PERMA FIX ENVIRONMENTAL SERVICES INC (PESI)

CIK: 0000891532. SIC: 4955 Hazardous Waste Management. Latest 10-K as of: 2026-03-24.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > Electric, Gas, And Sanitary Services > SIC 4955 Hazardous Waste Management

SEC company page: https://www.sec.gov/edgar/browse/?CIK=891532. Latest filing source: 0001493152-26-012314.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000891532.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000891532.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001493152-26-021732.

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item
2.

Management’s
Discussion and Analysis of Financial Condition and Results of Operations

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;

●

reductions
in the level of government funding in future years;

●

spending
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 remainder of 2026;

●

advancement
of our Perma-FAS technology to support long-term growth;

●

demand,
pricing, or throughput levels for PFAS waste volumes are sufficient to offset costs incurred from PFAS initiatives;

●

waste
receipt related to DFLAW program in the second quarter of 2026;

●

increase
in Hanford waste receipts in 2026;

●

delays
in anticipated treatment waste volumes;

●

reducing
operating costs and non-essential expenditures;

●

ability
to meet our quarterly financial covenant requirements under our PNC Loan Agreement;

●

expansion
into international and commercial markets;

●

cash
flow requirements;

●

expects
to either enter into a new loan agreement or amend our existing PNC Loan Agreement with our lender;

●

sufficient
cash flow and liquidity to fund operations for the next twelve months;

●

projected cash flows from operations subject to timing and uncertainty, including those resulting from ongoing
federal spending constraints;

●

amount
and funding of capital expenditures;

●

funding
of operating and capital expenditures from existing cash from operations, Liquidity under our Credit Facility, and/or financing;

●

ability to continue to operate as a going concern;

●

improvement
in operating margin from absorption of fixed costs with waste volume increase;

●

pursue
additional sources of liquidity, include raising capital through equity or other financing arrangements or disposing of certain assets;

●

obtain additional liquidity on acceptable terms, or at all;

●

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;

23

●

remediation
of material weakness identified;

●

potential
effect of being a PRP;

●

material adverse effect on financial condition, results of operations, or cash flow from NOV at the PFNWR facility;

●

favorable resolution of the NOV at the PFNWR facility;

●

potential
violations of environmental laws and attendant remediation at our facilities.

●

result
of contract with Lawrence Livermore National Laboratory; and

●

results
of strategic operations.

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 process waste at our facilities;

●

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;

●

material
adjustments to environmental remediation reserves;

●

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;

24

●

cost
reduction measures;

●

new
governmental regulations; and

●

risk
factors and other factors set forth in “Special Note Regarding Forward-Looking Statements” contained in the Company’s
2025 Form 10-K and the “Forward-Looking Statements” contained in the MD&A of this first quarter 2026 Form 10-Q.

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.

Overview

Our
results from operations for the first quarter of 2026 were significantly impacted by lower revenues than anticipated due to reduced receipts
in conjunction with planned efforts to reduce waste inventories in support of second quarter anticipated receipts and program starts.
Our prioritization of processing existing waste inventories, particularly at the PFNWR facility,
and the associated timing of these activities deferred revenue recognition into the second quarter.

The
decrease in activity in the first quarter of 2026 was driven in part by deferred receipts now expected in the second quarter associated
with the commencement and ramp-up of the operational phase of DOE’s DFLAW program at Hanford Washington. The commencement, scope,
and timing of DFLAW-related waste streams are controlled by the DOE and subject to appropriations, procurement processes, and operational
considerations beyond our control.

Additionally,
seasonal factors, including winter weather and typical post-holiday slowdowns, reduced field activity and delayed waste shipments at
each of our plants.

In
anticipation of increased waste treatment volumes, including those under the DFLAW program, we have made investments to expand treatment
capacity, increase our trained workforce, and upgrade infrastructure. As previously disclosed, in December 2025, our PFNWR facility received
its long-awaited permit renewal from state regulators. Among other enhancements, this renewal approximately triples the facility’s
permitted liquid mixed waste processing capacity to approximately 1,200,000 gallons per year and authorizes the processing of up to 175,000
tons of waste annually through macroencapsulation. This expanded permit provides additional capacity and operational flexibility, enhancing
our ability to manage a broader range of complex waste treatment requirements. As waste volumes increase, we expect improved absorption
of our fixed operating costs, which we believe should positively impact operating margins.

As
a result of the combined foregoing factors, revenue for the first quarter of 2026 decreased by approximately $2,793,000, or 20.1%, to
$11,126,000, compared to $13,919,000, for the first quarter of 2025, reflecting lower revenue in both the Treatment and Services segments.
Overall cost of goods sold increased by $745,000 or approximately 5.6% for the first quarter of 2026, compared to the corresponding period
of 2025. Overall gross profit decreased by approximately $3,538,000 or 538.5% for the first quarter of 2026, compared to the corresponding
period of 2025, due to lower revenue, changes in waste and project mix across our segments and overall higher fixed costs.

Our
overall SG&A increased by $284,000 or 7.1% for the three months ended March 31, 2026, compared to the corresponding period of 2025.

See
below “Results of Operations” for further discussions of our financial results for our two segments.

As a result of our recurring losses and negative operating
cash flows, our liquidity has declined, which raises substantial doubt about our ability to continue as a going concern (See “Liquidity
and Capital Resources” within this MD&A for a discussion of factors and conditions that raises substantial doubt about our ability
to continue as a going concern).

We
believe we are positioned for potential improvements in our financial results for the remainder of 2026. We anticipate that our continuing
initiatives include positioning ourselves for further large and mid-size procurements within the DOE and DOW and waste treatment in support
of DOE’s Hanford closure strategy. During the first quarter of 2026, our Services Segment was awarded a two-year master task agreement
which we believe to be valued at approximately $24 million for demolition and disposal at Lawrence Livermore National Laboratory.

25

Additionally,
we continue to focus on expansion into commercial and international markets. Furthermore, we are continuing our aggressive R&D, sales
and marketing efforts and capital expenditures related to our new patent-pending technology for the

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-03-24. Report date: 2025-12-31.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain
statements contained within Item 1 – “Business” and this “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” (“MD&A”) may be deemed “forward-looking statements” within the
meaning of Section 27A of the Act, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the “Private
Securities Litigation Reform Act of 1995”). See “Special Note regarding Forward-Looking Statements” contained in this
report.

Management’s
discussion and analysis is based, among other things, on our audited consolidated financial statements and includes our accounts and
the accounts of our wholly-owned subsidiaries.

The
following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto included
in Item 8 of this report.

19

Overview

In
2025, we generated modest consolidated revenue growth year-over-year, while delivering improvements in gross profit and operating
performance compared to the prior year, driven primarily by a rebound in the Treatment Segment. The Treatment Segment benefited from
higher waste volumes and higher averaged price waste mix, which included higher revenue generated from international and commercial
clients. In contrast, the Services Segment experienced lower revenue, due in part to delays in project mobilization and delays in procurements
that resulted from changes to the current presidential administration that began in January 2025 (the “Administration”) and
supporting policies that occurred in the first half of 2025. The partial government shutdown that occurred effective October 1, 2025,
also negatively impacted our revenue as procurement timing cycles were impacted.

Overall
revenue increased by $2,557,000 or 4.3% to $61,674,000 in 2025 as compared to $59,117,000 in 2024. The increase was entirely from our
Treatment Segment where revenue increased by $10,144,000 or approximately 29.0% to $45,097,000 for the twelve months ended December 31,
2025, from $34,953,000 in the same period of 2024. Services Segment revenue decreased $7,587,000 or 31.4% to $16,577,000 for the twelve
months ended December 31, 2025, from $24,164,000 for the same period of 2024. Gross profit increased by $5,971,000 or approximately 298,550%
for the twelve months ended December 31, 2025, as compared to the corresponding period of 2024. Selling, General, and Administrative
(“SG&A”) expenses increased by $1,925,000 or 13.3% for twelve months ended December 31, 2025, as compared to the corresponding
period of 2024. In spite of the improvement in gross profit, we experienced a loss
from continuing operations of approximately $10,665,000 in 2025. While the loss was disappointing, it reflected an improvement of approximately
45.5% from the 2024 loss from continuing operations of $19,569,000.

See
“Results of Operations” below for discussions of certain financial metrics pertaining to our operations, which includes our
two reportable segments.

We
believe we are positioned for potential improvements in our financial results in 2026. These expectations
are based on management’s current assumptions regarding the timing and execution of anticipated waste treatment volumes, including
the commencement and ramp-up of activities associated with the Direct-Feed-Low-Activity Waste (“DFLAW”) program at Hanford,
Washington, as well as our ability to convert existing Treatment Segment backlog into revenue. Treatment Segment backlog as of December
31, 2025, was approximately $11,861,000, representing an increase of approximately 50.9% from Treatment Segment backlog of $7,859,000
as of December 31, 2024. However, Treatment Segment backlog does not guarantee immediate revenue, as the timing of backlog processing
may vary based on waste complexity, customer requirements, and operational considerations. As noted above, however, we believe that our
Perma-Fix Northwest Richland, Inc. (“PFNWR”) treatment facility, immediately adjacent to the Hanford Nuclear Site, is positioned
to support the U.S. Department of Energy’s (“DOE”) DFLAW program at Hanford, which began hot commissioning of the Low-Activity
Waste Vitrification Facility in October 2025. The subsequent operational phase of the DFLAW program is anticipated to begin in 2026, which
will include generation of several effluent waste streams expected to be treated by our PFNWR facility. However, the commencement, scope,
and timing of DFLAW-related waste streams are controlled by the DOE and subject to appropriations, procurement processes, and operational
considerations beyond our control. Delays in anticipated waste treatment volumes, including DFLAW-related waste streams, could impact
our results of operations as we continue to incur fixed operating costs and capital expenditures in anticipation of waste treatment volumes
and program activities.

We continue to focus on expansion into international markets which is reflected
in revenue generated from foreign entities of approximately $6,440,000 in 2025, as compared to $2,452,000 in the corresponding period
of 2024, an increase of $3,988,000 or 162.6%. Additionally, we continue our aggressive research and development (“R&D”),
sales and marketing efforts and capital expenditures relating to our new patent-pending technology for the destruction of Per- and polyfluoroalkyl
substances (“PFAS”), which activities adversely impacted our results of operations in 2025 (See “Known Trends and Uncertainties
– New Processing Technology” for a discussion of our new PFAS-destruction technology).

Finally,
our continuing initiatives include, among other things, positioning ourselves for further large and mid-size procurements within the DOE and U.S. Department of War (“DOW”) and waste treatment in support of DOE’s
Hanford closure strategy, continuing investments in our facilities and capabilities to allow for broader waste treatment (including PFAS)
and continuing expansion of our waste treatment offerings within the commercial market.

We
are continually monitoring our operating costs to ensure alignment with our revenue levels.

See
“Known Trends and Uncertainties – Federal Funding” within this MD&A for a discussion of factors that could impact
our results of operations in 2026.

20

Business
Environment

Our
Treatment and Services Segments’ business continue 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, passage of government budgets and continuing resolutions
(“CRs”), 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,
government shutdown 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, liquidity and cash flows.

Results
of Operations

The
reporting of financial results and pertinent discussions are tailored to our two reportable segments: The Treatment Segment and Services
Segment.

Summary
- Years Ended December 31, 2025 and 2024

Below
are the results of continuing operations for years ended December 31, 2025, and 2024 (amounts in thousands):

(Consolidated)

2025

%

2024

%

Net revenues

$

61,674

100.0

$

59,117

100.0

Cost of goods sold

55,701

90.3

59,115

100.0

Gross profit

5,973

9.7

2

—

Selling, general and administrative

16,416

26.6

14,491

24.5

Research and development

1,291

2.1

1,172

2.0

Loss on disposal of
property and equipment

1

—

21

—

Loss from operations

(11,735

)

(19.0

)

(15,682

)

(26.5

)

Interest income

1,123

1.8

921

1.5

Interest expense

(230

)

(.4

)

(473

)

(.8

)

Interest expense – financing fees

(84

)

(.1

)

(66

)

(.1

)

Other income

261

.4

166

.3

Loss from continuing operations before taxes

(10,665

)

(17.3

)

(15,134

)

(25.6

)

Income tax expense

 —

—

4,435

7.5

Loss from continuing
operations

$

(10,665

)

(17.3

)

$

(19,569

)

(33.1

)

21

Revenue

Consolidated
revenues increased $2,557,000 for the year ended December 31, 2025, compared to the year ended December 31, 2024, as follows:

(In thousands)

2025

%

Revenue

2024

%

Revenue

Change

%
Change

Treatment

Government
waste

$

31,510

51.1

$

22,098

37.4

$

9,412

42.6

Hazardous/non-hazardous
(1)

5,460

8.8

4,995

8.4

465

9.3

Other nuclear waste

8,127

13.2

7,860

13.3

267

3.4

Total

45,097

73.1

34,953

59.1

10,144

29.0

Services

Nuclear

10,117

16.4

20,353

34.4

(10,236

)

(50.3

)

Technical

6,460

10.5

3,811

6.5

2,649

69.5

Total

16,577

26.9

24,164

40.9

(7,587

)

(31.4

)

Total

$

61,674

100.0

$

59,117

100.0

$

2,557

4.3

1)
Includes waste generated by government clients of $2,269,000 and $2,898,000 for the twelve months ended December 31, 2025, and 2024,
respectively.

Treatment
Segment revenue increased by $10,144,000 or 29.0% for the twelve-months ended December 31, 2025, over the same period in 2024. The overall
increase in revenue in the Treatment Segment revenue was primarily due to higher waste volume and higher averaged price waste mix. Our
Treatment Segment revenue was also positively impacted by our international initiatives, which generated an increase in revenue of approximately
$3,832,000 or 201.7%, to $5,732,000, as compared to $1,900,000, for the same period of last year. Services Segment revenue decreased
by approximately $7,587,000 or 31.4%. 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.

Cost
of Goods Sold

Cost
of goods sold decreased $3,414,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, as follows:

%

%

(In thousands)

2025

Revenue

2024

Revenue

Change

Treatment

$

40,303

89.4

$

36,063

103.2

$

4,240

Services

15,398

92.9

23,052

95.4

$

(7,654

)

Total

$

55,701

90.3

$

59,115

100.0

$

(3,414

)

Cost
of goods sold for the Treatment Segment increased by approximately $4,240,000 or 11.8%. Treatment Segment’s overall variable costs
increased by approximately $1,675,000 primarily due to the following: overall material and supplies, lab, transportation, and outside services costs were higher by approximately
$3,371,000; variable payroll costs (overtime) were higher by approximately $426,000 due to increased waste volume production; and disposal
costs were lower by approximately $2,122,000. Within our Treatment Segment, variable cost categories can fluctuate
based on waste mix. Treatment Segment’s overall fixed costs were higher by approximately $2,565,000 resulting from the following:
salaries and payroll related expenses were higher by $2,130,000 due to higher headcount and cost-of-living adjustments (“COLA”)
effected during the third quarter of 2025; general expenses were higher by $376,000, mostly due to higher utility costs; travel expenses
were higher by approximately $123,000; maintenance expenses were higher by approximately $59,000 from overall general maintenance of
equipment and updates to facility security; depreciation expenses were higher by $106,000 due to more finance leases and equipment purchases;
and regulatory expenses were lower by approximately $229,000 from fewer regulatory matters. Services Segment cost of goods sold decreased
$7,654,000 or 33.2% 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 $7,180,000; lower depreciation expenses totaling approximately $44,000
as certain equipment became fully depreciated in 2025; lower general expenses of approximately $265,000 in various categories; and overall
lower disposal, material and supplies and regulatory costs totaling approximately $165,000. Included within cost of goods sold is depreciation
and amortization expense of $1,700,000 and $1,637,000 for the twelve months ended December 31, 2025, and 2024, respectively.

22

Gross
Profit

Gross
profit for the year ended December 31, 2025, was $5,971,000 higher than 2024 as follows:

%

%

(In thousands)

2025

Revenue

2024

Revenue

Change

Treatment

$

4,794

10.6

$

(1,110

)

(3.2

)

$

5,904

Services

1,179

7.1

1,112

4.6

$

67

Total

$

5,973

9.7

$

2

0.0

$

5,971

Treatment
Segment gross profit increased by $5,904,000 or approximately 531.9% and gross margin increased to 10.6% % from (3.2)% primarily due
to higher revenue from higher waste volume and higher averaged price waste mix. The increase in fixed costs within the Treatment Segment partially offset these improvements, negatively impacting gross
profit and gross margin. Services Segment gross profit increased by $67,000 or approximately 6.0% and gross
margin improved to 7.1% from 4.6%. 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.

SG&A

SG&A
expenses increased $1,925,000 for the year ended December 31, 2025, as compared to the corresponding period for 2024 as follows:

(In thousands)

2025

% Revenue

2024

% Revenue

Change

Administrative

$

7,932

—

$

6,896

—

$

1,036

Treatment

5,268

11.7

4,290

12.3

978

Services

3,216

19.4

3,305

13.7

(89

)

Total

$

16,416

26.6

$

14,491

24.5

$

1,925

Administrative
SG&A expenses were higher primarily due to higher salaries, payroll related expenses and stock option compensation expenses
totaling approximately $558,000. The hiring of the Company’s COO in January 2025 and COLA increases to payroll effected during
the third quarter of 2025 contributed to this increase. The remaining higher expenses in Administrative SG&A were primarily due
to higher outside services expenses of approximately $425,000 from more legal and business-related matters and higher travel
expenses of approximately $53,000 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 $713,000 as more employee hours were
allocated to marketing initiatives of our new PFAS technology and overall business development; general expense were higher by
approximately $244,000 in various categories (which include higher tradeshow expenses of approximately $157,000); travel expenses
were higher by $35,000; and outside services expenses were lower by approximately $14,000 from fewer consulting matters. Services
Segment SG&A expenses were lower primarily due to the following: salaries and payroll related expenses were lower by
approximately $57,000 as fewer employee hours were allocated in supporting administrative/marketing functions due to lower revenue;
general expenses were lower by approximately $62,000 in various categories; outside services expenses were higher by approximately
$10,000 due to more consulting matters; and travel expense were higher by approximately $20,000. Included in SG&A expenses is
depreciation and amortization expense of $59,000 and $126,000 for the twelve months ended December 31, 2025 and 2024,
respectively.

R&D

R&D
expenses increased by $119,000 for the twelve months ended December 31, 2025, as compared to the corresponding period of 2024, primarily
due to expenses incurred in connection with our new PFAS technology.

23

Interest
Income

Interest
income increased by approximately $202,000 for the twelve-months ended December 31, 2025, as compared to the corresponding period of
2024. The increase in interest income in 2025 as compared to 2024 was 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,
offset by lower interest income earned from our finite risk sinking fund from lower interest rate.

Interest
Expense

Interest
expense decreased by approximately $243,000 for the twelve months ended December 31, 2025, as compared to the corresponding period of
2024. The decrease was primarily the result of capitalization of approximately $231,000 in interest costs incurred on debt on construction
of projects for our use, particularly our PFAS reactors.

Income
Taxes

We
had income tax expenses of $0 and $4,435,000 for continuing operations for the twelve-months ended December 31, 2025 and 2024, respectively.
Our effective tax rates were approximately 0% and (29.3%) for the twelve months ended December 31, 2025 and 2024, respectively. Our effective
tax rate for the each of the periods above 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.

Backlog

Our
Treatment Segment maintains a backlog of stored waste, which represents waste that has not been processed. The backlog is principally
a result of the timing and complexity of the waste being brought into the facilities and the selling price per container. As of December
31, 2025, our Treatment Segment had a backlog of approximately $11,861,000, as compared to approximately $7,859,000 as of December 31,
2024. Additionally, the time it takes to process waste from the time it arrives may increase due to the types and complexities of the
waste we are currently receiving. We use our best efforts to increase treatment of our waste backlog during
period of lower incoming waste receipts to optimize facility utilization, which historically has occurred in the first and fourth quarters.

Discontinued
Operations and Environmental Liabilities

Our
discontinued operations consist of all our subsidiaries included in our former Industrial Segment which encompasses subsidiaries divested
in 2011 and earlier, as well as three previously closed locations.

Our
discontinued operations had no revenue for the twelve months ended December 31, 2025 and 2024. We incurred net losses of $3,119,000 (net
of tax expense of $0) and $410,000 (net of tax benefit of $149,000) for our discontinued operations for the twelve months ended December
31, 2025, and 2024, respectively. Our net loss for 2025 included an increase to the environmental remediation reserve of approximately
$2,721,000 for our Perma-Fix of South Geogia, Inc. (“PFSG”) subsidiary as 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.

We
have three remediation projects, which are currently in progress relating to our Perma-Fix of Dayton, Inc. (“PFD”), Perma-Fix
of Memphis (“PFM”) and PFSG subsidiaries, all within our discontinued operations. We divested PFD in 2008; however, the environmental
liability of PFD was retained by us 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.

As
of December 31, 2025, we had total accrued 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 our total
environmental remediation liabilities were recorded as current.

24

Liquidity
and Capital Resources

Based
on current operating conditions and the timing of anticipated waste receipts and program activities, we currently expect to incur a loss
from operations during the first quarter of 2026. This expectation also reflects the timing of backlog processing, continued operating
fixed costs and capital expenditures incurred in anticipation of program activities, including ongoing investments in new technology
initiatives and with respect to the DFLAW program.

Despite
the anticipated near-term operating loss, we believe that our existing cash, cash equivalents, borrowing availability under our Revolving
Credit (see “Financing Activities – Credit Facility” below for a discussion of our Revolving Credit) and expected cash
flows from operations will be sufficient to fund our operations for at least the next twelve months, based on management’s current
assumptions regarding the timing and execution of anticipated waste treatment volumes.

Our
cash flow requirements during the twelve months ended December 31, 2025, were financed by our Liquidity (defined under our Loan Agreement
as borrowing availability under our Revolving Credit of our Credit Facility plus cash in our MMDA maintained with our lender). Our MMDA
consists 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, administration and monitoring of our discontinued operations, R&D related to our PFAS technology
and capital expenditures, including expenditures related to 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
continually review operating costs and evaluate opportunities to reduce operating costs and non-essential expenditures in order to align
spending levels with revenue levels. As of December 31, 2025, we had no outstanding borrowing under our Revolving Credit and our Liquidity
was approximately $18,126,000, which included approximately $11,529,000 of cash held in our MMDA.

The
following table reflects the cash flow activity for the year ended December 31, 2025, and the corresponding period of 2024:

(In thousands)

2025

2024

Cash used in operating activities
of continuing operations

$

(10,311

)

$

(14,146

)

Cash used in operating activities of discontinued
operations

(441

)

(597

)

Cash used in investing activities of continuing
operations

(4,897

)

(4,079

)

Cash used in investing activities of discontinued
operations

(54

)

(51

)

Cash (used in) provided by financing activities
of continuing operations

(981

)

40,955

Effect of exchange
rate changes on cash

13

(1

)

(Decrease) increase
in cash and finite risk sinking fund (restricted cash)

$

(16,671

)

$

22,081

As
of December 31, 2025, we were in a positive cash position with no Revolving Credit balance. As of December 31, 2025, we had cash on hand
of approximately $11,768,000, which included cash from our foreign subsidiaries of approximately $153,000. The decline in our cash from
2024 to 2025 of approximately $17,207,000 was primarily due to funding of our operating losses and capital investment.

Operating
Activities

Cash
used in operating activities of our continuing operations during 2025 consisted mostly of the net loss that we incurred of approximately
$10,665,000, adjusted for certain non-cash items, such as $818,000 of stock-based compensation expenses and $1,759,000 of depreciation
and amortization expenses. Cash flow decrease of approximately $2,921,000 resulting from net change in assets and liabilities reflects
an increase in unbilled receivables of approximately $3,791,000, a net decrease in accounts payables, accrued expenses, deferred revenue
and other accruals totaling approximately $1,660,000, offset by a decreased in accounts receivable (net of provision for credit losses)
of approximately $216,000 and a net decrease in inventories, prepaids and other assets totaling approximately of $2,314,000. Our accounts
receivables are impacted by timing of invoicing and collections. Our contracts with our customers are subject to various payment terms
and conditions. Our unbilled receivables are impacted by differences between invoicing timing and our revenue recognition methodology.

Cash
used in operating activities of our continuing operations during 2024 consisted mostly of the significant net loss that we incurred of
approximately $19,569,000, adjusted for certain non-cash items, such as $656,000 of stock-based compensation expense, $1,763,000 of depreciation
and amortization expense and the deferred income tax expense of $4,448,000. Cash flow decrease of approximately $2,229,000 resulting
from net change in assets and liabilities reflects an increase in accounts receivable of approximately $2,076,000 (net of provision for
credit losses), a net decrease in accounts payables, accrued expenses, deferred revenue and other accruals totaling approximately $6,667,000,
offset by a decreased in unbilled receivables of approximately $3,442,000 and a net decrease in inventories, prepaids and other assets
totaling approximately of $3,072,000.

25

Cash
used in operating activities of our discontinued operations during 2025 and 2024 consisted primarily of expenses incurred in connection
with management of administrative and regulatory matters related to our remediation projects.

We
had working capital of $13,803,000 (which included working capital of our discontinued operations) as of December 31, 2025, as compared
to working capital of $28,283,000 as of December 31, 2024. The decrease in our working capital was primarily driven by the losses incurred
from our operations during 2025 as previously discussed and increase in capital expenditures as discussed below.

Investing
Activities

Cash
used in investing activities of our continuing operations during 2025 consisted mostly of our purchases of property and equipment totaling
approximately $5,172,000, of which $464,000 was financed. Our capital expenditures for 2025 included expenditures made for our PFAS treatment
systems, which include our second-generation unit. The remaining cash used in investing activities consisted of cash outlays of approximately
$217,000 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 $28,000 from our sale of idle equipment.

Cash
used in investing activities of our continuing operations during 2024 consisted mostly of our purchases of property and equipment totaling
approximately $3,811,000, of which $406,000 was financed. Our capital expenditures for 2024 included expenditures made for our prototype
PFAS treatment unit. The remaining cash used in investing activities consisted of cash outlays made in connection with our operating
permits and certain intangible assets.

Cash
used in investing activities of our discontinued operations during 2025 consisted of payments made in connection with a certain regulatory
permit at our Perma-Fix South Georgia, Inc. (“PFSG”) subsidiary and improvements made to the existing building. Cash used
in investing activities of our discontinued operations in 2024 was primarily for roof replacement at our PFSG location.

Capital
Expenditures

We
anticipate making capital expenditures of approximately $3,000,000 to $5,000,000 in 2026 to maintain operations and regulatory compliance
requirements and support revenue growth, including the completion of our second-generation unit for our PFAS technology. We plan to fund
our capital expenditures for 2026 from cash from operations, Liquidity under our Credit Facility and/or financing. The initiation and
timing of our capital expenditures 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.

Financing
Activities

Our
cash used in financing during 2025 consisted mostly of principal payments of approximately $631,000 primarily for our Term and Capital
Loans under our Credit Facility, principal payments of $308,000 for our finance leases and payments of $195,000 of offering costs from
the equity raise that we completed in December 2024, partially offset by proceeds received from option exercises of approximately $172,000.

Our
cash provided by financing during 2024 consisted mostly of net proceeds of $41,859,000 received from the sales of our Common Stock in
May 2024 and December 2024 and proceeds received from option and warrant exercises totaling approximately $292,000, partially offset
by principal payments of approximately $832,000 primarily for our Term Loans and Capital Loan under our Credit Facility and $291,000
for our finance leases.

26

Credit
Facility

We
entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, which has since been
amended, with PNC National Association (“PNC” and “lender”), acting as agent and lender (the “Loan Agreement”).
The Loan Agreement provides us 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 (“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 our lender may impose from time to time ($750,000 as of December 31, 2025); (b) a term loan (“Term
Loan”) of $2,500,000, requiring monthly installments of $41,667, with a balance due under the Term Loan of approximately $1,333,000
as of December 31, 2025; and (c) a capital expenditure loan (“Capital Loan”) of approximately $524,000, requiring monthly
installments of principal of approximately $8,700 plus interest, with a balance due under the Capital Loan of approximately $149,000
as of December 31, 2025.

On
March 11, 2025, we entered into an amendment to our Loan Agreement with our lender which provided the following, among other things:

●

removed
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 we fail to meet a minimum of $5,000,000 in daily Liquidity. If triggered, we 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
we are able to achieve a minimum of $5,000,000 in daily Liquidity for a thirty-consecutive-day
period from the trigger date;

●

revised
the Facility Fee (as defined) from 0.375% to 0.500%. Such fee percentage will revert back
to 0.375% at such time that we are able to achieve a minimum 1.15 to 1.00 ratio in FCCR on
a twelve-month trailing basis; and

●

required
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 fees.

As amended, our Loan Agreement 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 2025. We expect to meet our covenant requirements under our Loan
Agreement for the next twelve months.

Off
Balance Sheet Arrangements

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 December 31, 2025, the total amount of standby letters of credit outstanding was
approximately $3,350,000 and the total amount of bonds outstanding was approximately $11,556,000. We also provide closure and post-closure
requirements through a financial assurance policy for certain of our Treatment Segment facilities through American International Group,
Inc. (“AIG”). As of December 31, 2025, the closure and post-closure requirements for these facilities were approximately
$23,951,000.

27

Critical
Accounting Policies and Estimates

Our
consolidated financial statements are prepared based upon the selection and application of US GAAP, which may require us to make estimates,
judgments and assumptions that affect amounts reported in our financial statements and accompanying notes. The accounting policies below
are those we believe affect the more significant estimates and judgments used in preparation of our financial statements. Our other accounting
policies are described in the accompanying notes to our consolidated financial statements of this Form 10-K (see “Item 8 –