PERMA FIX ENVIRONMENTAL SERVICES INC

Current report

We have sustained losses during 2024, 2025, and the first six months of 2026.

Current report

The Company sustained significant losses during 2024, 2025, and the first six months of 2026. We believe that our results of operations should improve starting in the second half of 2026. If, however, we fail to become profitable on an annualized basis in the foreseeable future, this could have a material adverse effect on our operations, credit facility, liquidity and potential growth. Continuing losses may require us to seek additional liquidity through equity or other financing arrangements, potential asset dispositions, or other strategic alternatives. We may also be required to reduce certain operating expenditures, including, but not limited to, reduction in R&D activities.

Current report

As described in Note 1 to our unaudited condensed consolidated financial statements, our recurring operating losses and negative cash flows from continuing operations have raised substantial doubt about our ability to continue as a going concern within one year after the date those financial statements are issued. Although the May 2026 equity offering significantly increased our liquidity, management concluded that the substantial doubt was not alleviated because a significant portion of the revenues and cash flows underlying our forecast depends on the timing and volume of waste shipments and project activity directed by U.S. government customers. Those customers do not provide binding assurances regarding the timing or volume of future work, and such activity is subject to appropriations, procurement processes, operational considerations and other factors outside our control. We expect that the operational developments and backlog discussed in this report may result in improved operating results during the second half of 2026; however, the timing and amount of any improvement remain subject to significant uncertainty.

Current report

Entry into Material Definitive Agreements

Current report

On August 10, 2026, subsequent to the end of the fiscal quarter ended June 30, 2026, and within four business days prior to the filing of this Quarterly Report on Form 10-Q, the Company and certain of its subsidiaries entered into an amendment to the PNC Loan Agreement. The amendment, among other things, extended the maturity date of the credit facility from May 15, 2027 to May 15, 2030 and eliminated the annual capital expenditure limitation of $6,000,000, provided that the Company maintains a minimum daily PNC Liquidity of $5,000,000. If PNC Liquidity falls below $5,000,000, the annual capital expenditure limitation of $6,000,000 becomes applicable.

Current report

Contract Award

Current report

On August 10, 2026, subsequent to the end of the fiscal quarter ended June 30, 2026, and within four business days prior to the filing of this Quarterly Report on Form 10-Q, the Company was awarded a Master IDIQ Subcontract by Hanford Tank Waste Operations & Closure, LLC (“H2C”) for the treatment and disposal of pretreated liquid mixed low-level waste from DOE’s Hanford Site (the “Company’s Master Subcontract”). H2C also awarded Master IDIQ Subcontracts to two other companies. H2C is the prime contractor to DOE’s Office of Environmental Management for tank waste operations and closure at the Hanford Site in southeastern Washington State. Work awarded to the Company under future task orders, if any, under the Company’s Master Subcontract, would be performed at its PFNW facility in Richland, Washington and would include the receipt and treatment of pretreated mixed low-level waste, with treated waste transported by rail for final disposal at a licensed commercial mixed low-level waste disposal facility outside the State of Washington. Task orders may be issued from January 1, 2027 through December 31, 2041, with performance of task orders issued before the end of the ordering period permitted for up to five years beyond the end of the ordering period. The multiple-award IDIQ procurement provides for a maximum cumulative quantity of 50 million gallons, with a maximum cumulative value of approximately $4.4 billion. These amounts represent procurement ceilings shared among all Master IDIQ Subcontract holders and do not represent amounts awarded or committed to the Company. The number, size and timing of task orders to be issued to the Company, if any, cannot be assured. Under the Company’s Performance Work Statement, the Company is required to maintain the capability to treat and dispose of pretreated tank waste at a rate of 100,800 gallons per week in accordance with facility license and permit conditions.

Current report

The foregoing description of the amendment to the PNC Loan Agreement under “Credit Facility” does not purport to be complete and is qualified in its entirety by reference to the amendment, which is filed as Exhibits 4.1 and 10.6 to this Form 10-Q and incorporated herein by reference.

Current report

The information set forth above under “Credit Facility” is being provided pursuant to Items 1.01 and 2.03 of Form 8-K and the information set forth above under “Contract Award” is being provided pursuant to Item 1.01 of Form 8-K.

Previous report

Our Liquidity (defined under our PNC Loan Agreement as borrowing availability under the Revolving Credit facility plus cash in our MMDA maintained with our lender) declined from $18,126,000 at December 31, 2025 to $10,720,000 at March 31, 2026, driven by ongoing operating losses, investments in PFAS technology, and infrastructure expansion, among other things. While we expect to fund operations through cash on hand, anticipated operating cash flows, and availability under our Revolving Credit facility, these sources are subject to uncertainty, including federal budget constraints and compliance with financial covenants. If these sources are insufficient, we may need to obtain additional financing or reduce expenditures, including R&D, which could materially adversely affect our business.

Previous report

On May 1, 2026, the Compensation Committee and the Board approved, and the Company entered into employment agreements, which became effective May 1, 2026, with each of the Company’s executive officers (each, an “Executive” and, collectively, the “Executives”): Mark Duff, President and CEO; Ben Naccarato, CFO and EVP; Dr. Louis Centofanti, EVP of Strategic Initiatives; Richard Grondin, EVP of Hanford Waste Operations; and Troy Eshleman, COO (each such employment agreement is, individually, a “New Employment Agreement” and, collectively, the “New Employment Agreements”). The New Employment Agreements effectively replace existing employment agreements that the Company had previously entered into with each of the Executives, all of which had expired on April 20, 2026.

Previous report

The New Employment Agreements are substantially identical, except for compensation amounts and certain post-termination covenants. Pursuant to the New Employment Agreements, each of the Executives is provided an annual salary, which annual salary may be increased from time to time, but not reduced, as determined by the Compensation Committee. The base salary under the New Employment Agreement of each Executive is as follows: Mark Duff, $429,670; Troy Eshleman, $329,600; Ben Naccarato, $342,795; Dr. Louis Centofanti, $285,666; and Richard Grondin, $324,725. In addition, each of the Executives is entitled to participate in the Company’s broad-based benefit plans and is eligible to receive equity awards under the Company’s employee stock option plan and to receive certain performance-based compensation that may be payable under the specific MIP applicable to each such Executive as approved by the Compensation Committee and the Board. Individual MIPs for the 2026 fiscal year commencing January 1, 2026, were previously approved by the Compensation Committee and the Board on January 22, 2026, each of which remains effective for fiscal year 2026 (See “Note 13 – Executive Compensation MIPs” for further discussion of the 2026 MIPs).

Previous report

Each of the New Employment Agreements is effective for three years from May 1, 2026 through April 30, 2029, unless earlier terminated by the Company or the Executive under the circumstances described in the New Employment Agreements and discussed below.

Previous report

Pursuant to the New Employment Agreements, if the Executive’s employment is terminated due to death or disability (as defined in the New Employment Agreements), the Company will pay to the Executive or to his estate an amount equal to (a) the sum of any accrued and unpaid base salary, reimbursement for any unreimbursed expenses properly incurred through the date of termination, accrued unused vacation time through the date of termination, and any benefits due to the Executive under any employee benefit plan (the “Accrued Amounts”), (b) performance compensation payable pursuant to the MIP with respect to the fiscal year immediately preceding the date of termination, if not already paid (“Prior Year Unpaid Bonuses”), (c) a pro-rata portion of the performance compensation payable pursuant to the MIP for the year of termination based on the number of days employed during the year (“Pro Rata Incentive Bonus”), and (d) a lump-sum payment (the “Cash Medical Continuation Benefit”) equal to eighteen times the monthly premium that would be required to be paid, pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), to continue group health coverage for the Executive’s eligible covered dependents (in the event of death) or for the Executive and his eligible covered dependents (in the event of disability), as in effect on the date of the Executive’s termination of employment, based on the premium for the first month of COBRA coverage. Such cash payment will be taxable and will be made regardless of whether COBRA continuation coverage is elected by the Executive.

Previous report

If the Executive terminates his employment for “good reason” (as defined in the New Employment Agreements) or is terminated by the Company “without cause” (as defined in the New Employment Agreements), under circumstances not constituting a Change in Control (as defined in the New Employment Agreements), the Company will pay the Executive, (a) the Accrued Amounts, (b) Prior Year Unpaid Bonuses, (c) two years of full base salary, (d) performance compensation amount under the MIP in effect for the year in which the Executive is terminated, assuming for purpose of this payment that the Executive has achieved 100% of the performance target level identified in the MIP (the “Target Bonus”), and (e) the Cash Medical Continuation Benefit.

Previous report

If the Executive terminates his employment for “good reason” or is terminated by the Company without cause within 24 months following a “Change in Control (as defined in the New Employment Agreements), the Company will pay the Executive (a) the Accrued Amounts, (b) Prior Year Unpaid Bonuses, (c) two years of full base salary, (d) two times the Target Bonus, and (e) the Cash Medical Continuation Benefit.

Previous report

If the Executive’s employment is terminated by the Company for “cause” (as defined in the New Employment Agreement) or the Executive terminates his employment for a reason other than for “good reason,” the Company will pay to the Executive the Accrued Amounts and Prior Year Unpaid Bonuses.

Previous report

Additionally, pursuant to the New Employment Agreements, in the event of the death or termination of the executive officer due to disability, all outstanding stock options to purchase Common Stock of the Company held by the Executive will immediately become exercisable in full commencing on the date of death or termination due to disability, with such options remaining exercisable for the earlier of the original option term or twelve months from the date of the Executive’s death or termination due to disability. In the event an Executive terminates his employment for “good reason” or is terminated by the Company without cause, under circumstances not involving a change in control, all then vested options at the time of termination will remain exercisable for the earlier of 12 months from the date of the Executive’s date of termination or the original term of the options. In the event an Executive terminates his employment for “good reason” or is terminated by the Company without cause within 24 months following a Change in Control, all outstanding stock options to purchase Common Stock held by the Executive will immediately become exercisable in full commencing on the date of termination with such options remaining exercisable for the earlier of the original option term or twelve months from the date of termination.

Previous report

Severance benefits payable with respect to a termination (other than Accrued Amounts) shall not be payable until the termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A.

Previous report

Each of the New Employment Agreements contain covenants relating to confidentiality and non-solicitation of employees, and, in the case of the New Employment Agreements of the CEO and COO, non-competition covenants, all of which covenants extend for the twelve (12) month period immediately following the Executive’s termination of employment with the Company for any reason.

Previous report

The descriptions of the material terms of the New Employment Agreements contained herein are qualified in their entirety by reference to the text of the New Employment Agreements attached as exhibits 10.6 to 10.10 to this Form 10-Q and incorporated herein by reference.