v3.26.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2026
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

9. Commitments and Contingencies

 

Hazardous Waste

 

In connection with our waste management services, the Company processes hazardous, non-hazardous, low-level radioactive and mixed (containing both hazardous and low-level radioactive) waste, which we transport to our own, or other, facilities for destruction or disposal. As a result of disposing of hazardous substances, in the event any cleanup is required at the disposal site, the Company could be a PRP for the costs of the cleanup notwithstanding any absence of fault on our part.

 

Notice of Non-Compliance

 

On April 30, 2026, the Company received a notice of non-compliance (the “Notice”) from the Washington State Department of Ecology (the “Department of Ecology”) following a June 24, 2025 inspection of the Company’s PFNW facility in Richland, Washington. The Notice is based on an inspection report identifying alleged non-compliance with certain Department of Ecology waste regulations and permit requirements and requires the Company to implement specified corrective actions and provide documentation of its compliance within prescribed timeframes.

 

No administrative order has been issued and no monetary penalties have been assessed as of the date of this report. The Company is actively responding to the Notice and implementing corrective measures. Based on information currently available and the Company’s ongoing response, the Company does not expect this matter to result in a material adverse effect on its financial condition, results of operations, or cash flows.

 

The outcome of this matter remains subject to regulatory review. While the Department of Ecology may pursue escalated enforcement action in accordance with Washington State Dangerous (Hazardous) Waste Regulations, the Company currently expects a favorable resolution of the Notice and does not believe that a loss is probable. Accordingly, the Company has not recorded an accrual for any potential loss related to this matter.

 

 

Legal Matters

 

In the normal course of conducting our business, the Company may be involved in various litigation. The Company is not a party to any litigation or governmental proceeding which our management believes could result in any judgments or fines against us that would have a material adverse effect on our financial position, liquidity or results of future operations.

 

Michael O’Neill

 

On November 25, 2024, purported shareholder Michael O’Neill (the “Plaintiff”) filed a complaint in the Court of Chancery of the State of Delaware against the Company and all current directors of the Company (the “Defendants”), asserting individual and class action claims for alleged breach of contract and breach of fiduciary duty. The case is styled Michael O’Neill v. Perma-Fix Environmental Services, Inc., et al., C.A. No. 2024-1211-PAF.

 

The plaintiff has filed an amended and supplemented complaint (the Amended Complaint”), alleging that certain provisions of the Amended Bylaws violated Delaware law (the “Challenged Bylaws).

 

The plaintiff is seeking a declaration of the Chancery Court that the Challenged Bylaws are invalid, illegal, and void, or, alternatively, an order of the Chancery Court rescinding or enjoining the Challenged Bylaws.

 

The Company and the other Defendants are vigorously defending against the Amended Complaint.

 

The Company’s insurance carrier is providing a defense in connection with this lawsuit, subject to a reservation of rights, a $500,000 self-insured retention and the terms and limitations contained in the insurance policy.

 

Edwin Monroy Wage and Hour Litigation

 

On June 26, 2026, Edwin Monroy filed a putative class action complaint in the Superior Court of the State of Washington for Benton County against Perma-Fix Northwest Richland, Inc., Perma-Fix Environmental Services, Inc., Perma-Fix Northwest, Inc., and other, unnamed, defendants. The complaint purports to assert claims on behalf of current and former hourly-paid or non-exempt employees who worked for the defendants in Washington during the three-year period preceding the filing of the complaint through the date of final judgment. The complaint alleges, among other things, failures to provide legally compliant meal and rest periods, pay for all hours worked, pay minimum and overtime wages, properly administer paid sick leave, timely pay wages, provide accurate wage statements and maintain required payroll and employment records, and reimburse certain business expenses. The plaintiff seeks class certification, recovery of allegedly unpaid wages and other compensation, statutory or enhanced damages, penalties, restitution, injunctive relief, interest, and attorneys’ fees and costs.

 

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

 

Insurance

 

The Company has a 25-year finite risk insurance policy entered into in June 2003 (“2003 Closure Policy”) with AIG, which provides financial assurance to the applicable states for our permitted facilities in the event of unforeseen closure. The 2003 Closure Policy, as amended, provides for a maximum allowable coverage of $28,177,000 which includes available capacity to allow for annual inflation and other performance and surety bond requirements. Total coverage under the 2003 Closure Policy, as amended, was $24,552,000 as of June 30, 2026. As of June 30, 2026, and December 31, 2025, finite risk sinking funds contributed by the Company related to the 2003 Closure Policy, which is included in other long term assets on the accompanying Condensed Consolidated Balance Sheets, totaled $13,457,000 and $13,216,000, respectively. These amounts included interest earned of $3,986,000 and $3,745,000 as of June 30, 2026 and December 31, 2025, respectively. Interest income for the three and six months ended June 30, 2026, was approximately $116,000 and $241,000, respectively. Interest income for the three and six months ended June 30, 2025, was approximately $128,000 and $272,000, respectively. If we elect so, AIG is obligated to pay the Company an amount equal to 100% of the finite risk sinking fund account balance in return for complete release of liability from both the Company and any applicable regulatory agency using this policy as an instrument to comply with financial assurance requirements.

 

 

Letter of Credits and Bonding Requirements

 

From time to time, the Company is required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. As of June 30, 2026, the total amount of standby letters of credit outstanding was approximately $3,420,000 and the total amount of bonds outstanding was approximately $19,295,000.