As
filed with the Securities and Exchange Commission on May 13, 2019
Registration
No. __________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
(Exact
name of registrant as specified in charter)
DELAWARE
|
|
58-1954497
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
Employer
Identification No.)
|
8302
Dunwoody Place, #250
Atlanta,
Georgia 30350
(770)
587-9898
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
MARK
DUFF
President
and Chief Executive Officer
Perma-Fix
Environmental Services, Inc.
8302
Dunwoody Place, #250
Atlanta,
Georgia 30350
(770)
587-9898
(Address,
including zip code, and telephone number, including area code, of agent for service)
Copy
to:
Irwin
H. Steinhorn, Esq.
Conner
& Winters, LLP
One
Leadership Square, Suite 1700
211
North Robinson
Oklahoma
City, Oklahoma 73102
(405)
272-5711
Approximate
date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If
the only securities being registered on this form are being offered pursuant to a dividend or interest reinvestment plans, please
check the following box: [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box: [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering: [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
|
[ ]
|
Accelerated
filer
|
[ ]
|
Non-accelerated
filer
|
[ ]
|
Smaller
reporting company
|
[X]
|
|
|
Emerging
growth company
|
[ ]
|
If
an emerging growth company, indicate by check mark if the registrant has selected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
[ ]
CALCULATION
OF REGISTRATION FEE
Title
of Each Class
of
Securities to be
Registered
|
|
Number
of Shares to be Registered
|
|
|
Proposed
Maximum Offering Price Per Share
(1)
|
|
|
Proposed
Maximum Aggregate Offering Price
|
|
|
Amount
of Registration Fee
(2)
|
|
Common Stock, $0.01 par value
|
|
|
2,500,000
|
|
|
$
|
4.3528
|
|
|
$
|
10,882,000
|
|
|
|
$
1,318.90
|
(3)
|
Rights attached to
above shares of Common Stock under Rights Agreement
(3)
|
|
|
2,500,000
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
(1)
|
The
proposed maximum aggregate offering price, estimated solely for the purpose of calculating the registration fee, has been
computed pursuant to Rule 457(c) of the Securities Act of 1933 and is based on the average of the high and low prices of Perma-Fix
Environmental Services, Inc.’s common stock, $0.001 par value, on May 7, 2019, as reported by The Nasdaq Capital Market.
|
|
|
(2)
|
Calculated
at the rate of $121.20 per million dollars.
|
|
|
(3)
|
Each
share of common stock has a Right attached to it pursuant to the Registrant’s Shareholder Rights Agreement dated May
2, 2018 (as more fully described beginning on page 16 of the prospectus). These Rights are also being registered in this registration
statement.
|
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, or until this registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities, and it is
not soliciting an offer to buy securities in any state where the offer or sale is not permitted.
Subject
to completion, dated` May 13, 2019
PROSPECTUS
2,500,000
Shares
and
the rights attached to the Shares
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
Common
Stock
Perma-Fix
Environmental Services, Inc. may offer shares of its common stock from time to time. Each share of common stock includes an attached
Right under our Rights Agreement, dated May 2, 2018. We will specify in an accompanying prospectus supplement the terms of any
offering. Our common stock is traded on the NASDAQ Capital Market under the symbol “PESI”. On April 15, 2019, the
closing price of our common stock as reported on the NASDAQ Capital Market was $4.14.
The
aggregate market value of our outstanding common stock held by non-affiliates, computed by reference to the price at which our
common stock was last sold on April 15, 2019 ($4.14 per share), was approximately $46,962,351, based on 12,054,439 shares of our
common stock outstanding as of that date, of which 11,343,563 shares were held by non-affiliates. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell securities in a public primary offering during the period of 12 calendar months immediately
prior to and including the sale with a value exceeding more than one-third of our public float so long as our public float remains
below $75.0 million. We have not offered any of our securities pursuant to General Instruction 1.B.6 of Form S-3 during the 12
calendar months prior to and including the date of this prospectus.
You
should read this prospectus, any prospectus supplement and the documents incorporated by reference in this prospectus or any prospectus
supplement carefully before you invest.
This prospectus may not be used to offer and sell securities unless accompanied by
a prospectus supplement.
Investing
in our common stock involves a high degree of risk. You should carefully consider the
Risk Factors
beginning on page 5
of this prospectus before you make an investment decision.
The
common stock offered by this prospectus may be offered in amounts, at prices and at terms determined at the time of the offering
and may be sold directly by us to investors, through agents designated from time to time or to or through underwriters or dealers.
We will set forth the names of any underwriters or agents in the accompanying prospectus supplement. For additional information
on the methods of sale, you should refer to the section entitled “Plan of Distribution.” The net proceeds we expect
to receive from such sale will also be set forth in a prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2019.
TABLE
OF CONTENTS
Unless
the context otherwise requires, references in this prospectus to “Perma-Fix,” “the company,” “we,”
“our,” and “us” refer to Perma-Fix Environmental Services, Inc. and its consolidated subsidiaries.
No
person has been authorized to give any information or make any representations in connection with this offering other than those
contained or incorporated by reference in this prospectus and any accompanying prospectus supplement in connection with the offering
described herein and therein, and, if given or made, such information or representations must not be relied upon as having been
authorized by us. Neither this prospectus nor any prospectus supplement shall constitute an offer to sell or a solicitation of
an offer to buy offered securities in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation.
Neither the delivery of this prospectus or any prospectus supplement nor any sale made hereunder shall under any circumstances
imply that the information contained or incorporated by reference herein or in any prospectus supplement is correct as of any
date subsequent to the date hereof or of such prospectus supplement.
SUMMARY
The
following summary is qualified in its entirety by the more detailed information included in this prospectus or incorporated by
reference in this prospectus. You should carefully consider the information set forth in this entire prospectus, including the
“Risk Factors” section, the applicable prospectus supplement for such securities and the other documents we refer
to or that we incorporate by reference.
This
prospectus is part of a Registration Statement on Form S-3 that we filed with the Securities and Exchange Commission (the “Commission”),
utilizing a
“
shelf
”
registration process. Under this shelf registration process, we may, from time to
time, sell up to an aggregate of 2,500,000 shares of our common stock in one or more offerings. This prospectus provides you with
a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any prospectus supplement, including the risk factors,
together with additional information described below under the headings
“
Where You Can Find More Information”
and “Incorporation by Reference.”
Perma-Fix
Perma-Fix
Environmental Services, Inc. is an environmental and technology know-how company. We have three reportable segments. In accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, “Segment
Reporting”, we define an operating segment as:
●
|
a
business activity from which we may earn revenue and incur expenses;
|
●
|
whose
operating results are regularly reviewed by the chief operating decision maker “(CODM”) to make decisions about
resources to be allocated and assess its performance; and
|
●
|
for
which discrete financial information is available.
|
Our
TREATMENT SEGMENT includes:
|
-
|
nuclear,
low-level radioactive, mixed (waste containing both hazardous and low-level radioactive
waste), hazardous and non-hazardous waste treatment, processing and disposal services
primarily through three uniquely licensed (Nuclear Regulatory Commission or state equivalent)
and permitted (U.S. Environmental Protection Agency (“EPA”) or state equivalent)
treatment and storage facilities held by the following subsidiaries: Perma-Fix of Florida,
Inc. (“PFF”), Diversified Scientific Services, Inc., (“DSSI”),
and Perma-Fix Northwest Richland, Inc. (“PFNWR”). The presence of nuclear
and low-level radioactive constituents within the waste streams processed by this segment
creates different and unique operational, processing and permitting/licensing requirements;
and
|
|
-
|
Research
and Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques
for problematic waste streams.
|
We
have completed the physical on-site closure and decommissioning activities at our East Tennessee Materials and Energy Corporation
(“M&EC”) facility (within our Treatment Segment and in closure status) in accordance with M&EC’s license
and permit requirements, with final closure of the facility subject to completion of final surveys and regulatory approvals. We
continue to transition operational capabilities to our other Treatment Segment facilities, subject to customer requirements and
regulatory approvals.
Our
SERVICES SEGMENT includes:
|
-
|
Technical
services, which include:
|
|
●
|
professional
radiological measurement and site survey of large government and commercial installations
using advanced methods, technology and engineering;
|
|
●
|
integrated
Occupational Safety and Health services including industrial hygiene (“IH”)
assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos
management/abatement oversight; indoor air quality evaluations; health risk and exposure
assessments; health & safety plan/program development, compliance auditing and training
services; and Occupational Safety and Health Administration (“OSHA”) citation
assistance;
|
|
●
|
global
technical services providing consulting, engineering, project management, waste management,
environmental, and decontamination and decommissioning field, technical, and management
personnel and services to commercial and government customers; and
|
|
●
|
on-site
waste management services to commercial and governmental customers.
|
|
-
|
Nuclear
services, which include:
|
|
●
|
technology-based
services including engineering, decontamination and decommissioning (“D&D”),
specialty services, logistics, transportation, processing and disposal;
|
|
●
|
remediation
of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites. Such services capability includes:
project investigation; radiological engineering; partial and total plant D&D; facility decontamination, dismantling, demolition,
and planning; site restoration; logistics; transportation; and emergency response; and
|
|
-
|
A
company owned equipment calibration and maintenance laboratory that services, maintains,
calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental,
and occupational safety and health (“NEOSH”) instrumentation.
|
|
-
|
A
company owned gamma spectroscopy laboratory for the analysis of oil and gas industry solids and liquids.
|
Our
MEDICAL SEGMENT includes: R&D costs for the new medical isotope production technology from Perma-Fix Medical (“PF Medical”),
our majority-owned Polish subsidiary (of which we own approximately 60.5% at December 31, 2018). The Medical Segment has not generated
any revenue as it remains in the R&D stage. R&D costs consist primarily of employee salaries and benefits, laboratory
costs, third party fees, and other related costs associated with the development of new technology. As previously disclosed, our
Medical Segment ceased a substantial portion of its R&D activities for the new medical isotope production technology due to
the need for substantial capital to fund such activities. We anticipate that our Medical Segment will not restart its full scale
R&D activities until it obtains the necessary funding or partners with others willing to provide the necessary funding.
Our
Treatment and Services Segments provide services to research institutions, commercial companies, public utilities, and governmental
agencies (domestic and foreign), including the U.S. Department of Energy (“DOE”) and U.S. Department of Defense (“DOD”).
The distribution channels for our services are through direct sales to customers or via intermediaries.
Our
principal executive offices are located at 8302 Dunwoody Place, Suite 250, Atlanta, Georgia 30350, and our telephone number is
(770) 587-9898.
THE
COMMON STOCK WE MAY OFFER
We
may offer up to an aggregate of 2,500,000 shares of common stock in one or more offerings. A prospectus supplement, which we will
provide to you each time we offer securities, will describe the specific amounts, prices and terms of these securities. Each share
of common stock includes an attached Right, as described beginning on page 16 of this prospectus.
We
may sell the common stock to or through underwriters, dealers or agents or directly to purchasers. We and our agents reserve the
sole right to accept and to reject in whole or in part any proposed purchase of securities. Each prospectus supplement will set
forth the names of any underwriters, dealers or agents involved in the sale of the common stock described in that prospectus supplement
and any applicable fee, commission or discount arrangements with them.
Common
stock holders are entitled to receive dividends declared by our board of directors out of funds legally available for the payment
of dividends, subject to rights, if any, of preferred stock holders. However, we have never paid a dividend, and we do not anticipate
paying a dividend in the foreseeable future. Our current secured credit facility prohibits us from paying cash dividends on our
common stock. Each holder of common stock is entitled to one vote per share. The holders of common stock have no preemptive rights
or cumulative voting rights. A prospectus supplement will describe the specific amounts, prices and terms of any common stock
to be issued.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the information incorporated by reference herein include forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). All statements in this prospectus and the information incorporated by reference
herein 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 our actual results and performance 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;
|
●
|
continue
to focus on expansion into both commercial and international markets to increase revenues;
|
●
|
closure
of M&EC facility;
|
●
|
improvement
to working capital;
|
●
|
reductions
in the level of government funding in future years;
|
●
|
R&D
activity of our Medical Segment;
|
●
|
reducing
operating costs;
|
●
|
expect
to meet our financial covenant requirements in the next twelve months;
|
●
|
cash
flow requirements;
|
●
|
government
funding for our services;
|
●
|
may
not have liquidity to repay debt if our lender accelerates payment of our borrowings;
|
●
|
our
cash flows from operations, our available liquidity from our credit facility, loan proceeds of $2,500,000, and finite sinking
funds that we expect to receive are sufficient to service our operations;
|
●
|
release
of restricted finite risk sinking funds;
|
●
|
manner
in which the government will be required to spend funding to remediate federal sites;
|
●
|
audit
by the Internal Revenue Services of our net operating losses;
|
●
|
funding
operations;
|
●
|
fund
capital expenditures from cash from operations and/or financing;
|
●
|
fund
remediation expenditures for sites from funds generated internally;
|
●
|
compliance
with environmental regulations;
|
●
|
future
environmental policies affecting operations;
|
●
|
potential
effect of being a Potentially Responsible Party (“PRP”);
|
●
|
subject
to fines and civil penalties in connection with violations of regulatory requirements;
|
●
|
large
business are more willing to team with small businesses;
|
●
|
permit
and license requirements represent a potential barrier to entry for possible competitors;
|
●
|
process
backlog during periods of low waste receipts, which historically has been in the first and fourth quarters;
|
●
|
potential
sites for violations of environmental laws and remediation of our facilities;
|
●
|
delay
in waste shipment should have positive effect for us in first half of 2019;
|
●
|
continuation
of contracts with federal government;
|
●
|
loss
of contracts;
|
●
|
necessary
capital for Medical Segment;
|
●
|
disposal
of our waste;
|
●
|
exposure
to one-time transition tax; and
|
●
|
contract
awards and estimated value of these contracts.
|
While
we believe the expectations reflected in such forward-looking statements are reasonable, we 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;
|
●
|
material
reduction in revenues;
|
●
|
ability
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;
|
●
|
public
not accepting our new technology;
|
●
|
inability
to develop new and existing technologies in the conduct of operations;
|
●
|
inability
to maintain and obtain closure and operating insurance requirements;
|
●
|
inability
to retain or renew certain required permits;
|
●
|
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;
|
●
|
delays
at our third-party disposal site can extend collection of our receivables greater than twelve months;
|
●
|
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;
|
●
|
requirements
to obtain permits for treatment, storage, and disposal (“TSD”) activities or licensing requirements to handle
low level radioactive materials are limited or lessened;
|
●
|
potential
increases in equipment, maintenance, operating or labor costs;
|
●
|
management
retention and development;
|
●
|
financial
valuation of intangible assets is substantially more/less than expected;
|
●
|
the
requirement to use internally generated funds for purposes not presently anticipated;
|
●
|
inability
to continue to be profitable on an annualized basis;
|
●
|
inability
of the Company to maintain the listing of its Common Stock on the NASDAQ;
|
●
|
terminations
of contracts with federal agencies or subcontracts involving federal agencies, or reduction in amount of waste delivered to
the Company under the contracts or subcontracts;
|
●
|
renegotiation
of contracts involving the federal government;
|
●
|
federal
government’s inability or failure to provide necessary funding to remediate contaminated federal sites;
|
●
|
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;
|
●
|
lender
refuses to waive non-compliance or revise our covenant so that we are in compliance; and
|
●
|
risk
factors contained in this prospectus.
|
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making
an investment decision, as well as the risks and other information included and incorporated by reference in the applicable prospectus
supplement when determining whether or not to purchase the securities offered under this prospectus and the applicable prospectus
supplement. You should also refer to the other information in this prospectus incorporated by reference into this prospectus and
the additional information in the other reports we file with the Commission.
Risks
Relating to our Operations
Failure
to maintain our financial assurance coverage that we are required to have in order to operate our permitted treatment, storage
and disposal facilities could have a material adverse effect on us.
We
maintain finite risk insurance policies and bonding mechanisms which provide financial assurance to the applicable states for
our permitted facilities in the event of unforeseen closure of those facilities. We are required to provide and to maintain financial
assurance that guarantees to the state that in the event of closure, our permitted facilities will be closed in accordance with
the regulations. In the event that we are unable to obtain or maintain our financial assurance coverage for any reason, this could
materially impact our operations and our permits which we are required to have in order to operate our treatment, storage, and
disposal facilities.
If
we cannot maintain adequate insurance coverage, we will be unable to continue certain operations.
Our
business exposes us to various risks, including claims for causing damage to property and injuries to persons that may involve
allegations of negligence or professional errors or omissions in the performance of our services. Such claims could be substantial.
We believe that our insurance coverage is presently adequate and similar to, or greater than, the coverage maintained by other
companies in the industry of our size. If we are unable to obtain adequate or required insurance coverage in the future, or if
our insurance is not available at affordable rates, we would violate our permit conditions and other requirements of the environmental
laws, rules, and regulations under which we operate. Such violations would render us unable to continue certain of our operations.
These events would have a material adverse effect on our financial condition.
The
inability to maintain existing government contracts or win new government contracts over an extended period could have a material
adverse effect on our operations and adversely affect our future revenues.
A
material amount of our Treatment and Services Segments’ revenues are generated through various government contracts or subcontracts
involving specifically the U.S. government. Our revenues from governmental contracts and subcontracts relating to domestic governmental
facilities within our segments were approximately $34,811,000, or 70.3%, and $37,019,000, or 74.4%, of our consolidated operating
revenues for 2018 and 2017, respectively. Most of our government contracts or our subcontracts granted under government contracts
are awarded through a regulated competitive bidding process. Some government contracts are awarded to multiple competitors, which
increase overall competition and pricing pressure and may require us to make sustained post-award efforts to realize revenues
under these government contracts. All contracts with, or subcontracts involving, the federal government are terminable, or subject
to renegotiation, by the applicable governmental agency on 30 days notice, at the option of the governmental agency. If we fail
to maintain or replace these relationships, or if a material contract is terminated or renegotiated in a manner that is materially
adverse to us, our revenues and future operations could be materially adversely affected.
Our
existing and future customers may reduce or halt their spending on hazardous waste and nuclear services with outside vendors,
including us.
A
variety of factors may cause our existing or future customers (including the federal government) to reduce or halt their spending
on hazardous waste and nuclear services from outside vendors, including us. These factors include, but are not limited to:
|
●
|
accidents,
terrorism, natural disasters or other incidents occurring at nuclear facilities or involving shipments of nuclear materials;
|
|
●
|
failure
of the federal government to approve necessary budgets, or to reduce the amount of the budget necessary, to fund remediation
of DOE and DOD sites;
|
|
●
|
civic
opposition to or changes in government policies regarding nuclear operations;
|
|
●
|
a
reduction in demand for nuclear generating capacity; or
|
|
●
|
failure
to perform under existing contracts, directly or indirectly, with the federal government.
|
These
events could result in or cause the federal government to terminate or cancel its existing contracts involving us to treat, store
or dispose of contaminated waste and/or to perform remediation projects, at one or more of the federal sites since all contracts
with, or subcontracts involving, the federal government are terminable upon or subject to renegotiation at the option of the government
on 30 days’ notice. These events also could adversely affect us to the extent that they result in the reduction or elimination
of contractual requirements, lower demand for nuclear services, burdensome regulation, disruptions of shipments or production,
increased operational costs or difficulties or increased liability for actual or threatened property damage or personal injury.
Economic
downturns and/or reductions in government funding could have a material negative impact on our businesses.
Demand
for our services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety
of factors beyond our control, including economic conditions, reductions in the budget for spending to remediate federal sites
due to numerous reasons, including, without limitation, the substantial deficits that the federal government has and is continuing
to incur. During economic downturns and large budget deficits that the federal government and many states are experiencing, the
ability of private and government entities to spend on waste services, including nuclear services, may decline significantly.
Our operations depend, in large part, upon governmental funding, particularly funding levels at the DOE. Significant reductions
in the level of governmental funding (for example, the annual budget of the DOE) or specifically mandated levels for different
programs that are important to our business could have a material adverse impact on our business, financial position, results
of operations and cash flows.
The
loss of one or a few customers could have an adverse effect on us.
One
or a few governmental customers or governmental related customers have in the past, and may in the future, account for a significant
portion of our revenue in any one year or over a period of several consecutive years. Because customers generally contract with
us for specific projects, we may lose these significant customers from year to year as their projects with us are completed. Our
inability to replace the business with other similar significant projects could have an adverse effect on our business and results
of operations.
As
a government contractor, we are subject to extensive government regulation, and our failure to comply with applicable regulations
could subject us to penalties that may restrict our ability to conduct our business.
Our
governmental contracts, which are primarily with the DOE or subcontracts relating to DOE sites, are a significant part of our
business. Allowable costs under U.S. government contracts are subject to audit by the U.S. government. If these audits result
in determinations that costs claimed as reimbursable are not allowed costs or were not allocated in accordance with applicable
regulations, we could be required to reimburse the U.S. government for amounts previously received.
Governmental
contracts or subcontracts involving governmental facilities are often subject to specific procurement regulations, contract provisions
and a variety of other requirements relating to the formation, administration, performance and accounting of these contracts.
Many of these contracts include express or implied certifications of compliance with applicable regulations and contractual provisions.
If we fail to comply with any regulations, requirements or statutes, our existing governmental contracts or subcontracts involving
governmental facilities could be terminated or we could be suspended from government contracting or subcontracting. If one or
more of our governmental contracts or subcontracts are terminated for any reason, or if we are suspended or debarred from government
work, we could suffer a significant reduction in expected revenues and profits. Furthermore, as a result of our governmental contracts
or subcontracts involving governmental facilities, claims for civil or criminal fraud may be brought by the government or violations
of these regulations, requirements or statutes.
We
are a holding company and depend, in large part, on receiving funds from our subsidiaries to fund our indebtedness.
Because
we are a holding company and operations are conducted through our subsidiaries, our ability to meet our obligations depends, in
large part, on the operating performance and cash flows of our subsidiaries.
Loss
of certain key personnel could have a material adverse effect on us.
Our
success depends on the contributions of our key management, environmental and engineering personnel. Our future success depends
on our ability to retain and expand our staff of qualified personnel, including environmental specialists and technicians, sales
personnel, and engineers. Without qualified personnel, we may incur delays in rendering our services or be unable to render certain
services. We cannot be certain that we will be successful in our efforts to attract and retain qualified personnel as their availability
is limited due to the demand for hazardous waste management services and the highly competitive nature of the hazardous waste
management industry. We do not maintain key person insurance on any of our employees, officers, or directors.
Changes
in environmental regulations and enforcement policies could subject us to additional liability and adversely affect our ability
to continue certain operations.
We
cannot predict the extent to which our operations may be affected by future governmental enforcement policies as applied to existing
laws, by changes to current environmental laws and regulations, or by the enactment of new environmental laws and regulations.
Any predictions regarding possible liability under such laws are complicated further by current environmental laws which provide
that we could be liable, jointly and severally, for certain activities of third parties over whom we have limited or no control.
Our
Treatment Segment has limited end disposal sites to utilize to dispose of its waste which could significantly impact our results
of operations.
Our
Treatment Segment has limited options available for disposal of its nuclear waste. Currently, there are only two disposal sites,
each site having different owners, for our low level radioactive waste we receive from non-governmental sites, allowing us to
take advantage of the pricing competition between the two sites. If either of these disposal sites ceases to accept waste or closes
for any reason or refuses to accept the waste of our Treatment Segment, for any reason, we would be limited to only the one remaining
site to dispose of our nuclear waste. With only one end disposal site to dispose of our waste, we could be subject to significantly
increased costs which could negatively impact our results of operations.
Our
businesses subject us to substantial potential environmental liability.
Our
business of rendering services in connection with management of waste, including certain types of hazardous waste, low-level radioactive
waste, and mixed waste (waste containing both hazardous and low-level radioactive waste), subjects us to risks of liability for
damages. Such liability could involve, without limitation:
|
●
|
claims
for clean-up costs, personal injury or damage to the environment in cases in which we are held responsible for the release
of hazardous or radioactive materials;
|
|
●
|
claims
of employees, customers, or third parties for personal injury or property damage occurring in the course of our operations;
and
|
|
●
|
claims
alleging negligence or professional errors or omissions in the planning or performance of our services.
|
Our
operations are subject to numerous environmental laws and regulations. We have in the past, and could in the future, be subject
to substantial fines, penalties, and sanctions for violations of environmental laws and substantial expenditures as a responsible
party for the cost of remediating any property which may be contaminated by hazardous substances generated by us and disposed
at such property, or transported by us to a site selected by us, including properties we own or lease.
As
our operations expand, we may be subject to increased litigation, which could have a negative impact on our future financial results.
Our
operations are highly regulated and we are subject to numerous laws and regulations regarding procedures for waste treatment,
storage, recycling, transportation, and disposal activities, all of which may provide the basis for litigation against us. In
recent years, the waste treatment industry has experienced a significant increase in so-called “toxic-tort” litigation
as those injured by contamination seek to recover for personal injuries or property damage. We believe that, as our operations
and activities expand, there will be a similar increase in the potential for litigation alleging that we have violated environmental
laws or regulations or are responsible for contamination or pollution caused by our normal operations, negligence or other misconduct,
or for accidents, which occur in the course of our business activities. Such litigation, if significant and not adequately insured
against, could adversely affect our financial condition and our ability to fund our operations. Protracted litigation would likely
cause us to spend significant amounts of our time, effort, and money. This could prevent our management from focusing on our operations
and expansion.
Our
operations are subject to seasonal factors, which cause our revenues to fluctuate.
We
have historically experienced reduced revenues and losses during the first and fourth quarters of our fiscal years due to a seasonal
slowdown in operations from poor weather conditions, overall reduced activities during these periods resulting from holiday periods,
and finalization of government budgets during the fourth quarter of each year. During our second and third fiscal quarters there
has historically been an increase in revenues and operating profits. If we do not continue to have increased revenues and profitability
during the second and third fiscal quarters, this could have a material adverse effect on our results of operations and liquidity.
If
environmental regulation or enforcement is relaxed, the demand for our services will decrease.
The
demand for our services is substantially dependent upon the public’s concern with, and the continuation and proliferation
of, the laws and regulations governing the treatment, storage, recycling, and disposal of hazardous, non-hazardous, and low-level
radioactive waste. A decrease in the level of public concern, the repeal or modification of these laws, or any significant relaxation
of regulations relating to the treatment, storage, recycling, and disposal of hazardous waste and low-level radioactive waste
would significantly reduce the demand for our services and could have a material adverse effect on our operations and financial
condition. We are not aware of any current federal or state government or agency efforts in which a moratorium or limitation has
been, or will be, placed upon the creation of new hazardous or radioactive waste regulations that would have a material adverse
effect on us; however, no assurance can be made that such a moratorium or limitation will not be implemented in the future.
We
and our customers operate in a politically sensitive environment, and the public perception of nuclear power and radioactive materials
can affect our customers and us.
We
and our customers operate in a politically sensitive environment. Opposition by third parties to particular projects can limit
the handling and disposal of radioactive materials. Adverse public reaction to developments in the disposal of radioactive materials,
including any high profile incident involving the discharge of radioactive materials, could directly affect our customers and
indirectly affect our business. Adverse public reaction also could lead to increased regulation or outright prohibition, limitations
on the activities of our customers, more onerous operating requirements or other conditions that could have a material adverse
impact on our customers’ and our business.
We
may be exposed to certain regulatory and financial risks related to climate change
.
Climate
change is receiving ever increasing attention from scientists and legislators alike. The debate is ongoing as to the extent to
which our climate is changing, the potential causes of this change and its potential impacts. Some attribute global warming to
increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts
to limit greenhouse gas emissions.
Presently there are no federally mandated
greenhouse gas reduction requirements in the United States. However, there are a number of legislative and regulatory proposals
to address greenhouse gas emissions, which are in various phases of discussion or implementation. The outcome of federal and state
actions to address global climate change could result in a variety of regulatory programs including potential new regulations.
Any adoption by federal or state governments mandating a substantial reduction in greenhouse gas emissions could increase costs
associated with our operations. Until the timing, scope and extent of any future regulation becomes known, we cannot predict the
effect on our financial position, operating results and cash flows.
We
may not be successful in winning new business mandates from our government and commercial customers or international customers.
We
must be successful in winning mandates from our government, commercial customers and international customers to replace revenues
from projects that we have completed or that are nearing completion and to increase our revenues. Our business and operating results
can be adversely affected by the size and timing of a single material contract.
The
elimination or any modification of the Price-Anderson Acts indemnification authority could have adverse consequences for our business.
The
Atomic Energy Act of 1954, as amended, or the AEA, comprehensively regulates the manufacture, use, and storage of radioactive
materials. The Price-Anderson Act (“PAA”) supports the nuclear services industry by offering broad indemnification
to DOE contractors for liabilities arising out of nuclear incidents at DOE nuclear facilities. That indemnification protects DOE
prime contractors, but also similar companies that work under contract or subcontract for a DOE prime contract or transporting
radioactive material to or from a site. The indemnification authority of the DOE under the PAA was extended through 2025 by the
Energy Policy Act of 2005.
Under
certain conditions, the PAA’s indemnification provisions may not apply to our processing of radioactive waste at governmental
facilities, and may not apply to liabilities that we might incur while performing services as a contractor for the DOE and the
nuclear energy industry. If an incident or evacuation is not covered under PAA indemnification, we could be held liable for damages,
regardless of fault, which could have an adverse effect on our results of operations and financial condition. If such indemnification
authority is not applicable in the future, our business could be adversely affected if the owners and operators of new facilities
fail to retain our services in the absence of commercial adequate insurance and indemnification.
We
are engaged in highly competitive businesses and typically must bid against other competitors to obtain major contracts.
We
are engaged in highly competitive business in which most of our government contracts and some of our commercial contracts are
awarded through competitive bidding processes. We compete with national and regional firms with nuclear and/or hazardous waste
services practices, as well as small or local contractors. Some of our competitors have greater financial and other resources
than we do, which can give them a competitive advantage. In addition, even if we are qualified to work on a new government contract,
we might not be awarded the contract because of existing government policies designed to protect certain types of businesses and
under-represented minority contractors. Although we believe we have the ability to certify and bid government contract as a small
business, there are a number of qualified small businesses in our market that will provide intense competition. For international
business, which we continue to focus on, there are additional competitors, many from within the country the work is to be performed,
making winning work in foreign countries more challenging. Competition places downward pressure on our contract prices and profit
margins. If we are unable to meet these competitive challenges, we could lose market share and experience on overall reduction
in our profits.
Our
failure to maintain our safety record could have an adverse effect on our business.
Our
safety record is critical to our reputation. In addition, many of our government and commercial customers require that we maintain
certain specified safety record guidelines to be eligible to bid for contracts with these customers. Furthermore, contract terms
may provide for automatic termination in the event that our safety record fails to adhere to agreed-upon guidelines during performance
of the contract. As a result, our failure to maintain our safety record could have a material adverse effect on our business,
financial condition and results of operations.
We
may be unable to utilize loss carryforwards in the future.
As
of December 31, 2018, we have approximately $21,277,000 and $76,312,000 in net operating loss carryforwards for federal and state
income tax purposes, respectively, which will expire in various amounts starting in 2021 if not used against future federal and
state income tax liabilities, respectively. Our net loss carryforwards are subject to various limitations. Our ability to use
the net loss carryforwards depends on whether we are able to generate sufficient income in the future years. Further, our net
loss carryforwards have not been audited or approved by the Internal Revenue Service.
If
any of our permits, other intangible assets, and tangible assets becomes impaired, we may be required to record significant charges
to earnings.
Under
accounting principles generally accepted in the United States (“U.S. GAAP”), we review our intangible and tangible
assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Our permits
are tested for impairment at least annually. Factors that may be considered a change in circumstances, indicating that the carrying
value of our permit, other intangible assets, and tangible assets may not be recoverable, include a decline in stock price and
market capitalization, reduced future cash flow estimates, and slower growth rates in our industry. We may be required, in the
future, to record impairment charges in our financial statements, in which any impairment of our permit, other intangible assets,
and tangible assets is determined. Such impairment charges could negatively impact our results of operations.
We
bear the risk of cost overruns in fixed-price contracts. We may experience reduced profits or, in some cases, losses under these
contracts if costs increase above our estimates.
Our
revenues may be earned under contracts that are fixed-price in nature. Fixed-price contracts expose us to a number of risks not
inherent in cost-reimbursable contracts. Under fixed price and guaranteed maximum-price contracts, contract prices are established
in part on cost and scheduling estimates which are based on a number of assumptions, including assumptions about future economic
conditions, prices and availability of labor, equipment and materials, and other exigencies. If these estimates prove inaccurate,
or if circumstances change such as unanticipated technical problems, difficulties in obtaining permits or approvals, changes in
laws or labor conditions, weather delays, cost of raw materials or our suppliers’ or subcontractors’ inability to
perform, cost overruns may occur and we could experience reduced profits or, in some cases, a loss for that project. Errors or
ambiguities as to contract specifications can also lead to cost-overruns.
Adequate
bonding is necessary for us to win certain types of new work and support facility closure requirements.
We
are often required to provide performance bonds to customers under fixed-price contracts, primarily within our Services Segment.
These surety instruments indemnify the customer if we fail to perform our obligations under the contract. If a bond is required
for a particular project and we are unable to obtain it due to insufficient liquidity or other reasons, we may not be able to
pursue that project. In addition, we provide bonds to support financial assurance in the event of facility closure pursuant to
state requirements. We currently have a bonding facility but, the issuance of bonds under that facility is at the surety’s
sole discretion. Moreover, due to events that affect the insurance and bonding markets generally, bonding may be more difficult
to obtain in the future or may only be available at significant additional cost. There can be no assurance that bonds will continue
to be available to us on reasonable terms. Our inability to obtain adequate bonding and, as a result, to bid on new work could
have a material adverse effect on our business, financial condition and results of operations.
Failure
to maintain effective internal control over financial reporting or failure to remediate a material weakness in internal control
over financial reporting could have a material adverse effect on our business, operating results, and stock price.
Maintaining
effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important
in helping to prevent financial fraud. If we are unable to maintain adequate internal controls, our business and operating results
could be harmed. We are required to satisfy the requirements of Section 404(a) of Sarbanes Oxley and the related rules of the
Commission, which require, among other things, management to assess annually the effectiveness of our internal control over financial
reporting. If we are unable to maintain adequate internal control over financial reporting or effectively remediate any material
weakness identified in internal control over financial reporting, there is a reasonable possibility that a misstatement of our
annual or interim financial statements will not be prevented or detected in a timely manner. If we cannot produce reliable financial
reports, investors could lose confidence in our reported financial information, the market price of our common stock could decline
significantly, and our business, financial condition, and reputation could be harmed.
Systems
failures, interruptions or breaches of security and other cyber security risks could have an adverse effect on our financial condition
and results of operations.
We
are subject to certain operational risks to our information systems. Because of efforts on the part of computer hackers and cyberterrorists
to breach data security of companies, we face risk associated with potential failures to adequately protect critical corporate,
customer and employee data. As part of our business, we develop and retain confidential data about us and our customers, including
the U.S. government. We also rely on the services of a variety of vendors to meet our data processing and communications needs.
Despite
our implemented security measures and established policies, we cannot be certain that all of our systems are entirely free from
vulnerability to attack or other technological difficulties or failures or failures on the part of our employees to follow our
established security measures and policies. Information security risks have increased significantly. Our technologies, systems,
and networks may become the target of cyber-attacks, computer viruses, malicious code, or information security breaches that could
result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential,
proprietary and other information and the disruption of our business operations. A security breach could adversely impact our
customer relationships, reputation and operation and result in violations of applicable privacy and other laws, financial loss
to us or to our customers or to our employees, and litigation exposure. While we maintain a system of internal controls and procedures,
any breach, attack, or failure as discussed above could have a material adverse impact on our business, financial condition, and
results of operations or liquidity.
There
is also an increasing attention on the importance of cybersecurity relating to infrastructure. This creates the potential for
future developments in regulations relating to cybersecurity that may adversely impact us, our customers and how we offer our
services to our customers.
Risks
Relating to our Intellectual Property
If
we cannot maintain our governmental permits or cannot obtain required permits, we may not be able to continue or expand our operations.
We
are a nuclear services and waste management company. Our business is subject to extensive, evolving, and increasingly stringent
federal, state, and local environmental laws and regulations. Such federal, state, and local environmental laws and regulations
govern our activities regarding the treatment, storage, recycling, disposal, and transportation of hazardous and non-hazardous
waste and low-level radioactive waste. We must obtain and maintain permits or licenses to conduct these activities in compliance
with such laws and regulations. Failure to obtain and maintain the required permits or licenses would have a material adverse
effect on our operations and financial condition. If any of our facilities are unable to maintain currently held permits or licenses
or obtain any additional permits or licenses which may be required to conduct its operations, we may not be able to continue those
operations at these facilities, which could have a material adverse effect on us.
We
believe our proprietary technology is important to us.
We
believe that it is important that we maintain our proprietary technologies. There can be no assurance that the steps taken by
us to protect our proprietary technologies will be adequate to prevent misappropriation of these technologies by third parties.
Misappropriation of our proprietary technology could have an adverse effect on our operations and financial condition. Changes
to current environmental laws and regulations also could limit the use of our proprietary technology.
Risks
Relating to our Financial Position and Need for Financing
Failure
to become profitable could have a material adverse effect on us.
We
have not reported a profit for several years, and did not report a profit for the first quarter of 2019. Our main objective is
to increase our revenues, returning the Company to profitability and to further evaluate various methods to increase our liquidity,
when needed. If we are unable to return to profitability in the near future, this could have a material adverse effect on the
Company.
Breach
of any of the covenants in our credit facility could result in a default, triggering repayment of outstanding debt under the credit
facility.
Our
credit facility with our bank contains financial covenants. A breach of any of these covenants could result in a default under
our credit facility triggering our lender to immediately require the repayment of all outstanding debt under our credit facility
and terminate all commitments to extend further credit. Our fixed charge coverage ratio fell below the minimum quarterly requirement
under our credit facility in the fourth quarter of 2018; however, we have obtained a waiver for this non-compliance from our lender.
Additionally, our lender also has provided certain amendments to our fixed charge coverage ratio requirements for 2019 which will
enable us to meet our quarterly fixed charge coverage ratio requirements. If we fail to meet any of our financial covenants going
forward, including the minimum quarterly fixed charge coverage ratio requirement, and our lender does not further waive the non-compliance
or further revise our covenant requirement so that we are in compliance, our lender could accelerates the payment of our borrowings
under our credit facility. In such event, we may not have sufficient liquidity to repay our debt under our credit facility and
other indebtedness.
Our
debt and borrowing availability under our credit facility could adversely affect our operations.
At
December 31, 2018, our aggregate consolidated debt was approximately $3,302,000. Our Amended and Restated Revolving Credit, Term
Loan and Security Agreement, dated October 31, 2011, as subsequently amended (“Revised Loan Agreement”) provides for
a total credit facility commitment of approximately $18,100,000, consisting of a $12,000,000 revolving line of credit and a term
loan of $6,100,000. The maximum we can borrow under the revolving part of the credit facility is based on a percentage of the
amount of our eligible receivables outstanding at any one time reduced by outstanding standby letters of credit and any borrowing
reduction that our lender may impose from time to time. At December 31, 2018, we had borrowings under the revolving part of our
credit facility of approximately $639,000 and borrowing availability of up to an additional $2,368,000. A lack of positive operating
results could have material adverse consequences on our ability to operate our business. Our ability to make principal and interest
payments, to refinance indebtedness, and borrow under our credit facility will depend on both our and our subsidiaries’
future operating performance and cash flow. Prevailing economic conditions, interest rate levels, and financial, competitive,
business, and other factors affect us. Many of these factors are beyond our control.
Our
indebtedness could limit our financial and operating activities, and adversely affect our ability to incur additional debt to
fund future needs.
As
a result of our indebtedness, we could, among other things, be:
|
●
|
required
to dedicate a substantial portion of our cash flow to the payment of principal and interest, thereby reducing the funds available
for operations and future business opportunities;
|
|
●
|
make
it more difficult for us to satisfy our obligations;
|
|
●
|
limit
our ability to borrow additional money if needed for other purposes, including working capital, capital expenditures, debt
service requirements, acquisitions and general corporate or other purposes, on satisfactory terms or at all;
|
|
●
|
limit
our ability to adjust to changing economic, business and competitive conditions;
|
|
●
|
place
us at a competitive disadvantage with competitors who may have less indebtedness or greater access to financing;
|
|
●
|
make
us more vulnerable to an increase in interest rates, a downturn in our operating performance or a decline in general economic
conditions; and
|
|
●
|
make
us more susceptible to changes in credit ratings, which could impact our ability to obtain financing in the future and increase
the cost of such financing.
|
Any
of the foregoing could adversely impact our operating results, financial condition, and liquidity. Our ability to continue our
operations depends on our ability to generate profitable operations or complete equity or debt financings to increase our capital.
Risks
Relating to our Common Stock
Issuance
of substantial amounts of our Common Stock could depress our stock price.
Any
sales of substantial amounts of our Common Stock in the public market could cause an adverse effect on the market price of our
Common Stock and could impair our ability to raise capital through the sale of additional equity securities. The issuance of our
Common Stock will result in the dilution in the percentage membership interest of our stockholders and the dilution in ownership
value. At December 31, 2018, we had 11,936,573 shares of Common Stock outstanding.
In
addition, at December 31, 2018, we had outstanding options to purchase 616,000 shares of our Common Stock at exercise prices ranging
from $2.79 to $13.35 per share. Further, our preferred share rights plan, if triggered, could result in the issuance of a substantial
amount of our Common Stock. The existence of this quantity of rights to purchase our Common Stock under the preferred share rights
plan could result in a significant dilution in the percentage ownership interest of our stockholders and the dilution in ownership
value. Future sales of the shares issuable could also depress the market price of our Common Stock.
We
do not intend to pay dividends on our Common Stock in the foreseeable future.
Since
our inception, we have not paid cash dividends on our Common Stock, and we do not anticipate paying any cash dividends in the
foreseeable future. Our credit facility prohibits us from paying cash dividends on our Common Stock without prior approval from
our lender.
The
price of our Common Stock may fluctuate significantly, which may make it difficult for our stockholders to resell our Common Stock
when a stockholder wants or at prices a stockholder finds attractive.
The
price of our Common Stock on the NASDAQ Capital Market constantly changes. We expect that the market price of our Common Stock
will continue to fluctuate. This may make it difficult for our stockholders to resell the Common Stock when a stockholder wants
or at prices a stockholder finds attractive.
Future
issuance of our Common Stock could adversely affect the price of our Common Stock, our ability to raise funds in new stock offerings
and could dilute the percentage ownership of our common stockholders.
Future
sales of substantial amounts of our Common Stock or equity-related securities in the public market, or the perception that such
sales or conversions could occur, could adversely affect prevailing trading prices of our Common Stock and could dilute the value
of Common Stock held by our existing stockholders. No prediction can be made as to the effect, if any, that future sales of shares
of our Common Stock or the availability of shares of our Common Stock for future sale will have on the trading price of our Common
Stock. Such future sales or conversions could also significantly reduce the percentage ownership of our common stockholders.
Delaware
law, certain of our charter provisions, our stock option plans, outstanding warrants and our Preferred Stock may inhibit a change
of control under circumstances that could give you an opportunity to realize a premium over prevailing market prices.
We
are a Delaware corporation governed, in part, by the provisions of Section 203 of the General Corporation Law of Delaware, an
anti-takeover law. In general, Section 203 prohibits a Delaware public corporation from engaging in a “business combination”
with an “interested stockholder” for a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in a prescribed manner. As a result of Section 203,
potential acquirers may be discouraged from attempting to effect acquisition transactions with us, thereby possibly depriving
our security holders of certain opportunities to sell, or otherwise dispose of, such securities at above-market prices pursuant
to such transactions. Further, certain of our option plans provide for the immediate acceleration of, and removal of restrictions
from, options and other awards under such plans upon a “change of control” (as defined in the respective plans). Such
provisions may also have the result of discouraging acquisition of us.
We
have authorized and unissued 17,439,785 (which include shares issuable under outstanding options to purchase 616,000 shares of
our Common Stock) shares of our Common Stock and 2,000,000 shares of our Preferred Stock as of December 31, 2018 (which includes
50,000 shares of our Preferred Stock reserved for issuance under our new shareholder share rights plan, discussed below). These
unissued shares could be used by our management to make it more difficult for, and thereby discourage an attempt to acquire control
of us.
We
have adopted a shareholder rights plan that may discourage, delay or prevent a change in control of the Comany.
We
have adopted a shareholder rights plan (“Rights Plan”) that could cause substantial dilution to a shareholder, and
substantially increase the cost paid by a shareholder, who attempts to acquire us on terms not approved by our board of directors.
This could prevent us from being acquired. See “Rights Attaching to Our Common Stock” for further information relating
to the Rights Plan.
USE
OF PROCEEDS
Except
as otherwise provided in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities
covered by this prospectus for general corporate purposes, which may include, but is not limited to, working capital, repayment
of indebtedness, capital expenditures, research and development expenditures and acquisitions of new technologies or businesses,
subject in all respects to the consent of our secured creditor. The precise amount, use and timing of the application of such
proceeds will depend upon our funding requirements and the availability and cost of other capital. Additional information on the
use of net proceeds from an offering of securities covered by this prospectus may be set forth in the prospectus supplement relating
to the specific offering.
PLAN
OF DISTRIBUTION
We
may sell the securities being offered pursuant to this prospectus to or through underwriters, through dealers, through agents,
or directly to one or more purchasers or through a combination of these methods. The applicable prospectus supplement will describe
the terms of the offering of the securities, including:
|
●
|
the
name or names of any underwriters, if, and if required, any dealers or agents;
|
|
●
|
the
purchase price of the securities and the proceeds we will receive from the sale;
|
|
●
|
any
underwriting discounts and other items constituting underwriters’ compensation;
|
|
●
|
any
discounts or concessions allowed or re-allowed or paid to dealers; and
|
|
●
|
any
securities exchange or market on which the securities may be listed or traded.
|
We
may distribute the securities from time to time in one or more transactions at:
|
●
|
a
fixed price or prices, which may be changed;
|
|
●
|
market
prices prevailing at the time of sale;
|
|
●
|
prices
related to such prevailing market prices; or
|
|
●
|
negotiated
prices.
|
Only
underwriters named in the prospectus supplement are underwriters of the securities offered by the prospectus supplement.
If
underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name
of each underwriter and the terms of the transaction (including any underwriting discounts and other terms constituting compensation
of the underwriters and any dealers) in a prospectus supplement. The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more investment banking firms or others, as designated.
If an underwriting syndicate is used, the managing underwriter(s) will be specified on the cover of the prospectus supplement.
If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or
at varying prices determined at the time of sale. Any public offering price and any discounts or concessions allowed or re-allowed
or paid to dealers may be changed from time to time. Unless otherwise set forth in the prospectus supplement, the obligations
of the underwriters to purchase the offered securities will be subject to conditions precedent, and the underwriters will be obligated
to purchase all of the offered securities, if any are purchased.
We
may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as may be set forth in a related prospectus supplement. The terms
of any over-allotment option will be set forth in the prospectus supplement for those securities.
If we use a
dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the securities
to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the
dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We may sell the securities directly
or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we
will describe any commissions we will pay the agent in the prospectus supplement.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public
offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers
of the securities for whom they act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the
securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of the securities, and any institutional investors or others that purchase securities directly
for the purpose of resale or distribution, may be deemed to be underwriters, and any discounts or commissions received by them
from us and any profit on the resale of the common stock by them may be deemed to be underwriting discounts and commissions under
the Securities Act. No FINRA member firm may receive compensation in excess of that allowable under FINRA rules, including Rule
5110, in connection with the offering of the securities.
We
may provide agents, underwriters and other purchasers with indemnification against particular civil liabilities, including liabilities
under the Securities Act, or contribution with respect to payments that the agents, underwriters or other purchasers may make
with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services for, us in the
ordinary course of business.
To
facilitate the public offering of a series of securities, persons participating in the offering may engage in transactions that
stabilize, maintain, or otherwise affect the market price of the securities. This may include over-allotments or short sales of
the securities, which involves the sale by persons participating in the offering of more securities than have been sold to them
by us. In exercising the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain
the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling
concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them
are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain
the market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions,
if commenced, may be discontinued at any time. We make no representation or prediction as to the direction or magnitude of any
effect that the transactions described above, if implemented, may have on the price of our securities.
Unless
otherwise specified in the applicable prospectus supplement, any common stock sold pursuant to a prospectus supplement will be
eligible for trading as quoted on the Nasdaq Capital Market. Any underwriters to whom securities are sold by us for public offering
and sale may make a market in the securities, but such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice.
In
order to comply with the securities laws of some states, if applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers or dealers. In addition, in some states securities may not
be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or
qualification requirement is available and complied with.
DESCRIPTION
OF COMMON STOCK
Our
certificate of incorporation authorizes us to issue up to 30,000,000 shares of common stock, $0.001 par value. As of April 15,
2019, there were 12,054,439 shares of our common stock outstanding.
The
holders of shares of our common stock are entitled to one vote per share on all matters to be voted on by stockholders. Common
stock holders are entitled to receive dividends declared by the board of directors out of funds legally available for the payment
of dividends, subject to the rights, if any, of preferred stock holders. However, we have never paid a dividend and we do not
anticipate paying a dividend in the foreseeable future. Our current secured credit facility prohibits us from paying cash dividends
on our common stock. Upon any liquidation, dissolution or winding up of our business, the holders of common stock are entitled
to share equally in all assets available for distribution after payment of all liabilities and provision for liquidation preference
of shares of preferred stock then outstanding. The holders of common stock have no preemptive rights and no rights to convert
their common stock into any other securities. There are no redemption or sinking fund provisions applicable to our common stock.
All outstanding shares of common stock are fully paid and nonassessable.
Each
share of our common stock includes an attached Right arising under and subject to the terms described in, the Rights Agreement
dated May 2, 2018 between us and Continental Stock Transfer & Trust Company, as rights agent. The terms of such Rights are
summarized in “Rights Attaching to Our Common Stock” below.
The
transfer agent and registrar for the common stock is Continental Stock Transfer & Trust Company, One State Street Plaza, 30
th
Floor, New York, New York 10004-1561.
RIGHTS
ATTACHING TO OUR COMMON STOCK
On
May 2, 2018, our Board of Directors declared a dividend distribution of one Right for each outstanding share of our common stock
to our stockholders of record on May 12, 2018 (the “Record Date”). The Rights Agreement (as defined below) also contemplates
the issuance of one Right for each share of common stock which is issued by the Company between the Record Date and the Distribution
Date (or earlier redemption or termination of the Rights). The Rights are subject to the terms and conditions of a Shareholder
Rights Agreement, a copy of which is attached as Exhibit 4.1 to our Form 8-A/12B Registration Statement filed on May 3, 2018 (“Rights
Agreement”), and incorporated herein by reference, as well as a First Amendment to Shareholder Rights Agreement, dated May
2, 2019, a copy of which is attached as Exhibit 4.2 to our Current Report on Form 8-K filed on May 3, 2019, and incorporated herein
by reference. A copy of the Rights Agreement is also available upon written request to us. Because the following is a summary,
the description below of the Rights and the Rights Agreement necessarily omits certain terms, exceptions, or qualifications to
the statements made therein. You are advised to review the entire Rights Agreement prior to making any investment decision.
Each
Right entitles the registered holder to purchase from us one one-thousandth of a share of our Series B Junior Participating Preferred
Stock, par value $.001 per share (the “Preferred Shares”) at a purchase price of $20.00 (the “Purchase Price”),
subject to certain adjustments.
The
Rights will not be exercisable until the earlier to occur of (i) the close of business on the 10th business day following a public
announcement or filing that a person has, or a group of affiliated or associated persons or persons acting in concert have, become
an “Acquiring Person,” which is defined as a person or group of affiliated or associated persons or persons acting
in concert who, at any time after the date of the Rights Agreement, have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Company’s outstanding shares of Common Stock, subject to certain exceptions, or (ii) the
close of business on the 10th business day (or such other date as may be determined by action of the Board prior to such time
as any person or group of affiliated or associated persons or persons acting in concert become an Acquiring Person) after the
commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would
result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”).
Any existing stockholder or group that beneficially owns 15% or more of the Common Stock will be grandfathered at its current
ownership level, but the Rights will become exercisable if at any time after the announcement of the Rights Agreement such stockholder
or group increases its ownership of the Common Stock. Certain synthetic interests in securities created by derivative positions,
whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of
Regulation 13D of the Exchange Act, are treated as beneficial ownership of the number of shares of common stock equivalent to
the economic exposure created by the derivative position, to the extent actual shares of the common stock are directly or indirectly
held by counterparties to the derivatives contracts.
With
respect to certificates representing shares of common stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for shares of common stock registered in the names of the holders thereof, and not
by separate Rights Certificates, as described further below. With respect to book entry shares of common stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by the balances indicated in the book entry account
system of the transfer agent for the common stock. Until the earlier of the Distribution Date and the Expiration Date (as defined
below), the transfer of any shares of common stock outstanding on the Record Date will also constitute the transfer of the Rights
associated with such shares of common stock. As soon as practicable after the Distribution Date, separate certificates evidencing
the Rights (“Right Certificates”) will be mailed to holders of record of the common stock as of the close of business
on the Distribution Date, and such separate Right Certificates alone will evidence the Rights.
The
Rights, which are not exercisable until the Distribution Date, will expire at the earliest to occur of (i) the close of business
on May 2, 2021; (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights
are exchanged pursuant to the Rights Agreement; or (iv) the time at which the Rights are terminated upon the closing of any merger
or other acquisition transaction involving the Company pursuant to a merger or other acquisition agreement that has been approved
by the Board prior to any person becoming an Acquiring Person (the earliest of (i), (ii), (iii) and (iv) is referred to as the
“Expiration Date”).
Each
share of Preferred Stock will be entitled to receive, when, as and if declared by the Board, a preferential per share quarterly
dividend payment equal to the greater of (i) $1.00 per share or (ii) 1,000 times the aggregate per share amount of all cash dividends
declared per share of common stock, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions declared per share of common stock. Each share of Preferred Stock will entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other
transaction in which shares of common stock are converted or exchanged, each share of Preferred Stock will be entitled to receive
1,000 times the amount received per share of common stock.
The
Exercise Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights,
options or warrants to subscribe for or purchase Preferred Stock or convertible securities at less than the then-current market
price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights, options
or warrants (other than those referred to above). The number of outstanding Rights and the number of one one-thousandths of a
share of Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of a stock split, reverse
stock split, stock dividends and other similar transactions.
In
the event that, after a person or a group of affiliated or associated persons or persons acting in concert have become an Acquiring
Person, the Company is acquired in a merger or other business combination transaction, or 50% or more of the Company’s assets
or earning power are sold, proper provision will be made so that each holder of a Right (other than Rights owned by an Acquiring
Person) will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right,
that number of shares of common stock of the acquiring company having a market value at the time of that transaction equal to
two times the Exercise Price.
With
certain exceptions, no adjustment in the Exercise Price will be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the Exercise Price. No fractional shares of Preferred Stock will be issued (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred
Stock on the trading day immediately prior to the date of exercise.
At
any time after any person or group of affiliated or associated persons or persons acting in concert become an Acquiring Person
and prior to the acquisition of beneficial ownership by such Acquiring Person of 50% or more of the outstanding shares of common
stock, the Board, at its option, and in its sole discretion, may exchange each Right (other than Rights owned by such person or
group of affiliated or associated persons or persons acting in concert which will have become void) in whole or in part, at an
exchange ratio of one share of common stock per outstanding Right (subject to adjustment).
At
any time before any person or group of affiliated or associated persons or persons acting in concert become an Acquiring Person,
the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (subject to certain adjustments) (the
“Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.
Immediately
upon the action of the Board electing to redeem or exchange the Rights, the Company shall make announcement thereof, and upon
such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Subject
to the terms of the Rights Agreement, in the event that any person or group of affiliated or associated persons acting in concert
become an Acquiring Person by acquiring 15% or more of the Company’s common stock, except as otherwise provided in the Rights
Agreement, each holder of a Right (other than the Acquiring Person) thereafter has the right to receive, upon exercise thereof
and in accordance with the Rights Agreement, in lieu of a number of one one thousandth of a share of Preferred Stock, a number
of shares of common stock of the Company equal to the result obtained by (A) multiplying the then current exercise price by the
then number of one one-thousandth of a share of Preferred Stock for which a Right was or would have been exercisable and (B) dividing
that product by 50% of the current market price of the Company’s common stock.
In
addition, if a Qualifying Offer (as described below) is made, a sufficient number of shares of common stock have been tendered
into the Qualifying Offer and not withdrawn to meet the Minimum Tender Condition (as defined below) and the Board has not redeemed
the outstanding Rights or exempted such offer from the terms of the Rights Agreement or has not called a special meeting of stockholders
for the purpose of voting on whether or not to exempt such Qualifying Offer from the terms of the Rights Agreement, in each case
after 90 calendar days from the commencement of the Qualifying Offer (the “Board Evaluation Period”), the record holders
of at least 15% of the outstanding shares of common stock may request, no later than 90 calendar days following the Board Evaluation
Period, the Board to submit to a vote of stockholders at a special meeting of the stockholders of the Company (a “Special
Meeting”) a resolution exempting such Qualifying Offer from the provisions of the Rights Agreement (the “Qualifying
Offer Resolution”). If a Special Meeting is not held prior to 90 calendar days after such request or, if at the Special
Meeting the holders of a majority of the shares of common stock outstanding (other than shares held by the offeror and its affiliated
and associated persons) vote in favor of the Qualifying Offer Resolution, then the Board will exempt the Qualifying Offer from
the provisions of the Rights Agreement or take such other action as may be necessary to prevent the Rights from interfering with
the consummation of the Qualifying Offer.
A
“Qualifying Offer” is an offer that is determined by the Board to have (among others) the following characteristics:
|
(i)
|
an
offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange Act;
|
|
(ii)
|
a
fully-financed, all-cash tender offer, or an exchange offer offering shares of common stock of the offeror, or a combination
thereof, in each such case for all of the outstanding shares of common stock at the same per-share consideration;
|
|
(iii)
|
an
offer that is conditioned on a minimum of at least a majority of (a) the shares of the common stock outstanding on a fully-diluted
basis; and (b) the outstanding shares of the common stock not held by the offeror (or such offeror’s affiliates or associated
persons) being tendered and not withdrawn as of the offer’s expiration date, which condition shall not be waivable (the
“Minimum Tender Condition”);
|
|
(iv)
|
an
offer that is subject only to the Minimum Tender Condition and other customary terms and conditions, which conditions shall
not include any financing, funding or similar conditions or any requirements with respect to the offeror or its agents being
permitted any due diligence on the Company; and
|
|
(v)
|
an
offer pursuant to which the Company and its stockholders have received an irrevocable written commitment of the offeror that
no amendments will be made to the offer to reduce the consideration being offered or to otherwise change the terms of the
offer in a way that is adverse to a tendering stockholder.
|
Until
a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The
Board may amend or supplement the Rights Agreement without the approval of any holders of Rights, including, without limitation,
in order to (a) cure any ambiguity, (b) correct inconsistent provisions, (c) alter time period provisions or (d) make additional
changes to the Rights Agreement that the Board deems necessary or desirable. However, from and after any person or group of affiliated
or associated persons or persons acting in concert become an Acquiring Person, the Rights Agreement may not be supplemented or
amended in any manner that would adversely affect the interests of the holders of Rights.
The
Rights Agreement, as well as the certificate of designations establishing the Series B Preferred Stock, are included as Exhibit
4.1 and Exhibit 3.1(i) to our Registration Statement on Form 8-A/12B
filed
with the SEC on May 3, 2018, and is incorporated herein by reference
. The Rights Agreement was
amended on May 2, 2019, solely to extend the Final Termination Date (as defined in the Rights Agreement) of the Rights Agreement
from May 2, 2019 to May 2, 2021. The
First Amendment to Shareholder Rights Agreement is attached as Exhibit 4.2 to our
Current Report on Form 8-K filed on May 3, 2019, and incorporated herein by reference.
The foregoing
description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement
and the First Amendment to Shareholder Rights Agreement.
LEGAL
MATTERS
Conner
& Winters, LLP, Oklahoma City, Oklahoma will opine as to the validity of the issuance of the securities offered by this prospectus.
EXPERTS
The
audited consolidated financial statements as of December 31, 2018 and 2017 and for the two years ended December 31, 2018 incorporated
by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference in reliance
upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in
accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the Commission ca registration statement on Form S-3 under the Securities Act with respect to the securities offered
by this prospectus. This prospectus, which is part of the registration statement, omits certain information, exhibits, schedules
and undertakings set forth in the registration statement. For further information pertaining to us and our securities, reference
is made to our Commission filings and the registration statement and the exhibits and schedules to the registration statement.
Statements contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not
necessarily complete, and in each instance where a copy of the document has been filed as an exhibit to the registration statement,
reference is made to the exhibit for a more complete description of the matters involved.
In
addition, registration statements and certain other filings made with the Commission electronically are publicly available through
the Commission’s web site at http://www.sec.gov. The registration statement, including all exhibits and amendments to the
registration statement, has been filed electronically with the SEC.
We
are subject to the information and periodic reporting requirements of the Exchange Act, and, in accordance with such requirements,
will file periodic reports, proxy statements, and other information with the Commission. These periodic reports, proxy statements,
and other information will be available for inspection and copying at the web site of the Commission referred to above. We also
maintain a website at http://www.perma-fix.com, at which you may access these materials free of charge as soon as reasonably practicable
after they are electronically filed with, or furnished to, the Commission. The information contained in, or that can be accessed
through, our website is not part of, and is not incorporated into, this prospectus. We have included our website address in this
prospectus solely as an inactive textual reference.
You
should rely only on the information in this prospectus and the additional information described above and under the heading “Incorporation
of Certain Information by Reference” below. We have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should not rely upon it. We are not making an offer to
sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in
this prospectus was accurate on the date of the front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
INCORPORATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” the information contained in documents that we file with the SEC, which
means that we can disclose important information to you by referring you to those other documents. The information incorporated
by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically
update and supersede this information. Therefore, before you decide to invest in a particular offering under this shelf-registration,
you should always check for reports we may have filed with the SEC after the data of this prospectus.
We
incorporate by reference the documents listed below:
|
●
|
Annual
Report on Form 10-K for the fiscal year ended December 31, 2018, filed April 1, 2019;
|
|
|
|
|
●
|
Quarterly
Report on Form 10-Q for the Quarter Ended March 31, 2019, filed May 9, 2019;
|
|
|
|
|
●
|
Current
Reports on Form 8-K filed January 23, 2019, March 28, 2019, April 1, 2019, April 4, 2019, May 3, 2019, and May 9, 2019 (six
reports);
|
|
|
|
|
●
|
The
description of our Rights Agreement and Series B Junior Participating Preferred Stock, par value $.001 per share, that is
contained in the Form 8-A/12B Registration Statement, filed on May 3, 2018, including any amendments or reports filed for
the purpose of updating such description.
|
|
|
|
|
●
|
The
description of our common stock that is contained in the Registration Statement on Form 8-A filed pursuant to Section 12 of
the Exchange Act, that became effective on October 30, 1992, including any amendments or reports filed for the purpose of
updating such description.
|
All
documents subsequently filed by the Registrant with the SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
(other than documents or portions of documents deemed to be furnished pursuant to the Exchange Act), prior to the filing of a
post-effective amendment which indicates that all securities offered have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such
documents.
Any
statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a statement contained herein, or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
aggregate estimated (other than the registration fee) expenses to be paid by the Registrant in connection with this offering are
as follows:
SEC Registration Fee
|
|
$
|
1,248
|
|
Legal Fees (Including Blue Sky)
|
|
$
|
15,000
|
|
Accounting Fees and Expenses
|
|
$
|
*
|
|
Printing
|
|
$
|
*
|
|
Miscellaneous
|
|
$
|
*
|
|
|
|
|
|
|
Total:
|
|
$
|
*
|
|
*
Estimated expenses not presently known.
Item
15. Indemnification of Officers and Directors
Section
145 of the Delaware Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent
of the corporation and certain other persons serving at the request of the corporation in related capacities against amounts paid
and expenses incurred in connection with an action or proceeding to which he is or is threatened to be made a party by reason
of such position, if such person shall have acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and, in any criminal proceeding, if such person had no reasonable cause to believe his
conduct was unlawful; provided that, no indemnification shall be made with respect to any matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent that the adjudicating court determines that,
despite the adjudication of liability but in view of all the circumstance of the case, such person is fairly and reasonably entitled
to indemnification.
Article
EIGHTH of our Restated Certificate of Incorporation, as amended, provides as follows with respect to the indemnification of our
officers and directors:
All
persons who the Corporation is empowered to indemnify pursuant to the provisions of Section 145 of the General Corporation Law
of the State of Delaware (or any similar provision or provisions of applicable law at the time in effect), shall be indemnified
by the Corporation to the full extent permitted thereby. The foregoing right of indemnification shall not be deemed to be exclusive
of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. No repeal or amendment of this Article EIGHTH shall adversely affect any rights of any
person pursuant to this Article EIGHTH which existed at the time of such repeal or amendment with respect to acts or omissions
occurring prior to such repeal or amendment.
Our
Restated Certificate of Incorporation, as amended, provides that no director shall be personally liable to us or its stockholders
for any monetary damages for breaches of fiduciary duty as a director, provided that this provision shall not eliminate or limit
the liability of a director (i) for any breach of the director’s duty of loyalty to us or our stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174
of the General Corporation Law of the State of Delaware; or (iv) for any transaction from which the director derived an improper
personal benefit.
The
indemnification discussed in this Item 15 is not exclusive of any other rights the party seeking indemnification may possess.
We carry officer and director liability insurance with respect to certain matters, including matters arising under the Securities
Act of 1933, as amended.
Item
16. Exhibits.
See
the Exhibit Index immediately following the signature page of this Registration Statement.
Item
17. Undertakings
|
(a)
|
The
undersigned registrant hereby undertakes:
|
|
(1)
|
To
file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement:
|
|
(i)
|
To
include any prospectus required by section 10(a)(3) of the Securities Act;
|
|
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement.
|
|
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
|
provided,
however
, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the registration statement is on Form S-3 or Form F-3,
and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Sections 13 or 15(d) of the Exchange Act that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
|
|
|
(4)
|
That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
|
|
(i)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of
the date the filed prospectus was deemed part of and included in the registration statement; and
|
|
|
|
|
(ii)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract
of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document
immediately prior to such effective date.
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
|
|
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
|
|
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
|
(b)
|
The
undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
|
|
|
|
|
(c)
|
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
|
SIGNATURES
Pursuant
to the requirements of the Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Atlanta, State of Georgia, on the 13th day of May, 2019.
|
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
|
|
|
|
|
By:
|
/s/
Mark Duff
|
|
|
Mark
Duff,
President
and Chief Executive Officer
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Mark Duff and Ben Naccarato, and each of them acting individually
and without the other, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution,
for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments, exhibits thereto and other documents in connection therewith) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Act, this Registration Statement has been signed by the following persons in the capacities and on
the dates indicated.
By
|
/s/
Dr. Louis F. Centofanti
|
|
Date
|
May
10 , 2019
|
|
Dr.
Louis F. Centofanti, Director
|
|
|
|
|
|
|
|
|
By
|
/s/
S. Robert Cochran
|
|
Date
|
May
13 , 2019
|
|
S.
Robert Cochran, Director
|
|
|
|
|
|
|
|
|
By
|
/s/
Joe R. Reeder
|
|
Date
|
May
13 , 2019
|
|
Joe
R. Reeder, Director
|
|
|
|
|
|
|
|
|
By
|
/s/
Larry M. Shelton
|
|
Date
|
May
10 , 2019
|
|
Larry
M. Shelton, Chairman of the Board
|
|
|
|
|
|
|
|
|
By
|
/s/
Zach P. Wamp
|
|
Date
|
May
13 , 2019
|
|
Zach
P. Wamp, Director
|
|
|
|
|
|
|
|
|
By
|
/s/
Mark A. Zwecker
|
|
Date
|
May
13 , 2019
|
|
Mark
A. Zwecker, Director
|
|
|
|
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
REGISTRATION
STATEMENT ON FORM S-3
EXHIBIT
INDEX
Exhibit
No.
|
|
Description
|
|
|
|
3(i)
|
|
Restated Certificate of Incorporation, as amended, of Perma-Fix Environmental Services, Inc.
(1)
|
3(ii)
|
|
Amended and Restated Bylaws, as amended effective July 28, 2016, of Perma-Fix Environmental Services, Inc.
(2)
|
4.1
|
|
Shareholder Rights Agreement dated and effective as of May 2, 2018 between Perma-Fix Environmental Services, Inc. as the Company and Continental Stock Transfer & Trust Company, as Rights Agent.
(3)
|
4.2
|
|
First Amendment to Shareholder Rights Agreement, dated May 2, 2019, between Perma-Fix Environmental Services, Inc., and Continental Stock Transfer & Trust Company as Rights Agent
(4)
|
4.3
|
|
Amended and Restated Revolving Credit, Term Loan and Security Agreement between Perma-Fix Environmental Services, Inc. and PNC Bank, National Association (as Lender and as Agent), dated October 31, 2011.
(5)
|
4.4
|
|
First Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated November 7, 2012, between the Company and PNC Bank, National Association.
(6)
|
4.5
|
|
Second Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement and Waiver, dated May 9, 2013, between the Company and PNC Bank, National Association.
(7)
|
4.6
|
|
Third Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated August 2, 2013.
(8)
|
4.7
|
|
Fourth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement and Waiver between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated April 14, 2014.
(9)
|
4.8
|
|
Fifth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated July 25, 2014.
(10)
|
4.9
|
|
Sixth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated July 28, 2014.
(11)
|
4.10
|
|
Seventh Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated March 24, 2016.
(12)
|
4.11
|
|
Eighth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated August 22, 2016.
(13)
|
4.12
|
|
Ninth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated November 17, 2016.
(14)
|
4.13
|
|
Tenth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated July 26, 2018.
(15)
|
4.14
|
|
Eleventh Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement and Waiver between PNC Bank, National Association and Perma-Fix Environmental Services, Inc., dated March 29, 2019.
(16)
|
5.1
|
|
Opinion of Conner & Winters, LLP, counsel to the Registrant, regarding the legality of the securities being registered.
|
23.1
|
|
Consent of Grant Thornton LLP
|
23.2
|
|
Consent of Conner & Winters, LLP (included in Exhibit 5.1)
|
24.1
|
|
Power of Attorney (included on signature page hereof)
|
|
(1)
|
Incorporated
by reference from Exhibit 3(i) to the Registrant’s Annual Report on Form 10-K filed on April 1, 2019.
|
|
(2)
|
Incorporated
by reference from Exhibit 3(ii) to the Registrant’s Current Report on Form 8-K filed on August 1, 2016.
|
|
(3)
|
Incorporated
by reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on May 2. 2018.
|
|
(4)
|
Incorporated
by reference from Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on May 3. 2019.
|
|
(5)
|
Incorporated
by reference from Exhibit 4.8 to the Registrant’s 2016 Form 10-K filed on March 24, 2017.
|
|
(6)
|
Incorporated
by reference from Exhibit 4.4 to the Registrant’s 2017 Form 10-K filed on March 16, 2018.
|
|
(7)
|
Incorporated
by reference from Exhibit 4.4 to the Registrant’s 2018 Form 10-K filed on April 1, 2019.
|
|
(8)
|
Incorporated
by reference from Exhibit 4.5 to the Registrant’s 2018 Form 10-K filed on April 1, 2019.
|
|
(9)
|
Incorporated
by reference from Exhibit 4.17 to the Registrant’s 2013 Form 10-K filed on April 15, 2014.
|
|
(10)
|
Incorporated
by reference from Exhibit 4.1 to the Registrant’s 8-K filed on July 31, 2014.
|
|
(11)
|
Incorporated
by reference from Exhibit 4.2 to the Registrant’s 8-K filed on July 31, 2014.
|
|
(12)
|
Incorporated
by reference from Exhibit 4.17 to the Registrant’s 2015 Form 10-K filed on March 24, 2016.
|
|
(13)
|
Incorporated
by reference from Exhibit 4.9 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016 filed on August 22,
2016.
|
|
(14)
|
Incorporated
by reference from Exhibit 4.10 to the Registrant’s Form 10-Q for the quarter ended September 30, 2016 filed on November
18, 2016.
|
|
(15)
|
Incorporated
by reference from Exhibit 4.1 to the Registrant’s Form 8-K filed on July 30, 2018.
|
|
(16)
|
Incorporated
by reference from Exhibit 4.14 to the Company’s 2018 Form 10-K filed on April 1, 2019.
|
PermaFix Environmental S... (NASDAQ:PESI)
Historical Stock Chart
From Aug 2024 to Sep 2024
PermaFix Environmental S... (NASDAQ:PESI)
Historical Stock Chart
From Sep 2023 to Sep 2024