Perma Fix Environmental Services reported a $3.46 million net loss

Cover page 5 changes

2 unchanged paragraphs

ENVIRONMENTAL SERVICES, INC.

name of registrant as specified in its charter)

REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 the transition period from _______________________ to ________________________ (Exact name of registrant as specified in its charter)

PERMA FIX ENVIRONMENTAL SERVICES INC

17 unchanged paragraphs

Outstanding at November 3, 2026

4 unchanged paragraphs

Financial statements 5 changes

Condensed Consolidated Balance Sheets -June - September 30, 2026, and December 31, 2025

Condensed Consolidated Statements of Operations - Three and Six Nine Months Ended June September 30, 2026, and 2025

Condensed Consolidated Statements of Comprehensive Loss - Three and Six Nine Months Ended June September 30, 2026, and 2025

Condensed Consolidated Statements Statement of Stockholders' Equity - Six Nine Months Ended June September 30, 2026, and 2025

Condensed Consolidated Statements of Cash Flows - Six -Nine Months Ended June September 30, 2026, and 2025

Other information 13 changes

into Material Definitive Agreements

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.

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.

Exchange Act Form 8-K Compliance and Disclosure Interpretation ("CDI") 101.01, the Company is disclosing the above information in this Quarterly Report on Form 10-Q in lieu of filing a separate Current Report on Form 8-K.

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.

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 (a)

MD&A 98 changes

2 unchanged paragraphs

Occupational Safety and Health Administration

and polyfluoroalkyl substances, a group of thousands of synthetic "forever chemicals" manufactured since the 1940s that resist heat, water, stains, and grease. They are found in non-stick cookware, stain-resistant fabrics, food packaging, and firefighting foam, and they persist in the environment and human body, posing significant, long-term health risks

3 unchanged paragraphs

Association, acting as agent and lender, with a maturity date of May 15, 2027 2030 and Development

U.S. Securities and Exchange Commission

7 unchanged paragraphs

in Thousands, Except for Share and Per Share Amounts)

Accounts receivable, net of allowance for credit losses

of $ 16 55 and $ 309 , respectively

1 unchanged paragraph

Property and equipment:

2 unchanged paragraphs

Total property and equipment

1 unchanged paragraph

Property and equipment related

and equipment related to discontinued operations

Operating lease right-of-use assets

Intangibles and other long term assets:

5 unchanged paragraphs

in Thousands, Except for Share and per Share Amounts)

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

6 unchanged paragraphs

Accrued closure costs

Long-term debt, less current portion

Long-term operating lease

operating lease liabilities, less current portion

Long-term finance lease liabilities,

finance lease liabilities, less current portion

2 unchanged paragraphs

and Contingencies (Note 9)

shares issued and outstanding

18,518,181 shares outstanding, respectively

Commitments and Contingencies

Stockholders' Equity:

Stock, $ .001 par value; 2,000,000 shares authorized, no shares issued and outstanding

Stock, $ .001 par value; 30,000,000 shares authorized; 21,215,194 21,226,930 and 18,525,823 shares issued, respectively; 21,207,552 21,219,288 and 18,518,181 shares outstanding, respectively paid-in capital deficit ( 127,863 )

7 unchanged paragraphs

(Amounts in Thousands, Except for Per Share Amounts)

Thousands, Except for Per Share Amounts)

Selling, general and administrative expenses

1 unchanged paragraph

Loss from operations

Gain loss on disposal of property and equipment

1 unchanged paragraph

Net loss per common share - basic and diluted:

Continuing operations

Discontinued operations

Interest expense-financing fees

Loss from continuing operations before taxes

Loss from continuing operations, net of taxes

Income (loss) from discontinued operations, net of taxes (Note 10)

1 unchanged paragraph

- basic and diluted:

Continuing operations

loss per common share

Weighted average number of common shares used in computing net loss per share:

3 unchanged paragraphs

currency translation (loss) gain

Other comprehensive (loss) income:

currency translation adjustment

8 unchanged paragraphs

Issuance of Common Stock upon exercise of options

2 unchanged paragraphs

Issuance of Common Stock upon exercise of options

1 unchanged paragraph

Sale of Common Stock, net of offering costs

Sale of Common Stock, net

Foreign currency translation

Issuance of Common Stock for

Issuance of Common Stock upon exercise of options

at September 30, 2026

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

ENVIRONMENTAL SERVICES, INC

Consolidated Statement of Stockholders' Equity, Continued

in thousands, except for share amounts)

3 unchanged paragraphs

Issuance of Common Stock upon exercise of options

2 unchanged paragraphs

Issuance of Common Stock upon exercise of options

Foreign currency translation

Issuance of Common Stock for

Issuance of Common Stock upon exercise of options

at September 30, 2025

3 unchanged paragraphs

Cash flows from operating activities:

1 unchanged paragraph

from continuing operations, net of taxes

3 unchanged paragraphs

on disposal of property and equipment

1 unchanged paragraph

in operating assets and liabilities of continuing operations receivable receivables ( 797 365 )

1 unchanged paragraph

payable, accrued expenses, unearned revenue and other liabilities ( 1,068 719 )

used in continuing operations

1 unchanged paragraph

Cash used in operating activities

Cash flows from investing activities:

1 unchanged paragraph

for capital equipment

2 unchanged paragraphs

used in continuing operations

1 unchanged paragraph

used in investing activities

Cash flows from financing activities:

1 unchanged paragraph

from issuance of Common Stock upon exercise of options

5 unchanged paragraphs

from issuance of Common Stock upon exercise of options

1 unchanged paragraph

2 unchanged paragraphs

and 18 more changes in the filing

Notes to the financial statements 397 changes

Basis of Presentation

condensed consolidated financial statements included herein have been prepared by the Company (which may be referred to as we, us or our), without an audit, pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the nine months ended September 30, 2026, are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2026.

condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2025.

condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Position and Liquidity

condensed consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Company incurred losses from continuing operations before tax of $ 15,134,000 during 2024, $ 10,665,000 during 2025, and $ 17,046,000 during the first nine months of 2026. We also experienced cash used in continuing operations of $ 14,146,000 during 2024, $ 10,311,000 during 2025, and $ 10,796,000 during the first nine months of 2026. The Company's operating results and liquidity were impacted in part by delays in the enactment of federal appropriations and Congress's continued use of CRs, increased investments in PFAS destruction technology, expansion of treatment capacity, workforce growth, equipment upgrades, and infrastructure enhancements intended to support anticipated waste treatment volumes, including anticipated Hanford-related waste volumes. In addition, during the first nine months of 2026, delays in the mobilization of a recently awarded project within our Services Segment, temporary downtime of certain processing equipment due to scheduled maintenance and upgrades, processing delays resulting from customer-directed changes in treatment protocols, and the processing of previously stored waste inventories to prepare for anticipated increases in certain Hanford-related waste volumes negatively impacted our revenues and results of operations. Certain of these previously stored waste inventories carried lower margins, which adversely affected our results of operations in 2026. These lower-margin previously stored waste inventories were substantially processed by the end of the second quarter.

Company's expected cash requirements over the next twelve months include working capital needs, scheduled principal payments on debt, costs associated with the administration and monitoring of discontinued operations, R&D expenditures related to PFAS technology, and capital expenditures.

significant portion of the projected revenues and cash flows underlying management's forecast depends on the timing and volume of waste shipments and project activity directed by U.S. government customers. Because these 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 the Company's control, management could not conclude that its plans are probable of effectively mitigating the conditions giving rise to substantial doubt. Accordingly, substantial doubt continues to exist about the Company's ability to continue as a going concern for one year following the date the accompanying Condensed Consolidated Financial Statements are issued.

plans to address these conditions include utilizing existing cash and borrowing availability; pursuing operating improvements supported by the Company's Treatment and Services Segment backlogs; continuing to pursue additional government, commercial, and international project opportunities; managing capital expenditures and operating costs; and, if necessary, seeking additional liquidity through equity or other financing arrangements or potential asset dispositions. In May 2026, the Company completed a public equity offering that generated net proceeds of approximately $ 21,114,000 , net of offering costs. In addition, on August 10, 2026, the Company extended the maturity of its PNC Credit Facility from May 2027 to May 2030, among other changes (see "Note 8 – Long Term Debt—Credit Facility").

Although the May 2026 equity offering strengthened the Company's liquidity, continued operating losses since the offering and significant capital expenditures, including investments made to support anticipated waste treatment volumes and improve operational capabilities, have reduced the Company's liquidity position. Therefore, management concluded that substantial doubt has not been alleviated. The Company expects to fund its operations during the assessment period with its existing liquidity, anticipated operating cash flows and borrowing availability. However, the ability of management's plans to mitigate the conditions giving rise to substantial doubt depends in part on the timing and volume of government-directed waste shipments and project activity, as well as other matters outside the Company's control. In addition, the Company's borrowing availability is subject to compliance with applicable financial covenants and other conditions. There can be no assurance that additional liquidity, if needed, will be available on acceptable terms or at all.

Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty.

the third quarter of 2026, the Company revised the presentation of the disaggregation of revenue in "Note 3 – Revenue"

for the three and nine months ended September 30, 2025, to reclassify certain contracts previously presented as fixed-price revenue to time-and-materials revenue. Approximately $ 553,000 and $ 790,000 of revenue for the three- and nine-month periods ended September

30, 2025, respectively, was reclassified from fixed-price revenue to time-and-materials revenue. This reclassification had no effect on the Company's previously reported consolidated statements of operations, balance sheets, stockholders' equity, cash flows, or total revenue.

of an Immaterial Error

the preparation of the accompanying Condensed Consolidated Financial Statements, the Company determined that the cash flow effects of certain property and equipment additions included in accounts payable were incorrectly presented in its previously issued Condensed Consolidated

Statement of Cash Flows for the nine months ended September 30, 2025. Specifically, the change in "Accounts payable, accrued expenses, unearned revenue and other liabilities" within operating activities included amounts attributable to property and equipment additions, and "Purchases of property and equipment" within investing activities did not properly reflect the cash paid during the period for such additions.

the Company has revised the comparative prior-period Condensed Consolidated Statement of Cash Flows presented herein by reducing the decrease in "Accounts payable, accrued expenses, unearned revenue and other liabilities" within operating activities by $ 26,000 , from $ ( 745,000 ) to $ ( 719,000 ) , and increasing the cash outflow from "Purchases of property and equipment" within investing activities by $ 26,000 , from $ ( 2,608,000 ) to $ ( 2,634,000 ) . The Company also presented property and equipment additions of $ 411,000 that remained unpaid and were included in accounts payable as of September 30, 2025 as a supplemental non-cash investing activity. The correction decreased net cash used in operating activities by $ 26,000 and increased net cash used in investing activities by $ 26,000 and had no effect on the Company's previously reported condensed consolidated statements of operations, balance sheets or stockholders' equity.

Summary of Significant

accounting policies are as set forth in the notes to the December 31, 2025, consolidated financial statements referred to above.

Issued Accounting Standards –Adopted

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

Receivable and Contract Assets." ASU 2025-05 provides the option to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The adoption of ASU 2025-05 by the Company in the first quarter of 2026 on a prospective basis did not have a material impact on its condensed consolidated financial statements.

Issued Accounting Standards – Not Yet Adopted

December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements." ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the update is to provide clarity about current interim requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this ASU are required to be adopted for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

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

Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses," which enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. ASU 2024-03 is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

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

Improvements to the Accounting for Internal-Use Software." ASU 2025-06 removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed, and the software will be used for its intended purpose.

The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. The standard allows for prospective, modified, or retrospective transition. Early adoption is permitted.

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

May 2026, the FASB issued ASU 2026-02, "Environmental Credits and Environmental Credit Obligations (Topic 818)." ASU 2026-02 improves the financial accounting for and disclosure of activities related to environmental credits and environmental credit obligations.

This update provides recognition, measurement, presentation, and disclosure requirements for all entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. The amendments in ASU 2026-02 are effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

general, the Company's business segmentation is aligned according to the nature and economic characteristics of our services and provides meaningful disaggregation of each business segment's results of operations. The nature of the Company's performance obligations within our Treatment and Services Segments result in the recognition of our revenue primarily over time. The following tables present further disaggregation of our revenues by different categories for our Services and Treatment Segments:

of Disaggregation of Revenue

Revenue by Contract Type

Revenue by Contract Type

Revenue by generator

Revenue by generator

generated from fixed unit rate contracts within the Services Segment are included within the "time and material" caption under the disaggregation table above due to similarity of the revenue recognition methodology.

timing of revenue recognition and billings can result in unbilled receivables (contract assets). The Company's contract liabilities consist of deferred revenues which represent advance payment from customers in advance of the completion of the Company's performance obligation. The following table represents changes in our contract asset and contract liabilities balances for the periods noted:

of Contract Balances

Unbilled receivables - current

Contract liabilities

Unbilled receivables - current

Contract liabilities

the three and nine months ended September 30, 2026, the Company recognized revenue of $ 1,488,000 and $ 8,804,000 , respectively, related to untreated waste that was in the Company's control as of the beginning of such respective period. During the three and nine months ended September 30, 2025, the Company recognized revenue of $ 752,000 and $ 4,640,000 , respectively, related to untreated waste that was in the Company's control as of the beginning of such respective period. Revenue recognized in each period related to performance obligations satisfied within the respective period.

following table represents changes in accounts receivable, net of credit losses, for the periods noted:

Schedule of Changes in Accounts Receivable, Net of Credit Losses (In thousands)

Accounts Receivable (net)

Accounts Receivable (net)

Performance Obligations

Company applies the practical expedient in Accounting Standards Codification ("ASC") 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

our Services Segment, there are service contracts which provide that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. For those contracts, the Company has utilized the practical expedient in ASC 606-10-55-18, which allows the Company to recognize revenue in the amount for which we have the right to invoice; accordingly, the Company does not disclose the value of remaining performance obligations for those contracts.

Company's contracts and subcontracts relating to activities at governmental sites generally allow for termination for convenience at any time at the government's option without payment of a substantial penalty. The Company does not disclose remaining performance obligations on these contracts.

the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement. Lease classifications, recognition, and measurement are then determined at the lease commencement date.

Company's operating lease ROU assets and operating lease liabilities primarily include leases for office and warehouse spaces used to conduct our business. Finance leases primarily consist of lab and processing equipment and motor vehicles used by the Company's facilities' operations.

components of lease cost for the Company's leases for the three and nine months ended September 30, 2026, and 2025 were as follows (in thousands):

Schedule of Components of Lease Cost

Amortization of ROU assets

Short-term lease rent

weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of September 30, 2026, were:

of Weighted Average Lease

Weighted average remaining lease

Weighted average discount rate

weighted average remaining lease term and the weighted average discount rate for operating and finance leases as of September 30, 2025, were:

Weighted average remaining lease

Weighted average discount rate

following table reconciles the undiscounted cash flows for the operating and finance leases as of September 30, 2026, to the operating and finance lease liabilities recorded on the balance sheet (in thousands):

of Operating and Finance Lease Liability Maturity

Total undiscounted lease payments

Less: Imputed interest

Present value of lease

Current portion of operating lease obligations

Long-term operating lease obligations, less

Current portion of finance lease obligations

Long-term finance lease obligations, less current

cash flow and other information related to our leases were as follows for the three and nine months ended September 30, 2026, and 2025 (in thousands):

Schedule of Supplemental Cash Flow and Other Information Related to Leases

and 317 more changes in the filing

Management 54 changes

5 unchanged paragraphs

of our Italian team partner to perform its requirements in connection with the Italian project;

11 unchanged paragraphs

2025 Form 10-K and the "Forward-Looking Statements" contained in the MD&A of the first quarter 2026 Form 10-Q and the this second quarter quarters 2026 Form 10-Q.

10-Qs and this third quarter 2026 Form 10-Q.

1 unchanged paragraph

operating results for the second quarter of 2026 were below management's expectations, primarily due to the timing of anticipated waste receipts, processing delays due to customer-directed changes in treatment protocols and continued strategic investments in support of future growth initiatives within our Treatment Segment. In addition, delays in the commencement of several new projects within our

Services Segment and the continued processing of previously stored waste inventories to prepare for anticipated increases in certain

Hanford-related waste volumes negatively impacted our revenues during the quarter, as described below. Despite these near-term impacts, the quarter marked an important operational milestone as our PFNW facility received certain Hanford-related waste streams as anticipated.

These receipts contributed to an increase in our Treatment Segment backlog to approximately $15,733,000 at June 30, 2026, up approximately

28.5% from $12,248,000 at March 31, 2026. Subsequent to quarter-end, in early July, PFNW also began receiving liquid effluent wastes from the DFLAW facility, representing another significant operational milestone for the Company.

these operational milestones were achieved, our second quarter financial results did not reflect the benefit of the waste receipts discussed above. Customer-directed changes in treatment protocols delayed the processing of certain Hanford-related waste streams received during the second quarter into the third quarter. We expect to commence treatment of these wastes during the third quarter of 2026. At the same time, we incurred increased personnel and other operating expenses in anticipation of increases of these waste receipts; thus, while the revenue shifted to the second half, associated costs were incurred in the second quarter, which contributed to our losses for the period.

In addition, as noted above, delays in the commencement of several new projects within our Services Segment and the continued processing of previously stored waste inventories to prepare for anticipated increases in certain Hanford-related waste volumes negatively impacted our revenues during the quarter. Certain of these previously stored waste inventories carried lower margins, which adversely affected our results of operations. These lower-margin previously stored waste inventories have now been substantially processed and are not expected to have a material effect on operating results during the next twelve months.

believe the investments we have made in personnel, operational readiness, facility upgrades, capacity enhancements, as well as the acquisition of the rail-line land parcel that connects the PFNW property to the Port of Benton short-line railroad (see "Note

Hanford-related waste receipts during the second quarter, the start of DFLAW liquid effluent waste receipts subsequent to quarter-end, the H2C contract award in August 2026 discussed below, and the growth in our Treatment Segment backlog indicate that these investments are beginning to translate into increased operating activity.

August 10 2026, we were awarded a Master IDIQ Subcontract by Hanford Tank Waste Operations & Closure, LLC ("H2C")

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 us under future task orders, if any, under the Company's Master Subcontract, would be performed at our

100,800 gallons per week in accordance with facility license and permit conditions.

is working with Washington State

regulators regarding an expansion of its existing grouting permits and is advancing the design and procurement of facility upgrades intended to support the proposed expanded capacity.

In addition, during the second quarter we were awarded nearly $15 million of additional contracts supporting multiple DOE and commercial sites.

May 2026, we completed a public equity raise and issued and sold an aggregate 2,628,571 shares of our Common Stock to fund capital investments and general working capital needs, including investments at our PFNW facility to support the Hanford waste program (see "Liquidity and Capital Resources – Financing Activities" within this MD&A and "Note 13 – Sale of Common Stock"

to the accompanying Condensed Consolidated Financial Statements for further discussion of this equity raise).

ahead, we believe our current initiatives position us for potential improvement in our financial results during the remainder of 2026.

These initiatives include pursuing additional large and mid-size procurement opportunities within the DOE and DOW, including opportunities under the Hanford waste program, as well as expanding our presence in commercial and international markets.

June 30, 2026, from $14,586,000 for the same period of 2025. The decrease was primarily attributable to our Treatment Segment, where revenue declined by $3,108,000, or 27.3%, to $8,289,000 from $11,397,000 in the prior-year period. This decrease was partially offset by higher Services Segment revenue, which increased by $1,407,000, or 44.1%, to $4,596,000 from $3,189,000 in the same period of 2025.

Cost of goods sold increased by $2,349,000, or 18.0%, to $15,388,000 for the three months ended June 30, 2026, compared to $13,039,000 for the same period of 2025. As a result, we incurred a gross loss of $2,503,000 for the three months ended June 30, 2026, compared with gross profit of $1,547,000 in the prior-year period. SG&A expenses decreased by $379,000 to $3,751,000 for the three months ended

June 30, 2026, from $4,130,000 in the same period of 2025.

the six months ended June 30, 2026, revenue decreased by $4,494,000, or 15.8%, to $24,011,000 from $28,505,000 for the same period of

2025. The decrease was primarily attributed to our Treatment Segment where revenue declined by $4,415,000. Services Segment revenue decreased slightly by $79,000 or 1.0% to $7,843,000 for the six months ended June 30, 2026 from $7,922,000 for the same period of 2025. Cost of goods sold increased by $3,094,000, or 11.8%, to $29,395,000 for the six months ended June 30, 2026, from $26,301,000 in the same period of 2025. As a result, we incurred a gross loss of $5,384,000 for the six months ended June 30, 2026, compared with gross profit of $2,204,000 in the prior-year period. SG&A expenses decreased by $96,000, or 1.2%, to $8,049,000 from $8,145,000 for the same period of 2025.

the positive developments discussed above, management concluded that substantial doubt continues to exist about our ability to continue as a going concern within one year after the date the accompanying Condensed Consolidated Financial Statements are issued (see "Liquidity and Capital Resources" within this MD&A for a discussion of the factors and conditions underlying this conclusion).

overall revenue increased in the third quarter of 2026 compared to the same period of 2025; however, our operating results continued to be impacted by certain customer-related and operational factors. These included customer-directed delays in waste processing activities within our Treatment Segment and the timing of project mobilizations within our Services Segment. The most significant factor affecting our third-quarter results was customer-directed changes in treatment protocols that delayed the processing of shipments of a certain Hanford-related waste stream received beginning in the second quarter of 2026 from the DOE Hanford site until

September 2026. In addition, the timing of shipments of certain liquid and solid wastes under the DFLAW program resulted in lower-than-expected waste receipts during the quarter, and temporary downtime of certain processing equipment due to scheduled maintenance and upgrades further impacted Treatment Segment results. The affected processing equipment has since returned to operation.

these challenges, continued waste receipts, combined with delays in processing of certain waste streams, contributed to an increase in our Treatment Segment backlog to approximately $19,608,000 at September 30, 2026, representing an increase of approximately 24.6% from

$15,733,000 at June 30, 2026. We believe this growing backlog supports future treatment activities; however, the timing of revenue recognized from our backlog may vary depending on waste complexity, customer requirements, and operational considerations.

in our Services Segment is also increasing. revenue increased during the first third quarter of 2026 compared with the segment was corresponding period of 2025, primarily driven by increased project activity, including projects awarded since the beginning of 2026. These awards included a two-year master task agreement awarded in the first quarter of 2026 with an estimated value of approximately $24 million for demolition and disposal services at Lawrence Livermore National Laboratory ("LLNL").

Livermore National Laboratory ("LLNL"). However, revenue growth was partially constrained by customer-related delays in the mobilization of a project awarded during the early part of the second quarter of 2026. The project has since been mobilized.

August 10, 2026, we were 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 us under future task orders, if any, would be performed at our 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

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. However, the commencement and timing of task orders, if any, are subject to applicable regulatory requirements, operational considerations, and other factors outside of our control. The multiple-award IDIQ procurement provides for a maximum cumulative quantity of 50 million gallons with and 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 us. The number, size, and timing of task orders to that might be issued to us under the Company's Master Subcontract, if any, cannot be determined or assured. Under our

Under our Performance Work Statement, we are 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 applicable facility license and permit conditions.

PFNW facility continues to work with Washington State regulators to expand its existing grouting permit capacity of 1.2 million gallons annually to levels that would support DOE's objectives for both the East and West tank farms at Hanford. We are advancing the final design and procurement of facility upgrades necessary to achieve the expanded capacity, which we currently anticipate completing in late

2027. Implementation of these upgrades remains subject to continued coordination with Washington State regulators and applicable regulatory approvals. Separately, we have further invested in more advanced processing equipment to enhance our capabilities to process current and anticipated Hanford-related waste streams.

believe our investments, together with our continued focus on personnel and operational readiness and our acquisition of the rail-line land parcel connecting the PFNW property to the Port of Benton short-line railroad, position us to support increasing Hanford-related activity. See "Note 8 – Long-Term Debt – Promissory Note" to the accompanying Condensed Consolidated Financial Statements for further discussion of rail-line land parcel) have positioned us to support increasing Hanford-related activity. The commencement of

Statements for further discussion of the rail-line land parcel.

ahead, we expect improved financial performance in the coming year driven in part by increased project activity within our Services

Segment, continued processing of our Treatment Segment backlog, and anticipated waste receipts from Hanford's cleanup programs including increasing effluent from DFLAW to include both solid and liquid waste streams. We also continue to pursue additional procurement opportunities within DOE and DOW, while expanding our presence in commercial and international markets. In addition, we have negotiated rate increases for certain government and commercial waste streams, including a significant rate increase for a particular government waste stream that will become effective during the fourth quarter of 2026. The commercial rate increases became effective late in the third quarter of 2026. We expect these increases to favorably impact Treatment Segment revenue and margins. While the timing and volume of waste receipts and processing activities remain subject to customer requirements and operational considerations, we believe these developments and ongoing activities position us for improved operating results in the coming year.

"Federal Funding" and "Market Trends and Uncertainties" in "Known Trends and Uncertainties" within this MD&A for a discussion of factors that could negatively impact our results of operations for the remainder of 2026 and 2027.

a result of the combined factors discussed above, revenue decreased increased by $1,701,000, $494,000, or 11.7%, 2.8%, to $12,885,000 $17,948,000 for the three months ended September

30, 2026, compared with $17,454,000 for the same period in 2025. The increase was attributable entirely to the Services Segment, in which revenue increased by $2,007,000, or 46.2%, to $6,347,000 from $4,340,000 in the prior-year period. Treatment Segment revenue declined by $1,513,000, or 11.5%, to $11,601,000 from $13,114,000 in the prior-year period. Cost of goods sold increased by $2,499,000, or 16.8%, to $17,396,000 for the three months ended September 30, 2026, compared with $14,897,000 for the same period in 2025. As a result, gross profit decreased by $2,005,000 to $552,000 for the three months ended September 30, 2026, compared with $2,557,000 in the prior-year period. SG&A expenses decreased by $85,000 to $3,998,000 for the three months ended September 30, 2026, from $4,083,000 in the same period in 2025.

the nine months ended September 30, 2026, revenue decreased by $4,000,000, or 8.7%, to $41,959,000 from $45,959,000 for the same period in 2025. The decrease was attributable entirely to our Treatment Segment, in which revenue declined by $5,928,000, or 17.6%. Services

Segment revenue increased by $1,928,000, or 15.7%, to $14,191,000 for the nine months ended September 30, 2026, from $12,263,000 for the same period in 2025. Cost of goods sold increased by $5,594,000, or 13.6%, to $46,792,000 for the nine months ended September 30,

2026, from $41,198,000 in the same period in 2025. As a result, gross profit decreased by $9,594,000, resulting in a gross loss of $4,833,000 for the nine months ended September 30, 2026, compared with a gross profit of $4,761,000 in the prior-year period. SG&A expenses decreased by $181,000, or 1.5%, to $12,047,000 from $12,228,000 for the same period in 2025.

below "Results of Operations" for a discussion of our financial results for the three and six nine months ended June September 30, 2026 as compared to the corresponding period of 2025.

2026 as compared to the corresponding period of 2025.

Business 121 changes

1 unchanged paragraph

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

– Three and Six Nine Months Ended June September 30, 2026, and 2025

Consolidated (amounts in thousands)

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Gain on disposal of property

(Gain) loss on disposal

of property and equipment

4 unchanged paragraphs

operations, net of taxes

revenues decreased $1,701,000, increased $494,000 for the three months ended June September 30, 2026, compared to the three months ended June September 30, 2025, as follows:

1 unchanged paragraph

Segment revenue decreased by $3,108,000, or 27.3%, for the three months ended June 30, 2026, compared with the same period in 2025. The decline was primarily due to lower waste volume and a less favorable revenue mix. The less favorable revenue mix reflected lower average pricing, primarily resulting from the processing of certain previously stored waste inventories. These previously stored waste inventories were processed as part of our preparation for anticipated increases in Hanford-related waste volumes.

Includes wastes waste generated by government clients of $702,000 $685,000 and $567,000 $560,000 for the three months ended June September 30, 2026, and the corresponding period of 2025, respectively.

Segment revenue decreased by $1,513,000, or 11.5%, for the three months ended September 30, 2026, compared with the same period in 2025.

The decline was primarily due to lower waste volume as discussed in the "Overview" section.

1 unchanged paragraph

revenues decreased $4,494,000 $4,000,000 for the six nine months ended June September 30, 2026, as compared to the six nine months ended June September 30, 2025, as follows:

1 unchanged paragraph

These previously stored waste inventories were processed as part of our preparation for anticipated increases in Hanford-related waste volumes.

decrease in revenue in our Services Segment was primarily attributable to a lower volume of project work during the first quarter of

of goods sold for the Treatment Segment increased by approximately $1,110,000, or 11.3%. Variable costs increased by approximately $477,000, primarily due to higher materials and supplies, transportation, and outside services costs totaling approximately $444,000, as well as higher overtime expense of approximately $217,000 incurred in processing previously stored waste inventories in anticipation of increases in Hanford-related waste volumes. These increases were partially offset by lower disposal costs of approximately $184,000. Within our

of goods sold increased $3,094,000, for the six months ended June 30, 2026, compared with the same period in 2025, as follows:

$810,000, primarily due to COLA adjustments implemented in July 2025 and increased headcount. Maintenance costs increased by approximately

profit for the six months ended June 30, 2026 decreased $7,588,000 over 2025 as follows:

income decreased by approximately $98,000 and $252,000 for the three and six months ended June 30, 2026, respectively, compared with the same periods in 2025. The decreases were primarily due to lower interest income earned on lower balances maintained in our MMDA.

Interest income also declined due to lower interest earned on our finite risk sinking funds, primarily as a result of lower interest rates.

Includes wastes waste generated by government clients of $1,214,000 $1,899,000 and $1,007,000 $1,569,000 for the six nine months ended June September 30, 2026, and the corresponding period of 2025, respectively.

Segment revenue decreased by $5,928,000, or 17.6%, for the nine months ended September 30, 2026, compared with the same period in 2025.

Segment revenue decreased by $4,415,000, or 21.4%, for The six months ended June 30, 2026, compared with the same period in 2025. The decline was primarily due to lower waste volumes and a less favorable revenue mix. The less favorable revenue mix reflected lower average pricing, which was impacted in part by the processing of certain previously stored waste inventories that carried lower average pricing. These previously stored waste inventories were processed as part of our preparation for anticipated increases in Hanford-related waste volumes and were substantially processed by the end of the second quarter of 2026.

increase in revenue in our Services Segment was primarily attributable to a higher volume of project activity beginning in the second quarter of 2026, partially offset by lower project activity during the first quarter of 2026. The lower project volume activity in the first quarter reflected, in part, the impact of seasonal factors, including typical winter weather conditions and post-holiday slowdowns that reduced field activity. Revenue in our Services Segment is project-based, and with the scope, duration, timing, and completion of individual projects vary varying from period to period. As a result, revenue may fluctuate significantly between reporting periods based depending on the timing, scope, and mix of projects performed.

of goods sold increased $2,349,000 $2,499,000 for the quarter ended June September 30, 2026, as compared with to the same period in quarter ended September 30, 2025, as follows:

Treatment Segment, the composition and level of variable costs can fluctuate based on goods sold for the waste mix. Treatment Segment increased by approximately $978,000, or 9.0%. Treatment Segment fixed costs increased by approximately $633,000. $1,094,000. Fixed salaries and payroll-related expenses increased by approximately $499,000, $756,000, primarily due to COLA adjustments implemented in July 2025 and increased headcount. Maintenance costs increased by approximately $45,000 $196,000 due to general scheduled equipment upkeep maintenance and facility security enhancements. Depreciation expense increased by approximately $59,000 $66,000 due to additional capitalized equipment, including our prototype PFAS reactor. Regulatory expenses increased by approximately $74,000 $49,000 due to increased regulatory activities and higher fees assessed by regulatory agencies. These The remaining increases were partially offset by a decrease of approximately $44,000 in from higher travel and general expenses primarily due to lower utility costs. totaling approximately

$27,000. Treatment Segment variable costs decreased by approximately $116,000, primarily due to lower materials and supplies, transportation, and outside services costs totaling approximately $312,000, partially offset by higher disposal costs of approximately $29,000 and higher overtime expenses of approximately $167,000. Within our Treatment Segment, the composition and level of variable costs can fluctuate based on the waste mix.

Segment cost of goods sold increased by $1,521,000, or 37.6%, primarily reflecting the higher volume of project work during the period.

Segment cost of goods sold increased by $208,000, or 2.8%. The increase was primarily driven by attributable to higher subcontract and outside services costs of approximately $736,000 and higher salaries and payroll-related expenses of approximately $534,000, $362,000, reflecting the COLA implemented in July 2025, as well as increased labor associated with the requirements from higher volume of project work. Cost of goods sold also increased due to higher travel costs of approximately $237,000. These Additional increases were partially offset by lower outside services costs of approximately $276,000, lower included materials and supplies, laboratory services, disposal, and regulatory costs totaling approximately $171,000, $464,000. These increases were partially offset by lower general travel expenses of approximately $83,000 across various categories, and lower depreciation expense of approximately $33,000 as certain equipment became fully depreciated in 2025. $41,000. Within our Services Segment, the composition and level of cost of goods sold are influenced by the type, scope, and timing of projects performed during the period. Certain projects require greater reliance on subcontractors, specialized materials, regulatory compliance activities, or travel, while others are more labor-intensive or utilize primarily in-house resources. As a result, the mix of project work can significantly affect both the composition and level of costs incurred, and which may not be directly proportional to changes in change proportionately with revenue.

of goods sold increased $5,594,000 for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, as follows:

of goods sold for the Treatment Segment increased by approximately $2,886,000, $3,865,000, or 15.4%. 13.1%. Variable costs increased by approximately $1,686,000, $1,571,000, primarily due to higher disposal, materials and supplies, transportation, and lab laboratory costs totaling approximately $1,453,000, $1,170,000, as well as higher overtime expense expenses of approximately $233,000 $401,000 incurred in processing previously stored waste inventories in anticipation of preparation for anticipated increases in Hanford-related waste volumes. Within our Treatment Segment, the composition and level of variable costs can fluctuate based on waste the mix of waste processed. Treatment Segment fixed costs increased by approximately $1,200,000. Fixed $2,294,000, primarily due to higher salaries and payroll-related expenses increased by of approximately $1,567,000, resulting from COLA implemented in

$127,000 July 2025 and increased headcount. Maintenance costs increased by approximately $323,000 due to scheduled maintenance, general equipment upkeep, and facility security enhancements. Depreciation expense increased by approximately $133,000 $199,000 due to additional capitalized equipment, including our prototype PFAS reactor. Regulatory expenses increased by approximately $192,000 $241,000 due to increased regulatory activities and higher fees assessed by regulatory agencies. These increases were partially offset by a decrease of approximately $62,000 $36,000 in general expenses, primarily due to lower utility costs.

Segment cost of goods sold increased by $1,239,000, $1,729,000, or 38.6%, primarily due to higher revenue during the period. 14.9%. The increase was primarily driven by higher subcontract and outside services costs of approximately $655,000 and higher salaries and payroll-related expenses of approximately $419,000. The increase in salaries and payroll-related expenses primarily reflected the $897,000, reflecting COLA implemented in July 2025, as well as increased labor associated with required by the higher volume of project work. Cost Additional increases included higher subcontract and outside services costs of goods sold also increased due to approximately $461,000, higher travel costs expenses of approximately $118,000 $193,000, and increased higher materials and supplies, laboratory services, disposal, and regulatory costs totaling approximately $108,000.

$299,000. These increases were partially offset by lower general expenses of approximately $48,000 $88,000 across various categories and lower depreciation expense expenses of approximately $13,000, $33,000 as certain equipment became fully depreciated in 2025. Within our Services Segment, the composition and level of cost of goods sold are influenced by the type, scope, and timing of projects performed during the period. Certain projects require greater reliance on subcontractors, specialized materials, regulatory compliance activities, or travel, while others are more labor-intensive or utilize primarily in-house resources. As a result, the mix of project work can significantly affect both the composition and level of costs incurred, and which may not be directly proportional to changes in change proportionately with revenue.

profit for the quarter ended June September 30, 2026, decreased $4,050,000 $2,005,000 over the same period in of 2025, as follows:

Segment incurred a gross loss of $2,652,000 $225,000 for the three months ended June September 30, 2026, compared with a gross profit of $1,566,000 $2,266,000 for the same period in 2025. Gross margin declined to (32.0%) (1.9%) from 13.7%. 17.3%. The decline in gross profit and gross margin was primarily due to lower revenue resulting from reduced waste volumes and a less favorable waste mix. In addition, the Treatment Segment's higher fixed operating costs, which were spread over a lower revenue base, further reducing adversely impacting gross margin. and contributing to the gross loss.

Segment gross profit increased by approximately $168,000, $486,000, and gross margin improved to 3.2% 12.2% from (0.6%) 6.7% in the prior-year period, primarily due to higher revenue and a more favorable mix of projects performed. Gross margins within our Services Segment are influenced by the type, scope, and mix of projects performed, which are generally competitively bid and have varying margin structures. As a result, gross margins may fluctuate from period to period based on the timing and mix of projects completed.

profit for the nine months ended September 30, 2026, decreased $9,594,000 over the same period in 2025, as follows:

Treatment Segment incurred a gross loss of $5,485,000 $5,711,000 for the six nine months ended June September 30, 2026, compared with a gross profit of $1,816,000 $4,082,000 for the same period of in 2025. Gross margin declined to (33.9%) (20.6%) from 8.8%, 12.1%, primarily due to lower revenue resulting from lower reduced waste volume volumes and a less favorable waste revenue mix. In addition, higher operating fixed operating costs, within the Treatment Segment, which were spread over a lower revenue base, further reduced gross margin and contributed to the gross loss.

Segment gross profit decreased increased by $287,000, $199,000, and gross margin declined improved to 1.3% 6.2% from 4.9% 5.5% in the prior-year period, primarily due to lower higher revenue and a less favorable from increased project margin mix. work. Gross margins within our Services Segment are influenced by the type, scope, and mix of projects performed, which are generally competitively bid and have varying margin structures. As a result, gross margins may fluctuate from period to period based on the timing and mix of projects completed.

expenses decreased $379,000 $85,000 for the three months ended June September 30, 2026, as compared to the corresponding period for 2025, as follows:

SG&A expenses increased primarily due to higher outside services costs of approximately $56,000 associated with increased legal and business activities, Treatment higher travel expenses of approximately $14,000 resulting from increased executive travel, and higher general expenses of approximately $14,000 across various categories.

Segment SG&A expenses decreased slightly, primarily due to lower salaries and payroll-related expenses of approximately $31,000, reflecting fewer employee hours required to support administrative and marketing functions. This decrease was substantially offset by higher general expenses of approximately $30,000 across various categories.

Segment SG&A expenses decreased primarily due to lower salaries and payroll-related expenses of approximately $148,000, reflecting fewer employee hours required to support marketing functions, partially offset by higher outside services costs associated with business-related activities.

expenses decreased $96,000 $181,000 for the six nine months ended June September 30, 2026, as compared to the corresponding period for 2025, as follows:

SG&A expenses increased primarily due to approximately $184,000 of higher outside services costs of approximately $240,000 associated with increased legal and business activities. The remaining increase was primarily attributable to higher salaries and payroll-related expenses resulting from COLA implemented in July 2025 for employees and January 2026 for executives. Treatment Segment SG&A increased primarily due to approximately $53,000 of higher outside services costs associated with increased consulting and business activities and approximately $31,000 of higher travel expenses incurred by information technology personnel. These increases were partially offset by lower salaries and payroll-related expenses, as fewer employee hours were required to support administrative and marketing functions. Services Segment SG&A declined primarily due to a decrease in provision for credit losses resulting from the settlement of a receivable that had previously been determined to be uncollectible.

Segment SG&A expenses increased primarily due to higher outside services costs of approximately $62,000 associated with increased consulting and business activities and higher travel expenses of approximately $36,000 incurred by information technology personnel.

These increases were partially offset by lower salaries and payroll-related expenses, reflecting fewer employee hours required to support administrative and marketing functions.

Segment SG&A declined primarily due to lower salaries and payroll-related expenses as fewer employee hours were required to support administrative and marketing functions. Services Segment SG&A declined decreased primarily due to a decrease in the provision for credit losses of approximately $283,000 resulting from the settlement of a receivable that had previously been determined to be uncollectible. as well as The remaining decrease was primarily attributable to lower travel expenses of approximately $30,000 and reduced salaries and payroll-related expenses due to fewer employee hours needed devoted to support marketing functions. activities.

income decreased by approximately $26,000 and $277,000 for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods of 2025. The decreases were primarily attributable to lower average balances maintained in our MMDA and lower interest rates earned on our finite risk sinking fund. The higher average MMDA balances in 2025 were primarily attributable to proceeds received from two equity offerings completed in May and December 2024.

expense decreased by approximately $36,000 and $138,000 for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods of 2025. The decreases were primarily attributable to capitalization of approximately $33,000 and $107,000 of interest expense during the three and nine months ended September 30, 2026, respectively, associated with debt incurred for construction projects, including our second PFAS reactor.

expense decreased by approximately $51,000 and $103,000 for the three and six months ended June 30, 2026, respectively, compared with the same periods in 2025. The decreases were primarily due to the capitalization of approximately $40,000 and $74,000 of interest in the three and six months ended June 30, 2026, respectively, related to debt incurred for construction projects, including our second had no income tax expense for continuing operations for the three and six nine months ended June September 30, 2026 and 2025. Our effective tax rate was 0% for each period as a result of the full valuation allowance recognized against its U.S. federal and state deferred tax assets during the quarter ended September 30, 2024.

1 unchanged paragraph

cash flow requirements during the six nine months ended June September 30, 2026, were funded primarily from available PNC Liquidity. Our PNC Liquidity includes cash held in our MMDA, which includes net proceeds from the sale of 2,628,571 shares of our Common Stock completed in May 2026 (see "Financing Activities" below within this MD&A and "Note 13—Sale of Common Stock" to the accompanying

1 unchanged paragraph

of June 30, 2026, we had no outstanding borrowings under our Revolving Credit and our PNC Liquidity was approximately $25,584,000, which included approximately $20,338,000 of cash held in our MMDA. As of December 31, 2025, we had no outstanding borrowing under our Revolving

Credit and our PNC Liquidity was approximately $18,126,000, which included approximately $11,529,000 of cash held in our MMDA.

of September 30, 2026, we had no outstanding borrowings under our Revolving Credit. PNC Liquidity is provided by two sources: cash, the substantial majority of which is held in our MMDA with our lender and borrowing availability under our Revolving Credit. As of September

30, 2026, cash held in our MMDA was approximately $14,331,000, compared to approximately $11,529,000 as of December 31, 2025, with the increase reflecting the net proceeds of approximately $21,114,000 from our May 2026 equity offering, substantially offset by cash used in operations and for capital expenditures during the first nine months of 2026. Borrowing availability under our Revolving Credit, which is determined by a borrowing base of eligible receivables and reduced by outstanding standby letters of credit ($3,420,000) and lender-imposed discretionary reserves ($750,000), was approximately $5,533,000 as of September 30, 2026, compared to approximately $6,597,000 as of

December 31, 2025, primarily reflecting lower eligible receivables. As a result, our PNC Liquidity was approximately $19,864,000 as of

September 30, 2026, compared to approximately $18,126,000 as of December 31, 2025. Our PNC Liquidity declined from approximately $25,584,000 as of June 30, 2026, reflecting continued operating losses and capital expenditures during the third quarter. Because availability under our Revolving Credit depends on the level of our eligible receivables, reductions in eligible receivables, or continued use of cash to fund operating losses and capital expenditures, could further reduce our PNC Liquidity.

incurred losses from continuing operations before tax of $15,134,000 during 2024, $10,665,000 during 2025, and $13,637,000 $17,046,000 during the first six nine months of 2026. We also experienced cash used in continuing operations of $14,146,000 during 2024, $10,311,000 during 2025, and $8,769,000 during the first six months of 2026. These results were due in part to delays in the enactment of federal appropriations and Congress's continued use of CRs, as well as increased investments in PFAS technology (see "Known Trends and Uncertainties

2025, and $10,796,000 during the first nine months of 2026. Our operating results and liquidity were impacted in part by delays in the enactment of federal appropriations and Congress's continued use of CRs, increased investments in PFAS destruction technology (see "Known Trends and Uncertainties – New Processing Technology" within this MD&A for a discussion of our new technology), expansion of treatment capacity, workforce growth, equipment upgrades, and infrastructure enhancements intended to support anticipated waste treatment volumes, including anticipated Hanford-related waste volumes. In addition, for during the first nine months of 2026, year to date, delays in the commencement mobilization of several new projects a recently awarded project within our Services Segment, temporary downtime of certain processing delays equipment due to scheduled maintenance and upgrades, processing delays resulting from customer-directed changes in treatment protocols, and the continued processing of previously stored waste inventories to prepare for anticipated increases in certain Hanford-related waste volumes negatively impacted our revenues during the quarter. and results of operations. Certain of these previously stored waste inventories carried lower margins, which adversely affected our results of operations These lower-margin previously stored waste inventories have now been substantially processed and are not expected to have a material effect on operating results during the next twelve months. in 2026.

These lower-margin previously stored waste inventories were substantially processed by the end of the second quarter.

1 unchanged paragraph

A significant portion of our projected 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. Because these 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 could not conclude that our plans are probable of effectively mitigating the conditions giving rise to substantial doubt. Accordingly, substantial doubt continues to exist about our ability to continue as a going concern for one year following the date the accompanying Condensed Consolidated Financial Statements are issued.

plans to address these conditions include utilizing existing cash and borrowing availability; pursuing operating improvements supported by the Company's Treatment and Services Segment backlogs; continuing to pursue additional government, commercial, and international project opportunities; managing capital expenditures and operating costs; and, if necessary, seeking additional liquidity through equity or other financing arrangements or potential asset dispositions. There can be no assurance that these plans, or any component thereof, can be achieved. In addition, on August 10, 2026, we extended the maturity of our PNC Credit

10, 2026, we extended the maturity of our PNC Credit Facility from May 2027 to May 2030, among other things (see "Liquidity and Capital Resources—Financing

Capital Resources—Financing Activities—Credit Facility" for a discussion of this extension).

Although the May 2026 equity offering discussed elsewhere in this Report strengthened our liquidity, continued operating losses since the offering and significant capital expenditures, including investments made to support anticipated waste treatment volumes and improve operational capabilities, have reduced our liquidity position. Therefore, we concluded that the substantial doubt was has not been alleviated. We expect to fund our operations during the assessment period with our existing liquidity, anticipated operating cash flows and borrowing availability. to be sufficient to fund our operations during the assessment period. However, the ability of our plans to mitigate the conditions giving rise to substantial doubt depends in part on the timing and volume of government-directed waste shipments and project activity, as well as other matters outside our control. In addition, the Company's our borrowing availability is subject to compliance with applicable financial covenants and other conditions. There can be no assurance that additional liquidity, , if needed, will be available on acceptable terms or at all.

following table reflects the cash flow activities during the first six nine months of 2026 and 2025.

7 unchanged paragraphs

used in operating activities from continuing operations during the first six months of 2026 primarily reflected our net loss of approximately

$13,637,000, adjusted for non-cash items, including stock-based compensation expense of approximately $398,000 and depreciation and amortization expense of approximately $974,000. Changes in operating assets and liabilities provided approximately $3,508,000 of cash, primarily reflecting a decrease in accounts receivable (including the recovery of credit losses) of approximately $1,481,000 and a net increase in accounts payable, accrued expenses, deferred revenue, and other accrued liabilities of approximately $3,074,000. These favorable changes were partially offset by an increase in unbilled receivables of approximately $797,000 and a net increase in inventories, prepaid expenses, and other assets of approximately $250,000. Accounts receivable balances are affected by the timing of customer invoicing and collections, while the timing of cash receipts is influenced by the payment terms and conditions of our customer contracts.

used in operating activities from continuing operations during the first six months of 2025 primarily reflected our net loss of approximately

had working capital of $18,390,000 (which included working capital of our discontinued operations) as of June 30, 2026, compared to working capital of $13,803,000 as of December 31, 2025. The increase in our working capital was primarily due to net proceeds received from the equity raise that we completed in May of 2026.

capital expenditures for the periods noted above included investments in our second-generation and prototype PFAS technology systems, as well as facility upgrades and capacity enhancements to support anticipated increases in waste volumes associated with the Hanford waste program.

30, 2026. Cash provided by financing activities also included proceeds received of approximately $153,000 from stock option exercises.

These cash inflows were partially offset by principal payments of approximately $521,000 on our Term Loan, Capital Loan, and finance lease obligations.

30, 2026) and (ii) discretionary reserves imposed by the lender ($750,000 as of June 30, 2026). The Credit Facility also includes a Term

Effect of exchange rate changes in cash

Increase (decrease) in cash and finite risk sinking fund (restricted cash)

sinking fund (restricted cash)

3 unchanged paragraphs

1 unchanged paragraph

5 unchanged paragraphs

2 unchanged paragraphs

3 unchanged paragraphs

1 unchanged paragraph

5 unchanged paragraphs

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and 41 more changes in the filing

Controls and procedures 4 changes

2 unchanged paragraphs

were not effective as of June September 30, 2026 due to a material weakness in our internal controls over financial reporting identified for the year ended December 31, 2025, as set forth below.

2 unchanged paragraphs

of Material Weakness in Internal Control Over Financial Reporting are committed to maintaining effective internal control over financing financial reporting. For the material weakness identified, we have commenced the process of developing and implementing implemented our remediation plan that includes completeness checks and additional reconciliation procedure procedures related to processed waste and our inventory waste management systems at our Treatment Segment. However, some of these steps will take additional time is required to be fully integrated evaluate and validated for validate the operating effectiveness Additional of these controls may also be required over time. through testing. We expect to complete this validation by December 31, 2026. Until sufficient testing has been performed to demonstrate that the remediation steps set forth above controls are fully implemented operating effectively and tested, the material weakness has been remediated, the material weakness described above will continue to exist.

1 unchanged paragraph

was no other change in our internal control over financial reporting (as defined in Rules

than the implementation of the remediation controls discussed above, there were no other change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

1 unchanged paragraph

Legal proceedings 8 changes

Wage and Hour Litigation

June 26, 2026, Edwin Monroy filed a putative class action complaint in the Superior Court of the State of Washington for Benton County against Perma-Fix Northwest Richland, Inc., Perma-Fix Environmental Services, Inc., Perma-Fix Northwest, Inc., and other, unnamed, defendants.

The complaint purports to assert claims on behalf of a class of approximately 50 or more current and former hourly-paid or non-exempt employees in Washington during the period beginning approximately June 26, 2023 through the date of final judgment. The complaint alleges, among other things, failures to provide legally compliant meal and rest periods, pay for all hours worked, pay minimum and overtime wages, properly administer paid sick leave, timely pay wages, provide accurate itemized wage statements and maintain required payroll and employment records, and reimburse certain business expenses. The complaint also alleges willful withholding of wages under Washington law. The plaintiff seeks class certification, recovery of allegedly unpaid wages and related compensation, statutory or enhanced damages, penalties, restitution, injunctive relief, pre- and post-judgment interest, and attorneys' fees and costs.

Company believes the claims are without merit and intends to defend the action vigorously. The action is in its preliminary stages, no class has been certified, and the allegations have not been proven. The Company has not accrued any amount with respect to this matter because a loss is not considered probable, and the amount or range of any reasonably possible loss cannot presently be estimated.

are no material legal proceedings pending against us and/or our subsidiaries not previously reported by us in Part I - Item 3 of our

are no material legal proceeding pending against us and/or our subsidiaries not previously reported by us in Item 3 of our Form 10-K for the year ended December 31, 2025 except and Part II - Item 1 of our Form 10-Q for the matter described below. quarter ended June 30, 2026. In addition, there has been no material change in the legal proceeding proceedings previously disclosed by us in our Form 10-Q for the quarter ended March 31, 2026 as discussed in "Note 9 - Commitments and Contingencies – Legal Matters – "Michael O'Neill" of the Condensed Consolidated Financial Statements. and

"Edwin Monroy Wage and Hour" under "Legal Matters" within "Note 9 - Commitments and Contingencies"

of the Condensed Consolidated Financial Statements of our Form 10-Q for the quarter ended June 30, 2026.

Risk factors 8 changes

has been no other material change from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2025 and

Form 10-Q 10-Qs for the quarter quarters ended March 31, 2026 and June 30, 2026, except as follows:

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We may also be required to reduce certain operating expenditures, including, but not limited to, reduction in R&D activities.

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

Company sustained significant losses during 2024, 2025, and the first six nine months of 2026. We believe that our results of operations should improve starting in the second half of 2026. coming twelve months. 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.

recurring losses and negative operating cash flows have raised continue to raise substantial doubt about our ability to continue as a going concern, and our expected improvement depends substantially on government-directed waste shipments and project activity that are outside our control.

described in Note 1 to our unaudited condensed consolidated financial statements, our recurring operating losses and negative cash flows from continuing operations, including continued losses during the third quarter of 2026, have raised contributed to the ongoing 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, continued operating losses since the offering and significant capital expenditures have reduced our liquidity. Management concluded that the substantial doubt was about our ability to continue as a going concern has not been 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.

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 anticipate that the operational developments and backlog discussed in this report may result in improved operating results in the coming twelve months; however, the timing and amount of any improvement remain subject to significant uncertainty.

Exhibits 30 changes

Employment Agreement dated May 1, 2026, between Mark Duff, President and Chief Executive Officer and Perma-Fix Environmental Services, Inc., as incorporated by reference from Exhibit 10.6 to the Company's Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026.

Employment Agreement dated May 1, 2026, between Ben Naccarato, EVP and Chief Financial Officer and Perma-Fix Environmental Services, Inc., as incorporated by reference from Exhibit 10.7 to the Company's Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026.

Employment Agreement dated May 1, 2026, between Dr. Louis Centofanti, EVP of Strategic Initiatives and Perma-Fix Environmental Services, Inc., as incorporated by reference from Exhibit 10.8 to the Company's Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026.

Employment Agreement dated May 1, 2026, between Richard Grondin, EVP of Hanford Waste Operations and Perma-Fix Environmental Services, Inc., as incorporated by reference from Exhibit 10.9 to the Company's Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026.

Employment Agreement dated May 1, 2026, between Chief Operating Officer and Perma-Fix Environmental Services, Inc. ., as incorporated by reference from Exhibit 10.10 to the Company's Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026.

Eleventh Amendment to Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated August 10, 2026, between Perma-Fix Environmental Services, Inc., and PNC Bank, National Association.

Environmental Services, Inc., and PNC Bank, National Association, as incorporated by reference from Exhibit 4.1 to the Company's

Form 10-Q for the quarter ended June 30, 2026, filed on August 12, 2026.

Eleventh Amendment to Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated August 10, 2026, between Perma-Fix Environmental Services, Inc., and PNC Bank, National Association, incorporated by reference to Exhibit 4.1 of this Quarterly Report on Form 10-Q.

Environmental Services, Inc., and PNC Bank, National Association, as incorporated by reference from Exhibit 4.1 to the Company's

Form 10-Q for the quarter ended June 30, 2026, filed on August 12, 2026.

Indefinite Delivery/Indefinite Quantity Master Subcontract (IDIQM), dated effective August 11, 2026, between Hanford Tank Waste Operations & Closure LLC (H2C) and Perma-Fix Environmental Services, Inc., for the disposal of mixed low-level waste from the U.S. Department of Energy's Hanford Site.

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Perma-Fix Environmental Services, Inc.'s Press Release dated August 12, 2026 Announcing its Second Quarter 2026 Results.

^ Certain identified information

has been excluded from these exhibits because it is not material and is the type of information that the Company customarily and actually treats as private and confidential. Redacted information is indicated by [***].

XBRL Instance Document-the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the

Inline XBRL document*

XBRL Taxonomy Extension Schema Document*

XBRL Taxonomy Extension Calculation Linkbase Document*

XBRL Taxonomy Extension Definition Linkbase Document*

XBRL Taxonomy Extension Labels Linkbase Document*

XBRL Taxonomy Extension Presentation Linkbase Document*

Page Interactive Data File (formatted as an Inline XBRL document and included in Exhibit 101).

* Pursuant to Rule 406T of

of Regulation S-T, the Inline Interactive Data File in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purpose of Section 18 of the Exchange

18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

# Certain schedules, exhibits, and attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation

S-K. A list briefly identifying the contents of all omitted schedules, exhibits, and attachments is included in the exhibit. The Company agrees to furnish supplementally a copy of any omitted schedule, exhibit, or attachment to the Securities and Exchange Commission upon request.

to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

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and Chief (Principal) Executive Officer

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