PERMA FIX ENVIRONMENTAL SERVICES INC

Previous wording

Revenue for the first quarter of 2025 increased by approximately $302,000 or approximately 2.2% to $13,919,000 for the first quarter of 2025 from $13,617,000 for the first quarter of 2024. The increase was attributed entirely to our Treatment Segment where revenue increased to $9,186,000 for the first quarter of 2025 from $8,709,000 for the first quarter of 2024, an increase of approximately $477,000 or 5.5%. Services Segment revenue decreased by approximately $175,000 or 3.6% to $4,733,000 for the first quarter of 2025 from $4,908,000 for the first quarter of 2024. Overall gross profit increased by approximately $1,277,000 or 206.0% for the first quarter of 2025 as compared to the corresponding period of 2024. Selling, General, and Administrative (“SG&A”) expenses increased by $471,000 or 13.3% for the three months ended March 31, 2025, as compared to the corresponding period of 2024 (see below “Results of Operations” for further discussions of our financial results).

Current wording

See below “Results of Operations” for further discussions of our financial results for the three and six months ended June 30, 2025 as compared to the corresponding period of 2024.

Previous wording

In December 2024, BWXT Technologies and its team, of which we are a member, were awarded the West Valley Project contract for the cleanup operations at the West Valley Development Project in West Valley, New York. The contract has a 10-year ordering period with a maximum value of up to $3 billion that can be performed for up to 15 years. We expect revenue contribution from this project in the second half of 2025 as our scope under the contract is further defined, approved and transitions into operation. Additionally, we are optimistic that the Direct-Feed Low-Activity Waste (“DFLAW”) program at Hanford, Washington remains on track to begin initial tank waste treatment operations in the third quarter of 2025 which our Perma-Fix Northwest, Richland facility is well-positioned to support. We continue to focus on increasing our expansion into the international markets.

Current wording

Although we saw marginal improvements in our financial results in the second quarter of 2025 and the six months ended June 30, 2025, as compared to the corresponding periods of 2024, our results of operations for these periods did not meet our expectation. However, we believe we are well positioned for continued improvements in the second half of 2025. Our Treatment backlog stands at approximately $13,151,000, an increase of $5,292,000 or 67.3% from the December 31, 2024, balance of $7,859,000. Additionally, in December 2024, BWXT Technologies and its team, of which we are a member, were awarded the West Valley Project contract for the cleanup operations at the West Valley Development Project in West Valley, New York. The contract has a 10-year ordering period with a maximum value of up to $3 billion that can be performed for up to 15 years. We expect revenue contribution from this project in the second half of 2025 as our scope under the contract is further defined, approved and transitions into operation. Also, we expect that the DFLAW program at Hanford, Washington will begin initial tank waste treatment operations in the fourth quarter of 2025 which we believe our PFNWR facility is well-positioned to support. We continue to focus on increasing our expansion into the international markets which is reflected in revenue generated from foreign entities of approximately $3,589,000 for the six months ended June 30, 2025, as compared to $1,030,000 for the corresponding period of 2024, an increase of $2,559,000 or 248.4%. Finally, we continue our aggressive approach in research and development (“R&D”), sales and marketing efforts and capital expenditures of our new PFAS technology which adversely impacted our results of operations for the first six months of 2025 (See “Known Trends and Uncertainties – New Processing Technology” for a discussion of our new technology).

Previous wording

We are continually monitoring our operating costs in order to align with our revenue level.

Current wording

We are attempting to make strategic improvements to our plants and equipment and bolster our operational staff to maximize our revenue production capabilities. We are continually monitoring our operating costs to ensure alignment with our revenue level.

Previous wording

Our Treatment and Services Segments’ business continues to be heavily dependent on services that we provide to federal governmental clients, primarily as subcontractors for others who are contractors to government entities or directly as the prime contractor. We believe demand for our services will continue to be subject to fluctuations due to a variety of factors beyond our control, including, without limitation, current economic and political conditions, the manner in which the applicable government authority will be required to spend funding to remediate various sites, and the potential impact from the Continuing Resolution enacted by Congress through the next fiscal federal government budget. In addition, our governmental contracts and subcontracts relating to activities at federal governmental sites are generally subject to termination for convenience at any time, at the government’s option. Significant reductions in the level of governmental funding or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations, and cash flows.

Current wording

Our Treatment and Services Segments’ business continues to be heavily dependent on services that we provide to federal governmental clients, primarily as subcontractors for others who are contractors to government entities or directly as the prime contractor. We believe demand for our services will continue to be subject to fluctuations due to a variety of factors beyond our control, including, without limitation, current economic and political conditions, government reductions, COVID like events, government budget issues and the manner in which the applicable government authority will be required to spend funding to remediate various sites. In addition, our governmental contracts and subcontracts relating to activities at federal governmental sites are generally subject to termination for convenience at any time, at the government’s option. Significant reductions in the level of governmental funding or specifically mandated levels for different programs that are important to our business could have a material adverse impact on our business, financial position, results of operations, and cash flows.

Previous wording

Consolidated revenues increased $302,000 for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, as follows:

Current wording

Consolidated revenues increased $600,000 for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, as follows:

Previous wording

(1) Includes wastes generated by government clients of $440,000 and $628,000 for the three months ended March 31, 2025, and the corresponding period of 2024, respectively.

Current wording

(1) Includes wastes generated by government clients of $567,000 and $608,000 for the three months ended June 30, 2025, and the corresponding period of 2024, respectively.

Previous wording

Treatment Segment revenue increased by $477,000 or 5.5% for the three months ended March 31, 2025, over the same period in 2024. The overall increase in revenue generated from government clients was primarily due to higher waste volume, partially offset by lower averaged price from waste mix. Revenue generated from government clients included approximately $2,207,000 in revenue generated from foreign waste receipts as the Company remains focused on its international initiatives. The decrease in other nuclear waste was primarily due to lower waste volume, partially offset by higher averaged price from waste mix. The decrease in revenue in the Services Segment was due to lack of projects due in part, to delay in procurement action resulting from the new Administration transition as previously discussed in the “Overview” section. Additionally, our Services Segment revenues are project based; as such, the scope, duration, and completion of each project vary.

Current wording

Treatment Segment overall revenue increased by $3,054,000 or 36.6% for the three months ended June 30, 2025, over the same period in 2024. The overall increase in revenue in the Treatment Segment was primarily due to higher waste volume and higher averaged price waste from waste mix. Our Treatment Segment revenue was also positively impacted by our international initiatives, which resulted in an increase in revenue of approximately $558,000 or 150.8% in revenue as compared to the same period of last year. Services Segment revenue decreased by approximately $2,454,000 or 43.5%. The decrease in revenue in the Services Segment was due to reasons as discussed in the “Overview” section. Additionally, our Services Segment revenues are project based; as such, the scope, duration, and completion of each project vary.

Previous wording

Cost of goods sold decreased $975,000 for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024, as follows:

Current wording

Cost of goods sold decreased $2,253,000 for the quarter ended June 30, 2025, as compared to the quarter ended June 30, 2024, as follows:

Previous wording

Cost of goods sold for the Treatment Segment increased by approximately $175,000 or 2.0%. Treatment Segment’s variable costs decreased by approximately $368,000 primarily due to lower disposal costs, partially offset by higher material and transportation costs. Treatment Segment’s overall fixed costs were higher by approximately $543,000 resulting from the following: salaries and payroll related expenses were higher by $556,000 due to higher headcount, attributed partly to the hiring of additional staff in connection with a certain waste stream as discussed in the “Overview” above. Also, salaries and payroll related expenses were higher in the first quarter of 2025 as more employees took vacation time in the first quarter of 2024 resulting in more hours charged to vacation accrual account; general expenses were higher by $113,000 primarily due to higher utility costs; maintenance expenses were higher by approximately $14,000; and regulatory expenses were lower by approximately $140,000. Services Segment cost of goods sold decreased by $1,150,000 or 21.0%. The decrease in cost of goods sold was primarily due to lower salaries/payroll related, outside services, and travel costs totaling approximately $1,513,000; lower general expenses by approximately $78,000 in various categories; and higher overall material and supplies, disposal, lab and regulatory expenses totaling approximately $441,000. The overall decrease in cost of goods sold within the Services Segment was attributed partly to cost cutting initiatives that we implemented in order to align expenses with revenue backlog. Additionally, cost of goods sold within our Services Segment are subject to variability as projects are competitively bid on. Included within cost of goods sold is depreciation and amortization expense of $421,000 and $404,000 for the three months ended March 31, 2025, and 2024, respectively.

Current wording

Cost of goods sold for the Treatment Segment increased by approximately $466,000 or 2.5%. Treatment Segment’s overall fixed costs were higher by approximately $1,225,000 resulting from the following: salaries and payroll related expenses were higher by $1,221,000 due to higher headcount. Additionally, salaries and payroll related expenses were higher in the first six months of 2025 as more employees took vacation time in the first six months of 2024 resulting in more hours charged to vacation accrual account; general expenses were higher by $124,000 primarily due to higher utility costs; maintenance expenses were higher by approximately $52,000; depreciation expenses were higher by $42,000; and regulatory expenses were lower by approximately $218,000. Treatment Segment’s variable costs decreased by approximately $759,000 primarily due to lower disposal costs of $2,107,000 and lower outside services costs of $79,000, offset by overall higher material and supplies, transportation and other costs of approximately $1,427,000. Within our Treatment Segment, variable cost categories can fluctuate based on waste mix. Services Segment cost of goods sold decreased $3,694,000 or 32.9% primarily due to lower revenue. The decrease in cost of goods sold was primarily due to overall lower salaries/payroll related, outside services, and travel costs totaling approximately $4,012,000; lower depreciation expenses totaling approximately $8,000; lower regulatory costs of $39,000; lower general expenses of approximately $104,000 in various categories; and overall higher material and supplies, lab and disposal costs totaling approximately $469.000. Included within cost of goods sold is depreciation and amortization expense of $845,000 and $810,000 for the six months ended June 30, 2025, and 2024, respectively.

Previous wording

Treatment Segment gross profit increased by $302,000 or approximately 580.8% and gross margin increased to 2.7% from (0.6)% primarily due higher revenue from overall higher waste volume, partially offset by overall lower averaged price from waste mix. The increase in fixed costs negatively impacted gross margin. Services Segment gross profit increased by $975,000 or 171.7% and gross margin increased to 8.6% from (11.6)%. The increase was attributed partly to cost cutting initiatives that we implemented within our Service Segment to align expenses with its revenue backlog as procurement cycles stabilize. Additionally, our overall Services Segment gross margin is impacted by our current projects which are competitively bid on and will therefore, have varying margin structures.

Current wording

Treatment Segment gross profit increased by $2,763,000 or approximately 230.8% and gross margin increased to 13.7% % from (14.3)% primarily due to higher revenue from higher waste volume and higher averaged price from waste mix. The increase in fixed costs within the Treatment Segment negatively impacted gross profit and gross margin. Services Segment gross profit increased by $90,000 or approximately 82.6% and gross margin improved slightly from (1.9)% to (0.6)%. The increases were attributed primarily to overall improved margin on projects and lower fixed costs which were offset by the impact of lower revenue. Our Services Segment gross margin is impacted by our current projects which are competitively bid on and will therefore, have varying margin structures.

Previous wording

SG&A expenses increased $471,000 for the three months ended March 31, 2025, as compared to the corresponding period for 2024, as follows:

Current wording

SG&Aexpenses increased $675,000 for the three months ended June 30, 2025, as compared to the corresponding period for 2024, as follows:

Previous wording

Administrative SG&A expenses were higher primarily due to higher salaries, payroll related expenses and stock option compensation expenses totaling approximately $98,000. The hiring of the Company’s new COO in January 2025 contributed to this increase. Additionally, salaries and payroll related expenses were higher in the first quarter of 2025 as more employees took vacation time in the first quarter of 2024 resulting in more hours charged to vacation accrual account. Administrative Travel expenses were also higher by approximately $12,000 due trips made to the Company’s various facilities by the new COO. The remaining higher expenses in Administrative SG&A expenses were primarily due to higher outside services expenses by approximately $126,000 from more legal and consulting matters. Treatment Segment SG&A expenses were higher primarily due to higher salaries and payroll related expenses of approximately $204,000 as more employee hours were allocated to marketing initiatives of our new PFAS technology. Treatment Segment general expenses were also higher by approximately $87,000 primarily due to higher trade show expenses and higher expenses in various other categories. The decrease in Services Segment SG&A was primarily due to lower salaries and payroll related expenses totaling approximately $117,000, which was partially offset by higher general expenses of approximately $26,000 in various categories, higher travel expenses of approximately $9,000 and higher outside services expenses of approximately $26,000. Included in SG&A expenses is depreciation and amortization expense of $15,000 and $27,000 for the three months ended March 31, 2025, and 2024, respectively.

Current wording

Administrative SG&A expenses were higher primarily due to higher salaries, payroll related expenses and stock option compensation expenses totaling approximately $203,000. The hiring of the Company’s new COO in January 2025 contributed to this increase. Additionally, salaries and payroll related expenses were higher in the first six months of 2025 as more employees took vacation time in the first six months of 2024 resulting in more hours charged to vacation accrual account. The remaining higher expenses in Administrative SG&A expenses were primarily due to higher outside services expenses by approximately $228,000 from more legal, consulting and business matters, higher general expenses of approximately $21,000 in various categories and higher travel expenses of approximately $27,000 due to more travel by senior management. Treatment Segment SG&A expenses were higher primarily due to the following: salaries and payroll related expenses were higher by approximately $414,000 as more employee hours were allocated to marketing initiatives of our new PFAS technology and overall business development; bad debt expenses were higher by approximately $31,000; general expense were higher by approximately $120,000 in various categories (which include higher tradeshow expense of approximately $53,000); travel expenses were higher by $11,000; and outside services expenses were lower by approximately $10,000. Services Segment SG&A expenses were higher primarily due to the following: salaries and payroll related expenses were higher by approximately $29,000 as more employee hours were spent on bid and proposals in the second quarter of 2025 as discussed above; general expenses were higher by approximately $41,000 in various categories; outside services expenses were higher by approximately $29,000 due to more consulting matters; and travel expense were slightly higher by approximately $2,000. Included in SG&A expenses is depreciation and amortization expense of $28,000 and $52,000 for the six months ended June 30, 2025, and 2024, respectively.

Previous wording

Interest income increased by approximately $161,000 in the first quarter of 2025 as compared to the corresponding period of 2024 primarily due to interest income earned from funds deposited into our money market deposit account (“MMDA”) from the two equity raises that were completed in May 2024 and December 2024.

Current wording

Interest income increased by approximately $88,000 and $249,000 for the three and six months ended June 30, 2025, respectively, as compared to the corresponding period of 2024 primarily due to higher interest income earned from funds deposited into our money market deposit account (“MMDA”) from the two equity raises that were completed in May 2024 and December 2024.

Previous wording

We had income tax expense of $0 and income tax benefit of approximately $956,000 for continuing operations for the three months ended March 31, 2025, and 2024, respectively. Our effective tax rate was approximately 0% and 21.7% for the three months ended March 31, 2025, and 2024, respectively. Our effective tax rate for the three months ended March 31, 2025, was impacted by our recognition of a full valuation allowance against our U.S federal and state deferred tax assets in the quarter ended September 30, 2024. Our effective tax rate for the three months ended March 31, 2024, was impacted by non-deductible expenses and state taxes.

Current wording

We had income tax expense of $0 and income tax benefit of $1,161,000 for continuing operations for the three months ended June 30, 2025, and the corresponding period of 2024, respectively, and income tax expense of $0 and income tax benefit of $2,117,000 for continuing operations for the six months ended June 30, 2025, and the corresponding period of 2024, respectively. Our effective tax rates were approximately 0% and 23.5% for the three months ended June 30, 2025, and the corresponding period of 2024, respectively, and 0% and 22.6% for the six months ended June 30, 2025, and the corresponding period of 2024, respectively. Our effective tax rates for the three and six months ended June 30, 2025, were impacted by our recognition of a full valuation allowance against our U.S federal and state deferred tax assets in the quarter ended September 30, 2024. Our effective tax rates for the three and six months ended June 30, 2024, were impacted by non-deductible expenses and state taxes.

Previous wording

Our cash flow requirements during the three months ended March 31, 2025, were primarily financed by our Liquidity (defined under our Loan Agreement as borrowing availability under the revolving credit plus cash in our MMDA maintained with our lender). We believe our cash flow requirements for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on our debt obligations, remediation projects, R&D on our PFAS technology and capital expenditures (which include our PFAS technology) (see “Known Trends and Uncertainties – New Processing Technology” within this MD&A for a discussion of this technology). We plan to fund these requirements from our operations and our Liquidity. We are 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 March 31, 2025, we had no outstanding borrowing under our revolving credit and our Liquidity was approximately $29,277,000. We believe that our cash flows from operations and our Liquidity should be sufficient to fund our operations for the next twelve months. Although we believe our operations should improve in the remainder of 2025, if we continue to incur losses such as in the first quarter of 2025, this could cause a reduction in our Liquidity.

Current wording

Our cash flow requirements during the six months ended June 30, 2025, were financed by our Liquidity (defined under our Loan Agreement as borrowing availability under the revolving credit plus cash in our MMDA maintained with our lender). Our MMDA consist of cash received in connection with the sale of our Common Stock completed in 2024 as discussed below under “Financing Activities.” We believe our cash flow requirements for the next twelve months will consist primarily of general working capital needs, scheduled principal payments on our debt obligations, remediation projects, R&D on our PFAS technology and capital expenditures (which include our PFAS technology) (see “Known Trends and Uncertainties – New Processing Technology” within this MD&A for a discussion of this technology). We plan to fund these requirements from our operations and our Liquidity. We are 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 June 30, 2025, we had no outstanding borrowing under our Revolving Credit and our Liquidity was approximately $25,440,000. We believe that our cash flows from operations and our Liquidity should be sufficient to fund our operations for the next twelve months. Although we believe our operations should improve in the remainder of 2025, if we continue to incur losses such as in the first and second quarters of 2025, this could cause a reduction in our Liquidity.

Previous wording

The following table reflects the cash flow activities during the first three months of 2025 and 2024:

Current wording

The following table reflects the cash flow activities during the first six months of 2025 and 2024.

Previous wording

As of March 31, 2025, we were in a positive cash position with no revolving credit balance. As of March 31, 2025, we had cash on hand of approximately $25,745,000.

Current wording

As of June 30, 2025, we were in a positive cash position with no revolving credit balance. As of June 30, 2025, we had cash on hand of approximately $22,594,000.

Previous wording

Cash used in operating activities of our continuing operations during the first quarter of 2025 consisted mostly of the significant net loss that we incurred of approximately $3,500,000, adjusted for certain non-cash items, such as $196,000 of stock-based compensation expenses and $436,000 of depreciation and amortization expenses. Cash flow increase of approximately $668,000 resulting from net change in assets and liabilities included a decrease in accounts receivable (net of provision for credit losses) of $2,248,000 and a decrease in deferred revenue of approximately $830,000. Our accounts receivables are impacted by timing of invoicing and collections. Our contracts with our customers are subject to various payment terms and conditions.

Current wording

Cash used in operating activities of our continuing operations during the first six months of 2025 consisted mostly of the significant net loss that we incurred of approximately $6,083,000, adjusted for certain non-cash items, such as $382,000 of stock-based compensation expenses and $873,000 of depreciation and amortization expenses. Cash flow increase of approximately $738,000 resulting from net change in assets and liabilities reflects a decrease in accounts receivable (net of provision for credit losses) of $2,974,000, a net decrease in inventories, prepaids and other assets totaling approximately of $463,000, offset by an increase in unbilled receivables of $1,297,000 and a net decrease in accounts payable, accrued expenses, deferred revenue and other accruals totaling approximately $1,402,000. Our accounts receivables are impacted by timing of invoicing and collections. Our contracts with our customers are subject to various payment terms and conditions.

Previous wording

Cash used in operating activities of our continuing operations during the first quarter of 2024 consisted primarily of the significant net loss that we incurred of approximately $3,458,000, adjusted for certain non-cash items, which included $152,000 of stock-based compensation expenses, $431,000 of depreciation and amortization expense and deferred income tax benefit of $956,000. Cash flow decrease of approximately $646,000 resulting from net change in assets and liabilities included a decrease in accounts payables of approximately $1,603,000 and a decrease in accounts receivable (net of recovery of credit losses) of $1,032,000. Our accounts payable are impacted by the timing of our payments as we are continually managing payment terms with our vendors to maximize our cash position.

Current wording

Cash used in operating activities of our continuing operations during the first six months of 2024 consisted primarily of the significant net loss that we incurred of approximately $7,243,000, adjusted for certain non-cash items, which included $284,000 of stock-based compensation expenses, $862,000 of depreciation and amortization expense and deferred income tax benefit of $2,117,000. Cash flow increase of approximately $2,388,000 resulting from net change in assets and liabilities included a net decrease in accounts receivable (net of recovery in credit losses) and unbilled receivables totaling approximately $4,667,000, a net decrease in inventories and prepaid and other assets totaling approximately of $1,670,000, offset by a net decrease in accounts payables, accrued expenses, deferred revenue and other accruals totaling approximately $3,949,000.

Previous wording

Cash used in operating activities of our discontinued operations in the first quarter of 2025 and 2024 consisted primarily of expenses incurred in connection with management and administration of regulatory matters for the Company’s remediation projects. Cash used in operating activities of our discontinued operations in the first quarter of 2025 was reduced by monthly rent payments of approximately $8,800, received from a tenant under a leasing agreement entered into on June 1, 2024, by our PFSG subsidiary, leasing a portion of the PFSG property.

Current wording

Cash used in operating activities of our discontinued operations in the first six months of 2025 and 2024 consisted primarily of expenses incurred in connection with management and administration of regulatory matters for the Company’s remediation projects.

Previous wording

We had working capital of $24,632,000 (which included working capital of our discontinued operations) as of March 31, 2025, as compared to working capital of $28,283,000 as of December 31, 2024. The decrease in our working capital was primarily due to the significant losses incurred from our operations as previously discussed.

Current wording

We had working capital of $21,481,000 (which included working capital of our discontinued operations) as of June 30, 2025, as compared to working capital of $28,283,000 as of December 31, 2024. The decrease in our working capital was primarily due to the losses incurred from our operations during the six months of 2025 as previously discussed.

Previous wording

Cash used in investing activities of our continuing operations in the first quarter of 2025 consisted mostly of our purchases of property and equipment totaling approximately $655,000, of which $132,000 was financed. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating permits and certain intangible assets.

Current wording

Cash used in investing activities of our continuing operations in the first six months of 2025 consisted mostly of our purchases of property and equipment totaling approximately $1,564,000, of which $132,000 was financed. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating permits and certain intangible assets. Total cash used in investing activities of our continuing operations was partially offset by approximately $33,000 from our sale of idle equipment.

Previous wording

Cash used in investing activities of our discontinued operations in the first quarter of 2025 consisted of payments made in connection with a certain regulatory permit at our PFSG subsidiary.

Current wording

Cash used in investing activities of our discontinued operations in the first six months of 2025 consisted of payments made in connection with a certain regulatory permit at our PFSG subsidiary.

Previous wording

Cash used in investing activities of our continuing operations in the first quarter of 2024 consisted mostly of our purchases of property and equipment totaling approximately $288,000, of which $44,000 was financed. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating permits and certain intangible assets.

Current wording

Cash used in investing activities of our continuing operations in the first six months of 2024 consisted mostly of our purchases of property and equipment totaling approximately $885,000, of which $44,000 was financed. The remaining cash used in investing activities of $502,000 consisted of cash outlays made in connection with our operating permits and certain intangible assets.

Previous wording

The increase in our purchases of property and equipment in 2025 as compared to 2024 was primarily due to capital expenditures made in connection with our PFAS technology which included the installation of our first unit in addition to upgrades made to the unit.

Current wording

The increase in our purchases of property and equipment in the six months ended June 30, 2025, as compared to the corresponding period of 2024 was primarily due to capital expenditures made in connection with our PFAS technology and plant improvements and equipment purchases related to increased productivity and safety measures.

Previous wording

We anticipate making capital expenditures of approximately $2,000,000 to $5,500,000 in 2025 to maintain operations and regulatory compliance requirements and support revenue growth. Our anticipated capital expenditures for 2025 include certain strategic project initiatives which include the installation of our second generation unit for our PFAS technology. We plan to fund our capital expenditures for 2025 from cash from operations, Liquidity and/or financing. The initiation and timing of our capital expenditures in 2025 are subject to a number of factors which include, among other things, cost/benefit analysis, the pace of our strategic project initiatives and improvement in our operations.

Current wording

We anticipate making capital expenditures of approximately up to $6,000,000 for the twelve months ended December 31, 2025, to maintain operations and regulatory compliance requirements and support revenue growth. Our anticipated capital expenditures for 2025 include certain strategic project initiatives which include the installation of our second generation unit for our PFAS technology (see “Known Trends and Uncertainties – New Processing Technology”). We plan to fund our capital expenditures for 2025 from cash from operations, Liquidity and/or financing. The initiation and timing of our capital expenditures in 2025 are subject to a number of factors which include, among other things, cost/benefit analysis, the pace of our strategic project initiatives and improvement in our operations.

Previous wording

Our cash used in financing during the first quarter of 2025 consisted mostly of principal payments of approximately $157,000 primarily for our Term and Capital Loans under our Credit Facility (see below for a discussion of our Credit Facility) principal payments of $71,000 for our finance leases, payments of $194,000 of offering costs from the equity raise that we completed in December 2024, partially offset by proceeds received from option exercises of approximately $41,000.

Current wording

Our cash used in financing during the first six months of 2025 consisted mostly of principal payments of approximately $313,000 primarily for our Term and Capital Loans under our Credit Facility (see below for a discussion of our Credit Facility) principal payments of $148,000 for our finance leases, payments of $194,000 of offering costs from the equity raise that we completed in December 2024, partially offset by proceeds received from option exercises of approximately $49,000.

Previous wording

Our cash used in financing during the first quarter of 2024 consisted mostly of principal payments of approximately $259,000 for our Term and Capital Loans under our Credit Facility principal payments of $75,000 for our finance leases, partially offset by proceeds received from option and warrant exercises of approximately $209,000.

Current wording

Our cash provided in financing during the first six months of 2024 consisted primarily of net proceeds of $18,636,000 received from the sale of our Common Stock in May 2024 and proceeds received from option and warrant exercises totaling approximately $218,000, partially offset by principal payments of approximately $520,000 for our Term and Capital Loans under our Credit Facility and principal payments of $146,000 for our finance leases.

Previous wording

Our Loan Agreement, as amended, with PNC, contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, 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. We met all of our financial covenant requirements in the first quarter of 2025. We expect to meet our covenant requirements under our Loan Agreement for the next twelve months.

Current wording

Our Loan Agreement, as amended, with PNC, contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, 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. We met all of our financial covenant requirements in the first and second quarters of 2025. We expect to meet our covenant requirements under our Loan Agreement for the next twelve months.

Previous wording

From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. As of March 31, 2025, the total amount of standby letters of credit outstanding totaled approximately $3,200,000 and the total amount of bonds outstanding totaled approximately $21,481,000. We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through AIG. As of March 31, 2025, the closure and post-closure requirements for these facilities were approximately $23,949,000.

Current wording

From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. As of June 30, 2025, the total amount of standby letters of credit outstanding totaled approximately $3,200,000 and the total amount of bonds outstanding totaled approximately $21,044,000. We also provide closure and post-closure requirements through a financial assurance policy for certain of our Treatment Segment facilities through AIG. As of June 30, 2025, the closure and post-closure requirements for these facilities were approximately $23,951,000.

Previous wording

See “Note 2 – Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” for the recent accounting pronouncement that was adopted in the first quarter of 2025 and recent accounting pronouncements that will be adopted in future periods.

Current wording

See “Note 2 – Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” for the recent accounting pronouncement that was adopted in the first six months of 2025 and recent accounting pronouncements that will be adopted in future periods.

Previous wording

Significant Customers. The contracts that we are a party to with others as subcontractors to the federal government or directly with the federal government generally provide that the government may terminate the contract at any time for convenience at the government’s option. Our inability to continue under existing contracts that we have with the federal government authorities (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition. We performed services relating to waste generated by federal government clients, either indirectly as a subcontractor or directly as a prime contractor to federal government entities, representing approximately $8,404,00 or 60.4% of our total revenue during the three months ended March 31, 2025, as compared to $9,373,000 or 68.8% of our total revenue during the corresponding period of 2024.

Current wording

Significant Customers. The contracts that we are a party to with others as subcontractors to the federal government or directly with the federal government generally provide that the government may terminate the contract at any time for convenience at the government’s option. Our inability to continue under existing contracts that we have with the federal government authorities (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition. We performed services relating to waste generated by federal government clients, either indirectly as a subcontractor or directly as a prime contractor to federal government entities, representing approximately $9,204,000 or 63.1% and $17,609,000 or 61.8% of our total revenues during the three and six months ended June 30, 2025, respectively, as compared to $9,669,000 or 69.1% and $18,699,000 or 67.7% of our total revenues during the corresponding period of 2024.

Previous wording

Market Trends and Uncertainties. Macroeconomic conditions which include recent government and policy changes implemented in the United States, tariff actions and uncertainties related to trade wars, ambiguity around interest rates, softening labor markets, have created significant uncertainty in the global economy, volatility in the capital markets and recessionary pressures. We continue to monitor potential effects from these conditions that could impact our revenue and profitability which include supply chain challenges, cost volatility in goods that we utilize in our revenue production, and economic pressures on our customers that may result in reduced spending. While we have experienced limited impact from these conditions at this time, we continue to evaluate and implement a range of strategic options to manage potential impacts from these factors, including supply chain optimization, pricing strategies, sourcing adjustments and cost reduction measures in order to minimize impacts to our financial results.

Current wording

Market Trends and Uncertainties. Macroeconomic conditions which include recent government and policy changes implemented in the United States, tariff actions and uncertainties related to trade wars, ambiguity around interest rates, softening labor markets, have created significant uncertainty in the global economy, volatility in the capital markets and recessionary pressures. We continue to monitor potential effects from these conditions that could impact our revenue and profitability which include supply chain challenges, cost volatility in goods that we utilize in our revenue production, and economic pressures on our customers that may result in reduced spending. While we have experienced limited impact from these conditions at this time, we continue to evaluate and implement a range of strategic options which we believe will assist us to manage potential impacts from these factors, including supply chain optimization, pricing strategies, sourcing adjustments and cost reduction measures in order to minimize impacts to our financial results.

Previous wording

*New Processing Technology.*We have completed the fabrication, installation, commissioning and startup of our first full scale commercial Perma-FAS system (“System”) for PFAS destruction, located at our Perma-Fix Florida, Inc. facility. PFAS, commonly known as “forever chemicals,” is the acronym for Perfluoroalkyl and Polyfluoroalkyl Substances, a diverse group of thousands of human-made chemical pollutants that have the potential to persist in both the environment and the human body. An increasing number of studies have documented adverse health risks that are associated with PFAS exposure, including increased risks of some cancers, reduced immune function, and developmental delays in children. Commercial destruction of PFAS offers a promising new source of revenue for us, as it complements our core waste remediation technologies, and we have filed patent applications relating to our System technology for PFAS destruction. With the successful startup of our pilot System, we have already processed commercial quantities of PFAS-containing waste materials. There are limited current treatment options for these materials, and we expect that our process will exceed any of these other current methods. Some of the sizable markets for PFAS include AFFF (aqueous film-forming foam) firefighting foams, both expired concentrate and flushing liquids, contaminated liquids from PFAS systems, and other water-based separation products from a variety of industrial systems. We have already secured and are treating approximately 10,000 gallons of AFFF liquids to support ongoing operations, demonstration, and further testing of our System. We believe that we will receive an additional 50,000 gallons in the coming months.

Current wording

*New Processing Technology.*We have completed the fabrication, installation, commissioning and startup of our first full scale commercial Perma-FAS system (“System”) for PFAS destruction, located at our Perma-Fix Florida, Inc. facility. PFAS, commonly known as “forever chemicals,” is the acronym for Perfluoroalkyl and Polyfluoroalkyl Substances, a diverse group of thousands of human-made chemical pollutants that have the potential to persist in both the environment and the human body. An increasing number of studies have documented adverse health risks that are associated with PFAS exposure, including increased risks of some cancers, reduced immune function, and developmental delays in children. Commercial destruction of PFAS offers a promising new source of revenue for us, as it complements our core waste remediation technologies, and we have filed patent applications relating to our System technology for PFAS destruction. With the successful startup of our pilot System, we have already processed commercial quantities of PFAS-containing waste materials. There are limited current treatment options for these materials, and we expect that our process will exceed any of these other current methods. Some of the sizable markets for PFAS include AFFF firefighting foams, both expired concentrate and flushing liquids, contaminated liquids from PFAS systems, and other water-based separation products from a variety of industrial systems. We have already secured and are treating approximately 10,000 gallons of AFFF liquids to support ongoing operations, demonstration, and further testing of our System. We believe that we will receive an additional 50,000 gallons in the coming months.

Previous wording

Our strategy for our System includes continued treatment of PFAS liquids over the coming months and targeting engineering refinements to support larger-scale Systems. With significant upgrades to our prototype currently in the design phase, we anticipate deployment of the second generation unit in the fourth quarter of 2025 at one of our other existing treatment facilities. By the third quarter of 2025, we expect to advance this technology into pilot-scale applications for soil, biosolids, and filter media, broadening the reach of our System’s PFAS destruction capabilities.

Current wording

Our strategy for our System includes continued treatment of PFAS liquids over the coming months and targeting engineering refinements to support larger-scale Systems. With significant upgrades to our prototype currently in the design phase, we anticipate deployment of the second generation unit in the fourth quarter of 2025 at one of our other existing treatment facilities. In the next several calendar quarters we expect to advance the Perma-FAS technology from demonstrated successful bench-scale testing to pilot-scale applications for soil, biosolids, and filter media, broadening the reach of our System’s PFAS destruction capabilities.

Previous wording

We have three environmental remediation projects, all within our discontinued operations, which principally entail the removal/remediation of contaminated soil, and, in most cases, the remediation of surrounding ground water. We expect to fund the expenses to remediate these sites from funds generated from operations. As of March 31, 2025, we had total accrued environmental remediation liabilities of $767,000, no change from the December 31, 2024 balance of $767,000. As of March 31, 2025, the total balance of the accrued environmental remediation liabilities was recorded as long-term.

Current wording

We have three environmental remediation projects, all within our discontinued operations, which principally entail the removal/remediation of contaminated soil, and, in most cases, the remediation of surrounding ground water. We expect to fund the expenses to remediate these sites from funds generated from operations. As of June 30, 2025, we had total accrued environmental remediation liabilities of $764,000, a decrease of $3,000 from the December 31, 2024 balance of $767,000. The decrease represents payments for our PFSG remediation project. As of June 30, 2025, the total balance of the accrued environmental remediation liabilities was recorded as long-term.