

however, the Company does not expect it will have a material impact on its consolidated financial statements.

Disaggregation

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

by Contract Type

OF DISAGGREGATION OF REVENUE

Revenue by Contract Type

(In thousands)

Time and materials

Revenue by generator

(In thousands)

Domestic government

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Foreign commercial

timing of revenue recognition and billings results in unbilled receivables (contract assets).

timing of revenue recognition and billings can result in unbilled receivables (contract assets).

The Company’s contract liabilities

consist of deferred revenues which represent advance payment from customers in advance of the completion of our performance obligation.

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

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.

consist of deferred revenues which represent advance payment from customers in advance of the completion of the Company’s performance

The following table represents changes in our contract asset and contract liabilities balances for the periods noted:

OF CONTRACT BALANCES

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Deferred revenue

reduction in unbilled receivables from 2023 to 2024 was primarily due to invoicing in 2024 of two large Services Segment projects that

were primarily completed by the end of 2023.

(In thousands)

Contract assets

Unbilled receivables - current

Contract liabilities

Deferred revenue

increase in unbilled receivables from 2022 to 2023 resulted primarily from a large Services Segment project which was completed primarily

by the end of 2023 and invoiced in 2024 as discussed above.

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 was completed in 2024.

the twelve-months ended December 31, 2024, and 2023, the Company recognized revenue of $ 5,887,000 and $ 6,759,000 , respectively, related

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relates to performance obligations satisfied within the respective period.

following table represents changes in accounts receivable, net of credit losses, for the periods noted:

SCHEDULE OF CHANGES IN ACCOUNTS RECEIVABLE, NET OF CREDIT LOSSES

(In thousands)

Accounts Receivable (net)

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

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Amortization of ROU assets

on lease liability

Interest on lease liability

Finance lease

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Total lease cost

weighted average remaining lease term and the weighted average discount rate for operating and finance leases at December 31, 2023, were:

SCHEDULE OF WEIGHTED AVERAGE LEASE

weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of December 31, 2024,

OF WEIGHTED AVERAGE LEASE

Operating Leases

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Weighted average discount rate

weighted average remaining lease term and the weighted average discount rate for operating and finance leases at December 31, 2022, were:

weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of December 31, 2023,

Operating Leases

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and thereafter

Total undiscounted lease payments

Total undiscounted lease

Imputed interest

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

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

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

SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES

Twelve Months Ended December

OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES

Twelve Months Ended December 31,

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

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:

Finance liabilities

Operating liabilities

Reduction to ROU assets resulting from purchase of underlying asset:

Operating liabilities

Reduction to ROU assets resulting from purchase

of underlying asset, Operating liabilities

reduction in ROU asset resulted from the purchase by the Company in July 2024 of the property where its EWOC facility conducts its waste

treatment operations.

The Company previously leased this property which was included within its operating leases (see “Note 9 –

Long Term Debt” for a discussion of the purchase of this property by the Company).

AND OTHER INTANGIBLE ASSETS

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

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

OF INTANGIBLE ASSETS

Permit (amount in thousands)

Balance as of December 31, 2021

Balance as of December 31, 2022

Balance as of December 31, 2023

(amount in thousands)

as of December 31, 2022

as of December 31, 2023

as of December 31, 2024

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

SCHEDULE OF DEFINITE LIVED INTANGIBLE ASSETS

Weighted Average

Amortization Period

Other Intangibles (amount in

Customer relationships

intangible assets noted above were amortized on a straight-line basis over their useful lives with the exception of customer relationships

which were amortized using an accelerated method.

December 31, 2024

December 31, 2023

Average Amortization

Intangibles (amount in thousands)

intangible assets noted above were amortized on a straight-line basis over their useful lives.

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

SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

expense recorded for definite-lived intangible assets was approximately $ 117,000 and $ 198,000 , for the years ended December 31, 2024,

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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).

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

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

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 Board.

The number of shares issued to each Eligible Director is determined based on 75% of the market value as defined

in the plan (the Company recognizes 100% of the market value of the shares issued).

As of December 31, 2024, the 2003 Plan had available

for issuance 204,133 shares.

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

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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.

an aggregate grant of 1,740,000 NQSOs and Incentive Stock Options (“ISOs”).

Consultants of the Company can only be granted

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.

As of December 31, 2024, the 2017 Plan had available for issuance 684,000 shares.

Options to Employees and Outside Director

January 18, 2024, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate of 45,000

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 $ 7.75 per share, which was equal to the fair market value of the Company’s

Common Stock on the date of grant.

July 18, 2024, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate of 35,500 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 $ 10.05 per share, which was equal to the fair market value of the Company’s Common Stock

on the date of grant.

July 18, 2024, the Company issued a NQSO to each of the Company’s seven reelected outside (non-management) directors for the purchase,

under the Company’s 2003 Outside Directors Stock Plan (the “2003 Plan”), of up to 10,000 shares of the Company’s

Common Stock.

Louis Centofanti and Mark Duff, 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 $ 10.20 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.

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

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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.

2024, the Company issued an aggregate 38,749 shares of its Common Stock from cashless exercises of options for the purchase of 64,000

shares of the Company’s Common Stock ranging from $ 3.15 per share to $ 7.005 per share.

Additionally, the Company issued 33,700

shares of its Common Stock from the cash exercises of options for the purchase of 33,700 shares of the Company’s Common Stock,

at exercise prices ranging from $ 3.70 per share to $ 7.005 per share, resulting in proceeds of approximately $ 187,000 .

Income tax benefit

associated with stock options exercised with cash during 2024 was approximately $ 17,000 .

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

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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

the Company’s Common Stock at $ 3.97 per share.

Additionally, the Company issued 2,400 shares of its Common Stock from the exercise

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

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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Stock Options Granted

Weighted-average fair value per share

Risk -free interest rate (1)

Weighted-average

fair value per share

-free interest rate (1)

4.04 %- 4.11 %

Expected volatility of stock

3.48 %- 4.98 %

Dividend yield (3)

Expected option life (years)

volatility of stock (2)

59.07 %- 59.10 %

55.19 %- 58.78 %

option life (years) (4)

Director Stock Options Granted

Weighted-average fair value per share

Risk -free interest rate (1)

Expected volatility of stock

Dividend yield (3)

Expected option life (years)

(1) The risk-free interest

rate is based on the U.S.

Weighted-average

fair value per share

-free interest rate (1)

volatility of stock (2)

option life (years) (4)

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.

expected volatility is based on historical volatility from the Company’s traded Common Stock over the expected term of 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.

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 2024 and 2023.

OF SHARE-BASED COMPENSATION, ALLOCATION OF RECOGNIZED PERIOD COSTS

Employee Stock Options

Director Stock Options

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

Stock Options

tax benefits associated with stock-based compensation expense were approximately $ 71,000 and $ 45,000 , respectively, for the years ended

3 unchanged sentences

The weighted average period over which the unrecognized compensation costs are expected to be recognized is approximately

Options to Consultant

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

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Intrinsic Value (4)

Options outstanding January 1, 2023

Forfeited/expired

Options outstanding end

of period (1)

Options exercisable at

December 31, 2023 (2)

outstanding January 1, 2024

outstanding end of period (1)

exercisable at December 31, 2024 (2)

Average Exercise Price

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Intrinsic Value (4)

Options outstanding January 1, 2022

outstanding January 1, 2023

Forfeited/expired

Options outstanding end

of period (3)

Options exercisable at

December 31, 2022 (3)

outstanding end of period (2)

exercisable at December 31, 2023 (3)

with exercise prices ranging from $ 3.15 to $ 10.20

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with exercise prices ranging from $ 3.15 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

The 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, 2024, and changes during the period then ended are presented as follows:

OF NON VESTED OPTIONS

Weighted Average

Non-vested options January 1, 2023

Non-vested options at December 31, 2023

options January 1, 2024

options at December 31, 2024

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

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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

One of the Warrant was exercised in the fourth

quarter of 2023 and the remaining Warrant was exercised in the first quarter of 2024.

Proceeds received by the Company was approximately

$ 105,000 for each of the Warrants exercised.

connection with the Company’s sales of its Common Stock in May 2024 and December 2024, the Company issued warrants to purchase

an aggregate 188,038 shares of its Common Stock at exercise prices of $ 11.50 and $ 12.19 per share (see “Note 17 – Sales of

Common Stock” for a discussion of these warrants).

These warrants remained outstanding as of December 31, 2024.

Stock Issued for Services

Company issued a total of 65,854 and 90,920 shares of our Common Stock in 2023 and 2022, respectively, under our 2003 Plan to our outside

directors as compensation for serving on our Board.

As a member of the Board, each director elects to receive either 65% or 100% of the

director’s fee in shares of our Common Stock.

The number of shares received is calculated based on 75% of the fair market value

of our Common Stock determined on the business day immediately preceding the date that the quarterly fee is due.

The balance of each

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

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

Company issued a total of 46,947 and 65,854 shares of its Common Stock in 2024 and 2023, respectively, under the Company’s 2003

Plan to its outside directors as compensation for serving on its Board.

As a member of the Board, each director elects to receive either

65% or 100% of the director’s fee in shares of the Company’s Common Stock.

The number of shares received is calculated based

on 75% of the fair market value of our Common Stock determined on the business day immediately preceding the date that the quarterly

The balance of each director’s fee, if any, is payable in cash.

The Company recorded approximately $ 480,000 and $ 477,000

in years ended 2024 and 2023, respectively, in compensation expense (included in SG&A expenses) for the portion of director fees

earned in the Company’s Common Stock.

of December 31, 2024, the Company has reserved approximately 1,000,900 shares of its 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:

INCOME PER SHARE

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

in Thousands, Except for Per Share Amounts)

income per common share from continuing operations

income from continuing operations, net of taxes

(loss) income per share

per common share from discontinued operations,

from discontinued operations, net of taxes

loss per share

(loss) income per common share

(loss) income

(loss) income per share

average shares outstanding:

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:

Stock options

weighted average shares outstanding

For year ended December 31, 2024, 983,267 weighted average shares of common stock underlying options and warrants were excluded from the

computation of diluted EPS because the effect would be anti-dilutive.

For the year ended December 31, 2023, 32,658 weighted average shares of common stock underlying options were excluded from the computation

of diluted EPS because the effect would be anti-dilutive.

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

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$ 117,000 ) for the years ended December 31, 2024 and 2023, respectively.

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.

June 1, 2024, the Company’s PFSG subsidiary entered into a lease agreement with a tenant leasing a portion of the PFSG property.

The lease is for a two-years term and requires monthly payment by the lessee of approximately $ 8,500 for the first year and approximately

$ 8,755 for the second year.

The lessee is responsible for all expenses relating to the permitted usage of the property, including all

utilities, a portion of the annual real estate taxes and is responsible for maintaining insurance coverage, among other things.

following table presents the major class of assets of discontinued operations as of December 31, 2024, and December 31, 2023.

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SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATION BALANCE SHEET

(Amounts in Thousands)

in Thousands)

current assets

Total current assets

Long-term assets

plant and equipment, net (1)

long-term assets

expenses and other liabilities

Environmental

current liabilities

Accounts payable

Accrued expenses and other liabilities

Environmental liabilities

Total current liabilities

Long-term liabilities

Closure liabilities

Environmental liabilities

Environmental

long-term liabilities

(1) net of accumulated

depreciation of $ 10,000 for each period presented.

of accumulated depreciation of $ 10,000 for each period presented.

Environmental

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December 31, 2023 balance of $ 845,000 .

The decrease represents payments for remediation projects.

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

the total accrued environmental liabilities was recorded as current.

The decrease represents payments for our PFSG remediation project.

As of December 31, 2024, $ 1,000

of the total accrued environmental liabilities was recorded as current.

current and long-term accrued environmental liabilities as of December 31, 2024, are summarized as follows (in thousands).

SCHEDULE OF CURRENT AND LONG TERM ACCRUED ENVIRONMENTAL LIABILITY

Total liability

debt consists of the following as of December 31, 2024, and December 31, 2023:

SCHEDULE OF LONG TERM DEBT

(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.

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 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 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

in Thousands)

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 rates for 2024 and 2023 were 10.5% and 9.7%, respectively (1)

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 rates for 2024 and 2023 were 10.5 % and 9.7 %, respectively (1)

Loan 1 dated May 8, 2020, payable in equal monthly installments of principal, balance due on May 15, 2027 .

Effective interest

rates for 2024 and 2023 were 9.5 % and 9.2 %, respectively (1)

Loan 2 dated July 31, 2023, payable in equal monthly installments of principal, balance due on May 15, 2027 .

Effective interest

rates for 2024 and 2023 were 9.3 % and 9.9 %, respectively (1)

Loan dated May 4, 2021, payable in equal monthly installments of principal, balance due on May 15, 2027 .

Effective interest rates

for 2024 and 2023 were were 8.7 % and 8.6 %, respectively (1)

Issuance Costs

Payable up to 2044, with annual interest rates ranging from 8.10 % to 10.7 % (3)

current portion of long-term debt

(1) Our revolving credit

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(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.

debt issuance costs in connection with the Company’s Credit Facility, which consists of the revolving credit, Terms Loans and Capital

Loan, as applicable.

(3) Includes a promissory

note entered into on July 24, 2024, in connection with the purchase of the Company’s EWOC property.

See a discussion of this note

below which include a variable interest rate provision.

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” and “lender”), acting as agent and lender.

Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, which has since

been amended from time to time, 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”),

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 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

The Loan Agreement provides the Company with a credit facility with a maturity date of May 15, 2027

(the “Credit Facility”) as follows:

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

capacity is subject to eligible receivables (as defined) and reduced by outstanding standby letters of credit ($ 3,200,000 as of December

31, 2024) and borrowing reductions that the Company’s lender may impose from time to time ($ 750,000 as of December 31, 2024);

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

off by the Company in June 2024);

and (d) a capital expenditure loan (“Capital Loan”) of approximately $ 524,000 , requiring monthly installments of principal

of approximately $ 8,700 plus interest that commenced on June 1, 2022.

to the Loan Agreement, payments of annual interest rates are as follows:

(i) interest due on the revolving credit is at prime (7.50%

at December 31, 2024) plus 2% or Secured Overnight Finance Rate (“SOFR”) (as defined in the Loan Agreement) 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,

(ii) interest due on each Term Loan 1 and the Capital Loan

was/is at prime plus 2.50% or SOFR plus 3.50% plus an SOFR Adjustment applicable for an interest period selected by the Company;

(iii) interest due on Term Loan 2 is at prime plus 3% or SOFR plus 4.00% 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.

Company agreed to pay PNC 0.5% of the total financing under the Loan Agreement if the Company pays off its obligations to its lender

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 after July 31, 2025.

May 8, 2024, and November 12, 2024, the Company entered into amendments to its Loan Agreement with its lender which provided the following,

among other things:

the quarterly Fixed Charge Coverage Ratio (“FCCR”) testing requirement for the first, second and third quarters of 2024;

reinstated the quarterly FCCR testing requirement starting in the fourth quarter of 2024, and revises the methodology to be used in calculating

the FCCR as follows (with no change to the minimum 1.15:1 ratio requirement):

FCCR for the fourth quarter is to be determined based on

financial results for the three-months period ending December 31, 2024;

FCCR for the first quarter of 2025 is to be determined based on

financial results for the six-months period ending March 31, 2025;

FCCR for the second quarter of 2025 is to be determined based on financial

results for the nine-months period ending June 30, 2025;

and FCCR for the third quarter of 2025 and each fiscal quarter thereafter is

to be determined based on financial results for a trailing twelve-months period ending basis;

maintenance of a minimum of $ 3,000,000

in daily Liquidity (defined as borrowing availability under the revolving credit plus cash in the MMDA maintained with the

Company’s lender) starting June 30, 2024, through September 29, 2025 (which we have met to date);

the event the Company is able to achieve its minimum quarterly FCCR requirement utilizing its financial results based on a trailing twelve-months

period starting with the quarter ended September 30, 2024 (which the Company did not achieve as of December 31, 2024), the maintenance

of a minimum of $ 3,000,000 in daily Liquidity requirement as discussed above will be removed.

Any subsequent fiscal quarter testing

of the FCCR will revert back to a trailing twelve-months period method.

connection with the amendments, the Company paid its lender fees totaling $ 37,500 which is being amortized over the remaining term of

the Loan Agreement as interest expense-financing fees.

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

5 unchanged sentences

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.

The Company was not required to perform testing of its FCCR requirement for

the first, second and third quarters of 2024 pursuant to the amendments dated May 8, 2024, and November 12, 2024, to its Loan Agreement

as discussed above.

The Company was also not required to perform testing of its FCCR requirement for the fourth quarter of 2024 pursuant

to the amendment dated March 11, 2025, to its Loan Agreement, as amended (See “Note 18 – Subsequent Events – Credit

Facility” for a discussion of this amendment which removed the testing requirement of the FCCR for the fourth quarter of 2024,

among other things).

Otherwise, the Company met all of its other financial covenant requirements in each of the quarters in 2024.

of December 31, 2024, the Company had no outstanding borrowing under its revolving credit and its Liquidity under the Credit Facility

was approximately $ 33,905,000 .

Promissory Note

July 24, 2024, the Company purchased the property which its EWOC facility operates on pursuant to a Purchase and Sales Agreement dated

April 30, 2024, for a purchase price of $ 425,000 .

The Company paid $ 63,750 in cash and entered into a promissory note dated July 24,

2024, in an amount of $ 361,250 with a bank (the “lender”) for the remaining balance of the purchase price, with a maturity

date in twenty years or July 24, 2044 (the “Note”).

For the first five years starting August 24, 2024, monthly payments under

the Note will consists of approximately $ 3,100 which include an annual fixed interest rate of 8.10 %.

Monthly payments under the Note

will then be adjusted at the end of years five, ten and fifteen, with interest calculated based on the weekly average five-year US Treasury

Securities Rate plus 3.0 %.

Under no circumstances will the variable interest rates on the Note be less than 4.0 % per annum or more than

(except in the case of default) the lesser of 20.5 % per annum or the maximum rate allowed by applicable law.

The Company agreed to pay

the lender 3.0 % of the total outstanding principal balance under the Note in the event the Company pays off its obligations during the

first year of the Note.

The prepayment penalty rate will be reduced by 1.0 % at each subsequent annual anniversary of the Note.

No prepayment

penalty will apply in the event the Company pays off the Note on the fourth anniversary of the Note or thereafter.

The property was previously

accounted for under the Company’s operating leases.

of Long-Term Debt

following table details the amount of the maturities of long-term debt maturing in future years as of December 31, 2024 (excludes unamortized

3 unchanged sentences

(In thousands)

RETENTION CREDIT (“ERC”)

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

filings claiming a refund from the U.S.

Treasury in the amount of approximately $ 1,975,000 .

As there is no authoritative guidance under

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 .

2030 and beyond

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

4 unchanged sentences

Insurance payable

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.

Total accrued expenses

CLOSURE COSTS AND ARO

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Accretion expense

Addition to closure liability

Balance as of December 31, 2023

1 unchanged sentence

Balance as of December 31, 2024

2022, the Company recorded a total of approximately $ 1,339,000 in additional estimated closure liabilities of which approximately $ 465,000

(within long-term) was recorded in connection with the footprint expansion at one of our facilities and an update to a processing enclosure

area at another facility.

The remaining additional closure liabilities was recorded for our EWOC facility for decommissioning activities

due to changes in estimated closure costs.

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

as of December 31, 2023, and 2022 with the following activity for the years ended December 31, 2023, and 2022:

of December 31, 2024, and 2023, the current portion of the closure liabilities totaled approximately $ 50,000 and $ 79,000 , respectively,

which reflect closure liabilities for our EWOC facility.

The spending made in each of the years 2024 and 2023 was primarily for our EWOC

The reported closure asset or ARO, is reported

as a component of “Net Property and equipment” in the Consolidated Balance Sheets as of December 31, 2024, and 2023 with

the following activity for the years ended December 31, 2024, and 2023:

OF ASSET RETIREMENT OBLIGATIONS

1 unchanged sentence

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

Amortization of closure

and post-closure asset

Amortization of closure and post-closure asset

Balance as of December 31, 2024

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):

components of (loss) income before income tax expense 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

income (loss) before tax benefit

Total (loss) income before tax expense

components of current and deferred federal and state income tax expense (benefit) for continuing operations for the years ended December

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OF COMPONENTS OF INCOME TAX (BENEFIT) EXPENSE

Federal income tax expense - current

Federal income tax benefit - deferred

Federal income tax (benefit) expense - current

Federal income tax expense (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).

State income tax expense (benefit) - deferred

Total income tax expense

overall reconciliation between the expected tax expense using the federal statutory rate of 21 % for each of the years ended 2024 and

2023 and the expense 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 expense (benefit) at

statutory rate

State tax expense, net of federal benefit

Federal tax (benefit) expense at statutory rate

State tax (benefit) expense, net of federal benefit

Difference in foreign rate

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Provision-to-return adjustments

(Decrease) increase

in valuation allowance

Income tax expense (benefit)

Increase (decrease) in valuation allowance

Income tax expense

global intangible low-taxed income (“GILTI”) provisions under the Tax Cuts and Jobs Act of 2017 (the “TCJA”)

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has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the years ended December 31, 2024 and

As the Canada and United Kingdom foreign subsidiaries are in loss positions for 2023, no GILTI inclusion is expected for these

entities for the current year.

As the Canada and United Kingdom foreign subsidiaries are in a combined loss position for 2024, no GILTI inclusion is expected

for these entities for the current year.

Company had temporary differences and net operating loss carry forwards from both our continuing and discontinued operations, which gave

rise to deferred tax assets as of December 31, 2023, and 2022 as follows (in thousands):

rise to deferred tax assets as of December 31, 2023.

No deferred tax assets remained as of December 31, 2024, as the Company provided

a full valuation allowance against its U.S.

federal and state deferred tax assets in 2024.

Table below reflects deferred tax asset balances

as of December 31, 2024, and 2023 (in thousands):

OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

Net operating

Environmental and closure

Net operating losses

Environmental and closure reserves

Lease liability

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Depreciation and amortization

Indefinite lived intangible

Indefinite lived intangible assets

Right-of-use lease asset

481(a) adjustment

tax assets, gross

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.

Prepaid expenses

Deferred tax assets, gross

Valuation allowance

Net deferred income tax asset

Company records a valuation allowance against its net deferred tax asset to the extent it determines it is more likely than

not that such asset will not be realized in the future.

The Company regularly evaluates the probability that its deferred tax assets will

be realized and determines whether valuation allowances or adjustments thereto are needed.

This determination involves judgement

and the use of estimates and assumptions, including expectations of future taxable income and tax planning strategies.

The Company applies

judgment to consider the relative impact of negative and positive evidence, and the weight given to negative and positive evidence is

commensurate with the extent to which such evidence can be objectively verified.

Based on the Company’s evaluation of all available

positive and negative evidence, and with greater weight placed on the objectively verifiable evidence which primarily included the Company’s

three-year cumulative losses, the Company determined that it is more likely than not that the Company’s net U.S.

deferred tax asset

will not be realized.

As a result, in 2024, the Company provided a full valuation allowance against its U.S.

federal and state deferred

tax assets and recorded an income tax expense in the amount of approximately $ 8,194,000 .

The Company continues to maintain a valuation

allowance against foreign tax attributes that may not be realized.

Company has estimated net operating loss carryforwards (“NOLs”) for federal and state income tax purposes of approximately

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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):

Company accounts for uncertainties in income tax pursuant to ASC 740.

A reconciliation of the beginning and ending amount of our unrecognized

tax expense is summarized as follows (in thousands):

SCHEDULE OF RECOGNIZED TAX EXPENSES

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Balances at end of the year

Company does not include interest and penalties related to income taxes, including uncertain tax positions, within the provision for

income taxes due to immateriality.

tax years 2021 through 2023 remain open to examination by taxing authorities in the jurisdictions in which the Company operates.

Company had $ 0 and $ 44,000 federal income tax payable for the years ended December 31, 2024, and 2023, 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.

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 each tax years 2024 and 2023, the Company has capitalized $ 2,240,000 of research and development

While Management believes the estimate for 2024 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, 2024.

AND CONTINGENCIES

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(“Tetra Tech”) filed a complaint in the U.S.

District Court for the Northern District

of California (the “Court”) against CH2M Hill, Inc.

(“CH2M”) and four subcontractors of CH2M, including the Company

(“Defendants”).

The complaint alleges various claims, including a claim for negligence, negligent misrepresentation, equitable

indemnification and related business claims against all Defendants related to alleged damages suffered by Tetra Tech in respect of certain

draft reports prepared by Defendants at the request of the U.S.

Navy as part of an investigation and review of certain whistleblower

complaints about Tetra Tech’s environmental restoration at the Hunter’s Point Naval Shipyard in San Francisco.

District Court for the Northern District of California

(the “Court”) against CH2M Hill, Inc.

(“CH2M”) and four subcontractors of CH2M, including the Company (“Defendants”).

The complaint alleges various claims, including a claim for negligence, negligent misrepresentation, equitable indemnification and related

business claims against all Defendants related to alleged damages suffered by Tetra Tech in respect of certain draft reports prepared

by Defendants at the request of the U.S.

Navy as part of an investigation and review of certain whistleblower complaints about Tetra

Tech’s environmental restoration at the Hunter’s Point Naval Shipyard in San Francisco.

was hired by the Navy in 2016 to review Tetra Tech’s work.

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The Company continues to believe it has no liability exposure to Tetra Tech.

November 25, 2024, purported shareholder Michael O’Neill filed a complaint in the Court of Chancery of the State of Delaware against

the Company and all current directors of the Company, asserting individual and class action claims for alleged breach of contract and

breach of fiduciary duty.

The case is styled Michael O’Neill v.

Perma-Fix Environmental Services, Inc., et al., C.A.

2024-1211-PAF.

complaint purports to be brought by the named plaintiff individually and on behalf of all “similarly situated Perma-Fix stockholders.”

According to the complaint, defendants allegedly made materially false and misleading statements in its proxy statement filed with the

Securities and Exchange Commission on June 8, 2023 regarding the effect of broker non-votes.

In particular, the complaint alleges that

defendants incorrectly stated in the proxy statement that broker non-votes would have no effect on the vote solicited to approve an amendment

to the Company’s 2017 Stock Option Plan to increase by 600,000 shares the number of shares of Common Stock issuable under the plan,

resulting in an alleged defective approval of the plan amendment.

As of the date of this Form 10-K, the Company has not issued any options

under the plan relating to the additional shares included in the plan amendment.

Company believes that the complaint is without merit.

The Company and the individual defendants intend to vigorously defend against the

Company’s insurance carrier is providing a defense in connection with this lawsuit, subject to a $ 1,000,000 self-insured retention

and the terms and limitations contained in the insurance policy.

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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and other performance and surety bond requirements.

Total coverage under the 2003 Closure Policy, as amended, was $ 22,461,000 at December

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 ,

respectively, which included interest earned of $ 2,603,000 and $ 2,099,000 on the finite risk sinking funds as of December 31, 2023 and

December 31, 2022, respectively.

Total coverage under the 2003 Closure Policy, as amended, was $ 23,379,000 as of December

As of December 31, 2024, and 2023, 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 $ 12,680,000 and $ 12,074,000 , respectively,

which included interest earned of $ 3,209,000 and $ 2,603,000 on the finite risk sinking funds as of December 31, 2024 and 2023, respectively.

Interest income for the year ended 2024 and 2023 was approximately $ 606,000 and $ 504,000 , respectively.

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).

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.

of Credits and Bonding Requirements

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and other obligations, including facility closures.

At December 31, 2023, the total amount of standby letters of credit outstanding was

approximately $ 3,950,000 and the total amount of bonds outstanding was approximately $ 36,674,000 .

As of December 31, 2024, the total amount of standby letters of credit outstanding

was approximately $ 3,200,000 and the total amount of bonds outstanding was approximately $ 20,930,000 .

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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Company contributions vest over a period of five years .

In 2023 and 2022, the Company

During 2024 and 2023, the Company

contributed approximately $ 580,000 and $ 576,000 in 401(k) matching funds, respectively.

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Centofanti serves as our Vice President of Information Systems.

For such position, he received annual compensation of $ 191,000 and $ 187,000

for 2023 and 2022, respectively.

For such position, he received annual compensation of $ 191,000 for each

of the years 2024 and 2023.

David Centofanti is the son of our EVP of Strategic Initiatives and a Board member.

SEGMENT REPORTING

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;

for which discrete financial information is available.

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

accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity:

which we may earn revenue and incur expenses;

operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segment and assess

its performance;

which discrete financial information is available.

Company has two reporting segments, consisting of the Treatment and Services Segments, which are primarily based on a service offering

approach (see “Note 1- Description of Business and Basis of Presentation” for the type of services from which each of the

Company’s reportable segments derives its revenue).

The Company’s reporting segments exclude our corporate headquarter which

serves to support its two reporting segments through various functions, such as our executives, finance, treasury, human resources, accounting,

and legal departments.

Financial results for the corporate headquarter are not considered by the CODM in evaluating the performance of

the reportable segments.

Our reporting segment also excludes our discontinued operations (see “Note 8 – Discontinued Operations”)

which do not generate revenues.

Company’s CODM, which is its chief executive officer, evaluates the performance of the Treatment and Services segments and allocates

resources (including financial or capital resources) to each reporting segment based on revenue and (loss) income from operations by

comparing actual results for these metrics to budgeted and forecasted amounts for these metrics on a monthly, quarterly and year-to-date

Company’s CODM does not evaluate and allocate resources for the reportable segments using assets;

therefore, the Company does not

disclosure assets for its reporting segments.

table below summarizes (loss) income from operations for the Company’s two reporting segments and its corporate headquarter and

provides reconciliation of such financial metric to the Company’s consolidated totals for the years 2024 and 2023 for our continuing

Significant segment expenses that are included in the measure of segment profit or losses for each reportable segment, and

regularly provided to the CODM include payroll and benefit, material and supplies, disposal and transportation and subcontract expenses

and are reflected separately, where applicable (in thousands).

SCHEDULE OF SEGMENT REPORTING INFORMATION

Reporting as of and for the year ended December 31, 2024

Segments Total

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$ 59,117 (4)(5)

Intercompany revenues

Cost of Goods Sold:

Payroll and benefits expenses

Material and supplies expenses

Disposal expenses

Transportation expenses

Subcontract expenses

cost of goods sold (2)

Total cost of goods sold

Gross (loss) profit

Selling, general and administrative expenses (“SG&A”):

Payroll and benefits

Research and development

Loss on disposal of property and equipment

Loss from operations

Interest income

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Interest expense-financing fees

Depreciation and amortization

Segment income (loss) before income taxes

Income tax (benefit) expense

Segment income (loss)

Segment assets (1)

Expenditures for segment assets (net)

Loss from continuing operations before taxes

Income tax expense

Loss from continuing operations, net of taxes

Reporting as of and for the year ended December 31, 2023

Segments Total

Corporate (2)

Consolidated Total

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$ 89,735 (4)(5)

Intercompany revenues

Cost of goods sold:

Payroll and benefit expenses

Material and supplies expenses

Disposal expenses

Transportation expenses

Subcontract expenses

cost of goods sold (2)

Total cost of goods sold

Selling, general and administrative expenses (“SG&A”):

Payroll and benefits

Research and development

Loss on disposal of property and equipment

Income (loss) from operations

Interest income

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Interest expense-financing fees

Depreciation and amortization

Segment income (loss) before income taxes

( 3,589 ) (8)

Income tax benefit

Segment income (loss)

Segment assets (1)

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), 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:

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.

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

The following table reflects revenue based on customer location:

Other expense

Income from continuing operations before taxes

Income tax expense

Income from continuing operations, net of taxes

reflect the activity for corporate headquarters not included in the segment reporting information.

cost of goods sold for each reportable segment includes:

- lab, regulatory, maintenance, depreciation and amortization, travel, outside services

and general expenses.

- material and supplies, disposal and transportation, lab, regulatory, maintenance, depreciation

and amortization, travel, outside services and general expenses.

SG&A for each reportable segment and Corporate includes:

Treatment -depreciation

and amortization, travel, outside services, maintenance and general expenses.

travel, outside services, maintenance and general expenses.

Corporate -maintenance,

depreciation and amortization, travel, public company, outside services and general expenses.

Company performed services relating to waste generated by federal government clients, either

directly as a prime contractor or indirectly for others as a subcontractor to federal government

entities, representing approximately $ 40,550,000 or 68.6 % of total revenue for 2024 and $ 68,595,000

or 76.4 % of total revenue for 2023.

following table reflects revenue based on customer location:

OF REVENUE BASED ON CUSTOMER LOCATION

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United Kingdom

Amount includes assets from our discontinued operations of $ 94,000 and $ 96,000 as of December 31, 2023, and 2022,

respectively.

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:

following table presents depreciation and amortization for the years ended December 31, (in thousand):

OF DEPRECIATION AND AMORTIZATION

Total segment

following table presents capital expenditures for the years ended December 31, (net of financed amount of $ 406 and $ 784 for 2024 and

2023, respectively (in thousand):

OF CAPITAL EXPENDITURES

Total segment

following table presents long-lived assets for the Company’s continuing operations for the years ended December 31, (in thousand):

OF LONG-LIVED ASSETS FOR CONTINUED OPERATIONS

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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.

OF COMMON STOCK

May 21, 2024, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain

institutional and retail investors (the “Purchasers”), pursuant to which the Company sold and issued, in a registered direct

public offering, an aggregate of 2,051,282 shares of the Company’s Common Stock, at a negotiated purchase price per share of $ 9.75

(the “Shares”), for aggregate gross proceeds to the Company of approximately $ 20,000,000 , before deducting fees payable to

the placement agents and other estimated offering expenses payable by the Company (the “Offering”).

The net proceeds from

the Offering was utilized to fund (i) continued R&D and business development relating to the Company’s patent-pending process

for the destruction of PFAS (Per- and polyfluoroalkyl substances), as well as the cost of installing at least one commercial treatment

(ii) ongoing facility capital expenditures and maintenance costs;

and (iii) general corporate and working capital purposes.

Shares were offered and sold by the Company pursuant to the Company’s “shelf” registration statement on Form S-3 and

prospectus supplement relating thereto.

Capital Group LLC (“Craig-Hallum”) and Wellington Shields & Co.

LLC (“Wellington Shields”) (Wellington Shields

and Craig-Hallum together are known as the “Placement Agents”) served as the exclusive placement agents in connection with

the Offering.

The Company paid the Placement Agents an aggregate cash fee of $ 1,200,000 , representing 6.00 % of the gross proceeds of

the Offering.

The Company also reimbursed the Placement Agents certain expenses in connection with the Offering in an aggregate amount

of approximately $ 80,000 .

As additional compensation to the Placement Agents in connection with the Offering, the Company also issued

to the Placement Agents and two (2) of their designees, warrants (the “Placement Agents’ Warrants”) to purchase an aggregate

of 61,538 shares of Common Stock (the “Warrant Shares”), an amount equal to 3.0% of the number of Shares sold in the registered

direct offering.

The Placement Agents’ Warrants have an exercise price per share equal to $12.19, which is equal to approximately

125% of the price per share of the Shares sold in the Offering.

Neither the Placement Agents’ Warrants nor the Warrant Shares have

been registered under the Registration Statement or otherwise.

The Placement Agents’ Warrants have a term of five years, are exercisable

at any time and from time to time, in whole or in part, during the four and one-half (4 ½) year period commencing 180 days from

the closing date of the Offering which was May 24, 2024, and are exercisable via “cashless exercise” in certain circumstances.

The aggregate fair value of the “Placement Agents’ Warrants” was determined to be approximately $ 331,000 using the

Black-Scholes pricing model with the following assumptions:

58.78 % volatility, risk free interest rate of 4.53 %, an expected life of

five years and no dividend.

The aggregate fair market value of the Placement Agent’s Warrants was recorded as an offset to gross

proceeds of the Offering and an increase to additional-paid-in capital.

deducting costs incurred and paid of approximately $ 1,544,000 (exclusive of the aggregate fair market value of the Placement Agents’

Warrants as discussed above) which were recorded as a deduction to equity in connection with the Offering, net cash proceeds to the Company

totaled approximately $ 18,456,000 .

December 18, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum

Capital Group, LLC (the “Underwriter”) to which the Company sold and issued pursuant to the terms and conditions of the Underwriting

Agreement, 2,200,000 shares of the Company’s Common Stock.

The shares of Common stock were sold at a negotiated price to the public

of $ 10.00 per share.

The Underwriting Agreement also allowed the Underwriter a 30-day over-allotment option (the “Over-Allotment

Option”) to purchase up to an additional 330,000 shares of the Company’s Common Stock on the same terms and conditions, which

option was exercised in its entirely on December 18, 2024.

The shares were offered and sold to the public pursuant to the Company’s

“universal shelf” registration statement on Form S-3 filed with the Commission on December 2, 2024, and declared effective

by the Commission on December 12, 2024, and prospectus supplement relating thereto.

The aggregate gross proceeds received by the Company

from the sale of the 2,530,000 shares sold totaled $ 25,300,000 , before deducting fees payable to the Underwriter and other estimated

offering expenses payable by the Company (the “Offering”).

The net proceeds from the Offering is anticipated to fund (i)

continued R&D and business development relating to the Company’s patent-pending process for the destruction of PFAS, as well

as the cost of installing at least one second-generation Perma-FAS commercial treatment unit;

(ii) ongoing facility capital expenditures

and maintenance costs;

and (iii) general corporate and working capital purposes.

Company paid the Underwriter a total cash fee of 7.00 % of the aggregate gross proceeds in the Offering, which totaled approximately $ 1,771,000 .

The Company also reimbursed the Underwriter certain expenses in connection with the Offering in an aggregate amount of approximately

As additional compensation to the Underwriter in connection with the Offering, the Company also issued to the Underwriter and

three (3) of their designees, warrants (the “Underwriters’ Warrant’s”) to purchase an aggregate of 126,500 shares

of Common Stock (the “Warrant Shares”), equal to 5.0% of the number of Shares sold in the offering, at an exercise price

per share equal to $11.50, which exercise price is equal to approximately 115% of the price per share of the shares sold in the Offering.

The Underwriter’s Warrants have a term of five years, are exercisable at any time and from time to time, in whole or in part, during

the five (5) year period commencing on December 19, 2024, the closing date of the Offering, and are exercisable via “cashless exercise”

in certain circumstances.

The aggregate fair value of the “Underwriter’s Warrants” was determined to be approximately

$ 695,000 using the Black-Scholes pricing model with the following assumptions:

58.51 % volatility, risk free interest rate of 4.43 %, an

expected life of five years and no dividend.

The aggregate fair market value of the Underwriter’s Warrants was recorded as an offset

to gross proceeds of the Offering and an increase to additional-paid-in capital.

deducting costs incurred of approximately $ 2,092,000 (exclusive of the aggregate fair market value of the Underwriter’s Warrants

as discussed above) which were recorded as a deduction to equity in connection with the Offering, net cash proceeds to the Company totaled

approximately $ 23,208,000 .

The Company has paid approximately $ 1,897,000 of the $ 2,092,000 costs incurred in connection with the Offering.

Company evaluated subsequent events and transactions that occurred after the balance sheet date through March 13, 2025, the date that

1 unchanged sentence

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.

events that would have required adjustment or disclosure in the consolidated financial statements other than the events described below.

of Chief Operating Officer (“COO”)

January 23, 2025, the Company’s Board approved the appointment of Mr.

Troy Eshleman as the Company’s Chief Operating Officer

(“COO”) at an annual salary of $ 320,000 .

Troy Eshleman was originally hired by the Company on January 6, 2025 as Vice

President of Operations.

of Hanford and International Waste Operations

January 23, 2025, the Board appointed Mr.

Richard Grondin as the Company’s EVP of Hanford and International Waste Operations, at

an annual salary of $ 315,267 .

Prior to his appointment to such office, Mr.

Grondin previously served as the Company’s EVP of Waste

Treatment Operations.

Grondin remains a named executive officer of the Company.

connection with the Board’s appointment of Mr.

Eshleman to the position of COO, the Compensation Committee recommended, and the

Board approved, the grant to Mr.

Eshleman of an ISO for the purchase, under the Company’s 2017 Plan, of up to 50,000 shares of

the Company’s Common Stock.

The ISO has a term of six years , and vests 20 % per year over a five-year period commencing on the first

anniversary date of grant.

The exercise price of the ISO is $ 10.70 per share, which is equal to the closing price as quoted on Nasdaq

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

January 23, 2025, the Board (with Mr.

1 unchanged sentence

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 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

MIP for the calendar year 2025 for each of the Company’s executive officers.

Each MIP is effective January 1, 2025 and applicable

for year 2025.

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 2025.

The total potential target performance compensation payable ranges from 25 % to 150 % of the 2025

base salary for the CEO ($ 104,287 to $ 625,733 ), 29 % to 100 % of the 2025 base salary for the CFO ($ 95,681 to $ 332,811 ), 29 % to 100 % of

the 2025 base salary for the EVP of Strategic Initiatives ($ 79,736 to $ 277,346 ), 25 % to 100 % ($ 78,817 to $ 315,267 ) of the 2025 base salary

for the EVP of Hanford and International Waste Operations, and 25 % to 100 % of the 2025 base salary for the COO ($ 80,000 to $ 320,000 ).

March 11, 2025, the Company entered into an amendment to its Loan Agreement with its lender which provided the following, among other

removes the quarterly FCCR testing requirement for the fourth quarter of 2024;

removes the requirement that the Company maintains a minimum of $ 3,000,000

in daily Liquidity through September 29, 2025, which was removable earlier subject to meeting certain conditions;

removes the quarterly FCCR covenant testing requirement utilizing a twelve-month trailing basis;

however, such FCCR testing requirement will be triggered on the day the Company fails to meet a minimum of $ 5,000,000

in daily Liquidity.

If triggered, the Company will be required to show compliance of a FCCR ratio of not less than 1.15

to 1.00 utilizing a trailing twelve-month-period ended starting with the most recently reported fiscal quarter and each

fiscal quarter thereafter.

The FCCR testing requirement can be removed again once the Company is able to achieve a minimum of $ 5,000,000

in daily Liquidity for a thirty-consecutive-day period from the trigger date;

revises the Facility Fee (as defined) from .375% to .500%.

Such fee percentage will revert back to .375% at such time that the Company is able to achieve a minimum 1.15 to 1.00 ratio in FCCR on a twelve-month trailing basis.

connection with the amendment, the Company paid its lender a fee of $ 12,500 .

Demand Letter

Company’s Board has received a demand letter, dated February 4, 2025 (the “Letter”), from a putative shareholder of

the Company, claiming that a provision in the Company’s Amended and Restated Bylaws (“Bylaws”), requiring shareholders

to indemnify the Company for attorneys’ fees in certain corporate proceedings in which the shareholder is not the prevailing party,

must be removed.

This provision of the Company’s Bylaws was adopted in 2012 when the Company adopted its Amended and Restated Bylaws.

The statute prohibiting certain reimbursements of attorneys’ fees was adopted in 2015.

The Letter demands that the Board amend

its Bylaws to remove the particular provision in question.

The Board has established a committee of the Board comprised of independent

directors who each became a member of the Board after 2012 to review and consider the Letter.

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