SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 15, 1998
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PERMA-FIX ENVIRONMENTAL SERVICES, INC.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-11596 58-1954497
______________ ___________ __________________
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1940 N.W. 67th Place, Suite A, Gainesville, Florida 32653
___________________________________________________ _________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (352) 373-4200
_________________
Not applicable
____________________________________________________________
(Former name or former address, if changed since last report)
Item 5. Other Events.
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Congress Loan. On January 15, 1998, the Registrant
entered into a definitive loan agreement in which Congress
Financial Corporation (Florida) ("Congress") provided to
the Registrant and certain subsidiaries of the Registrant
a $7,000,000 credit facility. Pursuant to the loan
agreement with Congress (the "Congress Agreement")
Congress provided the Registrant and its subsidiaries with
a $7,000,000 credit facility ("Congress Loan"), consisting
of (i) a revolving line of credit of up to $4,500,000,
with the exact amount that can be borrowed under the
revolving line of credit not to exceed eighty percent
(80%) of the Net Amount of Eligible Accounts (as
defined in the Congress Agreement) less certain reserves
and (ii) a term loan of $2,500,000, with the term loan
payable in monthly installments of approximately $52,000
plus interest. As of January 15, 1998, the Registrant's
availability under the Congress Agreement revolving line
of credit was approximately $1,500,000, less certain
reserve requirements as set forth in the Congress
Agreement. The Congress Agreement is for a term
of three years, subject to earlier termination pursuant to
the terms of the Congress Agreement.
The proceeds from the Congress Loan have been used, in
part, to replace other credit facilities of the
Registrant, which had been provided by Heller Financial,
Inc. ("Heller") and by Ally Capital Corporation ("Ally").
The replacement of Heller was accomplished through payment
to Heller of approximately $826,000 pursuant to the term
loan and approximately $2,289,000 pursuant to the
revolving credit facility, both as provided in that
certain Loan and Security Agreement between the Registrant
and Heller. The replacement of Ally was accomplished
through payment to Ally of approximately $909,000 pursuant
to that certain equipment financing agreement between the
Registrant and Ally. Due to the replacement of Heller and
Ally as creditors and the termination of the Registrant's
agreements with Heller and Ally, the Registrant is no
longer in default under the terms of such agreements.
Under the terms of the Congress Agreement, the Registrant
has agreed to maintain an Adjusted Net Worth (as defined
in the Congress Agreement) of not less than $3,000,000
throughout the term of the Congress Agreement. The
Registrant has agreed that it will not pay any dividends
on any shares of capital stock of the Registrant, except
that dividends may be paid on the Registrant's shares of
preferred stock outstanding as of the date of the Congress
Agreement (collectively, "Excepted Preferred Stock") under
the terms of the applicable Excepted Preferred Stock and
if and when declared by the Board of Directors of the
Registrant pursuant to Delaware General Corporation Law.
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Legal Proceedings: W & R Drum Company. Perma-Fix of
Memphis, Inc. ("PFM"), a subsidiary of the Registrant
which was purchased in December 1993 and was formerly
known as American Resource Recovery Corporation ("ARR"),
has been notified by the United States Environmental
Protection Agency ("EPA") that the EPA had conducted
remediation operations at a site owned and operated by W
& R Drum, Inc. in Memphis, Tennessee (the "Drum site"),
and that the EPA was seeking information regarding, among
other things, details regarding transportation of
materials by others (such as ARR and PFM) to the Drum site
and parties that may be a "potentially responsible party"
("PRP") regarding the Drum site as a result of delivering
hazardous waste containers to W & R Drum, Inc. during the
time of its operation.
By correspondence dated January 15, 1998 ("PRP Letter"),
the EPA has informed PFM that it believes that PFM is a
PRP regarding the remediation of the Drum site, primarily
as a result of acts by ARR prior to the time ARR was
acquired by the Registrant. The PRP Letter states that
the EPA is continuing to investigate other PRPs regarding
the Drum site which may be liable for certain remediation
costs of the Drum site. The PRP Letter estimated the
total remediation costs incurred by the EPA for the Drum
site to be approximately $1,400,000 as of November 30,
1997, and the EPA has orally informed the Registrant that
such remediation has been substantially complete as of such
date. Because CERCLA provides that liability for PRPs
for a particular site is joint and several, the PRP Letter
includes a demand by the EPA from PFM for the full amount
of the remediation of the Drum site, including interest
on such amount, as provided for in CERCLA. In addition,
the EPA has advised PFM that it has sent PRP Letters to
certain other companies making demand upon such other
companies regarding the Drum site. The Registrant
is currently investigating the allegations set forth in
the PRP Letter and intends to vigorously defend against
such allegations and the associated demand regarding
remediation costs of the Drum site. The Registrant has
notified certain of the previous owners of ARR that the
Registrant will seek recovery from them as PRPs in the
event PFM is determined to be a PRP regarding the Drum
site, however, no assurance can be made that PFM will
be able to recover remediation costs from such other
previous owners. If PFM is determined to be liable
for all or a substantial portion of the remediation
cost incurred by the EPA at the Drum site, such could
have a material adverse effect on the Registrant.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
4.1 Loan and Security Agreement by and between the
Registrant and Congress Financial Corporation
(Florida) dated January 15, 1998. This agreement
contains a list of schedules and exhibits omitted
from the filed copy and the Registrant agrees to
furnish supplementally a copy of any of the omitted
schedules or exhibits to the Commission upon
request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By: /s/ Richard T. Kelecy
_____________________________
Richard T. Kelecy
Chief Financial Officer
Date: February 11, 1998