What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-24 compared with 2025-03-13 · 875 added, 875 removed, 833 unchanged (68% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

STATEMENTS AND SUPPLEMENTARY DATA

to Consolidated Financial Statements

Financial Statements

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Consolidated Statements of Operations for the years ended December 31, 2025, and 2024

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

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025, and 2024

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, and 2024

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Directors and Stockholders

of Directors and Shareholders

Environmental Services, Inc.

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(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

(the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated

financial statements”).

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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.

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.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

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

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

We determined that there are no critical audit matters

GRANT THORNTON LLP

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of December 31,

(Amounts in Thousands, Except

for Share and Per Share Amounts)

Thousands, Except for Share and Per Share Amounts)

Current assets:

Accounts receivable, net

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

of allowance for credit losses of $ 309 and $ 202 , respectively

Unbilled receivables

Prepaid and other assets

Current assets related

to discontinued operations

assets related to discontinued operations

Total current assets

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Finite risk sinking fund

(restricted cash)

Deferred tax assets

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

(restricted cash) (Note 13)

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

ENVIRONMENTAL SERVICES, INC.

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for Share and per Share Amounts)

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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lease liabilities

liabilities related to discontinued operations

Current liabilities related

to discontinued operations

Total current liabilities

Accrued closure costs

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

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

Total long-term liabilities

Total liabilities

Commitments and Contingencies

Commitments and Contingencies (Note 13)

Stockholders’ Equity:

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

Common Stock, $ .001 par

Common Stock, $ .001 par value;

shares authorized;

18,525,823 and 18,384,879 shares issued, respectively;

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

18,518,181 and 18,377,237 shares outstanding, respectively

Additional paid-in capital

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Accumulated other comprehensive

Common Stock in treasury, at cost;

stockholders’ equity

liabilities and stockholders’ equity

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

Less Common Stock in treasury,

Total stockholders’

Total liabilities and stockholders’

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

ENVIRONMENTAL SERVICES, INC.

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for Per Share Amounts)

of goods sold

Selling, general and administrative

Cost of goods sold

Selling, general and administrative expenses

Research and development

on disposal of property and equipment

(Loss) income from operations

Loss on disposal of property and equipment

Loss from operations

Other income (expense):

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Interest expense

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:

Interest expense-financing fees

Loss from continuing operations before taxes

Income tax expense

Loss from continuing operations, net of taxes

Loss from discontinued operations (Note 8)

Net loss per common share - basic and diluted:

Continuing operations

income (loss) per common share

Weighted average number

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

Discontinued operations

Net loss per common share

Weighted average number of common shares used in computing net loss

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

ENVIRONMENTAL SERVICES, INC.

STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

STATEMENTS OF COMPREHENSIVE LOSS

the years ended December 31,

(Amounts in Thousands)

Other comprehensive (loss) income:

currency translation adjustments

Total other comprehensive

(loss) income

Other comprehensive income (loss):

Foreign currency translation

Total other comprehensive income (loss)

Comprehensive loss

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in Thousands, Except for Share Amounts)

Accumulated Other

Comprehensive

Stockholders’

at December 31, 2022

Balance at December 31, 2023

Foreign currency translation

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Issuance of Common Stock upon exercise of warrant

Sale of Common Stock, net of offering costs

Issuance of warrants from sale of Common Stock

Balance at December 31, 2024

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Issuance of Common Stock upon exercise of options

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 31, 2025

$ ( 110,714 )

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

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Cash flows from operating activities:

Net (loss) income

loss on discontinued

operations (Note 8)

(Loss) income from continuing

Loss from continuing operations

Adjustments to reconcile

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

net loss from continuing operations to cash used in operating activities:

Depreciation and amortization

Amortization of debt issuance

Deferred tax expense (benefit)

Deferred tax expense

Provision for credit losses

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and other assets

payable, accrued expenses and unearned revenue

Cash (used in) provided

by continuing operations

payable, accrued expenses, unearned revenue and other liabilities

Cash used in continuing

used in discontinued operations

Cash (used in) provided

by operating activities

Cash used in operating

Cash flows from investing activities:

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credit borrowings

Proceeds from long term

debt (Term Loan 2)

Proceeds from sale of Common

Stock, net of offering costs paid (Note 17)

Stock in May and December of 2024, net of offering costs paid

Payment of offering costs

from sale of Common Stock completed in December 2024

Principal repayment of

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from issuance of Common Stock upon exercise of options/warrant

Cash provided by financing

activities of continuing operations

(used in) provided by financing activities of continuing operations

Effect of exchange rate

changes on cash

Increase in cash and finite risk sinking fund

(restricted cash) (Note 2)

(Decrease) increase in cash and finite risk

sinking fund (restricted cash)

Cash and finite risk sinking

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

fund (restricted cash) at beginning of period

Cash and finite risk

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

sinking fund (restricted cash) at end of period

Supplemental disclosure:

Interest paid

Income taxes paid

Interest paid, net of capitalized amount

Non-cash investing and financing activities:

Equipment purchase subject to finance leases

Equipment purchase subject to financing

Advance for equipment purchase subject to financing

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

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SEGMENT, which includes:

services, which include:

○ professional

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using advanced methods, technology and engineering;

Occupational Safety and Health services including IH assessments;

hazardous materials surveys,

e.g., exposure monitoring;

lead and asbestos management/abatement oversight;

indoor air quality

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

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

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

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

lead and asbestos management/abatement

indoor air quality evaluations;

health risk and exposure assessments;

health & safety plan/program development,

compliance auditing and training services;

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;

waste management services to commercial and governmental customers.

services, which include:

○ technology-based

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

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

and Occupational

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

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

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

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

personnel and services to commercial and government customers;

management services to commercial and governmental customers.

of government and commercial facilities impacted with radioactive material and hazardous

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

transportation, processing and disposal;

○ remediation

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

Such services capability includes:

project investigation;

radiological engineering;

partial and total plant D&D;

facility decontamination, dismantling, demolition, and planning;

site restoration;

transportation;

and emergency response;

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

cycle of the termination process:

project management, planning, characterization, waste stream

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

reporting, transportation, disposal and emergency response.

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

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

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

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

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

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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.

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

closed locations.

Positions and Liquidity

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.

Company’s cash flow requirements during the twelve-months ended December 31, 2025, were primarily financed by its Liquidity

(defined under the Company’s Loan Agreement as borrowing availability under the Revolving Credit of its Credit Facility plus

cash in its Money Market Deposit Account (“MMDA”) maintained with its lender (see “Note 9 – Long-Term Debt

– Credit Facility” for a discussion of the Company’s Credit Facility)).

The Company’s Liquidity also

consisted of net proceeds 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, administration and monitoring of its discontinued operations, research and development (“R&D”) on

its Per- and polyfluoroalkyl substances (“PFAS”) technology and capital expenditures (which include its PFAS

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

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, 2025, 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.

under its Loan Agreement was approximately $ 18,126,000 ,

which included approximately $ 11,529,000

of cash in its MMDA.

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

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’

the year ended December 31, 2025, the Company revised the presentation of its disaggregation of revenue in “Note 3 – Revenue”

for year ended December 31, 2024, to reclassify certain contracts previously reported as fixed price to time and materials.

Specifically,

approximately $ 642,000 of revenue was reclassified from fixed price revenues to time and materials revenues.

The reclassification had

no effect on the consolidated statements of operations, balance sheets, stockholders’ equity and cash flows.

OF SIGNIFICANT ACCOUNTING POLICIES

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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

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

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

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

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

The Company does not apply a credit loss

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

The Company’s monitoring

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

Once the Company

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

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

The write off process involves

approvals from management based on required approval thresholds.

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 determined in accordance with Financial Accounting Standards Board’s (“FASB”)

Accounting Standards Update (“ASU”) 2016-13 “Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.”

which requires the Company to consider forward-looking information in estimating the expected loss and is developed using historical

collection experience, current and future economic and market conditions that may affect customers’ ability to pay, and a review

of the current status of customers’ accounts receivables.

The Company does not apply a credit loss allowance to government related

receivables due to our past successful experience in their collectability.

The Company’s monitoring activities include routine

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

Once the Company has exhausted all options

in the collection of a delinquent accounts receivable balance, which includes collection letters, demands for payment, collection agencies

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

The write off process involves approvals from management

based on required approval thresholds.

following table sets forth the activity in the allowance for credit losses for the years ended December 31, 2025, and 2024 (in thousands):

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Ended December 31,

for credit losses - beginning of year

Allowance for credit losses - beginning

Provision charges

for credit losses - end of year

Allowance for credit losses - end of year

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

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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.

consist primarily of treatment chemicals and certain supplies.

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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method over the estimated useful lives of the assets.

As of December 31, 2024, assets recorded under finance leases were $ 1,601,000 less

accumulated depreciation of $ 798,000 , resulting in net fixed assets under finance leases of $ 803,000 .

As of December 31, 2023, assets

recorded under finance leases were $ 1,608,000 less accumulated depreciation of $ 545,000 , resulting in net fixed assets under finance

leases of $ 1,063,000 .

The following table reflects assets recorded under finance leases as of December

31, 2025 and 2024.

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

assets, such as property, plant and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that

the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the

carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount

of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of

the asset exceeds the fair value of the asset.

Assets to be disposed of are separately presented in the balance sheet and reported at

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

OF FINANCED LEASED ASSETS

Ended December 31,

Financed leased assets, gross

accumulated amortization

Financed leased assets , net

assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount

of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds

its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the

fair value of the asset.

Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying

amount or fair value less costs to sell and are no longer depreciated.

expense totaled approximately $ 1,702,000 and $ 1,646,000 in 2025 and 2024, 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 policy is to capitalize interest costs incurred on debt during the construction of projects for its use.

A reconciliation

of the Company’s total interest cost to “Interest Expense” as reported on its Consolidated Statements of Operations

for 2025 and 2024 is as follows:

OF INTEREST EXPENSE

(Amounts in Thousands)

Interest cost capitalized

Interest cost charged to income

Total interest

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

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

Lease classifications,

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

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

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As of December 31, 2025, the Company’s operating leases have remaining

terms of approximately one to five years .

terms of approximately one to four years .

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

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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.

leases primarily consist of lab and processing equipment and motor vehicles 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

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Our goal is to discover, develop, and bring to market

innovative ways to process waste that address unmet environmental needs and to develop new company service offerings.

innovative ways to process waste that addresses unmet environmental needs and to develop new company service offerings.

The Company conducts

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and then discounted back, using a credit adjusted risk free rate, to the present value.

ARO’s are included within buildings as

part of property and equipment and are depreciated over the estimated useful life of the property.

In periods subsequent to initial measurement

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the Company’s depreciation policy.

The Company’s AROs are included within buildings as part of property and equipment on

the Consolidated Balance Sheets.

Environmental

Remediation Liabilities

Company has three environmental remediation projects in progress (all within discontinued operations).

These remediation projects principally

entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground water.

These remediation

activities are closely reviewed and monitored by the applicable state regulators and often span multiple years.

Environmental

remediation liabilities are accounted for in accordance with ASC 410, “Asset Retirement and Environmental Obligations.” Remediation

liabilities include costs for investigation, assessment, remediation, post-remediation monitoring, and related legal and consulting services.

Estimates are developed using internal and third-party environmental studies, engineering cost analyses, remediation plans, and discussions

with regulatory authorities.

Environmental remediation liabilities are estimated using

the undiscounted method when the timing and/or pattern of expected cash outflows cannot be reliably determined.

Under this approach, the

Company records a liability equal to management’s best estimate of the total probable and reasonably estimable costs to remediate

contaminated sites without reducing such amounts for the time value of money.

In developing these estimates, the Company considers current

site conditions, existing technology, present laws and regulations, prior experience in remediation of similar sites, and incorporates

an estimated inflation factor to reflect anticipated increases in labor, material, and other project-related costs over the expected remediation

These environmental remediation estimates are subject to revision as additional information becomes available or as conditions

The circumstances that could affect the Company’s remediation liabilities include new technologies that are being developed

to reduce our overall costs and increase contamination levels that could arise as we complete remediation which could increase our costs.

In addition, significant changes in regulations could adversely or favorably affect the Company’s costs to remediate the sites.

Because such estimates inherently involve significant assumptions regarding the scope of required remediation activities, future regulatory

actions, timing of expenditures, and cost escalation, actual costs may differ materially from the amounts recorded.

The Company’s

environmental remediation liabilities are reviewed and adjusted quarterly to reflect changes in projected expenditures and reductions

as a result of actual expenditures incurred during each quarter.

Environmental

remediation costs are generally expensed as incurred.

Capitalization of environmental remediation costs are allowed to the extent they

are recoverable if the costs:

(i) extend the life, increase the capacity or improve the safety or efficiency of the property;

(ii) mitigate

or prevent environmental contamination from future operations;

or (iii) are incurred preparing the property for sale which property is

currently classified as held for sale.

The Company has not capitalized any remediation costs as of December 31, 2025.

8 – Discontinued Operations” for a discussion of the Company’s environmental liabilities.

taxes are accounted for in accordance with ASC 740, “Income Taxes.” Under ASC 740, the provision for income taxes is comprised

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Concentration

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.

Company’s revenue derived from federal government entities, either directly as a prime contractor or indirectly for others as subcontractor

to federal government entities, totaled $ 39,243,000 , or 63.6 % of total revenue in 2025, compared to $ 40,550,000 , or 68.6 % of total revenue

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

a different customer from year to year.

instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts

The Company maintains cash with high quality financial institutions, which may exceed Federal Deposit Insurance Corporation

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

instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, accounts receivable

and unbilled receivables.

The Company maintains cash with high quality financial institutions, which may exceed Federal Deposit Insurance

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

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

Concentration

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

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

Concentration of credit risk with respect to accounts receivable and unbilled receivables are limited due to the Company’s large

number of customers and their dispersion throughout the United States as well as with the significant amount of work that we perform

for government entities.

Company had two government related customers whose total unbilled and net outstanding receivable balances represented 19.8 % and 19.6 %

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The 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 as of December 31, 2023.

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.

Recognition and Related Policies

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Segment Revenues:

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.

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

Transaction price

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

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

treatment contract.

For a 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.

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Control transfers when

the wastes are picked up by the Company.

the waste is picked up by the Company.

Segment Revenues:

for our Services Segment are generated from time and materials or fixed price arrangements:

for our Services Segment are generated from time and materials, fixed unit rate or fixed price arrangements:

Company’s primary obligation to customers in time and materials contracts relate to the provision of services to the customer at

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billing rates applied to services performed and materials delivered.

Services Segment’s fixed unit rate contracts provide for payment based on specified rates per unit of output (e.g., per labor

days incurred or volume of material processed).

Revenue earned from fixed unit rate

contracts is recognized over time using the output method, based on the contractual rate per

unit multiplied by actual quantities delivered.

The Company recognizes revenue in the amount to which it has a right to invoice,

which corresponds directly with the value transferred to the customer.

Revenues generated from fixed unit rate contracts are

included within “time and materials” caption under the disaggregation table in “Note 3 – Revenue” due

to the similarity of the revenue recognition methodology.

fixed price contracts, the objective of the project is not attained unless all scope items within the contract are completed and all

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Company’s contracts generally do not give rise to variable consideration.

However, from time to time, the Company may submit requests

for equitable adjustments under certain of its government contracts for price or other modifications that are determined to be variable

consideration.

The Company estimates the amount of variable consideration to include in the estimated transaction price based on historical

experience with government contracts, anticipated performance and management’s best judgment at the time and to the extent it is

probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable

consideration is resolved.

However, from time to time, the Company may submit request

for equitable adjustments (“REAs”) under certain of its government contracts for price or other modifications that are determined

to be variable consideration.

The Company estimates the amount of variable consideration to include in the estimated transaction price

based on historical experience with government contracts, anticipated performance and management’s best judgment at the time and

to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated

with the variable consideration is resolved.

These estimates are re-assessed each reporting period as required.

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is based on schedules established in customer contracts.

Payment terms vary by customers but are generally established at 30 days from

Payment terms vary by customers but are generally established at 30 to 60 days

from invoicing.

Costs to Obtain a Contract

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Comprehensive

Income (Loss)

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

(Loss) Per Share

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

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

of potential outstanding common shares.

In periods where they are anti-dilutive, such amounts are excluded from the calculations of dilutive

earnings per share.

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

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

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

loss per share is based on the weighted-average number of outstanding common shares plus the weighted-average number of potential outstanding

common shares.

In periods where they are anti-dilutive, such amounts are excluded from the calculations of dilutive earnings per share.

Loss per share is computed separately for each period presented.

Value of Financial Instruments

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As of December 31, 2025, 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.

2024, the fair value of the Company’s financial instruments approximated their carrying values.

The fair value of the Company’s

revolving credit, term loan 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):

Improvements to Reportable Segment Disclosures,”

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

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

The ASU also requires disclosure

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

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

Additionally, ASU 2023-07 requires

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

The 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).

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax 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 Company adopted ASU 2023-09 in

its annual financial statements for the year ended December 31, 2025.

The amendments were applied on a retrospective basis to all periods

presented in the consolidated financial statements.

Accordingly, prior period income tax disclosures have been recast to conform to the

new requirements.

The adoption of ASU 2023-09 had no material impact to the Company’s consolidated financial statements other than

updated disclosures (See “Note 12 – Income Taxes” for disclosure in connection the adoption of ASU 2023-09).

Issued Accounting Standards – Not Yet Adopted

December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270):

Narrow-Scope Improvements.” ASU 2025-11 clarifies

interim disclosure requirements and the applicability of Topic 270.

The objective of the update is to provide clarity about current interim

requirements.

The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end

of the last annual reporting period that have a material impact on the entity.

The amendments in this ASU are required to be adopted

for interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently

evaluating the impact of this standard on its consolidated financial statements.

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

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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.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax 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.

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

September 2025, the FASB issued ASU 2025-06, “Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 removes all references to prescriptive and sequential software

development stages.

The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding

the software project, and it is probable that the project will be completed, and the software will be used for its intended purpose.

The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within

those annual reporting periods.

The standard allows for prospective, modified, or retrospective transition.

Early adoption is permitted.

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

July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts

Receivable and Contract Assets.” ASU 2025-05 provides the option to elect a practical expedient to assume that the current conditions

as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast

as part of estimating expected credit losses on these assets.

ASU 2025-05 is effective for the Company for fiscal year and interim periods

beginning after December 15, 2025, on a prospective basis, with early adoption permitted.

The Company does not expect the adoption of

ASU 2025-05 in the first quarter of 2026 to 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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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.

increase in unbilled receivables from 2024 to 2025 was primarily due to timing difference between completion of revenue recognition and

agreed upon invoicing terms at one of our Treatment facilities.

(In thousands)

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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.

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.

the twelve months ended December 31, 2025, and 2024, the Company recognized revenue of $ 5,365,000 and $ 5,887,000 , respectively, related

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

OF COMPONENTS OF LEASE COST

SCHEDULE OF COMPONENTS OF LEASE COST

Months Ended December 31,

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weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of December 31, 2025,

OF WEIGHTED AVERAGE LEASE

Operating Leases

Finance Leases

SCHEDULE OF WEIGHTED AVERAGE LEASE

Weighted average remaining lease

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

Operating Leases

Finance Leases

Weighted average remaining lease

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

OF OPERATING AND FINANCE LEASE LIABILITY MATURITY

Operating Leases

Finance Leases

and thereafter

Total undiscounted lease

SCHEDULE OF OPERATING AND FINANCE LEASE LIABILITY MATURITY

Total undiscounted lease payments

Imputed interest

value of lease payments

Current portion of operating

lease obligations

Long-term operating lease

obligations, less current portion

Current portion of finance

lease obligations

Long-term finance lease

obligations, less current portion

Present value of lease payments

Current portion of operating lease

Long-term operating lease obligations, less

current portion

Current portion of finance lease obligations

Long-term finance lease obligations, less current

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

OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES

Twelve Months Ended December 31,

SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES

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 for:

Operating cash

flow from operating leases

Operating cash flow from

finance leases

Financing cash flow from

finance leases

ROU assets obtained in exchange for lease obligations

Finance liabilities

Operating liabilities

Reduction to ROU assets resulting from purchase of underlying asset:

Reduction to ROU assets resulting from purchase

of underlying asset:

Operating liabilities

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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).

reduction in ROU assets in 2024 as noted above 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 in our Treatment Segment.

OF INTANGIBLE ASSETS

(amount in thousands)

as of December 31, 2022

as of December 31, 2023

as of December 31, 2024

SCHEDULE OF INTANGIBLE ASSETS

Permit (amount in thousands)

Balance as of December 31, 2023

Balance as of December 31, 2024

Balance as of December 31, 2025

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

SCHEDULE OF DEFINITE LIVED INTANGIBLE ASSETS

December 31, 2024

December 31, 2023

Average Amortization

Intangibles (amount in thousands)

Weighted Average

Amortization Period

Other Intangibles (amount in

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:

OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE

expense recorded for definite-lived intangible assets was approximately $ 57,000 and $ 117,000 , for the years ended December 31, 2025,

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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

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

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

The 2017 Plan authorizes

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

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.

Outside Directors Stock Plan (“2003 Plan”)

Company’s 2003 Plan, as amended, provides for the grant of non-qualified stock options (“NQSOs”) to members of the Company’s Board of Directors (the “Board”)

who are not employees 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 6 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 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, 2025, the 2003 Plan had available for issuance 83,971 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

Stock Option Plan (“2017 Plan”)

Company’s 2017 Plan, as amended, authorizes the grant of incentive stock options (“ISOs”) and non- NQSOs to officers

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

2017 Plan’s authorized shares included an increase of 600,000 shares (the “Share Increase Proposal”) pursuant to the

Second Amendment to the 2017 Plan, which had been submitted to, and approved by, the Company’s stockholders at the Company’s

2023 Annual meeting of Stockholders held on July 20, 2023.

On November 13, 2025, the Company’s Board voted to rescind the Share

Increase Proposal, in order to render moot a challenge to the Second Amendment to the 2017 Plan brought by a stockholder of the Company

on November 25, 2024, pursuant to a putative class action against the Company and the individual members of the Board (see “Note

13 – Commitment and Contingencies – Legal Matter - Michael O’Neill” for further discussion of the legal matter

in connection with the Second Amendment to the 2017 Plan.) Additionally, on November 13, 2025, the Board approved a new amendment to

the 2017 Plan to increase the number of shares authorized under the 2017 Plan by 600,000 shares (the “New Amendment”).

New Amendment, which essentially replaces the rescinded Share Increase Proposal, is subject to approval by the Company’s stockholders

either at a special meeting of the Company’s stockholders or at the Company’s 2026 Annual Meeting of Stockholders, provided

any such approval must be obtained within 12 months of the Board’s approval of the New Amendment.

No options have been granted

under the rescinded Share Increase Proposal.

the 2017 Plan, 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.

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, 2025, the 2017 Plan had available for issuance

51,000 shares, which excludes the shares under the New Amendment, which is subject to approval by the Company’s stockholders as

discussed above.

Options to Employees and Outside Directors

connection with the appointment of Mr.

Troy Eshleman to the position of Chief Operating Officer (“COO”) by the Company’s

Board on January 23, 2025, the Company granted to Mr.

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

50,000 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.

The ISO has a six-year 6 term and vests at 20 % per year over a five-year 5 period, commencing

on the first anniversary of the grant date.

The exercise price of the ISO is $ 10.70 per share, which equals the closing price of the

Company’s Common Stock as quoted on NASDAQ on the grant date.

July 24, 2025, the Company issued an NQSO to each of the Company’s seven reelected outside (non-management) directors for the purchase,

under the Company’s 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.

granted has a term of ten years and vests at 25 % per year over a four-year 4 period, commencing on the first anniversary of the grant date.

The exercise price of each NQSO is $ 12.23 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.

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 .

under the Company’s 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.

granted has a contractual term of ten years and vests at 25% per year over a four-year period, commencing on the first anniversary of

the grant date .

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

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.

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

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

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

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

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

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

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

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

The exercise price

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

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

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

The CEO and EVP of Strategic Initiatives, each

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

Each NQSO granted

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

The exercise price of each NQSO is $ 9.81

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

with the 2003 Plan.

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

Common Stock.

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

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

Each ISO granted has a contractual term of six years and vests at 20% per year over a five-year

period, commencing on the first anniversary of the grant date .

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.

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 has a contractual term of six years and vests at 20% per year over a five-year

period, commencing on the first anniversary of the grant date .

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.

2025, the Company issued an aggregate 47,882 shares of its Common Stock from cashless exercises of options for the purchase of 79,000

shares of the Company’s Common Stock ranging from $ 3.15 to $ 7.75 per share.

Additionally, the Company issued an aggregate 42,900

shares of its Common Stock from cash exercises of options for the purchase of 42,900 shares of the Company’s Common Stock, at exercise

prices ranging from $ 3.15 to $ 7.01 per share, resulting in proceeds of approximately $ 172,000 .

Income tax benefit associated with stock

options exercised with cash during 2025 was approximately $ 19,000 .

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.

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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

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

Additionally, the Company

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

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

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

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

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used to value the options granted were as follows:

OF STOCK OPTIONS VALUATION ASSUMPTIONS

SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS

Stock Options Granted

Weighted-average

fair value per share

-free interest rate (1)

4.04 %- 4.11 %

3.48 %- 4.98 %

volatility of stock (2)

Weighted-average fair value per share

Risk -free interest rate (1)

4.04 %- 4.11 %

Expected volatility of stock

59.07 %- 59.10 %

option life (years) (4)

Dividend yield (3)

Expected option life (years)

Director Stock Options Granted

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.

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.

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

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.

(2) The expected volatility

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

(3) The Company has

never paid any dividends on its Common Stock.

Our Loan Agreement prohibits the Company from paying any cash dividends without prior approval

from our lender.

(4) The expected option

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

following table summarizes stock-based compensation recognized (within SG&A expenses) for fiscal years 2025 and 2024.

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

Stock Options

Employee Stock Options

Director Stock Options

tax benefits associated with stock-based compensation expense were approximately $ 96,000 and $ 71,000 , respectively, for the years ended

1 unchanged sentence

December 31, 2025, the Company had approximately $ 1,910,000 of total unrecognized compensation costs related to unvested options for

employee and directors.

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

employees and directors.

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

approximately 2.8 years.

of Stock Option Plans

summary of the Company’s total plans as of December 31, 2025, and 2024, and changes during the period then ended are presented

OF STOCK OPTIONS ROLL FORWARD

SCHEDULE OF STOCK OPTIONS ROLL FORWARD

Average Exercise Price

1 unchanged sentence

Intrinsic Value (5)

outstanding January 1, 2024

outstanding end of period (1)

exercisable at December 31, 2024 (2)

Options outstanding January 1, 2025

Options outstanding end of period (1)

Options exercisable at December 31, 2025 (2)

Average Exercise Price

1 unchanged sentence

Intrinsic Value (5)

outstanding January 1, 2023

Forfeited/expired

outstanding end of period (2)

exercisable at December 31, 2023 (3)

with exercise prices ranging from $ 3.15 to $ 10.20

with exercise prices ranging from $ 3.15 to $ 9.81

with exercise prices ranging from $ 3.15 to $ 7.50

The intrinsic

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

Options outstanding January 1, 2024

Options outstanding end of period (3)

Options exercisable at December 31, 2024 (4)

Options with exercise

prices ranging from $ 3.31 to $ 12.23 .

Options with exercise

prices ranging from $ 3.31 to $ 10.20 .

Options with exercise

prices ranging from $ 3.15 to $ 10.20 .

Options with exercise

prices ranging from $ 3.15 to $ 9.81 .

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, 2025, and changes during the period then ended are presented as follows:

OF NON VESTED OPTIONS

options January 1, 2024

options at December 31, 2024

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

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

the Company issued a warrant to Mr.

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

Stock at an exercise price of $ 3.51 per share.

The Ferguson Loan was paid in full in December 2020.

Ferguson’s death,

the Ferguson Warrant was transferred equally to Mr.

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

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

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.

SCHEDULE OF NON VESTED OPTIONS

Weighted Average

Non-vested options January 1, 2025

Non-vested options at December 31, 2025

total fair value of stock options vested during the year ended December 2025, and 2024 was approximately $ 734,000 and $ 573,000 , respectively.

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

2 unchanged sentences

These warrants remained outstanding as of December 31, 2025.

Company received proceeds of approximately $ 105,000 from the exercise of a warrant in the first quarter of 2024 for the purchase of up

to 30,000 shares of the Company’s Common Stock at an exercise price of $ 3.51 per share.

The warrant was issued in connection with

a loan that the Company received from Mr.

Robert Ferguson on April 1, 2019.

Stock Issued for Services

11 unchanged sentences

option arrangements.

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

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

dilutive effect of stock options

dilutive effect of warrants

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

SCHEDULE OF EARNINGS PER SHARE

(Amounts in Thousands, Except

for Per Share Amounts)

Loss per common

share from continuing operations

Loss from continuing operations,

Basic loss per share

Diluted loss per share

Loss per common

share from discontinued operations,

Loss from discontinued operations, net of taxes

Basic loss per share

Diluted loss per share

Net loss per common share

Basic loss per share

Diluted loss per share

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

Basic weighted average shares outstanding

dilutive effect of

stock options

dilutive effect of

Diluted weighted average shares outstanding

year ended December 31, 2025, 1,127,901 weighted average shares of common stock underlying options and warrants were excluded from the

computation of diluted earnings per share (“EPS”) because the effect would be anti-dilutive.

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

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

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

Company incurred losses from discontinued operations of $ 410,000 (net of tax benefit of $ 149,000 ) and $ 433,000 (net of tax benefit of

Company incurred net losses from discontinued operations of $ 3,119,000 (net of tax expense of $ 0 ) and $ 410,000 (net of tax benefit of

$ 149,000 ) for the years ended December 31, 2025 and 2024, respectively.

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.

The net loss for 2025 included an increase to the environmental

remediation reserve of approximately $ 2,721,000 at our Perma-Fix South Georgia, Inc.

(“PFSG”) subsidiary discussed below.

The remaining net loss for 2025 and net loss for 2024 were primarily due to costs incurred in connection with management of administrative

and regulatory matters related to our remediation projects.

following table presents the major class of assets of discontinued operations as of December 31, 2025, and December 31, 2024.

1 unchanged sentence

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATION BALANCE SHEET

in Thousands)

(Amounts 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

Environmental

Accounts payable

Accrued expenses and other liabilities

Environmental liabilities

Total current liabilities

Long-term liabilities

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

Closure liabilities

Environmental liabilities

long-term liabilities

(1) net of accumulated

depreciation of $ 10,000 for each period presented.

Environmental

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

discontinued operations.

Remediation Liabilities

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

Perma-Fix of Memphis (“PFM”) and PFSG subsidiaries, all within our discontinued operations.

The Company divested PFD in 2008;

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

the divestiture of PFD.

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

the remediation of surrounding ground water.

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

of December 31, 2024, the Company had total accrued environmental remediation liabilities of $ 767,000 , a decrease of $ 78,000 from the

December 31, 2023 balance of $ 845,000 .

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).

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

These remediation projects principally

entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground water.

The remediation

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

of December 31, 2025, the Company had total environmental remediation liabilities of $ 3,485,000 , an increase of $ 2,718,000 from the December

31, 2024, balance of $ 767,000 .

The net increase of approximately $ 2,718,000 reflects an increase of approximately $ 2,721,000 made to

the reserve at our PFSG subsidiary following a reassessment of remediation cost estimates after clarification of the remediation

plan from the state regulator, offset by payments of approximately

$ 3,000 for our PFSG remediation project.

As of December 31, 2025, approximately $ 76,000 of the total environmental remediation liabilities

were recorded as current.

current and long-term environmental liabilities as of December 31, 2025 and 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, 2025, and December 31, 2024:

OF 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.

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 rates for 2025 and 2024 were 9.5% and 10.5%, 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 .

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 rates for 2025 and 2024 were 9.5 % and 10.5 %, 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

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

Effective interest rates for

2025 and 2024 were 8.3 % and 9.3 %, respectively (1)

Capital Loan dated May 4, 2021, payable

in equal monthly installments of principal, balance due on May 15, 2027 .

Effective interest rates for 2025 and 2024 were were 7.8 %

and 8.7 %, respectively (1)

Debt Issuance Costs

Payable up to 2044, with annual interest rates ranging from 8.1 % to 10.7 % (3)

current portion of long-term debt

Less current portion of long-term debt

Long-term debt

(1) Our revolving credit

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

and equipment.

facility is collateralized by our accounts receivable, and our Term Loan and Capital Loan are collateralized by our property and equipment.

(2) Aggregate unamortized

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

debt issuance costs in connection with the Company’s Credit Facility, which consists of the Revolving Credit, Term Loan and Capital

Loan, as applicable.

2 unchanged sentences

See a discussion of this note

below which include a variable interest rate provision.

Credit and Term Loan Agreement

below which includes a variable interest rate provision.

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”).

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.

been amended, with PNC National Association (“PNC” and “lender”), acting as agent and lender (the “Loan

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

Facility”) which consists of the following as of December 31, 2025:

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

Credit”), which borrowing capacity is subject to eligible receivables (as defined) and reduced by outstanding standby letters of

credit ($ 3,350,000 as of December 31, 2025) and borrowing reductions that the Company’s lender may impose from time to time ($ 750,000

as of December 31, 2025);

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

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

of approximately $ 8,700 plus interest.

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

(i) interest due on the Revolving Credit is at prime (6.75%

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;

(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.

as of December 31, 2025) 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;

(ii) interest due on the Capital Loan is at prime

plus 2.50% or SOFR plus 3.50% plus an SOFR Adjustment applicable for an interest period selected by the Company;

and (iii) interest due

on the Term Loan is at prime plus 3.00% or SOFR plus 4.00% plus an SOFR Adjustment applicable for an interest period selected by the

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

representations and warranties.

A breach of any of these financial covenants, unless waived by PNC, could result in a default under our

Credit Facility allowing our lender to immediately require the repayment of all outstanding debt under our Credit Facility and terminate

all commitments to extend further credit.

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

our Common Stock without prior approval from our lender.

The Company was not required to perform testing of 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

early termination fee applies if the Company pays off its obligations under the Loan Agreement after July 31, 2025.

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

the quarterly fixed charge coverage ratio (“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 (defined

under the Loan Agreement as borrowing availability under the Revolving Credit plus cash in

the money market deposit account (“MMDA”) maintained with the Company’s

If triggered, the Company will be required to show compliance with an 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;

the Facility Fee (as defined) from 0.375% to 0.500%.

Such fee percentage will revert back

to 0.375% 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 ;

payment by the Company of an amendment fee of $ 12,500 , which is being amortized over the remaining term of the Loan Agreement as interest expense-financing

As amended, the Company’s Loan Agreement with PNC, contains certain financial covenants, along with customary representations and

A breach of any of these financial covenants, unless waived by PNC, could result in a default under our Loan Agreement, allowing

our lender to immediately require the repayment of all outstanding debt under our Loan Agreement and terminate all commitments to extend

further credit.

The Company’s Loan Agreement, as amended, prohibits us from paying cash dividends on our Common Stock without prior

approval from our lender.

The Company met all of its financial covenant requirements in 2025.

of December 31, 2025, the Company had no outstanding borrowing under its Revolving Credit and its Liquidity under the Loan Agreement

was approximately $ 18,126,000 .

6 unchanged sentences

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

the Note will consist 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 %.

2 unchanged sentences

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 lender 3.0 % of the total outstanding principal balance under the Note had the Company paid off its obligations during the first year

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.

No prepayment penalty

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

of Long-Term Debt

6 unchanged sentences

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

OF ACCRUED EXPENSES

SCHEDULE OF ACCRUED EXPENSES

Salaries and employee benefits

2 unchanged sentences

Insurance payable

Total accrued expenses

accrued expenses

CLOSURE COSTS AND ARO

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

closure costs represent our estimated environmental liability to clean up our Treatment Segment facilities as required by our permits,

in the event of closure.

1 unchanged sentence

were as follows:

OF CHANGE IN ASSET RETIREMENT OBLIGATION

SCHEDULE OF CHANGE IN ASSET RETIREMENT OBLIGATION

Amounts in thousands

6 unchanged sentences

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

The spending made in each of the years 2025 and 2024 was primarily at our EWOC

The additional closure costs accrual added in 2025 was 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, 2025, and 2024 with the following activity for the years ended December 31, 2025, and 2024:

SCHEDULE OF ASSET RETIREMENT OBLIGATIONS

Amounts in thousands

3 unchanged sentences

Amortization of closure and post-closure asset

Addition to closure and post-closure asset

Balance as of December 31, 2025

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

addition to ARO in 2025 reflects addition to closure obligation as discussed above.

components of loss before income tax expense by jurisdiction for continuing operations for the years ended December 31, consisted of

the following (in thousands):

SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAX (BENEFIT) EXPENSE

United States

United Kingdom

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

31, consisted of the following (in thousands):

OF COMPONENTS OF INCOME TAX (BENEFIT) EXPENSE

Federal income tax (benefit) expense - current

Federal income tax expense (benefit) - deferred

Total loss before tax expense

amount of income taxes paid (net of refunds) for continuing operations for the years ended December 31, consisted of the following (in

SCHEDULE OF INCOME TAX PAID (NET OF REFUNDS)

income tax expense

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

December 31, consisted of the following (in thousands):

SCHEDULE OF COMPONENTS OF INCOME TAX (BENEFIT) EXPENSE

Federal income benefit - current

Federal income tax expense - deferred

State income tax expense - current

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 (benefit) expense at statutory rate

State tax (benefit) expense, net of federal benefit

Difference in foreign rate

Permanent items

Change in deferred tax rates

Reserve for uncertain tax positions

Stock-based compensation

Provision-to-return adjustments

Increase (decrease) in valuation allowance

State income tax expense - deferred

Foreign income tax expense - current

Foreign income tax expense

(benefit) - deferred

income tax expense

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

require the Company to include in its U.S.

income tax return foreign subsidiary earnings in excess of an allowable return on the foreign

subsidiary’s tangible assets.

The Company has elected to account for GILTI tax in the period in which it is incurred and therefore,

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 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.

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

Company’s U.S.

federal statutory rate is 21 %.

The following table reconciles the Company’s U.S federal statutory rate of

21% to its effective tax rate from continuing operations for the years ended December 31, as follows (in thousands except for percentages):

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

(In thousands)

Percentage of

(In thousands)

Percentage of

(In thousands)

Percentage of

(In thousands)

Percentage of

federal statutory tax rate

State income taxes, net of federal effect

Foreign tax effects

research and development tax credit

Increase in valuation allowance

Nontaxable or nondeductible items

Changes in unrecognized tax benefits

Other Adjustments

Effective tax rate

Company has not recorded any state tax expense or benefit for 2025.

Based on the Company’s

state filing profile, California and Tennessee would contribute the majority (greater than

50%) of the tax effect in this category in 2025.

taxes in Tennessee and New Jersey made up the majority (greater than 50%) of the tax effect

in this category for 2024.

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.

In 2024, 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, 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.

table below reflects components of the Company’s deferred tax asset balances for the years ended December 31, as follows:

(in thousands):

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets:

Net operating losses

Environmental and closure reserves

Net operating

Environmental and closure

Lease liability

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Depreciation and amortization

Indefinite lived intangible assets

Indefinite lived intangible

Right-of-use lease asset

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.

Net deferred income

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

$ 46,470,000 and $ 94,925,000 , respectively, as of December 31, 2025.

These NOLs can be carried forward and applied against future taxable

income, if any, and expire in various amounts starting in 2024 .

All of our federal NOLs were generated after December 31, 2017 and thus

do not expire.

Additionally, the Company has estimated NOLs for foreign income tax

purposes of approximately $ 7,994,000 as of December 31, 2025.

All of our NOLs can be carried forward and applied against future taxable

income, if any, and expire in various amounts starting in 2026 with the exception of our federal NOLs which do not expire.

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

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Balances at beginning of year

Addition related to R&D tax credit

Balances at end of the year

related to R&D tax credit

Balances at end of the

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

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tax years 2022 through 2024 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 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.

Company had $ 0 federal income tax payable for each of the years ended December 31, 2025, and 2025.

July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”) tax legislation.

Included in this legislation

are provisions that allow for the immediate expensing of domestic U.S.

research and experimentation expenditures and software development

costs (collectively, “R&E expenditures”), the permanent extension of 100% “bonus” depreciation for certain

property, and the permanent restoration of the tax-basis EBITDA (earnings before interest, taxes and depreciation)-based limitation on

the deductibility of business interest expense.

The Company has reflected the estimated impact of the OBBBA on current and deferred income

taxes in its Consolidated Balance Sheets.

in 2022, the Tax Cuts and Jobs Act of 2017 amended Section 174 to eliminate current-year deductibility of 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 tax years 2022 to 2024, the Company has capitalized a total of $ 8,631,000

of R&E expenditures.

The OBBBA enacted changes to no longer require capitalization of domestic R&E expenditures for tax years

beginning after December 31, 2024.

As such, the Company has no capitalized costs in 2025 and has elected to continue amortizing 2022

to 2024 capitalized expenditures over five years.

AND CONTINGENCIES

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adverse effect on our financial position, liquidity or results of future operations.

Tech EC, Inc.

(“Tetra Tech”)

July 2020, Tetra Tech EC, Inc.

(“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.

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

CH2M subcontracted with environmental consulting and cleanup firms Battelle

Memorial Institute, Cabrera Services, Inc., SC&A, Inc.

and the Company to assist with the review, according to the complaint.

Company’s insurance carrier is providing a defense on our behalf in connection with this lawsuit, subject to a $ 100,000 self-insured

retention and the terms and limitations contained in the insurance policy.

majority of Tetra Tech’s claims have been dismissed by the Court.

Remaining claims include:

(1) Intentional interference with contractual

and (2) inducing a breach of contract.

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 Company and all current directors of the Company (the “Defendants”), 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.

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

The complaint alleged that a proposal submitted to the Company’s stockholders at the Annual Meeting of Stockholders on July 20,

2023, with respect to the Second Amendment to the Company’s 2017 Stock Plan, to increase the number of shares available to be issued

thereunder by 600,000 shares (the “Share Increase Proposal”), failed to pass, despite the Company reporting on its Current

Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2023, that the Share Increase Proposal had in fact passed.

Although the Company calculated the vote in accordance with the vote requirement disclosed in the Company’s proxy statement relating

to, among other matters, the Share Increase Proposal, the putative class action asserted that a vote requirement set forth in Article

II, Section 6 of the Bylaws compelled a different result, specifically, that broker non-votes should have been counted as votes against

the proposal, despite the fact that (i) the Company had consistently excluded broker non-votes as being considered voting present with

respect to a proposal on which the broker is not permitted to vote if not given instruction by the beneficial owner of the shares held

of record by the broker, (ii) the vote requirement set forth in Article II, Section 6 of the Bylaws was explicitly stated as being subject

to law, the Certificate of Incorporation or the Bylaws, and (iii) the more specific voting requirement set forth in Article II, Section

12 of the Bylaws clearly expressed that the voting requirement for all matters other than the election of Directors was “a majority

of the votes that could be cast at the meeting upon a given question.” Since broker non-votes represent shares that could not be

cast on the Share Increase Proposal, the Company believes that it appropriately excluded such shares from the calculation of the vote

on the Share Increase Proposal.

after the Delaware Court of Chancery’s denial of the Company’s motion to dismiss, finding that the Bylaws could be read in

more than one way, the Board acted to eliminate any uncertainty as to the intent of the Bylaws regarding the counting of broker non-votes

and as to the effectiveness of the approval of the Share Increase Proposal.

On November 13, 2025, the Board approved to rescind the Share

Increase Proposal approved on July 20, 2023, and to amend the Bylaws.

Additionally, the Board’s Compensation Committee recommended,

and the Board approved, a new amendment to the Company’s 2017 Plan to increase the number of shares authorized under the 2017 Stock

Plan by 600,000 shares (the “New Amendment”).

The New Amendment, which essentially replaces the rescinded Share Increase

Proposal, is subject to approval by the Company’s stockholders either at a special meeting of the Company’s stockholders

or at the 2026 Annual Meeting of Stockholders, provided any such approval must be obtained within 12 months of the Board’s approval

of the New Amendment.

No options were granted pursuant to the rescinded Share Increase Proposal.

Defendants continue to vigorously defend against the complaint.

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

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Centofanti serves as our Vice President of Information Systems.

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.

For such position, he received annual compensation of $ 200,000 and $ 195,000

for years 2025 and 2024, respectively.

David Centofanti is the son of our Executive Vice President (“EVP”) of Strategic Initiatives, who is also a Board member.

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;

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

to be allocated to the segment and assess its performance;

which discrete financial information is available.

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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,

The Company’s reporting segments exclude our corporate headquarters which

serve 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”)

Financial results for our corporate headquarters are not considered by the CODM in evaluating the performance

of the reportable segments.

Our reporting segments also exclude 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).

Company’s CODM is represented by its Chief Executive Officer (“CEO”) and COO (or “CODM group”).

group 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 income (loss) 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 basis.

The Company’s CODM group does not evaluate

and allocate resources for the reportable segments using assets;

therefore, the Company does not disclose assets for its reporting segments.

table below summarizes loss from operations for the Company’s two reporting segments and its corporate headquarters and provides

reconciliation of such financial metric to the Company’s consolidated totals for the years 2025 and 2024 for our continuing operations.

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, 2025

Segments Total

Consolidated Total

Revenue from external customers

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Cost of goods sold:

Payroll and benefits expenses

Payroll and benefit expenses

Material and supplies expenses

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Total cost of goods sold

Gross (loss) profit

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

Selling, general and administrative expenses

Payroll and benefits

Research and development

Loss on disposal of property and equipment

Loss (gain) on disposal

of property and equipment

Loss from operations

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Interest expense-financing fees

Other expense

Loss from continuing operations before taxes

Income tax expense

Loss from continuing operations, net of taxes

Loss from continuing

operations, net of taxes

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

Segments Total

Consolidated Total

Revenue from external customers

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Cost of Goods Sold:

Payroll and benefit expenses

Payroll and benefits expenses

Material and supplies expenses

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Total cost of goods sold

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

Gross (loss) profit

Payroll and benefits

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Loss on disposal of property and equipment

Income (loss) from operations

Loss from operations

Interest income

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Interest expense-financing fees

Other expense

Income from continuing operations before taxes

Loss 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

Loss from continuing operations, net of taxes

Amounts reflect the activity

for corporate headquarters not included in the segment reporting information.

Other cost of goods sold

for each reportable segment includes:

Treatment - lab, regulatory,

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

Services - material

and supplies, disposal and transportation, lab, regulatory, maintenance, depreciation and amortization, travel, outside services and

general expenses.

Other SG&A for each reportable

segment and Corporate includes:

Treatment-depreciation and

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

Services- travel,

outside services, maintenance and general expenses.

Corporate-maintenance, depreciation

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

Revenue derived from federal government entities, either directly as a prime contractor or indirectly for others

as a subcontractor to federal government entities, was approximately $ 39,243,000 or 63.6 % of total revenue for 2025 and $ 40,550,000 or 68.6 % of total revenue for 2024.

following table reflects revenue based on customer location (in thousands):

SCHEDULE OF REVENUE BASED ON CUSTOMER LOCATION

United States

United Kingdom

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

OF DEPRECIATION AND AMORTIZATION

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

SCHEDULE 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

Depreciation and

following table presents capital expenditures for the years ended December 31, (net of financed amount of $ 464,000 and $ 406,000 for 2025

and 2024, respectively (in thousands):

SCHEDULE 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

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

SCHEDULE OF LONG-LIVED ASSETS FOR CONTINUED OPERATIONS

United States

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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;

for the destruction of PFAS, as well as the cost of installing at least one commercial treatment unit;

(ii) 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.

The 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.

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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.

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’

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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

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.

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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

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

and maintenance costs;

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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 24, 2026, the date that

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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.

Incentive Plans (“MIPs”)

January 22, 2026, the Board (with Mr.

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The total potential target performance compensation payable ranges from 25 % to 150 % of the 2026

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.

base salary for the CEO ($ 107,417 to $ 644,505 ), 29 % to 100 % of the 2026 base salary for the Chief Financial Officer ($ 98,553 to $ 342,795 ),

29 % to 100 % of the 2026 base salary for the EVP of Strategic Initiatives ($ 82,127 to $ 285,666 ), 25 % to 100 % ($ 81,180 to $ 324,725 ) of

the 2026 base salary for the EVP of Hanford and International Waste Operations, and 25 % to 100 % of the 2026 base salary for the COO ($ 82,400

to $ 329,600 ).

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