Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM
7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not
required under Regulation S-K for smaller reporting companies.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking
Statements
Certain
statements contained within this report may be deemed “forward-looking statements” within the meaning of the “Private
Securities Litigation Reform Act of 1995”. All statements in this report other than a statement of historical fact are forward-looking
statements that are subject to known and unknown risks, uncertainties and other factors, which could cause actual results and performance
of the Company to differ materially from such statements. The words “believe,” “expect,” “anticipate,”
“intend,” “will,” and similar expressions identify forward-looking statements. Forward-looking statements contained
herein relate to, among other things,
●
demand
for our services;
●
international
opportunities in 2026;
●
reductions
in the level of government funding in future years;
●
pending
priorities of Congress;
●
passage
of U.S. fiscal year government budgets or enactment of CRs to keep government departments and agencies in operations;
●
improvement
in financial results in 2026;
●
increase
in revenue under Italian contract in late 2026;
●
advancement
of our Perma-FAS technology;
●
demand,
pricing, or throughput levels for PFAS waste volumes are sufficient to offset costs incurred from PFAS initiatives;
●
capability
and capacity of PFNWR facility to support the DFLAW program;
●
treatment
of several effluent waste streams by our PFNWR facility;
●
operational
phase of DFLAW to begin in 2026;
●
increase
in Hanford waste receipts in first half of 2026;
●
delays
in anticipated treatment waste volumes;
●
operating
losses in the near term;
●
reducing
operating costs and non-essential expenditures;
●
ability
to meet our quarterly financial covenant requirements under our loan agreement;
●
expansion
into international markets;
●
cash
flow requirements;
●
sufficient
cash flow and Liquidity to fund operations for the next twelve months;
●
amount
of capital expenditures;
●
manner
in which the applicable government authority will be required to spend funding to remediate various sites;
●
success
in bidding on international contracts;
●
funding
of operating and capital expenditures from existing cash from operations, Liquidity under our Credit Facility, and/or financing;
●
the
efficacy of our PFAS technology process compared to other PFAS destruction or treatment methods;
●
adoption
and acceptance of our PFAS technology are subject to regulatory and market factors;
●
limited
current treatment destruction options for these materials to eliminate generator liabilities;
●
deployment
of the second generation PFAS destruction unit in second half of 2026;
●
expectation
that the second generation PFAS destruction unit will triple our production capacity;
●
funding
of remediation expenditures for sites from funds generated internally;
●
compliance
with environmental regulations;
●
positioning
for procurements from DOE and other government agencies;
●
initiatives
for 2026;
●
adjustment
to remediation reserves;
●
remediation
of material weakness identified;
●
potential
effect of being a PRP; and
●
potential
violations of environmental laws and attendant remediation at our facilities.
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While
the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance such expectations
will prove to be correct. There are a variety of factors which could cause future outcomes to differ materially from those described
in this report, including, but not limited to:
●
general
economic conditions and uncertainties;
●
inability
to properly bid contracts;
●
reduction
in or inability to obtain new contracts with federal, state and local governments, agencies and departments, resulting in a reduction
in revenue;
●
changes
in federal government budgeting and spending priorities;
●
failure
by Congress or other governmental bodies to approve budgets and debt ceiling increases in a timely fashion and related reductions
in government spending;
●
tariff
actions and uncertainties related to trade wars;
●
inability
to meet PNC covenant requirements;
●
inability
to collect in a timely manner a material amount of receivables;
●
increased
competitive pressures;
●
inability
to maintain and obtain required permits and approvals to conduct operations;
●
inability
to develop new and existing technologies in the conduct of operations;
●
inability
to maintain and obtain closure and operating insurance requirements;
●
discovery
of additional contamination or expanded contamination at any of the sites or facilities leased or owned by us or our subsidiaries
which would result in a material increase in remediation expenditures;
●
refusal
of third-party disposal sites to accept our waste;
●
changes
in federal, state and local laws and regulations, especially environmental laws and regulations, or in interpretation of such;
●
new
or additional requirements to handle low-level radioactive and hazardous waste materials;
●
management
retention and development;
●
financial
valuation of intangible assets is substantially more/less than expected;
●
the
need to use internally generated funds for purposes not presently anticipated;
●
inability
of the Company to maintain the listing of its Common Stock on the Nasdaq;
●
terminations
of contracts with government agencies or subcontracts involving government agencies or reduction in amount of waste delivered to
the Company under the contracts or subcontracts;
●
failure
of our Italian team partner to perform its requirements in connection with the Italian project;
●
changes
in the scope of work relating to existing contracts;
●
occurrence
of a health pandemic having adverse effects on the U.S. and world economics;
●
renegotiation
or termination of contracts involving government agencies;
●
disposal
expense accrual could prove to be inadequate in the event the waste requires re-treatment;
●
inability
to raise capital on commercially reasonable terms;
●
inability
to increase profitable revenue;
●
risks
resulting from expanding our service offerings and client base;
●
non-acceptance
of our new technology;
●
adjustments
to our valuation allowance;
●
supply
chain difficulties;
●
pricing
adjustments;
●
cost
reduction measures;
●
new
governmental regulations; and
●
risk
factors contained in Item 1A of this report
Our
forward-looking statements are based on the beliefs and assumptions of our management and the information available to our management
at the time these statements were prepared. Although we believe the expectations reflected in these statements are reasonable, we cannot
guarantee future results, levels of activity, performance, or achievements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update these forward-looking
statements, even if our situation changes in the future.
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