Hudson
Annual Report 2016

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KHUDSON TECHNOLOGIES INC /NY - HDSNFiled: March 10, 2017 (period: December 31, 2016)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-13412 Hudson Technologies, Inc. (Exact name of registrant as specified in its charter) New York13-3641539(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)P.O. Box 1541 One Blue Hill Plaza Pearl River, New York10965(Address of Principal Executive Offices)(Zip Code) Registrant’s telephone number, including area code(845) 735-6000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common stock, $.01 par value The NASDAQ Stock Market LLC (NASDAQ Capital Market) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act ¨¨ Yes xx No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act ¨¨ Yes xx No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. xx Yes ¨¨ No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). xx Yes ¨¨ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K. ¨¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule12b-2 of the Exchange Act. Large accelerated filer ¨ Accelerated filer xx Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨¨ Yes xx No The aggregate market value of registrant’s common stock held by non-affiliates at June 30, 2016 was approximately $96,210,824. As of March 1, 2017 therewere 41,518,820 shares of the registrant’s common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Proxy Statement for its Annual Meeting of Stockholders to be held on June 14, 2017, are incorporated by reference in Part III ofthis Report. Except as expressly incorporated by reference, the Registrant's Proxy Statement shall not be deemed to be part of this Form 10-K. Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. Index Part Item Page Part I.Item 1 -Business 3 Item 1A -Risk Factors 8 Item 1B -Unresolved Staff Comments 11 Item 2 -Properties 11 Item 3 -Legal Proceedings 12 Item 4 -Mine Safety Disclosures 12 Part II.Item 5 -Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities 13 Item 6 -Selected Financial Data 14 Item 7 -Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 7A -Quantitative and Qualitative Disclosures About Market Risk 21 Item 8 -Financial Statements and Supplementary Data 21 Item 9 -Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 21 Item 9A -Controls and Procedures 21 Item 9B -Other Information 24 Part III.Item 10 -Directors, Executive Officers and Corporate Governance 24 Item 11 -Executive Compensation 24 Item 12 -Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 24 Item 13 -Certain Relationships and Related Transactions, and Director Independence 24 Item 14 -Principal Accountant Fees and Services 24Part IV.Item 15 -Exhibits and Financial Statement Schedules 25 Item 16-Form 10-K Summary 27 Signatures 50 2 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Part IItem 1. Business General Hudson Technologies, Inc., incorporated under the laws of New York on January 11, 1991, is a refrigerant services company providing innovative solutionsto recurring problems within the refrigeration industry. The Company’s operations consist of one reportable segment. The Company's products and servicesare primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerantmanagement services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer's site, consisting of systemdecontamination to remove moisture, oils and other contaminants. In addition, the Company’s SmartEnergy OPSTM service is a web-based real timecontinuous monitoring service applicable to a facility’s refrigeration systems and other energy systems. The Company’s Chiller Chemistry® and ChillSmart® services are also predictive and diagnostic service offerings. As a component of the Company’s products and services, the Company also participatesin the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company. Unlessthe context requires otherwise, references to the “Company”, “Hudson”, “we", “us”, “our”, or similar pronouns refer to Hudson Technologies, Inc. and itssubsidiaries. The Company's executive offices are located at One Blue Hill Plaza, Pearl River, New York and its telephone number is (845) 735-6000. The Companymaintains a website at www.hudsontech.com, the contents of which are not incorporated into this filing. Industry Background The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results.Currently the Company purchases virgin, hydro chlorofluorocarbon (“HCFC”) and hydro fluorocarbon (“HFC”) refrigerants and reclaimable, primarilyHCFC, HFC and chlorofluorocarbon (“CFC”) refrigerants from suppliers and its customers. Effective January 1, 1996, the Clean Air Act, as amended (the“Act”) prohibited the production of virgin CFC refrigerants and limited the production of virgin HCFC refrigerants. Effective January 2004, the Act furtherlimited the production of virgin HCFC refrigerants and federal regulations were enacted which established production and consumption allowances forHCFC refrigerants and which imposed limitations on the importation of certain virgin HCFC refrigerants. Under the Act, production of certain virgin HCFCrefrigerants is scheduled to be phased out during the period 2010 through 2020, and production of all virgin HCFC refrigerants is scheduled to be phased outby 2030. In October 2014, the EPA published a final rule providing further reductions in the production and consumption allowances for virgin HCFCrefrigerants for the years 2015 through 2019 (the “Final Rule”). In the Final Rule, the EPA has established a linear annual phase down schedule for theproduction or importation of virgin HCFC-22 that started at approximately 22 million pounds in 2015 and reduces by approximately 4.5 million poundseach year and ends at zero in 2020. HFC refrigerants are used as substitutes for CFC and HCFC refrigerants in certain applications. As a result of the increasing restrictions and limitations on theproduction and use of CFC and HCFC refrigerants, various segments of the air conditioning and refrigeration industry have been replacing or modifyingequipment that utilize CFC and HCFC refrigerants and have been transitioning to equipment that utilize HFC refrigerants and hydrofluoro-olefins (“HFO”).HFC refrigerants are not ozone depleting chemicals and are not currently regulated under the Act. However, certain HFC refrigerants are highly weightedgreenhouse gases that are believed to contribute to global warming and climate change and, as a result, are now subject to various state and federalregulations relating to the sale, use and emissions of HFC refrigerants. The Company expects that HFC refrigerants eventually will be replaced by HFOs orother types of products with lower global warming potentials. In October 2016, more than 200 countries, including the United States, agreed to amend the Montreal Protocol to phase down production of HFCs by 85%between now and 2047. The amendment establishes timetables for all developed and developing countries to freeze and then reduce production and use ofHFCs, with the first reductions by developed countries starting in 2019. The amendment becomes effective January 1, 2019 if twenty countries ratify theamendment. To date, the amendment has not been ratified by the United States. The Act, and the federal regulations enacted under authority of the Act, have mandated and/or promoted responsible use practices in the air conditioning andrefrigeration industry, which are intended to minimize the release of refrigerants into the atmosphere and encourage the recovery and re-use of refrigerants.The Act prohibits the venting of CFC, HFC and HCFC refrigerants, and prohibits and/or phases down the production of CFC and HCFC refrigerants. The Act also mandates the recovery of CFC and HCFC refrigerants and also promotes and encourages re-use and reclamation of CFC and HCFC refrigerants.Under the Act, owners, operators and companies servicing cooling equipment utilizing CFC and HCFC refrigerants are responsible for the integrity of thesystems regardless of the refrigerant being used. In November 2016, the EPA issued a final rule extending these requirements to HFCs and to certain otherrefrigerants that are approved by the EPA as alternatives for CFC and HCFC refrigerants. 3 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Products and Services From its inception, the Company has sold refrigerants, and has provided refrigerant reclamation and refrigerant management services that are designed torecover and reuse refrigerants, thereby protecting the environment from release to the atmosphere and the corresponding ozone depletion and global warmingimpact. The reclamation process allows the refrigerant to be re-used thereby eliminating the need to destroy or manufacture additional refrigerant andeliminating the corresponding impact to the environment associated with the destruction and manufacturing. The Company believes it is the largestrefrigerant reclaimer in the United States. Additionally, the Company has created alternative solutions to reactive and preventative maintenance proceduresthat are performed on commercial and industrial refrigeration systems. These services, known as RefrigerantSide® Services, complement the Company’srefrigerant sales and refrigerant reclamation and management services. The Company has also developed SmartEnergy OPSTM that identify inefficiencies inthe operation of air conditioning and refrigeration systems and assists companies to improve the energy efficiency of their systems and save operating costsand improve system reliability. In addition, the Company is pursuing potential opportunities for the creation and monetization of verified emissionreductions. Refrigerant and Industrial Gas Sales The Company sells reclaimed and virgin (new) refrigerants to a variety of customers in various segments of the air conditioning and refrigeration industry,and sells industrial gases to a variety of industry segments. The Company continues to sell reclaimed CFC based refrigerants, which are no longermanufactured. Virgin, non-CFC refrigerants, including HCFC and HFC refrigerants, are purchased by the Company from several suppliers and resold by theCompany, typically at wholesale. Additionally, the Company regularly purchases used or contaminated refrigerants, some of which are CFC based, frommany different sources, which refrigerants are then reclaimed using the Company's high speed proprietary reclamation equipment, its proprietary Zugibeast®system, and then are resold by the Company. Refrigerant Management Services The Company provides a complete offering of refrigerant management services, which primarily include reclamation of refrigerants, laboratory testingthrough the Company’s laboratory, which has been certified by the Air Conditioning, Heating and Refrigeration Institute (“AHRI”), and banking (storage)services tailored to individual customer requirements. Hudson also separates “crossed” (i.e. commingled) refrigerants and provides re-usable cylinderrefurbishment and hydrostatic testing services. RefrigerantSide® Services The Company provides decontamination and recovery services that are performed at a customer's site through the use of portable, high volume, high-speedproprietary equipment, including the patented Zugibeast® system. Certain of these RefrigerantSide® Services, which encompass system decontamination,and refrigerant recovery and reclamation, are also proprietary and are covered by process patents. In addition to the decontamination and recovery services previously described, the Company also provides predictive and diagnostic services for itscustomers. The Company offers diagnostic services that are intended to predict potential problems in air conditioning and refrigeration systems before theyoccur. The Company’s Chiller Chemistry® offering integrates several fluid tests of an operating system and the corresponding laboratory results into anengineering report providing its customers with an understanding of the current condition of the fluids, the cause for any abnormal findings and the potentialconsequences if the abnormal findings are not remediated. Fluid Chemistry®, an abbreviated version of the Company’s Chiller Chemistry® offering, isdesigned to quickly identify systems that require further examination. The Company has also been awarded several US patents for its SmartEnergy OPSTM, which is a system for measuring, modifying and improving theefficiency of energy systems, including air conditioning and refrigeration systems, in industrial and commercial applications. This service is a web-based realtime continuous monitoring service applicable to a facility’s chiller plant systems. The SmartEnergy OPSTM offering enables customers to monitor andimprove their chiller plant performance and proactively identify and correct system inefficiencies. SmartEnergy OPSTM is able to identify specificinefficiencies in the operation of chiller plant systems and, when used with Hudson’s RefrigerantSide® Services, can increase the efficiency of the operatingsystems thereby reducing energy usage and costs. Improving the system efficiency reduces power consumption thereby directly reducing CO2 emissions atthe power plants or onsite. Lastly, the Company’s ChillSmart® offering, which combines the system optimization with the Company’s Chiller Chemistry®offering, provides a snapshot of a packaged chiller’s operating efficiency and health. ChillSmart® provides a very effective predictive maintenance tool andhelps our customers to identify the operating chillers that cause higher operating costs. The Company’s engineers who developed and support Smart Energy OPSTM are recognized as Energy Experts and Qualified Best Practices Specialists by theUnited States Department of Energy (“DOE”) in the areas of Steam and Process Heating under the DOE “Best Practices” program, and are the LeadInternational Energy Experts for steam, chillers and refrigeration systems for the United Nations Industrial Development Organization (“UNIDO”). TheCompany’s staff have trained more than 4,000 industrial plant personnel in the US and internationally, and have developed and are currently deliveringtraining curriculums in 12 different countries. The Company’s staff have completed more than 200 industrial ESAs in the US and internationally. 4 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Carbon Offset Projects CFC refrigerants are ozone depleting substances and are also highly weighted greenhouse gases that contribute to global warming and climate change. Thedestruction of CFC refrigerants may be eligible for verified emission reductions that can be converted and monetized into carbon offset credits that may betraded in the emerging carbon offset markets. The Company is pursuing opportunities to acquire CFC refrigerants and is developing relationships within theemerging environmental markets in order to develop opportunities for the creation and monetization of verified emission reductions from the destruction ofCFC refrigerants. In October 2015, the American Carbon Registry (“ACR”) established a methodology to provide, among other things, a quantification framework for thecreation of carbon offset credits for the use of certified reclaimed HFC refrigerants. The Company is pursuing opportunities to acquire HFC refrigerants and isdeveloping relationships within the emerging environmental markets in order to develop opportunities for the creation and monetization of verified emissionreductions from the reclamation of HFC refrigerants. The following is a summary of revenues over the last three years: Years Ended December 31, 2016 2015 2014 (in thousands) Product and related sales $101,344 $75,154 $50,460 RefrigerantSide® Services 4,137 4,568 5,350 Total $105,481 $79,722 $55,810 Hudson's Network Hudson operates from a network of facilities located in: Pearl River, New York—Company headquarters and administrative officesChampaign, Illinois—Reclamation and separation of refrigerants and cylinder refurbishment center; RefrigerantSide® Service depotNashville, Tennessee—Reclamation and separation of refrigerants and cylinder refurbishment centerOntario, California—Reclamation and cylinder refurbishment centerCatano, Puerto Rico—Reclamation center and RefrigerantSide® Service depotAuburn, Washington—RefrigerantSide® Service depotBaton Rouge, Louisiana—RefrigerantSide® Service depotCharlotte, North Carolina—RefrigerantSide® Service depotEscondido, California—RefrigerantSide® Service depotStony Point, New York—RefrigerantSide® Service depotTulsa, Oklahoma—Energy and Carbon ServicesHampstead, New Hampshire—Telemarketing officePottsboro, Texas—Telemarketing office Strategic Alliances The Company believes that the international market for refrigerant reclamation, sales and services is equal in size to the United States market for those salesand services. The Company has Alliances in Europe and South Africa, and over time, the Company expects to introduce its technology and offerings toseveral other markets around the world. Suppliers The Company's financial performance and its ability to sell refrigerants is in part dependent on its ability to obtain sufficient quantities of virgin, non-CFCbased refrigerants, and of reclaimable CFC and non-CFC based, refrigerants from manufacturers, wholesalers, distributors, bulk gas brokers and from othersources within the air conditioning, refrigeration and automotive aftermarket industries, and on corresponding demand for refrigerants. The Company'srefrigerant sales include CFC based refrigerants, which are no longer manufactured. Additionally, the Company's refrigerant sales include non-CFC basedrefrigerants, including HCFC and HFC refrigerants, which are the most-widely used refrigerants. Effective January 1, 1996, the Act limited the production ofvirgin HCFC refrigerants, which production was further limited in January 2004. Federal regulations enacted in January 2004 established production andconsumption allowances for HCFCs and imposed limitations on the importation of certain virgin HCFC refrigerants. Under the Act, production of certainvirgin HCFC refrigerants is scheduled to be phased out during the period 2010 through 2020 and production of all virgin HCFC refrigerants is scheduled tobe phased out by 2030. In October 2014, the EPA published the Final Rule providing further reductions in the production and consumption allowances forvirgin HCFC refrigerants for the years 2015 through 2019. In the Final Rule, the EPA has established a linear annual phase down schedule for the productionor importation of virgin HCFC-22 that will start at approximately 22 million pounds in 2015 and reduce by approximately 4.5 million pounds each year andend at zero in 2020. In October 2016, more than 200 countries, including the United States, agreed to amend the Montreal Protocol to phase down production of HFCs by 85%between now and 2047. The amendment establishes timetables for all developed and developing countries to freeze and then reduce production and use ofHFCs, with the first reductions by developed countries starting in 2019. The amendment becomes effective January 1, 2019 if twenty countries ratify theamendment. To date, the amendment has not been ratified by the United States. 5 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Customers The Company provides its services to commercial, industrial and governmental customers, as well as to refrigerant wholesalers, distributors, contractors andto refrigeration equipment manufacturers. Agreements with larger customers generally provide for standardized pricing for specified services. The Companygenerates sales by purchase order on a real-time basis and therefore does not carry a backlog of sales. For the year ended December 31, 2016, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 30% of the Company’s revenues. At December 31, 2016, there were no outstanding receivables from these customers. For the year ended December 31, 2015, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 33% of the Company’s revenues. At December 31, 2015, there were no outstanding receivables from these customers. For the year ended December 31, 2014, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 25% of the Company’s revenues. At December 31, 2014, there were $0.7 million in outstanding receivables from these customers. Marketing Marketing programs are conducted through the efforts of the Company's executive officers, Company sales personnel, and third parties. Hudson employsvarious marketing methods, including direct mailings, technical bulletins, in-person solicitation, print advertising, response to quotation requests and theinternet through the Company’s website (www.hudsontech.com). Information on the Company's website is not part of this report. The Company's sales personnel are compensated on a combination of a base salary and commission. The Company's executive officers devote significanttime and effort to customer relationships. Competition The Company competes primarily on the basis of the performance of its proprietary high volume, high-speed equipment used in its operations, the breadth ofservices offered by the Company, including proprietary RefrigerantSide® Services and other on-site services, and price, particularly with respect torefrigerant sales. The Company competes with numerous regional and national companies that market reclaimed and virgin refrigerants and provide refrigerant reclamationservices. Certain of these competitors possess greater financial, marketing, distribution and other resources for the sale and distribution of refrigerants than theCompany and, in some instances, serve a more extensive geographic area than the Company. Hudson's RefrigerantSide® Services provide new and innovative solutions to certain problems within the refrigeration industry and, as such, the demand andmarket acceptance for these services are subject to uncertainty. Competition for these services primarily consists of traditional methods of solving theindustry's problems. The Company’s marketing strategy is to educate the marketplace that its alternative solutions are available and that RefrigerantSide®Services are superior to traditional methods. Insurance The Company carries insurance coverage that it considers sufficient to protect the Company's assets and operations. The Company currently maintainsgeneral commercial liability insurance and excess liability coverage for claims up to $11,000,000 per occurrence and $12,000,000 in the aggregate. TheCompany attempts to operate in a professional and prudent manner and to reduce potential liability risks through specific risk management efforts, includingongoing employee training. The refrigerant industry involves potentially significant risks of statutory and common law liability for environmental damage and personal injury. TheCompany, and in certain instances, its officers, directors and employees, may be subject to claims arising from the Company's on-site or off-site services,including the improper release, spillage, misuse or mishandling of refrigerants classified as hazardous or non-hazardous substances or materials. TheCompany may be held strictly liable for damages, which could be substantial, regardless of whether it exercised due care and complied with all relevant lawsand regulations. Hudson maintains environmental impairment insurance of $10,000,000 per occurrence, and $10,000,000 annual aggregate, for events occurring subsequentto November 1996. 6 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Government Regulation The business of refrigerant sales, reclamation and management is subject to extensive, stringent and frequently changing federal, state and local laws andsubstantial regulation under these laws by governmental agencies, including the EPA, the United States Occupational Safety and Health Administration(“OSHA”) and the United States Department of Transportation (“DOT”). Among other things, these regulatory authorities impose requirements which regulate the handling, packaging, labeling, transportation and disposal ofhazardous and non-hazardous materials and the health and safety of workers, and require the Company and, in certain instances, its employees, to obtain andmaintain licenses in connection with its operations. This extensive regulatory framework imposes significant compliance burdens and risks on the Company. Hudson and its customers are subject to the requirements of the Act, and the regulations promulgated thereunder by the EPA, which make it unlawful for anyperson in the course of maintaining, servicing, repairing, and disposing of air conditioning or refrigeration equipment, to knowingly vent or otherwise releaseor dispose of ozone depleting substances, and non-ozone depleting substitutes, used as refrigerants. Pursuant to the Act, reclaimed refrigerant must satisfy the same purity standards as newly manufactured, virgin refrigerants in accordance with standardsestablished by AHRI prior to resale to a person other than the owner of the equipment from which it was recovered. The EPA administers a certificationprogram pursuant to which applicants certify to reclaim refrigerants in compliance with AHRI standards. The Company is one of only four certified refrigeranttesting laboratories in the United States under AHRI’s laboratory certification program, which is a voluntary program that certifies the ability of a laboratoryto test refrigerant in accordance with the AHRI 700 standard. In addition, the EPA has established a mandatory certification program for air conditioning and refrigeration technicians. Hudson's technicians have appliedfor or obtained such certification. The Company may also be subject to regulations adopted by the EPA which impose reporting requirements arising out of the importation of certain HCFCs,and arising out of the importation, purchase, production, use and/or emissions of certain greenhouse gases, including HFCs. The Company is also subject to regulations adopted by the DOT which classify most refrigerants handled by the Company as hazardous materials orsubstances and imposes requirements for handling, packaging, labeling and transporting refrigerants and which regulate the use and operation of theCompany’s commercial motor vehicles used in the Company’s business. The Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), requires facilities that treat, store or dispose of hazardous wastes to complywith certain operating standards. Before transportation and disposal of hazardous wastes off-site, generators of such waste must package and label theirshipments consistent with detailed regulations and prepare a manifest identifying the material and stating its destination. The transporter must deliver thehazardous waste in accordance with the manifest to a facility with an appropriate RCRA permit. Under RCRA, impurities removed from refrigerantsconsisting of oils mixed with water and other contaminants are not presumed to be hazardous waste. The Emergency Planning and Community Right-to-Know Act of 1986, as amended, requires the annual reporting by the Company of Emergency andHazardous Chemical Inventories (Tier II reports) to the various states in which the Company operates and requires the Company to file annual ToxicChemical Release Inventory Forms with the EPA. The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), establishes liability for clean-up costs andenvironmental damages to current and former facility owners and operators, as well as persons who transport or arrange for transportation of hazardoussubstances. Almost all states have similar statutes regulating the handling and storage of hazardous substances, hazardous wastes and non-hazardous wastes.Many such statutes impose requirements that are more stringent than their federal counterparts. The Company could be subject to substantial liability underthese statutes to private parties and government entities, in some instances without any fault, for fines, remediation costs and environmental damage, as aresult of the mishandling, release, or existence of any hazardous substances at any of its facilities. The Occupational Safety and Health Act of 1970, as amended mandates requirements for a safe work place for employees and special procedures andmeasures for the handling of certain hazardous and toxic substances. State laws, in certain circumstances, mandate additional measures for facilities handlingspecified materials. The Company is also subject to regulations adopted by the California Air Resources Board which impose certain reporting requirements arising out of thereclamation and sale of refrigerants that takes place within the State of California. 7 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company believes that it is in material compliance with all applicable regulations material to its business operations. Quality Assurance & Environmental Compliance The Company utilizes in-house quality and regulatory compliance control procedures. Hudson maintains its own analytical testing laboratory, which isAHRI certified, to assure that reclaimed refrigerants comply with AHRI purity standards and employs portable testing equipment when performing on-siteservices to verify certain quality specifications. The Company employs ten persons engaged full-time in quality control and to monitor the Company'soperations for regulatory compliance. Employees On December 31, 2016, the Company had 137 full time employees including air conditioning and refrigeration technicians, chemists, engineers, sales andadministrative personnel. None of the Company's employees are represented by a union. The Company believes it has good relations with its employees. Patents and Proprietary Information The Company holds several U.S. and foreign patents, as well as pending patent applications, related to certain RefrigerantSide® Services and supportingsystems developed by the Company for systems and processes for measuring and improving the efficiency of refrigeration systems, and for certain refrigerantrecycling and reclamation technologies. These patents will expire between February 2017 and April 2031. The Company believes that patent protection is important to its business. There can be no assurance as to the breadth or degree of protection that patents mayafford the Company, that any patent applications will result in issued patents or that patents will not be circumvented or invalidated. Technologicaldevelopment in the refrigerant industry may result in extensive patent filings and a rapid rate of issuance of new patents. Although the Company believesthat its existing patents and the Company's equipment do not and will not infringe upon existing patents or violate proprietary rights of others, it is possiblethat the Company's existing patent rights may not be valid or that infringement of existing or future patents or violations of proprietary rights of others mayoccur. In the event the Company's equipment or processes infringe, or are alleged to infringe, patents or other proprietary rights of others, the Company maybe required to modify the design of its equipment or processes, obtain a license or defend a possible patent infringement action. There can be no assurancethat the Company will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action or thatthe Company will not become liable for damages. The Company also relies on trade secrets and proprietary know-how, and employs various methods to protect its technology. However, such methods may notafford complete protection and there can be no assurance that others will not independently develop such know-how or obtain access to the Company'sknow-how, concepts, ideas and documentation. Failure to protect its trade secrets could have a material adverse effect on the Company. SEC Filings The Company makes available on its internet website copies of its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form8-K, and amendments thereto, as soon as reasonably practicable after they are filed with the Securities and Exchange Commission. Item 1A. Risk Factors There are many important factors, including those discussed below (and above as described under “Patents and Proprietary Information”), that have affected,and in the future could affect Hudson’s business including, but not limited to, the factors discussed below, which should be reviewed carefully together withthe other information contained in this report. Some of the factors are beyond Hudson’s control and future trends are difficult to predict. Our existing and future debt obligations could impair our liquidity and financial condition. Our existing credit facility, which currently expires in June 2020, is secured by substantially all of our assets and contains formulas that limit the amount ofour borrowings under the facility. Moreover, the terms of our credit facility also include negative covenants that, among other things, may limit our ability toincur additional indebtedness. If we violate any loan covenants and do not obtain a waiver from our lender, our indebtedness under the credit facility wouldbecome immediately due and payable, and the lender could foreclose on its security, which could materially adversely affect our business and futurefinancial condition and could require us to curtail or otherwise cease our existing operations. 8 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We may need additional financing to satisfy our future capital requirements, which may not be readily available to us. Our capital requirements may be significant in the future. In the future, we may incur additional expenses in the development and implementation of ouroperations. Due to fluctuations in the price, demand and availability of new refrigerants, our existing credit facility that expires in June 2020 may not in thefuture be sufficient to provide all of the capital that we need to acquire and manage our inventories of new refrigerant. As a result, we may be required to seekadditional equity or debt financing in order to develop our RefrigerantSide® Services business, our refrigerant sales business and our other businesses. Wehave no current arrangements with respect to, or sources of, additional financing other than our existing credit facility. There can be no assurance that we willbe able to obtain any additional financing on terms acceptable to us or at all. Our inability to obtain financing, if and when needed, could materiallyadversely affect our business and future financial condition and could require us to curtail or otherwise cease our existing operations. Adverse weather or economic downturn could adversely impact our financial results. Our business could be negatively impacted by adverse weather or economic downturns. Weather is a significant factor in determining market demand for therefrigerants sold by us, and to a lesser extent, our RefrigerantSide® Services. Unusually cool temperatures in the spring and summer tend to depress demandfor, and price of, refrigerants we sell. Protracted periods of cooler than normal spring and summer weather could result in a substantial reduction in our saleswhich could adversely affect our financial position as well as our results of operations. An economic downturn could cause customers to postpone or cancelpurchases of the Company’s products or services. Either or both of these conditions could have severe negative implications to our business that mayexacerbate many of the risk factors we identified in this report but not limited, to the following: Liquidity These conditions could reduce our liquidity and this could have a negative impact on our financial condition and results of operations. Demand These conditions could lower the demand and/or price for our product and services, which would have a negative impact on our results of operations. The nature of our business exposes us to potential liability. The refrigerant recovery and reclamation industry involves potentially significant risks of statutory and common law liability for environmental damage andpersonal injury. We, and in certain instances, our officers, directors and employees, may be subject to claims arising from our on-site or off-site services,including the improper release, spillage, misuse or mishandling of refrigerants classified as hazardous or non-hazardous substances or materials. We may bestrictly liable for damages, which could be substantial, regardless of whether we exercised due care and complied with all relevant laws and regulations. Ourcurrent insurance coverage may not be sufficient to cover potential claims, and adequate levels of insurance coverage may not be available in the future at areasonable cost. A partially or completely uninsured claim against us, if successful and of sufficient magnitude would have a material adverse effect on ourbusiness and financial condition. Our business and financial condition is substantially dependent on the sale and continued environmental regulation of refrigerants. Our business and prospects are largely dependent upon continued regulation of the use and disposition of refrigerants. Changes in government regulationsrelating to the emission of refrigerants into the atmosphere could have a material adverse effect on us. Failure by government authorities to otherwisecontinue to enforce existing regulations or significant relaxation of regulatory requirements could also adversely affect demand for our services and products. Our business is subject to significant regulatory compliance burdens. The refrigerant reclamation and management business is subject to extensive, stringent and frequently changing federal, state and local laws and substantialregulation under these laws by governmental agencies, including the EPA, the OSHA and DOT. Although we believe that we are in material compliance withall applicable regulations material to our business operations, amendments to existing statutes and regulations or adoption of new statutes and regulationswhich affect the marketing and sale of refrigerant could require us to continually alter our methods of operation and/or discontinue the sale of certain of ourproducts resulting in costs to us that could be substantial. We may not be able, for financial or other reasons, to comply with applicable laws, regulations andpermit requirements, particularly as we seek to enter into new geographic markets. Our failure to comply with applicable laws, rules or regulations or permitrequirements could subject us to civil remedies, including substantial fines, penalties and injunctions, as well as possible criminal sanctions, which would, ifof significant magnitude, materially adversely impact our operations and future financial condition. 9 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. A number of factors could negatively impact the price and/or availability of refrigerants, which would, in turn, adversely affect our business and financialcondition. Refrigerant sales continue to represent a significant majority of our revenues. Therefore, our business is substantially dependent on the availability of bothnew and used refrigerants in large quantities, which may be affected by several factors including, without limitation: (i) commercial production andconsumption limitations imposed by the Act and legislative limitations and ban on HCFC refrigerants; (ii) the ban on production of CFC based refrigerantsunder the Act; (iii) the amendment to the Montreal Protocol, if ratified, and any legislation and regulation enacted to implement the amendment, couldimpose limitations on production and consumption of HFC refrigerants; (iv) introduction of new refrigerants and air conditioning and refrigerationequipment; (v) price competition resulting from additional market entrants; (vi) changes in government regulation on the use and production of refrigerants;and (vii) reduction in demand for refrigerants. We do not maintain firm agreements with any of our suppliers of refrigerants and we do not hold allowancespermitting us to purchase and import HCFC refrigerants from abroad. Sufficient amounts of new and/or used refrigerants may not be available to us in thefuture, particularly as a result of the further phase down of HCFC production, or may not be available on commercially reasonable terms. Additionally, wemay be subject to price fluctuations, periodic delays or shortages of new and/or used refrigerants. Our failure to obtain and resell sufficient quantities ofvirgin refrigerants on commercially reasonable terms, or at all, or to obtain, reclaim and resell sufficient quantities of used refrigerants would have a materialadverse effect on our operating margins and results of operations. As a result of competition, and the strength of some of our competitors in the market, we may not be able to compete effectively. The markets for our services and products are highly competitive. We compete with numerous regional and national companies which provide refrigerantrecovery and reclamation services, as well as companies which market and deal in new and reclaimed alternative refrigerants, including certain of oursuppliers, some of which possess greater financial, marketing, distribution and other resources than us. We also compete with numerous manufacturers ofrefrigerant recovery and reclamation equipment. Certain of these competitors have established reputations for success in the service of air conditioning andrefrigeration systems. We may not be able to compete successfully, particularly as we seek to enter into new markets. Issues relating to potential global warming and climate change could have an impact on our business. Refrigerants are considered to be strong greenhouse gases that are believed to contribute to global warming and climate change and are now subject tovarious state and federal regulations relating to the sale, use and emissions of refrigerants. Current and future global warming and climate change or relatedlegislation and/or regulations may impose additional compliance burdens on us and on our customers and suppliers which could potentially result inincreased administrative costs, decreased demand in the marketplace for our products, and/or increased costs for our supplies and products. In addition, anamendment to the Montreal Protocol has established timetables for all developed and developing countries to freeze and then reduce production and use ofHFCs by 85% between now and 2047, with the first reductions by developed countries starting in 2019. The amendment becomes effective January 1, 2019 iftwenty countries ratify the amendment. To date, the amendment has not been ratified by the United States. It is unclear if the United States will ratify theamendment and, if it does ratify the amendment, what legislation and/or regulations will be enacted to implement the amendment. The loss of key management personnel would adversely impact our business. Our success is largely dependent upon the efforts of our Chief Executive Officer and Chairman. The loss of his services would have a material adverse effecton our business and prospects. We have the ability to designate and issue preferred stock, which may have rights, preferences and privileges greater than Hudson’s common stock andwhich could impede a subsequent change in control of us. Our Certificate of Incorporation authorizes our Board of Directors to issue up to 5,000,000 shares of “blank check” preferred stock and to fix the rights,preferences, privileges and restrictions, including voting rights, of these shares, without further shareholder approval. The rights of the holders of our commonstock will be subject to, and may be adversely affected by, the rights of holders of any additional preferred stock that may be issued by us in the future. Ourability to issue preferred stock without shareholder approval could have the effect of making it more difficult for a third party to acquire a majority of ourvoting stock, thereby delaying, deferring or preventing a change in control of us. If our common stock were delisted from NASDAQ it could be subject to “penny stock” rules which would negatively impact its liquidity and ourshareholders’ ability to sell their shares. Our common stock is currently listed on the NASDAQ Capital Market. We must comply with numerous NASDAQ Marketplace rules in order to continue thelisting of our common stock on NASDAQ. There can be no assurance that we can continue to meet the rules required to maintain the NASDAQ listing of ourcommon stock. If we are unable to maintain our listing on NASDAQ, the market liquidity of our common stock may be severely limited. 10 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our management has significant control over our affairs. Currently, our officers and directors collectively own approximately 13% of our outstanding common stock. Accordingly, our officers and directors are in aposition to significantly affect major corporate transactions and the election of our directors. There is no provision for cumulative voting for our directors. We may fail to successfully integrate any acquisitions made by us into our operations. As part of our business strategy, we may look for opportunities to grow by acquiring other product lines, technologies or facilities that complement or expandour existing business. We may be unable to identify suitable acquisition candidates or negotiate acceptable terms. In addition, we may not be able tosuccessfully integrate any assets, liabilities, customers, systems or management personnel we may acquire into our operations and we may not be able torealize related revenue synergies and cost savings within expected time frames. There can be no assurance that we will be able to successfully integrate anyprior or future acquisition. Our information technology systems, processes, and sites may suffer interruptions, failures, or attacks which could affect our ability to conduct business. Our information technology systems provide critical data connectivity, information and services for internal and external users. These include, among otherthings, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements, storing projectinformation and other processes necessary to manage the business. Our systems and technologies, or those of third parties on which we rely, could fail orbecome unreliable due to equipment failures, software viruses, cyber threats, terrorist acts, natural disasters, power failures or other causes. Cybersecuritythreats are evolving and include, but are not limited to, malicious software, cyber espionage, attempts to gain unauthorized access to our sensitiveinformation, including that of our customers, suppliers, and subcontractors, and other electronic security breaches that could lead to disruptions in missioncritical systems, unauthorized release of confidential or otherwise protected information, and corruption of data. Although we utilize various procedures andcontrols to monitor and mitigate these threats, there can be no assurance that these procedures and controls will be sufficient to prevent security threats frommaterializing. If any of these events were to materialize, the costs related to cyber or other security threats or disruptions may not be fully insured orindemnified and could have a material adverse effect on our reputation, operating results, and financial condition. Item 1B. Unresolved Staff Comments None. Item 2. Properties The Company's headquarters are located in a 6,100 square foot office facility located in a multi-tenant building in Pearl River, New York. The building isleased from an unaffiliated third party at an annual rental of approximately $150,000 pursuant to an agreement expiring in December 2021. The Company's Champaign, Illinois facility is located in a 48,000 square foot building, which was purchased by the Company in May 2005 for $999,999. OnJune 1, 2012, the Company entered into a mortgage note with Busey Bank for $855,000. The note bears interest at the fixed rate of 4% per annum, amortizingover 60 months and maturing on June 1, 2017. The mortgage note is secured by the Company’s land and building located in Champaign, Illinois. As ofDecember 31, 2016, the Company has $93,000 outstanding under this mortgage. The Company has established a second facility in Champaign, Illinois, which is a 135,000 square foot facility. The building is leased from an unaffiliatedthird party at an annual rental of $504,000, pursuant to an arrangement expiring in December 2018. The Company’s Nashville, Tennessee facility is a 33,000 square foot office facility leased from an unaffiliated third party at an annual rental of $173,000pursuant to an agreement expiring March 2018. The Company’s Ontario, California facility is a 20,000 square foot facility leased from an unaffiliated third party at an annual rental of $90,000 pursuant toan agreement expiring in December 2018. The Company’s Catano, Puerto Rico facility is a 15,000 square foot facility leased from an unaffiliated third party at an annual rental of $124,000 pursuant toan agreement expiring in December 2020. The Company's Auburn, Washington depot facility is a 6,000 square foot facility located in a multi-tenant building leased from an unaffiliated third party atan annual rental of $39,000 pursuant to an agreement expiring August 2018. The Company's Baton Rouge, Louisiana depot facility is a 3,000 square foot facility located in a multi-tenant building leased from an unaffiliated third partyat an annual rental of $23,000 pursuant to an agreement expiring in May 2019. The Company's Charlotte, North Carolina depot facility is a 2,600 square foot facility located in a multi-tenant building leased from an unaffiliated thirdparty at an annual rental of $26,000 pursuant to an agreement expiring in May 2019. The Company’s Escondido, California depot facility is a 6,000 square foot facility leased from a company that is owned by a non-executive employee at anannual rental of $36,000 pursuant to a month to month rental agreement. The Company’s Stony Point, New York depot facility is an 18,000 square foot facility located in a multi-tenant building leased from an unaffiliated thirdparty at an annual rental of $90,000 pursuant to an agreement expiring in June 2021. 11 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company’s Tulsa, Oklahoma energy and carbon services facility is located in a 2,304 square foot office facility located in a multi-tenant building leasedfrom an unaffiliated third party at an annual rental of $27,000 which includes our share of operating expenses. This lease expires December 2017. The Company's Hampstead, New Hampshire telemarketing facility is located in a 2,546 square foot office facility located in a multi-tenant building leasedfrom an unaffiliated third party at an annual rental of $52,000 pursuant to an agreement expiring in August 2022. The Company’s Pottsboro, Texas telemarketing facility is located in a 1,000 square foot office facility located in a multi-tenant building leased from anunaffiliated third party at an annual rental of $6,000 pursuant to an agreement expiring in August 2017. In addition to the above leases, the Company from time to time utilizes public warehouse space on a month to month basis. The Company typically entersinto short-term leases for its facilities and whenever possible extends the expiration date of such leases. The Company believes that its insurance policies areadequate to protect the Company’s property. Item 3. Legal Proceedings On April 1, 1999, the Company reported a release of approximately 7,800 lbs. of R-11 refrigerant (the “1999 Release”), at its former leased facility inHillburn, NY (the “Hillburn Facility”), which the Company vacated in June 2006. Since September 2000, last modified in March 2013, the Company signed an Order on Consent with the New York State Department of EnvironmentalConservation (“DEC”) whereby the Company agreed to operate a remediation system to reduce R-11 refrigerant levels in the groundwater under and aroundthe Hillburn Facility and agreed to perform periodic testing at the Hillburn Facility until remaining groundwater contamination has been effectively abated.The Company accrued, as an expense in its consolidated financial statements, the costs that the Company believes it will incur in connection with itscompliance with the Order of Consent through December 31, 2018. There can be no assurance that additional testing will not be required or that theCompany will not incur additional costs and such costs in excess of the Company’s estimate may have a material adverse effect on the Company financialcondition or results of operations. The Company has exhausted all insurance proceeds available for the 1999 Release under all applicable policies. In May 2000 the Hillburn Facility, as a result of the 1999 Release, was nominated by EPA for listing on the National Priorities List (“NPL”) pursuant toCERCLA. In September 2003, the EPA advised the Company that it had no current plans to finalize the process for listing of the Hillburn Facility on theNPL. During the years ended December 31, 2016, 2015 and 2014 the Company incurred none, none, and $53,000, respectively, in additional remediation costs inconnection with the matters above. The remaining liability on our Balance Sheet as of December 31, 2016 is approximately $150,000. There can be noassurance that the ultimate outcome of the 1999 Release will not have a material adverse effect on the Company's financial condition and results ofoperations. There can be no assurance that the EPA will not change its current plans and seek to finalize the process of listing the Hillburn Facility on theNPL, or that the ultimate outcome of such a listing will not have a material adverse effect on the Company's financial condition and results of operations. Item 4. Mine Safety Disclosures Not Applicable 12 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock trades on the NASDAQ Capital Market under the symbol “HDSN”. The following table sets forth, for the periods indicated, therange of the high and low sale prices for the common stock as reported by NASDAQ. High Low 2015 - First Quarter $4.56 $3.35 - Second Quarter $4.75 $3.40 - Third Quarter $3.58 $2.45 - Fourth Quarter $3.56 $2.69 2016 - First Quarter $3.69 $2.64 - Second Quarter $3.95 $3.09 - Third Quarter $6.72 $3.26 - Fourth Quarter $8.50 $5.55 Stock Price Performance Graph The following graph illustrates a comparison of the total cumulative stockholder return on our common stock since December 31, 2011, to two indices: theNASDAQ Composite Index and the Nasdaq Industrial Index. The stockholder return shown in the graph below is not necessarily indicative of futureperformance, and we do not make or endorse any predictions as to future stockholder returns. The above Stock Price Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities andExchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or SecuritiesExchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. The number of record holders of the Company's common stock was approximately 153 as of March 1, 2017. The Company believes that there are in excess of3,294 beneficial owners of its common stock. To date, the Company has not declared or paid any cash dividends on its common stock. The payment of dividends, if any, in the future is within thediscretion of the Board of Directors and will depend upon the Company's earnings, its capital requirements and financial condition, borrowing covenants,and other relevant factors. The Company presently intends to retain all earnings, if any, to finance the Company's operations and development of its businessand does not expect to declare or pay any cash dividends on its common stock in the foreseeable future. In addition, the Company has a credit facility withPNC Bank National Association (“PNC”) that, among other things, restricts the Company's ability to declare or pay any cash dividends on its capital stock. 13 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 6. Selected Financial Data The following selected financial data, with respect to our financial position and results of operations for each of the five fiscal years in the period endedDecember 31, 2016, set forth below, has been derived from, should be read in conjunction with and is qualified in its entirety by reference to, ourconsolidated financial statements and notes thereto, included either elsewhere in this report or in reports we have filed previously with the SEC. The selectedfinancial data presented below should also be read in conjunction with ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations”. For the Year Ended (Amounts in thousands, except per share data) 2016 2015 2014 2013 2012 Selected Statement of Operations Data: Revenues $105,481 $79,722 $55,810 $58,634 $56,447 Gross Profit $31,086 $18,489 $6,446 $(730) $22,542 Operating Income (Loss) $18,947 $8,181 $(985) $(8,485) $14,880 Net income (loss) $10,637 $4,763 $(720) $(5,842) $12,801 Net income (loss) per share - Basic $0.31 $0.15 $(0.02) $(0.24) $0.54 Net income (loss) per share- Diluted $0.30 $0.14 $(0.02) $(0.24) $0.49 Weighted average number of shares- Basic 34,104 32,547 29,123 24,826 23,907 Weighted average number of shares- Diluted 35,417 33,936 29,123 24,826 26,354 Selected Balance Sheet Data: Cash and cash equivalents $33,931 $1,258 $935 $669 $3,991 Inventory $68,601 $61,897 $37,017 $33,967 $40,167 Total assets $122,470 $85,011 $59,935 $52,368 $57,232 Debt- short and long-term $351 $24,866 $10,709 $20,038 $17,656 Stockholders’ Equity $112,017 $49,425 $43,999 $28,086 $32,696 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain statements, contained in this section and elsewhere in this Form 10-K, constitute “forward-looking statements” within the meaning of the PrivateSecurities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factorswhich may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance orachievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the laws and regulationsaffecting the industry, changes in the demand and price for refrigerants (including unfavorable market conditions adversely affecting the demand for, and theprice of refrigerants), the Company's ability to source refrigerants, regulatory and economic factors, seasonality, competition, litigation, the nature of supplieror customer arrangements that become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existingproducts and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability,customer concentration, the ability to obtain financing, any delays or interruptions in bringing products and services to market, the timely availability of anyrequisite permits and authorizations from governmental entities and third parties as well as factors relating to doing business outside the United States,including changes in the laws, regulations, policies, and political, financial and economic conditions, including inflation, interest and currency exchangerates, of countries in which the Company may seek to conduct business, the Company’s ability to successfully integrate any assets it acquires from thirdparties into its operations, and other risks detailed in the this report and in the Company’s other subsequent filings with the Securities and ExchangeCommission (“SEC”). The words “believe”, “expect”, “anticipate”, “may”, “plan”, “should” and similar expressions identify forward-looking statements.Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Critical Accounting Policies The Company's discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which havebeen prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statementsrequires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure ofcontingent assets and liabilities. Several of the Company's accounting policies involve significant judgments, uncertainties and estimates. The Companybases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of whichform the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under differentassumptions or conditions. To the extent that actual results differ from management's judgments and estimates, there could be a material adverse effect on theCompany. On a continuous basis, the Company evaluates its estimates, including, but not limited to, those estimates related to its allowance for doubtfulaccounts, inventory reserves, and valuation allowance for the deferred tax assets relating to its net operating loss carry forwards (“NOLs”) and commitmentsand contingencies. With respect to accounts receivable, the Company estimates the necessary allowance for doubtful accounts based on both historical andanticipated trends of payment history and the ability of the customer to fulfill its obligations. For inventory, the Company evaluates both current andanticipated sales prices of its products to determine if a write down of inventory to net realizable value is necessary. In determining the Company’s valuationallowance for its deferred tax assets, the Company assesses its ability to generate taxable income in the future. Goodwill represents the excess of the purchaseprice over the fair value of the net assets acquired in business combinations accounted for under the purchase method of accounting. The Company tests forany impairment of goodwill annually. Intangibles with determinable lives are amortized over the estimated useful lives of the assets currently ranging from 2to 10 years. The Company reviews these useful lives annually to determine that they reflect future realizable value. The Company utilizes both internal andexternal sources to evaluate potential current and future liabilities for various commitments and contingencies. In the event that the assumptions orconditions change in the future, the estimates could differ from the original estimates. 14 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Overview Sales of refrigerants continue to represent a significant majority of the Company’s revenues. The Company’s refrigerant sales are primarily HCFC and HFCbased refrigerants and to a lesser extent CFC based refrigerants that are no longer manufactured. Currently the Company purchases virgin HCFC and HFCrefrigerants and reclaimable HCFC, HFC and CFC refrigerants from suppliers and its customers. Effective January 1, 1996, the Clean Air Act (the “Act”)prohibited the production of virgin CFC refrigerants and limited the production of virgin HCFC refrigerants, which production was further limited in January2004. Federal regulations enacted in January 2004 established production and consumption allowances for HCFCs and imposed limitations on theimportation of certain virgin HCFC refrigerants. Under the Act, production of certain virgin HCFC refrigerants is scheduled to be phased out during theperiod 2010 through 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by 2030. In October 2014, the EPA published theFinal Rule providing further reductions in the production and consumption allowances for virgin HCFC refrigerants for the years 2015 through 2019. In theFinal Rule, the EPA has established a linear annual phase down schedule for the production or importation of virgin HCFC-22 that started at approximately22 million pounds in 2015 and is being reduced by approximately 4.5 million pounds each year and ends at zero in 2020. The Company has created and developed a service offering known as RefrigerantSide® Services. RefrigerantSide® Services are sold to contractors and end-users whose refrigeration systems are used in commercial air conditioning and industrial processing. These services are offered in addition to refrigerant salesand the Company's traditional refrigerant management services, which consist primarily of reclamation of refrigerants. The Company has created a network ofservice depots that provide a full range of the Company's RefrigerantSide® Services to facilitate the growth and development of its service offerings. The Company focuses its sales and marketing efforts for its RefrigerantSide® Services on customers who the Company believes most readily appreciate andunderstand the value that is provided by its RefrigerantSide® Services offering. In pursuing its sales and marketing strategy, the Company offers itsRefrigerantSide® Services to customers in the following industries: petrochemical, pharmaceutical, industrial power, manufacturing, commercial facility andproperty management and maritime. The Company may incur additional expenses as it further develops and markets its RefrigerantSide® Services offering. In July 2016 the Company was awarded, as prime contractor, a five-year contract, including a five-year renewal option, by the United States DefenseLogistics Agency (“DLA”) for the management, supply, and sale of refrigerants, compressed gases, cylinders and related terms. Results of Operations Year ended December 31, 2016 as compared to the year ended December 31, 2015 Revenues for the year ended December 31, 2016 were $105.5 million, an increase of $25.8 million or 32% from the $79.7 million reported during thecomparable 2015 period. The increase in revenues was attributable to an increase in refrigerant revenues of $26.2 million, offset by a reduction in servicesrevenues of $0.4 million. The increase in refrigerant revenue is primarily related to an increase in the selling price per pound of certain refrigerants sold,which accounted for an increase in revenues of $17.6 million, as well as an increase in the number of pounds of certain refrigerants sold, which accounted foran increase in revenues of $8.6 million. Cost of sales for the year ended December 31, 2016 was $74.4 million or 71% of sales. The cost of sales for the year ended December 31, 2015 was $61.2million or 77% of sales. The decrease in the cost of sales percentage from 77% for the year ended December 31, 2015 to 71% for the year ended December 31,2016 is primarily due to the increase in the selling price per pound of certain refrigerants sold and to a lesser extent, increases in volume sold for the yearended December 31, 2016 compared to the same period in 2015. Operating expenses for the year ended December 31, 2016 were $12.1 million, an increase of $1.8 million from the $10.3 million reported during thecomparable 2015 period. The increase in operating expenses is primarily due to an increase in non-cash, non-recurring stock compensation expense andprofessional fees in 2016 when compared to 2015. Other expense for the year ended December 31, 2016 was $1.7 million, compared to the $0.5 million reported during the comparable 2015 period. TheCompany recorded $0.6 million of expense relating to a deferred acquisition cost in 2016, compared to $0.3 million of income in 2015. Interest expenseincluded in Other expense increased from $0.8 million in 2015 to $1.1 million in 2016. The increase in interest expense is due to increased borrowings underthe PNC Credit Facility. As of December 31, 2016, the Company paid off its borrowings under the PNC Credit Facility. Income tax expense for the year ended December 31, 2016 was $6.6 million compared to income tax expense for the year ended December 31, 2015 of $2.9million. The $3.7 million increase was attributable to higher pre-tax income for 2016 when compared to 2015. For 2016 and 2015 the income tax expensewas for federal and state income tax at statutory rates applied to the pre-tax income. Net income for the year ended December 31, 2016 was $10.6 million, an increase of $5.8 million from the $4.8 million net income reported during thecomparable 2015 period, primarily due to the increase in revenues, partially offset by an increase in operating expenses and income tax expense. Year ended December 31, 2015 as compared to the year ended December 31, 2014 Revenues for the year ended December 31, 2015 were $79.7 million, an increase of $23.9 million or 43% from the $55.8 million reported during thecomparable 2014 period. The increase in revenues was attributable to an increase in refrigerant revenues of $24.7 million, offset in part by a decrease inRefrigerantSide® Services revenues of $0.8 million. The increase in refrigerant revenue is related to both an increase in the selling price per pound of certainrefrigerants sold, which accounted for an increase in revenues of $17.4 million, as well as an increase in the number of pounds of certain refrigerants sold,which accounted for an increase in revenues of $7.3 million. The decrease in RefrigerantSide® Services was primarily attributable to a decrease in the price ofjobs completed when compared to the same period in 2014. 15 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Cost of sales for the year ended December 31, 2015 was $61.2 million or 77% of sales. Cost of sales for year ended December 31, 2014 was $49.4 million, or88% of sales. The decrease in the cost of sales percentage, from 88% in 2014 to 77% in 2015, is related to the increase in the selling price per pound ofrefrigerants, as described in the revenue discussion above. Operating expenses for the year ended December 31, 2015 were $10.3 million, an increase of $2.9 million from the $7.4 million reported during thecomparable 2014 period. The increase in operating expenses is primarily attributable to payroll expenses of $2.4 million, of which approximately $1.1million is associated with payroll for the acquisitions completed in late 2014 and early 2015 as well as approximately $0.5 million of amortization ofintangibles associated with these same acquisitions. Other expense for the year ended December 31, 2015 was $0.5 million, compared to the $0.6 million reported during the comparable 2014 period. Otherexpense consists of interest expense of $0.8 million and $0.6 million for the comparable 2015 and 2014 periods, respectively. The increase in interestexpense is due to increased borrowing on the PNC credit facility. Additionally, other expense includes other income of $0.3 million in 2015 related to the2015 acquisition earn out that was less than the total amount that had been recorded as part of the purchase price accounting for the acquisition of a supplierof refrigerants and compressed gases. Income tax expense for the year ended December 31, 2015 was $2.9 million compared to an income tax benefit of $0.9 million reported during thecomparable 2014 period. For 2015 the income tax expense of $2.9 million was for federal and state income tax at statutory rates applied to the pre-taxincome. For 2014 the income tax benefit of $0.9 million was for federal and state income tax at statutory rates applied to the pre-tax loss, as well as stateincome tax refunds for 2013. Net income for the year ended December 31, 2015 was $4.8 million, an increase of $5.5 million from the $0.7 million net loss reported during the comparable2014 period, primarily due to the increase in revenue and gross profit partially offset by increases in operating expenses, interest expense and income taxexpense. Liquidity and Capital Resources At December 31, 2016, the Company had working capital, which represents current assets less current liabilities, of $97.9 million, an increase of $59.4million from the working capital of $38.5 million at December 31, 2015. The increase in working capital is primarily attributable to increased net income andthe December 2016 public offering, as discussed further below. The Company has historically financed its working capital requirements through cash flows from operations, the issuance of debt and equity securities, andbank borrowings. Net cash provided by operating activities for the year ended December 31, 2016, was $9.3 million compared with net cash used in operating activities of$10.5 million for the comparable 2015 period and net cash provided by operating activities of $1.7 million for the comparable 2014 period. Net cashprovided by operating activities for the 2016 period was primarily attributable to net income, offset by increases in accounts receivable and inventory. Netcash used by operating activities for the 2015 period was primarily attributable to an increase in inventory partially offset by net income, the utilization ofthe deferred tax assets, as well as increases in accounts payable and accrued expenses. Net cash provided by operating activities for the 2014 period wasprimarily attributable to a decrease in income taxes receivable, offset in part by an increase in inventory. Net cash used by investing activities for the year ended December 31, 2016, was $1.7 million, compared with net cash used by investing activities of $3.3million for the comparable 2015 period, and net cash used by investing activities of $8.0 million for the comparable 2014 period. The net cash used byinvesting activities for the 2016 period was primarily related to investment in general purpose equipment for the Company’s reclamations operations. The netcash used by investing activities for the 2015 period was primarily related to the acquisition of a refrigerant and compressed gases supplier, as well asinvestment in general purpose equipment for the Company’s Champaign, Illinois facility. The net cash used by investing activities for the 2014 period wasprimarily related to the acquisition of Polar Technologies, as well as investment in general purpose equipment for the Company’s Champaign, Illinoisfacility. 16 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Net cash provided by financing activities for the year ended December 31, 2016, was $25.1 million compared with net cash provided by financing activitiesof $14.2 million for the comparable 2015 period, and net cash provided by financing activities of $6.6 million for the comparable 2014 period. The net cashprovided by financing activities for the 2016 period was primarily due to the proceeds from the issuance of common stock, offset by the repayment of debtand payment of deferred acquisition cost. The net cash provided by financing activities for the 2015 period was primarily due to increased borrowings on thePNC credit facility. The net cash provided by financing activities for the 2014 period was primarily due to the proceeds from the issuance of common stock,partially offset by the repayment of short term debt and long term debt. The Company had cash and cash equivalents of $33.9 million and $1.3 million at December 31, 2016 and 2015, respectively, with no debt currentlyoutstanding under the current PNC facility. The Company may, to the extent necessary, continue to utilize its cash balances to purchase equipment primarilyfor its operations. The Company continues to assess its capital expenditure needs. The following is a summary of the Company's significant contractual obligations for the periods indicated that existed as of December 31, 2016 (in 000’s): Twelve Month Period Ending December 31, 2017 2018 2019 2020 2021 Thereafter Total Long and short term debt and capital lease obligations: Principal $199 $93 $47 $9 $3 $— $351 Estimated interest (1) 10 5 1 — — — 16 Operating leases 1,368 1,145 464 446 253 35 3,711 Acquisition earn out 789 — — — — — 789 Total contractual obligations $2,366 $1,243 $512 $455 $256 $35 $4,867 (1) The estimated future interest payments on all debt other than revolving debt are based on the respective interest rates applied to the declining principalbalances on each of the notes. On June 22, 2012, a subsidiary of Hudson entered into a Revolving Credit, Term Loan and Security Agreement (the “PNC Facility”) with PNC Bank,National Association, as agent (“Agent” or “PNC”), and such other lenders as may thereafter become a party to the PNC Facility. The Maximum LoanAmount (as defined in the PNC Facility) is currently $50,000,000, and the Maximum Revolving Advance Amount (as defined in the PNC Facility) is$46,000,000. In December 2016, the Company repaid all of its debt under the current PNC facility. The Termination Date of the Facility (as defined in thePNC Facility) is June 30, 2020. Under the terms of the original PNC Facility, as amended by the First Amendment to the PNC Facility, dated February 15, 2013, Hudson could initiallyborrow up to a maximum of $40,000,000 consisting of a term loan in the principal amount of $4,000,000 and revolving loans in a maximum amount up to$36,000,000. Amounts borrowed under the PNC Facility may be used by Hudson for working capital needs and to reimburse drawings under letters of credit. Interest on loans under the PNC Facility is payable in arrears on the first day of each month with respect to loans bearing interest at the domestic rate (as setforth in the PNC Facility) and at the end of each interest period with respect to loans bearing interest at the Eurodollar Rate (as defined in the PNC Facility)or, for Eurodollar Rate Loans (as defined in the PNC Facility) with an interest period in excess of three months, at the earlier of (a) each three months from thecommencement of such Eurodollar Rate Loan or (b) the end of the interest period. Interest charges with respect to loans are computed on the actual principalamount of loans outstanding during the month at a rate per annum equal to (A) with respect to Domestic Rate Loans (as defined in the PNC Facility), the sumof the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) and (B) with respect to Eurodollar Rate Loans, the sum of theEurodollar Rate plus two and one quarter of one percent (2.25%). Hudson granted to PNC, for itself, and as agent for such other lenders as may thereafter become a lender under the PNC Facility, a security interest inHudson’s receivables, intellectual property, general intangibles, inventory and certain other assets. 17 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The PNC Facility contains certain financial and non-financial covenants relating to Hudson, including limitations on Hudson’s ability to pay dividends oncommon stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties,covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts,impairments to guarantees and a change of control. The PNC Facility contains a financial covenant to maintain at all times a Fixed Charge Coverage Ratio ofnot less than 1.10 to 1.00, tested quarterly on a rolling twelve month basis. Fixed Charge Coverage Ratio is defined in the PNC Facility, with respect to anyfiscal period, as the ratio of (a) EBITDA of Hudson for such period, minus unfinanced capital expenditures (as defined in the PNC Facility) made by Hudsonduring such period, minus the aggregate amount of cash taxes paid by Hudson during such period, minus the aggregate amount of dividends anddistributions made by Hudson during such period, minus the aggregate amount of payments made with cash by Hudson to satisfy soil sampling andreclamation related to environmental cleanup at the Company’s former Hillburn, NY facility during such period (to the extent not already included in thecalculation of EBITDA as determined by the Agent) to (b) the aggregate amount of all principal payments due and/or made, except principal paymentsrelated to outstanding revolving advances with regard to all funded debt (as defined in the PNC Facility) of Hudson during such period, plus the aggregateinterest expense of Hudson during such period. EBITDA as defined in the PNC Facility shall mean for any period the sum of (i) earnings before interest andtaxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period, plus (iv) non-cash charges. On October 25, 2013, the Company entered into the Second Amendment to the PNC facility (the “Second PNC Amendment”) which, among other things,waived the requirement to comply with the minimum fixed charge coverage ratio covenant of 1.10 to 1.00 for the fiscal quarter ended September 30, 2013,under the PNC Facility, and suspended the minimum fixed charge ratio covenant until the quarterly period ended March 31, 2015. On July 2, 2014, the Company entered into the Third Amendment to the PNC Facility (the “Third PNC Amendment”) which, among other things, extendedthe term of PNC Facility. Pursuant to the Third PNC Amendment, which was effective June 30, 2014, the Termination Date of the PNC Facility (as defined inthe PNC Facility) was extended to June 30, 2018. On July 1, 2015, the Company entered into the Fourth Amendment to the PNC Facility (the “Fourth PNC Amendment”). The Fourth PNC Amendmentredefined the “Revolving Interest Rate” as well as the “Term Loan Rate” (as defined in the PNC Facility) as follows: “Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one halfof one percent (.50%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) withrespect to the Eurodollar Rate Loans. “Term Loan Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus one half of one percent (.50%) with respect to theDomestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) with respect to Eurodollar Rate Loans. On April 8, 2016, the Company entered into the Fifth Amendment to the PNC Facility (the “Fifth PNC Amendment”). Pursuant to the Fifth PNC Amendment,the Maximum Loan Amount (as defined in the PNC Facility) has been increased from $40,000,000 to $50,000,000, and the Maximum Revolving AdvanceAmount (as defined in the PNC Facility) has been increased from $36,000,000 to $46,000,000. Additionally, pursuant to the Fifth PNC Amendment theTermination Date of the Facility (as defined in the PNC Facility) has been extended to June 30, 2020. In December 2016, the Company repaid its entire debtunder the PNC Facility, with approximately $44 million of availability under the revolving line of credit at December 31, 2016. In addition, there is a$130,000 outstanding letter of credit under the PNC Facility at December 31, 2016. The Company was in compliance with all covenants, under the PNC Facility as of December 31, 2016. The Company’s ability to comply with thesecovenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions,regulations and refrigerant pricing. Although we expect to remain in compliance with all covenants in the PNC Facility, as amended, depending on our futureoperating performance and general economic conditions, we cannot make any assurance that we will continue to be in compliance. The commitments under the PNC Facility will expire and the full outstanding principal amount of the loans, together with accrued and unpaid interest, aredue and payable in full on June 30, 2020, unless the commitments are terminated for any reason or the outstanding principal amount of the loans areaccelerated sooner following an event of default. December 2016 Public Offering On December 8, 2016 the Company entered into an Underwriting Agreement with two investment banking firms for themselves and as representatives for twoother investment banking firms (collectively, the “Underwriters”), in connection with an underwritten offering (the “Offering”) of 6,428,571 shares of theCompany’s common stock, par value $0.01 per share (the “Firm Shares”). Pursuant to the Underwriting Agreement, the Company agreed to sell to theUnderwriters, and the Underwriters agreed to purchase from the Company, an aggregate of 6,428,571 shares of common stock and also granted theUnderwriters a 30 day option to purchase up to 964,285 additional shares of its common stock to cover over-allotments, if any. The Company also agreed toreimburse certain expenses incurred by the Underwriters in the Offering. The closing of the Offering was held on December 14, 2016, at which time the Company sold 7,392,856 shares of its common stock to the Underwriters(including 964,285 shares to cover over-allotments) at a price to the public of $7.00 per share, less underwriting discounts and commissions, and receivedgross proceeds of $51.7 million. The Company incurred approximately $3.3 million of transaction fees in connection with the Offering, resulting in netproceeds of $48.4 million. 18 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operationsand available funds under the PNC Facility. In addition, the proceeds from the Offering may be used for working capital and general corporate purposeswhich may include, among other things, funding additional acquisitions, although we have no present commitments or agreements with respect to any suchtransactions. Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase inoperating expenses or failure to achieve expected revenues from the Company's RefrigerantSide® Services and/or refrigerant sales or additional expansion oracquisition costs that may arise in the future would adversely affect the Company's future capital needs. There can be no assurance that the Company'sproposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not beavailable on acceptable terms, or at all. Inflation Inflation has not historically had a material impact on the Company's operations. Reliance on Suppliers and Customers The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results.Currently the Company purchases virgin HCFC and HFC refrigerants and reclaimable, primarily HCFC and CFC, refrigerants from suppliers and itscustomers. Under the Act the phase-down of future production of certain virgin HCFC refrigerants commenced in 2010 and is scheduled to be fully phasedout by the year 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by the year 2030. To the extent that the Company isunable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms or experiences a decline in demandand/or price for refrigerants sold by it, the Company could realize reductions in revenue from refrigerant sales, which could have a material adverse effect onthe Company’s operating results and financial position. For the year ended December 31, 2016, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 30% of the Company’s revenues. At December 31, 2016, there were no outstanding receivables from these customers. For the year ended December 31, 2015, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 33% of the Company’s revenues. At December 31, 2015, there were no outstanding receivables from these customers. For the year ended December 31, 2014, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 25% of the Company’s revenues. At December 31, 2014, there were $0.7 million in outstanding receivables from these customers. The loss of a principal customer or a decline in the economic prospects of and/or a reduction in purchases of the Company's products or services by any suchcustomer could have a material adverse effect on the Company's operating results and financial position. Seasonality and Weather Conditions and Fluctuations in Operating Results The Company's operating results vary from period to period as a result of weather conditions, requirements of potential customers, non-recurring refrigerantand service sales, availability and price of refrigerant products (virgin or reclaimable), changes in reclamation technology and regulations, timing inintroduction and/or retrofit or replacement of refrigeration equipment, the rate of expansion of the Company's operations, and by other factors. TheCompany's business is seasonal in nature with peak sales of refrigerants occurring in the first nine months of each year. During past years, the seasonaldecrease in sales of refrigerants has resulted in losses particularly in the fourth quarter of the year. In addition, to the extent that there is unseasonably coolweather throughout the spring and summer months, which would adversely affect the demand for refrigerants, there would be a corresponding negativeimpact on the Company. Delays or inability in securing adequate supplies of refrigerants at peak demand periods, lack of refrigerant demand, increasedexpenses, declining refrigerant prices and a loss of a principal customer could result in significant losses. There can be no assurance that the foregoing factorswill not occur and result in a material adverse effect on the Company's financial position and significant losses. The Company believes that to a lesser extentthere is a similar seasonal element to RefrigerantSide® Service revenues as refrigerant sales. The Company is continuing to assess its RefrigerantSide®Service revenues seasonal trend. Off-Balance Sheet Arrangements None. 19 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Recent Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." ThisASU addresses eight specific cash flow issues with the objective of eliminating the existing diversity in practice. The amendments in this ASU are effectivefor public business entities for fiscal years beginning after December 15, 2017, and for interim periods therein. We elected to adopt ASU 2016-15 as ofDecember 31, 2016, and the adoption did not have a material impact on the presentation of the statement of cash flows. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." This ASU requires an organization to measure all expected creditlosses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financialinstitutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The amendments in this ASU areeffective for fiscal years beginning after December 15, 2019, and for interim periods therein. The Company does not expect the amended standard to have amaterial impact on the Company’s results of operations. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Excess tax benefits and deficiencieswill be recognized in the consolidated statement of earnings rather than capital in excess of par value of stock on a prospective basis. A policy election willbe available to account for forfeitures as they occur, with the cumulative effect of the change recognized as an adjustment to retained earnings at the date ofadoption. Excess tax benefits within the consolidated statement of cash flows will be presented as an operating activity (prospective or retrospectiveapplication) and cash payments to tax authorities in connection with shares withheld for statutory tax withholding requirements will be presented as afinancing activity (retrospective application). The guidance is effective beginning in 2017. The Company expects that the future adoption of ASU No. 2016-09 will not have a material impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The new standard establishes a right-of-use ("ROU") model that requires a lessee torecord a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance oroperating, with classification affecting the pattern of expense recognition in the statement of operations. This ASU is effective for fiscal years beginning afterDecember 15, 2018, including interim periods within those fiscal years and early adoption is permitted. A modified retrospective transition approach isrequired for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financialstatements, with certain practical expedients available. At a minimum, adoption of ASU 2016-02 will require recording a ROU asset and a lease liability onthe Company's consolidated balance sheet; however, the Company is still currently evaluating the impact on its consolidated financial statements. See Note10 for the current anticipated future operating lease payments. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 requires thatdeferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in ASU 2015-17 apply to allentities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component ofan entity be offset and presented as a single amount is not affected. For public business entities, the amendments in ASU 2015-17 are effective for financialstatements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company elected to earlyadopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assets and liabilities have been presented as noncurrent on theconsolidated balance sheet as of December 31, 2016. There was no impact on our results of operations as a result of the adoption of ASU 2015-17 and priorperiods have not been adjusted. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting forMeasurement-Period Adjustments”, or ASU 2015-16. This amendment requires the acquirer in a business combination to recognize in the reporting period inwhich adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if theaccounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financialstatements as of the acquisition date for adjustments to provisional amounts. The amendments in ASU 2015-16 are to be applied prospectively uponadoption. The Company adopted ASU 2015-16 in the fourth quarter of 2016. The adoption of the provisions of ASU 2015-16 did not have a material impacton its results of operations or financial position. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenuerecognition standard provides a five-step analysis to determine when and how revenue is recognized. The standard requires that a company recognizesrevenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to beentitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2017 and will be appliedretrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact ofthe pending adoption of ASU 2014-09. 20 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity We are exposed to market risk from fluctuations in interest rates on the PNC Facility. The PNC Facility is a $50,000,000 secured facility. Interest on loansunder the PNC Facility is payable in arrears on the first day of each month with respect to loans bearing interest at the domestic rate (as set forth in the PNCFacility) and at the end of each interest period with respect to loans bearing interest at the Eurodollar rate (as set forth in the PNC Facility) or, for Eurodollarrate loans with an interest period in excess of three months, at the earlier of (a) each three months from the commencement of such Eurodollar rate loan or (b)the end if he interest period. As of December 31, 2016 interest charges with respect to loans are computed on the actual principal amount of loans outstandingduring the month at a rate per annum equal to (A) with respect to Domestic Rate Loans (as defined in the PNC Facility), the sum of the Alternate Base Rate (asdefined in the PNC Facility) plus one half of one percent (.50%) and (B) with respect to Eurodollar Rate Loans, the sum of the Eurodollar Rate plus two andone quarter of one percent (2.25%). There was $0 outstanding balance on the PNC Facility as of December 31, 2016. Future interest rate changes on ourborrowing under the PNC Facility may have an impact on our consolidated results of operations. Refrigerant Market We are also exposed to market risk from fluctuations in the demand, price and availability of refrigerants. To the extent that the Company is unable to sourcesufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms, or experiences a decline in demand and/or price forrefrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales or write downs of inventory, which could have amaterial adverse effect on our consolidated results of operations. Item 8. Financial Statements and Supplementary Data The financial statements appear in a separate section of this report following Part IV. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not Applicable Item 9A. Controls and Procedures Disclosure Controls and Procedures The Company, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and ChiefFinancial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the SecuritiesExchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief ExecutiveOfficer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective and provided reasonableassurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the timeperiods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to theCompany’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding requireddisclosure. Because of the inherent limitations in all control systems, any controls and procedures, no matter how well designed and operated, can provideonly reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Furthermore, the Company’s controls and procedures can be circumvented by the individual acts ofsome persons, by collusion of two or more people or by management override of the control and misstatements due to error or fraud may occur and not bedetected on a timely basis. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarterended December 31, 2016 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 21 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Management’s Report on Internal Control over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as definedin Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance to theCompany’s management and board of directors regarding the preparation and fair presentation of published financial statements and the reliability offinancial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systemsdetermined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The Company’s Chief Executive Officer and Chief Financial Officer have assessed the effectiveness of the Company’s internal control over financialreporting as of December 31, 2016. In making this assessment, the Company’s Chief Executive Officer and Chief Financial Officer have used the criteria setforth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013). Based onour assessment, the Company’s Chief Executive Officer and Chief Financial Officer believe that, as of December 31, 2016, the Company’s internal controlover financial reporting is effective based on those criteria. BDO USA, LLP, the independent registered public accounting firm which audits our financial statements, has audited our internal control over financialreporting as of December 31, 2016 and has expressed an unqualified opinion thereon. 22 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders Hudson Technologies, Inc.Pearl River, NY We have audited Hudson Technologies Inc.’s and Subsidiaries internal control over financial reporting as of December 31, 2016, based on criteria establishedin Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria).Hudson Technologies Inc.’s and Subsidiaries management is responsible for maintaining effective internal control over financial reporting and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control OverFinancial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. In our opinion, Hudson Technologies Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as ofDecember 31, 2016, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsof Hudson Technologies Inc. and Subsidiaries as of December 31, 2016 and 2015, and the consolidated statements of operations, stockholders’ equity, andcash flows for each of the three years in the period ended December 31, 2016 and our report dated March 10, 2017 expressed an unqualified opinion thereon. /s/ BDO USA, LLP Stamford, CTMarch 10, 2017 23 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 9B. Other Information None Part III Item 10. Directors, Executive Officers and Corporate Governance Reference is made to the disclosure required by Items 401, 405, 406, and 407(c)(3), (d)(4), and (d)(5) of Regulation S-K to be contained in the Registrant'sdefinitive proxy statement to be mailed to stockholders on or about April 28, 2017, and to be filed with the Securities and Exchange Commission. Item 11. Executive Compensation Reference is made to the disclosure required by Items 402 and 407(e)(4) and (e)(5) of Regulation S-K to be contained in the Registrant's definitive proxystatement to be mailed to stockholders on or about April 28, 2017, and to be filed with the Securities and Exchange Commission. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Reference is made to the disclosure required by Item 403 of Regulation S-K to be contained in the Registrant's definitive proxy statement to be mailed tostockholders on or about April 28, 2017, and to be filed with the Securities Exchange Commission. Equity Compensation Plan The following table provides certain information with respect to all of Hudson’s equity compensation plans as of December 31, 2016. Number of securities to be issued upon exercise of outstanding options Weighted-average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders 3,214,398 $2.68 3,251,340 Item 13. Certain Relationships and Related Transactions, and Director Independence Reference is made to the disclosure required by Items 404 and 407(a) of Regulation S-K to be contained in the Registrant's definitive proxy statement to bemailed to stockholders on or about April 28, 2017, and to be filed with the Securities and Exchange Commission. Item 14. Principal Accountant Fees and Services Reference is made to the proposal regarding the approval of the Registrant's independent registered public accounting firm to be contained in the Registrant'sdefinitive proxy statement to be mailed to stockholders on or about April 28, 2017, and to be filed with the Securities and Exchange Commission. 24 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Part IV Item 15. Exhibits and Financial Statement Schedules (A)(1)Financial Statements The consolidated financial statements of Hudson Technologies, Inc. appear after Item 16 of this report(A)(2)Financial Statement Schedules None(A)(3)Exhibits3.1Certificate of Incorporation and Amendment. (1)3.2Amendment to Certificate of Incorporation, dated July 20, 1994. (1)3.3Amendment to Certificate of Incorporation, dated October 26, 1994. (1)3.4Certificate of Amendment of the Certificate of Incorporation dated March 16, 1999. (2)3.5Certificate of Correction of the Certificate of Amendment dated March 25, 1999. (2)3.6Certificate of Amendment of the Certificate of Incorporation dated March 29, 1999. (2)3.7Certificate of Amendment of the Certificate of Incorporation dated February 16, 2001. (4)3.8Certificate of Amendment of the Certificate of Incorporation dated March 20, 2002. (5)3.9Amendment to Certificate of Incorporation dated January 3, 2003. (6)3.10Amended and Restated By-Laws adopted July 29, 2011. (14)3.11Certificate of Amendment of the Certificate of Incorporation dated September 15, 2015. (24)10.1Assignment of patent rights from Kevin J. Zugibe to Registrant. (1)10.21997 Stock Option Plan of the Company, as amended. (3) *10.32004 Stock Incentive Plan. (9)*10.4Commercial Mortgage, dated May 27, 2005, between Hudson Technologies Company and Busey Bank. (7)10.5Commercial Installment Mortgage Note, dated May 27, 2005, between Hudson Technologies Company and Busey Bank. (7)10.6Amended and Restated Employment Agreement with Kevin J. Zugibe, as amended. (11)*10.7Agreement with Brian F. Coleman, as amended. (11)*10.8Agreement with James R. Buscemi, as amended. (11)*10.9Agreement with Charles F. Harkins, as amended. (11)*10.10Agreement with Stephen P. Mandracchia, as amended. (11)*10.112008 Stock Incentive Plan. (10)*10.12Form of Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (11)*10.13Form of Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (11)*10.14Form of Non-Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (11)*10.15Form of Non-Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (11)*10.16First Amendment to Amended and Restated Employment Agreement with Kevin J. Zugibe, dated December 30, 2008. (11)*10.17Form of Warrant issued in the 2010 Offering. (12)10.18Form of Agreement and Consent, to amend warrants issued in connection with the 2010 Offering, dated March 7, 2011. (13)10.19Revolving Credit, Term Loan and Security Agreement, dated June 22, 2012, between Hudson Technologies Company as borrower and PNCBank, National Association as lender and agent (15)10.20$23,000,000 Revolving Credit Note, dated June 22, 2012, by Hudson Technologies Company as borrower in favor of PNC (15)10.21$4,000,000 Term Note, dated June 22.2012, by Hudson Technologies Company as borrower in favor of PNC. (15)10.22Guaranty & Suretyship Agreement, dated June 22, 2012, made by Hudson Holdings, Inc. as guarantor on behalf of Hudson TechnologiesCompany. (15)10.23Guaranty & Suretyship Agreement, dated June 22, 2012, made by the Company as guarantor on behalf of Hudson Technologies Company. (15)10.24Patent, Trademarks, and Copyrights Security Agreement, dated June 22, 2012, between the Company and PNC. (15)10.25Patent, Trademarks, and Copyrights Security Agreement, dated June 22, 2012, between Hudson Technologies Company and PNC. (15)10.26Long Term Care Insurance Plan Summary. (16)*10.27First Amendment to Revolving Credit, Term Loan, and Security Agreement between Hudson Technologies Company and PNC dated February15, 2013. (17) 25 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.28$36,000,000 Amended and Restated Revolving Credit Note, dated February 15, 2013, by Hudson Technologies Company as borrower in favorof PNC. (17)10.29Guarantors’ Ratification dated February 15, 2013, by the Company and Hudson Holdings, Inc. (17)10.30Second Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank,National Association dated October 25, 2013 (18)10.31Guarantors’ Ratification dated October 25, 2013 by Hudson Technologies, Inc. and Hudson Holdings, Inc. (18)10.32Amendment No. 1 to the Hudson Technologies, Inc. 2008 Stock Incentive Plan adopted October 22, 2013. (19) *10.33Underwriting Agreement between William Blair & Company, L.L.C., for itself and as representative of the several underwriters, and HudsonTechnologies, Inc., dated June 6, 2014 (20)10.34Third Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank, NationalAssociation, dated July 2, 2014 (21)10.35Guarantor’s Ratification, dated July 1, 2014, by Hudson Technologies, Inc. and Hudson Holdings, Inc. (21) 10.362014 Stock Incentive Plan (22)*10.37Form of Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.38Form of Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (23)*10.39Form of Non-Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.40Form of Non-Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (23)*10.41Form of Incentive Barrier Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.42Form of Non-Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.43Form of Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.44Form of Non-Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.45Fourth Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank,National Association, dated July 1, 2015 (25)10.46Guarantor’s Ratification, dated July 1, 2015, by Hudson Technologies, Inc. and Hudson Holdings, Inc. (25)10.47Second Amended and Restated Employment Agreement with Kevin J. Zugibe. (26)*10.48Amended and Restated Agreement with Brian Coleman (26)*10.49Fifth Amendment to Revolving Credit, Term Loan and Security Agreement between Hudson Technologies Company and PNC, dated April 8,2016. (27)10.50Second Amended and Restated Revolving Credit Note, dated April 8, 2016 by Hudson Technologies Company as borrower in favor of PNC.(27)10.51Guarantor’s’ Ratification, dated April 8, 2016 by the Registrant and Hudson Holdings, Inc. (27)10.52Agreement, dated September 5, 2016, between Hudson Technologies, Inc. and Nat Krishnumurti. (28)*10.53Underwriting Agreement among William Blair & Company, L.L.C. and Craig-Hallum Capital Group LLP, for themselves and as representativesof several underwriters, and Hudson Technologies, Inc. dated December 8, 2016. (29)14Code of Business Conduct and Ethics. (8)21Subsidiaries of the Company. (30)23.1Consent of BDO USA, LLP. (30) 31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (30) 31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (30) 32.1Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of2002. (30)32.2Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of2002. (30)101Interactive data file pursuant to Rule 405 of Regulation S-T. (30) (1)Incorporated by reference to the comparable exhibit filed with the Company's Registration Statement on Form SB-2 (No. 33-80279-NY).(2)Incorporated by reference to the comparable exhibit filed with the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30,1999.(3)Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year ended December 31,1999.(4)Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year ended December 31,2000. 26 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (5)Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-KSB for the year ended December 31,2001.(6)Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year ended December 31,2002.(7)Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30,2005.(8)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K, for the event dated March 3, 2005,and filed May 31, 2005.(9)Incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed August 18, 2004. (10)Incorporated by reference to Appendix I to the Company’s Definitive Proxy Statement on Schedule 14A filed July 29, 2008.(11)Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December 31,2008.(12)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated July 1, 2010 andfiled July 2, 2010.(13)Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December 31,2010.(14)Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form-10-Q for the quarter ended June 30,2011.(15)Incorporated by reference to the comparable exhibit filed with the Company’s Report on Form 8-K for the event dated June 22, 2012 and filedJune 28, 2012.(16)Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September30, 2012.(17)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated February 15,2013 and filed February 20, 2013.(18)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated October 25, 2013and filed October 31, 2013.(19)Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December 31,2013.(20)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed on June 6, 2014.(21)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed on July 7, 2014.(22)Incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed August 12, 2014. (23)Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September30, 2014.(24)Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September30, 2015.(25)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated July 7, 2015 andfiled July 8, 2015.(26)Incorporated by reference to the comparable exhibit filed with the Company Annual Report on form 10-K for the year ended December 31,2015.(27)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed April 14, 2016.(28)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed September 9, 2016.(29)Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed December 9, 2016.(30)Filed herewith(*)Denotes Management Compensation Plan, agreement or arrangement. Item 16. Form 10-K SummaryNone. 27 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc.Consolidated Financial Statements Contents Report of Independent Registered Public Accounting Firm 29Audited Consolidated Financial Statements: Consolidated Balance Sheets as of December 31, 2016 and 2015 30Consolidated Statements of Operations for the years ended December 31, 2016, December 31, 2015, and December 31, 2014 31Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, December 31, 2015, and December 31, 2014 32Consolidated Statements of Cash Flows for the years ended December 31, 2016, December 31, 2015, and December 31, 2014 33Notes to the Consolidated Financial Statements 34 28 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders Hudson Technologies, Inc.Pearl River, NY We have audited the accompanying consolidated balance sheets of Hudson Technologies, Inc. and Subsidiaries as of December 31, 2016 and 2015 and therelated consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2016. Theseconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Webelieve that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hudson Technologies,Inc. and subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2016, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Hudson Technologies, Inc.’sinternal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 10, 2017 expressed an unqualified opinionthereon. /s/ BDO USA, LLP Stamford, CTMarch 10, 2017 29 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. and SubsidiariesConsolidated Balance Sheets(Amounts in thousands, except for share and par value amounts) December 31, 2016 2015 Assets Current assets: Cash and cash equivalents $33,931 $1,258 Trade accounts receivable - net 4,797 4,414 Inventories 68,601 61,897 Deferred tax asset — 376 Prepaid expenses and other current assets 847 1,524 Total current assets 108,176 69,469 Property, plant and equipment, less accumulated depreciation 7,532 7,536 Deferred tax asset 2,532 3,287 Goodwill 856 856 Intangible assets, less accumulated amortization 3,299 3,787 Other assets 75 76 Total Assets $122,470 $85,011 Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $5,110 $5,792 Accrued expenses and other current liabilities 2,888 3,018 Accrued payroll 1,782 1,577 Income taxes payable 322 — Short-term debt and current maturities of long-term debt 199 20,573 Total current liabilities 10,301 30,960 Other liabilities - 333 Long-term debt, less current maturities 152 4,293 Total Liabilities 10,453 35,586 Commitments and contingencies Stockholders' equity: Preferred stock, shares authorized 5,000,000: Series A Convertible preferred stock, $0.01 par value ($100liquidation preference value); shares authorized 150,000; none issued or outstanding — — Common stock, $0.01 par value; shares authorized 100,000,000; issued and outstanding 41,465,820 and32,804,617 415 328 Additional paid-in capital 114,032 62,163 Accumulated deficit (2,430) (13,066)Total Stockholders' Equity 112,017 49,425 Total Liabilities and Stockholders' Equity $122,470 $85,011 See Accompanying Notes to the Consolidated Financial Statements. 30 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. and SubsidiariesConsolidated Statements of Operations(Amounts in thousands, except for share and per share amounts) For the years ended December 31, 2016 2015 2014 Revenues $105,481 $79,722 $55,810 Cost of sales 74,395 61,233 49,364 Gross profit 31,086 18,489 6,446 Operating expenses: Selling and marketing 4,310 4,179 2,723 General and administrative 7,829 6,129 4,708 Total operating expenses 12,139 10,308 7,431 Operating income (loss) 18,947 8,181 (985) Other income (expense): Interest expense (1,118) (776) (641)Other income (expense) (564) 302 — Total other (expense) (1,682) (474) (641) Income (loss) before income taxes 17,265 7,707 (1,626) Income tax expense (benefit) 6,628 2,944 (906) Net income (loss) $10,637 $4,763 $(720) Net income (loss) per common share - Basic $0.31 $0.15 $(0.02)Net income (loss) per common share - Diluted $0.30 $0.14 $(0.02) Weighted average number of shares outstanding – Basic 34,104,476 32,546,840 29,122,746 Weighted average number of shares outstanding – Diluted 35,416,910 33,936,099 29,122,746 See Accompanying Notes to the Consolidated Financial Statements. 31 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. and SubsidiariesConsolidated Statements of Stockholders' Equity(Amounts in thousands, except for share amounts) Common Stock Additional Accumulated Shares Amount Paid-in Capital Deficit Total Balance at January 1, 2014 25,070,386 $251 $44,944 $(17,109) $28,086 Sale of common stock 6,900,000 69 15,547 — 15,616 Issuance of common stock upon exercise of stockoptions 341,890 3 306 — 309 Value of share-based arrangements — — 708 — 708 Net loss — 0 — (720) (720) Balance at December 31, 2014 32,312,276 $323 $61,505 $(17,829) $43,999 Issuance of common stock upon exercise of stockoptions and warrants 482,506 5 455 — 460 Issuance of common stock for services 9,835 — 30 — 30 Value of share-based arrangements — — 173 — 173 Net income — — — 4,763 4,763 Balance at December 31, 2015 32,804,617 $328 $62,163 $(13,066) $49,425 Sale of common stock 7,392,856 74 48,282 — 48,356 Issuance of common stock upon exercise of stockoptions and warrants 1,251,199 13 2,691 — 2,704 Excess tax benefits from exercise of stock options 189 — 189 Issuance of common stock for services 17,148 — 105 — 105 Value of share-based arrangements — — 601 — 601 Net income — — — 10,637 10,637 Balance at December 31, 2016 41,465,820 $415 $114,032 $(2,430) $112,017 See Accompanying Notes to the Consolidated Financial Statements. 32 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. and SubsidiariesConsolidated Statements of Cash Flows(Amounts in thousands) For the years ended December 31, 2016 2015 2014 Cash flows from operating activities: Net income (loss) $10,637 $4,763 $(720)Adjustments to reconcile net income (loss): Depreciation and amortization 2,225 2,072 979 Allowance for doubtful accounts 21 99 31 Amortization of deferred finance cost 154 75 112 Value of share-based payment arrangements 706 203 708 Excess tax benefits from stock option exercise (189) — — Deferred tax expense (benefit) 1,080 2,768 (857)Other non cash (income) expenses 564 (302) 414 Changes in assets and liabilities (net of acquisitions): Trade accounts receivable (404) (545) (293)Inventories (6,704) (23,430) (1,150)Prepaid and other assets 523 (465) (548)Income taxes payable 562 — 2,709 Accounts payable and accrued expenses 173 4,259 316 Cash provided (used) by operating activities 9,348 (10,503) 1,701 Cash flows from investing activities: Payments for acquisitions — (2,424) (7,368)Additions to patents — (12) (10)Additions to property, plant and equipment (1,733) (889) (716)Investment in affiliates — — 63 Cash used in investing activities (1,733) (3,325) (8,031) Cash flows from financing activities: Net proceeds from issuances of common stock 51,060 460 15,925 Excess tax benefits from stock-based compensation 189 — — (Repayments of) borrowing from short-term debt - net (20,227) 14,172 (9,024)Proceeds from long-term debt 61 292 — Repayment of long-term debt (4,349) (328) (305)Payment of deferred acquisition cost (1,676) (445) — Cash provided by financing activities 25,058 14,151 6,596 Increase in cash and cash equivalents 32,673 323 266 Cash and cash equivalents at beginning of period 1,258 935 669 Cash and cash equivalents at end of period $33,931 $1,258 $935 Supplemental disclosure of cash flow information: Cash paid during period for interest $964 $701 $529 Cash paid for income taxes $4,985 $— $— Non cash investing activity: Deferred acquisition cost $— $1,982 $667 See Accompanying Notes to the Consolidated Financial Statements 33 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Hudson Technologies, Inc. and SubsidiariesNotes to the Consolidated Financial Statements Note 1 - Summary of Significant Accounting Policies Business Hudson Technologies, Inc., incorporated under the laws of New York on January 11, 1991, is a refrigerant services company providing innovative solutionsto recurring problems within the refrigeration industry. The Company’s operations consist of one reportable segment. The Company's products and servicesare primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerantmanagement services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer's site, consisting of systemdecontamination to remove moisture, oils and other contaminants. In addition, the Company’s SmartEnergy OPSTM service is a web-based real timecontinuous monitoring service applicable to a facility’s refrigeration systems and other energy systems. The Company’s Chiller Chemistry® and ChillSmart® services are also predictive and diagnostic service offerings. As a component of the Company’s products and services, the Company also participatesin the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company. Unlessthe context requires otherwise, references to the “Company”, “Hudson”, “we", “us”, “our”, or similar pronouns refer to Hudson Technologies, Inc. and itssubsidiaries. In preparing the accompanying consolidated financial statements, and in accordance with ASC855-10 “Subsequent Events”, the Company’s management hasevaluated subsequent events through the date that the financial statements were filed. In the opinion of management, all estimates and adjustments considered necessary for a fair presentation have been included and all such adjustments werenormal and recurring. Consolidation The consolidated financial statements represent all companies of which Hudson directly or indirectly has majority ownership or otherwise controls.Significant intercompany accounts and transactions have been eliminated. The Company's consolidated financial statements include the accounts of wholly-owned subsidiaries Hudson Holdings, Inc. and Hudson Technologies Company. The Company does not present a statement of comprehensive income as itscomprehensive income is the same as its net income. Fair Value of Financial Instruments The carrying values of financial instruments including trade accounts receivable and accounts payable approximate fair value at December 31, 2016 andDecember 31, 2015, because of the relatively short maturity of these instruments. The carrying value of short and long-term debt approximates fair value, dueto the variable rate nature of the debt, as of December 31, 2016 and December 31, 2015. Please see Note 2 for further details on fair value description andhierarchy of the Company’s deferred acquisition cost. Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of temporary cash investments and tradeaccounts receivable. The Company maintains its temporary cash investments in highly-rated financial institutions and, at times, the balances exceed FDICinsurance coverage. The Company's trade accounts receivable are primarily due from companies throughout the United States. The Company reviews eachcustomer's credit history before extending credit. The Company establishes an allowance for doubtful accounts based on factors associated with the credit risk of specific accounts, historical trends, and otherinformation. The carrying value of the Company’s accounts receivable is reduced by the established allowance for doubtful accounts. The allowance fordoubtful accounts includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve for the remaining accountsreceivable balances. The Company adjusts its reserves based on factors that affect the collectability of the accounts receivable balances. For the year ended December 31, 2016, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 30% of the Company’s revenues. At December 31, 2016, there were no outstanding receivables from these customers. For the year ended December 31, 2015, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 33% of the Company’s revenues. At December 31, 2015, there were no outstanding receivables from these customers. 34 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. For the year ended December 31, 2014, two customers each accounted for 10% or more of the Company’s revenues and, in the aggregate these two customersaccounted for 25% of the Company’s revenues. At December 31, 2014, there were $0.7 million in outstanding receivables from these customers. The loss of a principal customer or a decline in the economic prospects of and/or a reduction in purchases of the Company's products or services by any suchcustomer could have a material adverse effect on the Company's operating results and financial position. Cash and Cash Equivalents Temporary investments with original maturities of ninety days or less are included in cash and cash equivalents. Inventories Inventories, consisting primarily of refrigerant products available for sale, are stated at the lower of cost, on a first-in first-out basis, or market. Where themarket price of inventory is less than the related cost, the Company may be required to write down its inventory through a lower of cost or market adjustment,the impact of which would be reflected in cost of sales on the Consolidated Statements of Operations. Any such adjustment would be based on management’sjudgment regarding future demand and market conditions and analysis of historical experience. Property, Plant and Equipment Property, plant and equipment are stated at cost, including internally manufactured equipment. The cost to complete equipment that is under construction isnot considered to be material to the Company's financial position. Provision for depreciation is recorded (for financial reporting purposes) using the straight-line method over the useful lives of the respective assets. Leasehold improvements are amortized on a straight-line basis over the shorter of economic life orterms of the respective leases. Costs of maintenance and repairs are charged to expense when incurred. Due to the specialized nature of the Company's business, it is possible that the Company's estimates of equipment useful life periods may change in thefuture. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchasemethod of accounting. The Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is morelikely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, we identify and consider thesignificance of relevant key factors, events, and circumstances that affect the fair value of our goodwill. These factors include external factors such asmacroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and planned financial performance. If the results of thequalitative assessment conclude that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitativeimpairment testing is performed. Revenues and Cost of Sales Revenues are recorded upon completion of service or product shipment and passage of title to customers in accordance with contractual terms. The Companyevaluates each sale to ensure collectability. In addition, each sale is based on an arrangement with the customer and the sales price to the customer is fixed. InJuly 2016 the Company was awarded, as prime contractor, a five-year contract, including a five-year renewal option, by the United States Defense LogisticsAgency (“DLA”) for the management, supply, and sale of refrigerants, compressed gases, cylinders and related terms. Due to the contract containing multipleelements, the Company assessed the arrangement in accordance with Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition: Multiple-Element Arrangements. ASC 605-25 addresses when and how a company that is providing more than one revenue generating activity or deliverable shouldseparate and account for a multiple element arrangement. The Company determined that the sale of refrigerants and the management services provided underthe contract each have stand-alone value, and accordingly revenue related to the sale of product is recognized at the time of product shipment, and servicerevenue is recognized on a straight-line basis over the term of the arrangement. Annual service revenue under the contract is approximately $2.4 million, ofwhich $1.3 million was recognized during 2016 and recorded in Product and related sales. Cost of sales is recorded based on the cost of products shipped or services performed and related direct operating costs of the Company's facilities. To theextent that the Company charges its customers shipping fees, such amounts are included as a component of revenue and the corresponding costs are includedas a component of cost of sales. 35 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company's revenues are derived from Product and related sales and RefrigerantSide® Services revenues. The revenues for each of these lines are asfollows: Years Ended December 31, 2016 2015 2014 (in thousands) Product and related sales $101,344 $75,154 $50,460 RefrigerantSide® Services 4,137 4,568 5,350 Total $105,481 $79,722 $55,810 Income Taxes The Company utilizes the asset and liability method for recording deferred income taxes, which provides for the establishment of deferred tax asset orliability accounts based on the difference between tax and financial reporting bases of certain assets and liabilities. The tax benefit associated with theCompany's net operating loss carry forwards (“NOLs”) is recognized to the extent that the Company is expected to recognize future taxable income. TheCompany assesses the recoverability of its deferred tax assets based on its expectation that it will recognize future taxable income and adjusts its valuationallowance accordingly. As of December 31, 2016 and 2015, the net deferred tax asset was $2.5 million and $3.7 million, respectively. Certain states either do not allow or limit NOLs and as such the Company will be liable for certain state taxes. To the extent that the Company utilizes itsNOLs, it will not pay tax on such income but may be subject to the federal alternative minimum tax. In addition, to the extent that the Company’s netincome, if any, exceeds the annual NOL limitation it will pay income taxes based on existing statutory rates. Moreover, as a result of a “change in control”, asdefined by the Internal Revenue Service, the Company’s ability to utilize its existing NOLs is subject to certain annual limitations. All of the Company’sremaining $5.4 million of NOLs are subject to annual limitations of $1.3 million. As a result of an Internal Revenue Service audit, the 2013 and prior federal tax years have been closed. The Company operates in many states throughout theUnited States and, as of December 31, 2016, the various states’ statutes of limitations remain open for tax years subsequent to 2009. The Company recognizesinterest and penalties, if any, relating to income taxes as a component of the provision for income taxes. The Company evaluates uncertain tax positions, if any, by determining if it is more likely than not to be sustained upon examination by the taxingauthorities. As of December 31, 2016 and 2015, the Company had no uncertain tax positions. Income per Common and Equivalent Shares If dilutive, common equivalent shares (common shares assuming exercise of options and warrants) utilizing the treasury stock method are considered in thepresentation of diluted earnings per share. The reconciliation of shares used to determine net income per share is as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net income (loss) $ 10,637 $ 4,763 $ (720) Weighted average number of shares - basic 34,104,476 32,546,840 29,122,746 Shares underlying warrants — 300,846 — Shares underlying options 1,312,434 1,088,413 — Weighted average number of shares outstanding – diluted 35,416,910 33,936,099 29,122,746 During the years ended December 31, 2016, 2015 and 2014, certain options and warrants aggregating 73,034, 106,290 and 4,449,624 shares, respectively,have been excluded from the calculation of diluted shares, due to the fact that their effect would be anti-dilutive. Estimates and Risks The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to makeestimates and assumptions that affect reported amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities, and the results ofoperations during the reporting period. Actual results could differ from these estimates. 36 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company utilizes both internal and external sources to evaluate potential current and future liabilities for various commitments and contingencies. Inthe event that the assumptions or conditions change in the future, the estimates could differ from the original estimates. Several of the Company's accounting policies involve significant judgments, uncertainties and estimates. The Company bases its estimates on historicalexperience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for makingjudgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. To theextent that actual results differ from management's judgments and estimates, there could be a material adverse effect on the Company. On a continuous basis,the Company evaluates its estimates, including, but not limited to, those estimates related to its allowance for doubtful accounts, inventory reserves, andvaluation allowance for the deferred tax assets relating to its NOLs and commitments and contingencies. With respect to accounts receivable, the Companyestimates the necessary allowance for doubtful accounts based on both historical and anticipated trends of payment history and the ability of the customer tofulfill its obligations. For inventory, the Company evaluates both current and anticipated sales prices of its products to determine if a write down of inventoryto net realizable value is necessary. In determining the Company’s valuation allowance for its deferred tax assets, the Company assesses its ability to generatetaxable income in the future. The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results.Currently the Company purchases virgin hydrochlorofluorocarbon (“HCFC”) and hydrofluorocarbon (“HFC”) refrigerants and reclaimable, primarily HCFC,HFC and chlorofluorocarbon (“CFC”), refrigerants from suppliers and its customers. Effective January 1, 1996, the Clean Air Act (the “Act”) prohibited theproduction of virgin CFC refrigerants and limited the production of virgin HCFC refrigerants. Effective January 2004, the Act further limited the productionof virgin HCFC refrigerants and federal regulations were enacted which established production and consumption allowances for HCFC refrigerants whichimposed limitations on the importation of certain virgin HCFC refrigerants. Under the Act, production of certain virgin HCFC refrigerants is scheduled to bephased out during the period 2010 through 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by 2030. In April 2013, theEnvironmental Protection Agency (“EPA”) published a final rule providing for the production or importation of 63 million and 51 million pounds of HCFC-22 in 2013 and 2014, respectively. In October 2014, the EPA published a final rule providing further reductions in the production and consumptionallowances for virgin HCFC refrigerants for the years 2015 through 2019 (the “Final Rule”). In the Final Rule, the EPA has established a linear draw down forthe production or importation of virgin HCFC-22 that started at approximately 22 million pounds in 2015 and reduces by approximately 4.5 million poundseach year and ends at zero in 2020. To the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms orexperiences a decline in demand and/or price for refrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales,which could have a material adverse effect on its operating results and its financial position. The Company is subject to various legal proceedings. The Company assesses the merit and potential liability associated with each of these proceedings. Inaddition, the Company estimates potential liability, if any, related to these matters. To the extent that these estimates are not accurate, or circumstanceschange in the future, the Company could realize liabilities, which could have a material adverse effect on its operating results and its financial position. Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flowsexpected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which thecarrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less thecost to sell. Recent Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." ThisASU addresses eight specific cash flow issues with the objective of eliminating the existing diversity in practice. The amendments in this ASU are effectivefor public business entities for fiscal years beginning after December 15, 2017, and for interim periods therein. We elected to adopt ASU 2016-15 as ofDecember 31, 2016, and the adoption did not have a material impact on the presentation of the statement of cash flows. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." This ASU requires an organization to measure all expected creditlosses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financialinstitutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The amendments in this ASU areeffective for fiscal years beginning after December 15, 2019, and for interim periods therein. The Company does not expect the amended standard to have amaterial impact on the Company’s results of operations. 37 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Excess tax benefits and deficiencieswill be recognized in the consolidated statement of earnings rather than capital in excess of par value of stock on a prospective basis. A policy election willbe available to account for forfeitures as they occur, with the cumulative effect of the change recognized as an adjustment to retained earnings at the date ofadoption. Excess tax benefits within the consolidated statement of cash flows will be presented as an operating activity (prospective or retrospectiveapplication) and cash payments to tax authorities in connection with shares withheld for statutory tax withholding requirements will be presented as afinancing activity (retrospective application). The guidance is effective beginning in 2017. The Company expects that the future adoption of ASU No. 2016-09 will not have a material impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The new standard establishes a right-of-use ("ROU") model that requires a lessee torecord a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance oroperating, with classification affecting the pattern of expense recognition in the statement of operations. This ASU is effective for fiscal years beginning afterDecember 15, 2018, including interim periods within those fiscal years and early adoption is permitted. A modified retrospective transition approach isrequired for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financialstatements, with certain practical expedients available. At a minimum, adoption of ASU 2016-02 will require recording a ROU asset and a lease liability onthe Company's consolidated balance sheet; however, the Company is still currently evaluating the impact on its consolidated financial statements. See Note10 for the current anticipated future operating lease payments. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 requires thatdeferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in ASU 2015-17 apply to allentities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component ofan entity be offset and presented as a single amount is not affected. For public business entities, the amendments in ASU 2015-17 are effective for financialstatements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company elected to earlyadopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assets and liabilities have been presented as noncurrent on theconsolidated balance sheet as of December 31, 2016. There was no impact on our results of operations as a result of the adoption of ASU 2015-17 and priorperiods have not been adjusted. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting forMeasurement-Period Adjustments”, or ASU 2015-16. This amendment requires the acquirer in a business combination to recognize in the reporting period inwhich adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if theaccounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financialstatements as of the acquisition date for adjustments to provisional amounts. The amendments in ASU 2015-16 are to be applied prospectively uponadoption. The Company adopted ASU 2015-16 in the fourth quarter of 2016. The adoption of the provisions of ASU 2015-16 did not have a material impacton its results of operations or financial position. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenuerecognition standard provides a five-step analysis to determine when and how revenue is recognized. The standard requires that a company recognizesrevenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to beentitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2017 and will be appliedretrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact ofthe pending adoption of ASU 2014-09. Note 2- Fair Value ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. The Company often utilizes certain assumptions that market participants would use in pricing the asset orliability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the useof unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fairvalue hierarchy. 38 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assetsor liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services foridentical or similar assets or liabilities. Level 3: Valuations for assets and liabilities include certain unobservable inputs in the assumptions and projections used in determining the fair valueassigned to such assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fairvalue hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in itsentirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considersfactors specific to the asset or liability. The valuation methodologies used for the Company's financial instruments measured on a recurring basis at fair value,including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below. (in thousands) As of December 31, 2016 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Liabilities: Deferred acquisition cost $789 $789 $789 (in thousands) As of December 31, 2015 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Liabilities: Deferred acquisition cost $1,902 $1,902 $1,902 The following is a rollforward of deferred acquisition costs in 2015 and 2016. (in thousands) Acquisition of Polar 2015Acquisition (1) Total DeferredAcquisition CostPayable Balance at January 1, 2015 $667 $— $667 2015 Acquisition (1) — 1,982 1,982 Payments — (445) (445)Total adjustments included in earnings — (302) (302)Balance at December, 31, 2015 $667 $1,235 $1,902 Payments (667) (1,010) (1,677)Total adjustments included in earnings — 564 564 Balance at December 31, 2016 $— $789 $789 (1) Represents acquisition of a supplier of refrigerants and compressed gases in January 2015. Note 3 - Trade accounts receivable - net At December 31, 2016, 2015, and 2014 trade accounts receivable are net of reserves for doubtful accounts of $0.4 million, $0.3 million and $0.2 million,respectively. The following table represents the activity occurring in the reserves for doubtful accounts in 2016, 2015 and 2014. (in thousands) Beginning Balance at January 1 Net additions charged to Operations Deductions and Other (1) Ending Balance at December 31 2016 $335 $21 $9 $365 2015 $244 $99 $(8) $335 2014 $227 $31 $(14) $244 (1)2016 includes a reclassification adjustment not affecting operations Note 4- Inventories Inventories, net of reserve, consist of the following: December 31, 2016 2015 (in thousands) Refrigerant and cylinders $11,168 $11,167 Packaged refrigerants 57,433 50,730 Total $68,601 $61,897 39 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Note 5 - Property, plant and equipment Elements of property, plant and equipment are as follows: December 31, 2016 2015 Estimated Lives(in thousands) Property, plant and equipment - Land $535 $535 - Buildings 830 830 39 years - Building improvements 873 810 39 years - Equipment 13,423 13,206 3-7 years - Equipment under capital lease 248 234 5-7 years - Vehicles 1,360 1,311 5 years - Lab and computer equipment, software 2,652 2,499 3-5 years - Furniture & fixtures 289 276 7-8 years - Leasehold improvements 119 110 3 years - Equipment under construction 1,654 491 Subtotal 21,983 20,302 Accumulated depreciation 14,451 12,766 Total $7,532 $7,536 Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $1.7 million, $1.6 million, and $0.9 million, respectively. Note 6 - Income taxes Income tax expense (benefit) for the years ended December 31, 2016, 2015 and 2014 was $6.6 million, $2.9 million and ($0.9 million), respectively. Theincome tax expense (benefit) for each of the years ended December 31, 2016, 2015 and 2014 was for federal and state income tax at statutory rates applied tothe pre-tax income (loss) for each of the periods. The following summarizes the (benefit) / provision for income taxes: Years Ended December 31, 2016 2015 2014 (in thousands) Current: Federal $4,981 $174 $0 State and local 567 2 (49) 5,548 176 (49)Deferred: Federal 949 2,460 (767)State and local 131 308 (90) 1,080 2,768 (857)Expense (benefit) for income taxes $6,628 $2,944 $(906) Reconciliation of the Company's actual tax rate to the U.S. Federal statutory rate is as follows: Years ended December 31, 2016 2015 2014 Income tax rates - Statutory U.S. federal rate 35% 34% 34% - States, net U.S. benefits 3% 4% 4% - Tax benefit from prior year 0% 0% 18%Total 38% 38% 56% As of December 31, 2016, the Company had NOL's of approximately $5.4 million expiring through 2023, all of which are subject to annual limitations of$1.3 million. 40 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Elements of deferred income tax assets (liabilities) are as follows: December 31, 2016 2015 (in thousands) Deferred tax assets (liabilities) - Depreciation & amortization $(236) $(412) - Reserves for doubtful accounts 139 127 - Inventory reserve 304 250 - Non qualified stock options 247 108 - NOL 2,078 3,430 - AMT credit carryforward — 160 Total $2,532 $3,663 As discussed above in Note 1, the Company elected to early adopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assetsand liabilities have been presented as noncurrent on the consolidated balance sheet as of December 31, 2016. The Company considered its projected future taxable income, and associated annual limitations, in determining the amount of deferred tax assets torecognize. The Company believes that given the extended time period that it may recognize its deferred tax assets, it is more likely than not it will realize thebenefit of these assets prior to their expiration. Note 7 – Goodwill and intangible assets Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchasemethod of accounting. The Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is morelikely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, we identify and consider thesignificance of relevant key factors, events, and circumstances that affect the fair value of our goodwill. These factors include external factors such asmacroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and planned financial performance. If the results of thequalitative assessment conclude that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitativeimpairment testing is performed. The impairment test was performed at the operating segment level as the acquired businesses have been fully integrated into our existing structure. Based onthe results of the impairment assessment performed, we concluded that it is more likely than not that the fair value of our goodwill significantly exceeds thecarrying value. At December 31, 2016 the Company had $0.9 million of goodwill, of which $0.4 million is attributable to the acquisition of Polar Technologies, LLC and$0.4 million is attributable to the acquisition of a supplier of refrigerants and compressed gases. Please see Note 12 for further details. The Company’s other intangible assets consist of the following: December 31, 2016 2015 (in thousands) Amortization Gross Gross Period Carrying Accumulated Carrying Accumulated (in years) Amount Amortization Net Amount Amortization Net Intangible Assets with determinable lives Patents 5 $386 $366 $20 $387 $352 $35 Covenant Not to Compete 6 - 10 1,270 322 948 1,270 171 1,099 Customer Relationships 3 - 10 2,000 452 1,548 2,000 236 1,764 Trade Name 2 30 30 0 30 24 6 Licenses 10 1,000 217 783 1,000 117 883 Totals identifiable intangible assets $4,686 $1,387 $3,299 $4,687 $900 $3,787 Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group maynot be recoverable. No impairments were recognized for the years ended December 31, 2016 and December 31, 2015. The amortization of intangible assets for the years ended December 31, 2016, 2015, and 2014 were $0.5 million, $0.5 million and $0.1 million respectively.Future estimated amortization expense is as follows: 2017 - $0.5 million, 2018 - $0.4 million, 2019 - $0.4 million, 2020 - $0.4 million, 2021- $0.4 millionand thereafter - $1.1 million. 41 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Note 8 - Short-term and long-term debt Elements of short-term and long-term debt are as follows: December 31, 2016 2015 (in thousands) Short-term & long-term debt Short-term debt: - Bank credit line $— $20,227 - Long-term debt: current 199 346 Subtotal 199 20,573 Long-term debt: - Bank credit line — 4,000 - Building and land mortgage 93 260 - Vehicle and equipment loans 70 145 - Capital lease obligations 188 234 - Less: current maturities (199) (346)Subtotal 152 4,293 Total short-term & long-term debt $351 $24,866 Bank Credit Line On June 22, 2012, a subsidiary of Hudson entered into a Revolving Credit, Term Loan and Security Agreement (the “PNC Facility”) with PNC Bank,National Association, as agent (“Agent” or “PNC”), and such other lenders as may thereafter become a party to the PNC Facility. The Maximum LoanAmount (as defined in the PNC Facility) is currently $50,000,000, and the Maximum Revolving Advance Amount (as defined in the PNC Facility) is$46,000,000. In December 2016, the Company repaid all of its debt under the current PNC Facility, with approximately $44 million of availability under therevolving line of credit at December 31, 2016. In addition, there is a $130,000 outstanding letter of credit under the PNC Facility at December 31, 2016. TheTermination Date of the Facility (as defined in the PNC Facility) is June 30, 2020. Under the terms of the original PNC Facility, as amended by the First Amendment to the PNC Facility, dated February 15, 2013, Hudson could initiallyborrow up to a maximum of $40,000,000 consisting of a term loan in the principal amount of $4,000,000 and revolving loans in a maximum amount up to$36,000,000. Amounts borrowed under the PNC Facility may be used by Hudson for working capital needs and to reimburse drawings under letters of credit. Interest on loans under the PNC Facility is payable in arrears on the first day of each month with respect to loans bearing interest at the domestic rate (as setforth in the PNC Facility) and at the end of each interest period with respect to loans bearing interest at the Eurodollar Rate (as defined in the PNC Facility)or, for Eurodollar Rate Loans (as defined in the PNC Facility) with an interest period in excess of three months, at the earlier of (a) each three months from thecommencement of such Eurodollar Rate Loan or (b) the end of the interest period. Interest charges with respect to loans are computed on the actual principalamount of loans outstanding during the month at a rate per annum equal to (A) with respect to Domestic Rate Loans (as defined in the PNC Facility), the sumof the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) and (B) with respect to Eurodollar Rate Loans, the sum of theEurodollar Rate plus two and one quarter of one percent (2.25%). Hudson granted to PNC, for itself, and as agent for such other lenders as may thereafter become a lender under the PNC Facility, a security interest inHudson’s receivables, intellectual property, general intangibles, inventory and certain other assets. The PNC Facility contains certain financial and non-financial covenants relating to Hudson, including limitations on Hudson’s ability to pay dividends oncommon stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties,covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts,impairments to guarantees and a change of control. The PNC Facility contains a financial covenant to maintain at all times a Fixed Charge Coverage Ratio ofnot less than 1.10 to 1.00, tested quarterly on a rolling twelve month basis. Fixed Charge Coverage Ratio is defined in the PNC Facility, with respect to anyfiscal period, as the ratio of (a) EBITDA of Hudson for such period, minus unfinanced capital expenditures (as defined in the PNC Facility) made by Hudsonduring such period, minus the aggregate amount of cash taxes paid by Hudson during such period, minus the aggregate amount of dividends anddistributions made by Hudson during such period, minus the aggregate amount of payments made with cash by Hudson to satisfy soil sampling andreclamation related to environmental cleanup at the Company’s former Hillburn, NY facility during such period (to the extent not already included in thecalculation of EBITDA as determined by the Agent) to (b) the aggregate amount of all principal payments due and/or made, except principal paymentsrelated to outstanding revolving advances with regard to all funded debt (as defined in the PNC Facility) of Hudson during such period, plus the aggregateinterest expense of Hudson during such period. EBITDA as defined in the PNC Facility shall mean for any period the sum of (i) earnings before interest andtaxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period, plus (iv) non-cash charges. 42 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. On October 25, 2013, the Company entered into the Second Amendment to the PNC facility (the “Second PNC Amendment”) which, among other things,waived the requirement to comply with the minimum fixed charge coverage ratio covenant of 1.10 to 1.00 for the fiscal quarter ended September 30, 2013,under the PNC Facility, and suspended the minimum fixed charge ratio covenant until the quarterly period ended March 31, 2015. On July 2, 2014, the Company entered into the Third Amendment to the PNC Facility (the “Third PNC Amendment”) which, among other things, extendedthe term of PNC Facility. Pursuant to the Third PNC Amendment, which was effective June 30, 2014, the Termination Date of the PNC Facility (as defined inthe PNC Facility) was extended to June 30, 2018. On July 1, 2015, the Company entered into the Fourth Amendment to the PNC Facility (the “Fourth PNC Amendment”). The Fourth PNC Amendmentredefined the “Revolving Interest Rate” as well as the “Term Loan Rate” (as defined in the PNC Facility) as follows: “Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one halfof one percent (.50%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) withrespect to the Eurodollar Rate Loans. “Term Loan Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus one half of one percent (.50%) with respect to theDomestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) with respect to Eurodollar Rate Loans. On April 8, 2016, the Company entered into the Fifth Amendment to the PNC Facility (the “Fifth PNC Amendment”). Pursuant to the Fifth PNC Amendment,the Maximum Loan Amount (as defined in the PNC Facility) has been increased from $40,000,000 to $50,000,000, and the Maximum Revolving AdvanceAmount (as defined in the PNC Facility) has been increased from $36,000,000 to $46,000,000. Additionally, pursuant to the Fifth PNC Amendment theTermination Date of the Facility (as defined in the PNC Facility) has been extended to June 30, 2020. In December 2016, the Company repaid its entire debtunder the PNC Facility. The Company was in compliance with all covenants, under the PNC Facility as of December 31, 2016. The Company’s ability to comply with thesecovenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions,regulations and refrigerant pricing. Although we expect to remain in compliance with all covenants in the PNC Facility, as amended, depending on our futureoperating performance and general economic conditions, we cannot make any assurance that we will continue to be in compliance. The commitments under the PNC Facility will expire and the full outstanding principal amount of the loans, together with accrued and unpaid interest, aredue and payable in full on June 30, 2020, unless the commitments are terminated for any reason or the outstanding principal amount of the loans areaccelerated sooner following an event of default. Building and Land Mortgage On June 1, 2012, the Company entered into a mortgage note with Busey Bank for $855,000. The note bears interest at the fixed rate of 4% per annum,amortizing over 60 months and maturing on June 1, 2017. The mortgage note is secured by the Company’s land and building located in Champaign, Illinois.At December 31, 2016 the principal balance of this mortgage note was $93,000. Vehicle and Equipment Loans The Company has entered into various vehicle and equipment loans. These loans are payable in 60 monthly payments through March 2020 and bear interestranging from 0.0% to 6.7%. Capital Lease Obligations The Company rents certain equipment with a net book value of approximately $249,000 at December 31, 2016 under leases which have been classified ascapital leases. Scheduled future minimum lease payments under capital leases, net of interest, are as follows: Years ended December 31, Amount (in thousands) -2017 $82 -2018 82 -2019 31 -2020 6 -2021 3 Subtotal 204 Less interest expense (16)Total $188 43 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Scheduled maturities of the Company's long-term debt and capital lease obligations are as follows: Years ended December 31, Amount (in thousands) -2018 $93 -2019 47 -2020 9 -2021 3 Thereafter - Total $152 Note 9 - Stockholders' equity On July 7, 2010, the Company sold 2,737,500 units, with the aggregate units consisting of 2,737,500 shares of the Company’s common stock and warrants topurchase 1,368,750 shares, at a price of $2.00 per unit in a registered direct offering (the “2010 Offering”). The warrants issued as part of the 2010 Offeringhad an exercise price of $2.60 per share and were exercisable for a five-year period, which commenced on January 7, 2011. The net proceeds pursuant to the2010 Offering were approximately $4.9 million. The value of the aggregate number of warrants issued pursuant to the 2010 Offering was approximately$1,300,000 and such amount was charged as a component of stockholders’ equity to additional paid-in capital. Effective as of March 4, 2011, the Company re-purchased warrants to purchase 150,000 shares of the Company’s common stock, at a price of $0.60 per share,which warrants were issued in connection with the 2010 Offering. On March 7, 2011, the remaining 1,218,750 warrants issued in connection with the 2010 Offering were amended upon consent of the holders of more thantwo-thirds of the remaining warrants, to among other things, extend the expiration date of the warrants to July 7, 2016. Between January 2016 and July 2016, 1,161,252 warrants issued in connection with the 2010 Offering were exercised at $2.60 per share. In July 2016, 7,498warrants issued in connection with the 2010 Offering expired. On December 8, 2016 the Company entered into an Underwriting Agreement with two investment banking firms for themselves and as representatives for twoother investment banking firms (collectively, the “Underwriters”), in connection with an underwritten offering (the “Offering”) of 6,428,571 shares of theCompany’s common stock, par value $0.01 per share (the “Firm Shares”). Pursuant to the Underwriting Agreement, the Company agreed to sell to theUnderwriters, and the Underwriters agreed to purchase from the Company, an aggregate of 6,428,571 shares of common stock and also granted theUnderwriters a 30 day option to purchase up to 964,285 additional shares of its common stock to cover over-allotments, if any. The Company also agreed toreimburse certain expenses incurred by the Underwriters in the Offering. The closing of the Offering was held on December 14, 2016, at which time the Company sold 7,392,856 shares of its common stock to the Underwriters(including 964,285 shares to cover over-allotments) at a price to the public of $7.00 per share, less underwriting discounts and commissions, and receivedgross proceeds of $51.7 million. The Company incurred approximately $3.3 million of transaction fees in connection with the Offering, resulting in netproceeds of $48.4 million. Note 10 - Commitments and contingencies Rents and operating leases Hudson utilizes leased facilities and operates equipment under non-cancelable operating leases through August 31, 2022 as follows: Properties Location Annual Rent Lease ExpirationDateAuburn, Washington $39,000 8/2018Baton Rouge, Louisiana $23,000 5/2019Champaign, Illinois $504,000 12/2018Charlotte, North Carolina $26,000 5/2019Escondido, California $36,000 Month to MonthHampstead, New Hampshire $52,000 8/2022Nashville, Tennessee $173,000 3/2018Ontario, California $90,000 12/2018Pearl River, New York $150,000 12/2021Pottsboro, Texas $6,000 8/2017Catano, Puerto Rico $124,000 12/2020Stony Point, New York $90,000 6/2021Tulsa, Oklahoma $27,000 12/2017 44 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company rents properties and various equipment under operating leases. Rent expense for the years ended December 31, 2016, 2015 and 2014 totaledapproximately $1.4 million, $1.2 million and $0.8 million, respectively. In addition to the properties above, the Company does at times utilize publicwarehouse space on a month to month basis. The Company typically enters into short-term leases for the facilities and wherever possible extends theexpiration date of such leases. Future commitments under operating leases are summarized as follows: Years ended December 31, Amount (in thousands) -2017 $1,368 -2018 1,145 -2019 464 -2020 446 -2021 253 Thereafter 35 Total $3,711 Legal Proceedings On April 1, 1999, the Company reported a release of approximately 7,800 lbs. of R-11 refrigerant (the “1999 Release”), at its former leased facility inHillburn, NY (the “Hillburn Facility”), which the Company vacated in June 2006. Since September 2000, last modified in March 2013, the Company signed an Order on Consent with the New York State Department of EnvironmentalConservation (“DEC”) whereby the Company agreed to operate a remediation system to reduce R-11 refrigerant levels in the groundwater under and aroundthe Hillburn Facility and agreed to perform periodic testing at the Hillburn Facility until remaining groundwater contamination has been effectively abated.The Company accrued, as an expense in its consolidated financial statements, the costs that the Company believes it will incur in connection with itscompliance with the Order of Consent through December 31, 2018. There can be no assurance that additional testing will not be required or that theCompany will not incur additional costs and such costs in excess of the Company’s estimate may have a material adverse effect on the Company financialcondition or results of operations. The Company has exhausted all insurance proceeds available for the 1999 Release under all applicable policies. In May 2000, the Hillburn Facility as a result of the 1999 Release, was nominated by EPA for listing on the National Priorities List (“NPL”) pursuant toCERCLA. In September 2003, the EPA advised the Company that it had no current plans to finalize the process for listing of the Hillburn Facility on theNPL. During the years ended December 31, 2016, 2015 and 2014 the Company incurred $0, $0, and $53,000, respectively, in additional remediation costs inconnection with the matters above. The remaining liability on the Company’s Balance Sheet as of December 31, 2016 is approximately $0.1 million. Therecan be no assurance that the ultimate outcome of the 1999 Release will not have a material adverse effect on the Company's financial condition and results ofoperations. There can be no assurance that the EPA will not change its current plans and seek to finalize the process of listing the Hillburn Facility on theNPL, or that the ultimate outcome of such a listing will not have a material adverse effect on the Company's financial condition and results of operations. Note 11 - Share-Based Compensation Share-based compensation represents the cost related to share-based awards, typically stock options or stock grants, granted to employees, non-employees,officers and directors. Share-based compensation is measured at grant date, based on the estimated aggregate fair value of the award on the grant date, andsuch amount is charged to compensation expense on a straight-line basis (net of estimated forfeitures) over the requisite service period. For the years ended2016, 2015 and 2014, the share-based compensation expense of $0.6 million, $0.2 million and $0.7 million, respectively, is reflected in general andadministrative expenses in the consolidated Statements of Operations. 45 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Share-based awards have historically been made as stock options, and recently during the third quarter 2015 as stock grants, issued pursuant to the terms ofthe Company’s stock option and stock incentive plans, (collectively, the “Plans”), described below. The Plans may be administered by the Board of Directorsor the Compensation Committee of the Board or by another committee appointed by the Board from among its members as provided in the Plans. Presently,the Plans are administered by the Company’s Compensation Committee of the Board of Directors. As of December 31, 2016, the Plans authorized theissuance of stock options to purchase 6,000,000 shares `of the Company’s common stock and, as of December 31, 2016 there were 3,251,340 shares of theCompany’s common stock available for issuance for future stock option grants or other stock based awards. Stock option awards, which allow the recipient to purchase shares of the Company’s common stock at a fixed price, are typically granted at an exercise priceequal to the Company’s stock price at the date of grant. Typically, the Company’s stock option awards have vested from immediately to two years from thegrant date and have had a contractual term ranging from three to ten years. During the years ended December 31, 2016, 2015 and 2014, the Company issued options to purchase 1,170,534 shares, 164,506 shares and 1,055,500 shares,respectively. During the years ended 2016, 2015 and 2014, the Company issued stock grants of 17,148 shares, 9,835 shares and no shares, respectively. Effective July 25, 1997, the Company adopted its 1997 Employee Stock Option Plan, which was amended on August 19, 1999, (“1997 Plan”) pursuant towhich 2,000,000 shares of common stock were reserved for issuance upon the exercise of options designated as either (i) incentive stock options (“ISOs”)under the Internal Revenue Code of 1986, as amended (the “Code”), or (ii) nonqualified options. ISOs could be granted under the 1997 Plan to employeesand officers of the Company. Non-qualified options could be granted to consultants, directors (whether or not they are employees), employees or officers ofthe Company. Stock appreciation rights could also be issued in tandem with stock options. Effective June 11, 2007, the Company’s ability to grant optionsor stock appreciation rights under the 1997 Plan expired. Effective September 10, 2004, the Company adopted its 2004 Stock Incentive Plan (“2004 Plan”) pursuant to which 2,500,000 shares of common stock werereserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or otherstock-based awards. ISOs could be granted under the 2004 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock orother stock-based awards could be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stockappreciation rights could also be issued in tandem with stock options. Effective September 10, 2014, the Company’s ability to grant options or other awardsunder the 2004 Plan expired. Effective August 27, 2008, the Company adopted its 2008 Stock Incentive Plan (“2008 Plan”) pursuant to which 3,000,000 shares of common stock werereserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or otherstock-based awards. ISOs may be granted under the 2008 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock orother stock-based awards may be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stockappreciation rights may also be issued in tandem with stock options. Unless the 2008 Plan is sooner terminated, the ability to grant options or other awardsunder the 2008 Plan will expire on August 27, 2018. ISOs granted under the 2008 Plan may not be granted at a price less than the fair market value of the common stock on the date of grant (or 110% of fairmarket value in the case of persons holding 10% or more of the voting stock of the Company). Nonqualified options granted under the 2008 Plan may not begranted at a price less than the fair market value of the common stock. Options granted under the 2008 Plan expire not more than ten years from the date ofgrant (five years in the case of ISOs granted to persons holding 10% or more of the voting stock of the Company). Effective September 17, 2014, the Company adopted its 2014 Stock Incentive Plan (“2014 Plan”) pursuant to which 3,000,000 shares of common stock werereserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or otherstock-based awards. ISOs may be granted under the 2014 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock orother stock-based awards may be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stockappreciation rights may also be issued in tandem with stock options. Unless the 2014 Plan is sooner terminated, the ability to grant options or other awardsunder the 2014 Plan will expire on September 17, 2024. ISOs granted under the 2014 Plan may not be granted at a price less than the fair market value of the common stock on the date of grant (or 110% of fairmarket value in the case of persons holding 10% or more of the voting stock of the Company). Nonqualified options granted under the 2014 Plan may not begranted at a price less than the fair market value of the common stock. Options granted under the 2014 Plan expire not more than ten years from the date ofgrant (five years in the case of ISOs granted to persons holding 10% or more of the voting stock of the Company). All stock options have been granted to employees and non-employees at exercise prices equal to or in excess of the market value on the date of the grant. 46 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company determines the fair value of share based awards at the grant date by using the Black-Scholes option-pricing model, and is incorporating thesimplified method to compute expected lives of share based awards with the following weighted-average assumptions: Years endedDecember 31, 2016 2015 2014 Assumptions Dividend yield 0% 0% 0%Risk free interest rate 0.%-1.0% 0.83%-1.03% 1.00%-1.69%Expected volatility 47%-53% 49%-60% 59%-66%Expected lives 3 years 3 years 3-5 years A summary of the activity for the Company's Plans for the indicated periods is presented below: Stock Option Plan Totals Shares WeightedAverageExercise Price Outstanding at December 31, 2013 2,517,911 $1.33 -Exercised (292,537) $1.03 -Granted 1,055,500 $3.28 Outstanding at December 31, 2014 3,280,874 $1.98 -Cancelled (132,500) $3.72 -Exercised (679,291) $1.65 -Granted 164,506 $3.28 Outstanding at December 31, 2015 2,633,589 $2.06 -Exercised (589,725) $2.43 -Granted 1,170,534 $3.95 Outstanding at December 31, 2016 3,214,398 $2.68 The following is the weighted average contractual life in years and the weighted average exercise price at December 31, 2016 and 2015 of: Weighted Average Number of Remaining Weighted Average 2016 Options Contractual Life Exercise Price Options outstanding 3,214,398 2.0 years $2.68 Options vested 1,191,368 3.0 years $3.94 Weighted Average Number of Remaining Weighted Average 2015 Options Contractual Life Exercise Price Options outstanding 2,633,589 2.8 years $2.06 Options vested 2,612,755 2.8 years $2.05 The intrinsic values of options outstanding at December 31, 2016 and 2015 are $17.1 million and $2.8 million respectively. The intrinsic values of options vested and exercised during the years ended 2016, 2015 and 2014 were as follows: 2016 2015 2014 Intrinsic value of options vested $4,843,774 $5,000 $535,000 Intrinsic value of options exercised $1,777,476 $1,309,000 $793,000 Note 12 - Acquisitions On November 5, 2014 the Company purchased certain assets from Polar Technologies, LLC (“Polar”) related to its refrigerant reclamation business andfacilities in Nashville, Tennessee; Ontario, California, and San Juan, Puerto Rico; hiring approximately thirty-two Polar employees associated with thebusiness. The purchase price for this acquisition was $8.0 million. A portion of the purchase price was to be paid in the future pursuant to the purchaseagreement. The preliminary asset allocation reflected in the December 31, 2014 financial statements was approximately $5.4 million of tangible assets,approximately $2.3 million of intangible assets, and approximately $0.3 million of goodwill. The intangible assets are being amortized over a period of 2 to10 years. The goodwill recognized as part of the acquisition, is deductible for tax purposes. 47 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. As of December 31, 2015 the valuation and allocation of the purchase price for Polar was finalized resulting in an increase in tangible assets of $0.2 million,as well as an increase in goodwill of $0.2 million and a decrease in intangible assets of $0.3 million. This final valuation was reflected in the December 31,2015 financial statements. The results of the Polar operations are included in the Company’s consolidated statement of operations from the date of acquisition and are not material tothe Company’s financial position or results of operations. On January 16, 2015, the Company acquired certain assets of a supplier of refrigerants and compressed gases, and also hired three employees associated withthe business. The purchase price for this acquisition was $2.4 million cash paid at closing and the assumption of a liability of $20,000, and a maximum of anadditional $3.0 million of deferred acquisition cost, or earn-out. The preliminary asset allocation was approximately $1.6 million of tangible assets,approximately $1.5 million of intangible assets, and approximately $2.3 million of goodwill. As of December 31, 2015 the valuation and allocation of the purchase price for this acquisition was finalized. As part of that process it was determined thatthe deferred acquisition cost payable that had been previously recorded at the maximum earn out of $3.0 million per the purchase agreement was overstatedby approximately $1.0 million. This adjustment to the deferred acquisition cost payable resulted in lowering the purchase price from approximately $5.4million to approximately $4.4 million. The final valuation resulted in a reduction in goodwill by approximately $1.9 million, and increase in intangibleassets of approximately $0.8 million and an increase in current assets of approximately $0.1 million. This final valuation, as well as the respective changes inthe amortization of intangibles, was reflected in the December 31, 2015 financial statements. Please see table in Note 2 for a rollforward of the deferred acquisition cost. During the year ended December 31, 2015, approximately $0.4 million of the2015 deferred acquisition cost liability was paid. During the year ended December 31, 2015, as a result of reduced earnings, the Company reduced thedeferred acquisition cost liability by approximately $0.3 million, which was reflected in the December 31, 2015 Consolidated Statements of Operations asOther Income (Expense). The deferred acquisition cost liability balance at December 31, 2015, which was included in Accrued expenses and other current liabilities, was $1.9 million.During the year ended December 31, 2016, the Company paid approximately $1.7 million in deferred acquisition cost. During the year ended December 31,2016, as a result of improved performance, the Company increased this deferred acquisition cost liability by approximately $0.6 million and recorded theamount as Other Income (Expense) in 2016. The remaining liability of $0.8 million was subsequently paid in January 2017. The intangible assets are being amortized over a period ranging from two to ten years. The goodwill recognized as part of the acquisition will be deductiblefor tax purposes. The transaction also provides for additional employee compensation for years 2017 through 2019, based on certain revenue performance.The total additional employee compensation, if any, cannot exceed $3,000,000. The results of the acquired business operations are included in the Company’s consolidated Statements of Operations from the date of acquisition, and are notmaterial to the Company’s financial position or results of operations. Note 13- Quarterly Financial Data (Unaudited)(in thousands, except share and per share data) For the Year Ended 2016 Q1 Q2 Q3 Q4 Total (a) Revenues $28,167 $34,605 $34,930 $7,779 $105,481 Gross profit $7,522 $10,491 $12,040 $1,033 $31,086 Operating expenses $2,503 $2,347 $4,022 $3,267 $12,139 Operating income (loss) $5,019 $8,144 $8,018 $(2,234) $18,947 Other (expense) $(271) $(352) $(296) $(763) $(1,682)Income (loss) before income taxes $4,748 $7,792 $7,722 $(2,997) $17,265 Income tax expense (benefit) $1,804 $2,962 $2,933 $(1,071) $6,628 Net income (loss) $2,944 $4,830 $4,789 $(1,926) $10,637 Net income (loss) per common share – Basic(a) $0.09 $0.15 $0.14 $(0.05) $0.31 Net income (loss) per common share –Diluted (a) $0.09 $0.14 $0.14 $(0.05) $0.30 Weighted average number of sharesoutstanding – Basic 32,888,659 33,128,518 33,873,479 36,527,250 34,104,476 Weighted average number of sharesoutstanding – Diluted 33,944,876 34,270,337 35,297,585 36,527,250 35,416,910 (a)The sum of the net earnings per share may not add up to the full year amount due to rounding and because the quarterly calculations are based onvarying numbers of shares outstanding. 48 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. For the Year Ended 2015 Q1 Q2 Q3 Q4 Total (a) Revenues $22,103 $28,637 $21,682 $7,300 $79,722 Gross profit $5,525 $7,212 $4,384 $1,368 $18,489 Operating expenses $2,255 $2,451 $2,482 $3,120 $10,308 Operating income (loss) $3,270 $4,761 $1,902 $(1,752) $8,181 Other Income (expense) $(207) $(236) $(157) $126 $(474)Income (loss) before income taxes $3,063 $4,525 $1,745 $(1,626) $7,707 Income tax expense (benefit) $1,170 $1,714 $663 $(603) $2,944 Net income (loss) $1,893 $2,811 $1,082 $(1,023) $4,763 Net income (loss) per common share – Basic $0.06 $0.09 $0.03 $(0.03) $0.15 Net income (loss) per common share –Diluted $0.06 $0.08 $0.03 $(0.03) $0.14 Weighted average number of sharesoutstanding – Basic 32,333,443 32,542,672 32,639,429 32,715,802 32,546,840 Weighted average number of sharesoutstanding – Diluted 34,280,385 34,383,092 33,856,045 32,715,802 33,936,099 (a)The sum of the net earnings per share may not add up to the full year amount due to rounding and because the quarterly calculations are based onvarying numbers of shares outstanding. 49 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. HUDSON TECHNOLOGIES, INC. By:/s/ Kevin J. Zugibe Kevin J. Zugibe, Chairman and Chief Executive Officer Date:March 10, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. Signature Title Date /s/ Kevin J. Zugibe Chairman of the Board and Chief Executive Officer (Principal Executive Officer) March 10, 2017Kevin J. Zugibe /s/ Nat Krishnamurti Chief Financial Officer (Principal Financial and Accounting Officer) March 10, 2017Nat Krishnamurti /s/ Vincent P. Abbatecola Director March 10, 2017Vincent P. Abbatecola /s/ Brian F. Coleman Director and President and Chief Operating Officer March 10, 2017Brian F. Coleman /s/ Dominic J. Monetta Director March 10, 2017Dominic J. Monetta /s/ Otto C. Morch Director March 10, 2017Otto C. Morch /s/ Richard Parrillo Director March 10, 2017Richard Parrillo /s/ Eric A. Prouty Director March 10, 2017Eric A. Prouty 50 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Index to Exhibits ExhibitNumber Description Exhibits3.1 Certificate of Incorporation and Amendment. (1)3.2 Amendment to Certificate of Incorporation, dated July 20, 1994. (1)3.3 Amendment to Certificate of Incorporation, dated October 26, 1994. (1)3.4 Certificate of Amendment of the Certificate of Incorporation dated March 16, 1999. (2)3.5 Certificate of Correction of the Certificate of Amendment dated March 25, 1999. (2)3.6 Certificate of Amendment of the Certificate of Incorporation dated March 29, 1999. (2)3.7 Certificate of Amendment of the Certificate of Incorporation dated February 16, 2001. (4)3.8 Certificate of Amendment of the Certificate of Incorporation dated March 20, 2002. (5)3.9 Amendment to Certificate of Incorporation dated January 3, 2003. (6)3.10 Amended and Restated By-Laws adopted July 29, 2011. (14)3.11 Certificate of Amendment of the Certificate of Incorporation dated September 15, 2015. (24)10.1 Assignment of patent rights from Kevin J. Zugibe to Registrant. (1)10.2 1997 Stock Option Plan of the Company, as amended. (3) *10.3 2004 Stock Incentive Plan. (9)*10.4 Commercial Mortgage, dated May 27, 2005, between Hudson Technologies Company and Busey Bank. (7)10.5 Commercial Installment Mortgage Note, dated May 27, 2005, between Hudson Technologies Company and Busey Bank. (7)10.6 Amended and Restated Employment Agreement with Kevin J. Zugibe, as amended. (11)*10.7 Agreement with Brian F. Coleman, as amended. (11)*10.8 Agreement with James R. Buscemi, as amended. (11)*10.9 Agreement with Charles F. Harkins, as amended. (11)*10.10 Agreement with Stephen P. Mandracchia, as amended. (11)*10.11 2008 Stock Incentive Plan. (10)*10.12 Form of Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (11)*10.13 Form of Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (11)*10.14 Form of Non-Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (11)*10.15 Form of Non-Incentive Stock Option Agreement under the 2008 Stock Incentive Plan with options vesting in equal installments over twoyear period. (11)*10.16 First Amendment to Amended and Restated Employment Agreement with Kevin J. Zugibe, dated December 30, 2008. (11)*10.17 Form of Warrant issued in the 2010 Offering. (12)10.18 Form of Agreement and Consent, to amend warrants issued in connection with the 2010 Offering, dated March 7, 2011. (13)10.19 Revolving Credit, Term Loan and Security Agreement, dated June 22, 2012, between Hudson Technologies Company as borrower andPNC Bank, National Association as lender and agent (15)10.20 $23,000,000 Revolving Credit Note, dated June 22, 2012, by Hudson Technologies Company as borrower in favor of PNC (15)10.21 $4,000,000 Term Note, dated June 22.2012, by Hudson Technologies Company as borrower in favor of PNC. (15)10.22 Guaranty & Suretyship Agreement, dated June 22, 2012, made by Hudson Holdings, Inc. as guarantor on behalf of Hudson TechnologiesCompany. (15)10.23 Guaranty & Suretyship Agreement, dated June 22, 2012, made by the Company as guarantor on behalf of Hudson Technologies Company.(15)10.24 Patent, Trademarks, and Copyrights Security Agreement, dated June 22, 2012, between the Company and PNC. (15)10.25 Patent, Trademarks, and Copyrights Security Agreement, dated June 22, 2012, between Hudson Technologies Company and PNC. (15)10.26 Long Term Care Insurance Plan Summary. (16)*10.27 First Amendment to Revolving Credit, Term Loan, and Security Agreement between Hudson Technologies Company and PNC datedFebruary 15, 2013. (17)10.28 $36,000,000 Amended and Restated Revolving Credit Note, dated February 15, 2013, by Hudson Technologies Company as borrower infavor of PNC. (17)10.29 Guarantors’ Ratification dated February 15, 2013, by the Company and Hudson Holdings, Inc. (17) 51 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.30 Second Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank,National Association dated October 25, 2013 (18)10.31 Guarantors’ Ratification dated October 25, 2013 by Hudson Technologies, Inc. and Hudson Holdings, Inc. (18)10.32 Amendment No. 1 to the Hudson Technologies, Inc. 2008 Stock Incentive Plan adopted October 22, 2013. (19) *10.33 Underwriting Agreement between William Blair & Company, L.L.C., for itself and as representative of the several underwriters, andHudson Technologies, Inc., dated June 6, 2014 (20)10.34 Third Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank,National Association, dated July 2, 2014 (21)10.35 Guarantor’s Ratification, dated July 1, 2014, by Hudson Technologies, Inc. and Hudson Holdings, Inc. (21) 10.36 2014 Stock Incentive Plan (22)*10.37 Form of Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.38 Form of Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with options vesting in equal installments over two yearperiod. (23)*10.39 Form of Non-Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.40 Form of Non-Incentive Stock Option Agreement under the 2014 Stock Incentive Plan with options vesting in equal installments over twoyear period. (23)*10.41 Form of Incentive Barrier Stock Option Agreement under the 2014 Stock Incentive Plan with full vesting upon issuance. (23)*10.42 Form of Non-Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.43 Form of Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.44 Form of Non-Incentive Barrier Stock Option Agreement under the 2008 Stock Incentive Plan with full vesting upon issuance. (23)*10.45 Fourth Amendment to Revolving Credit, Term Loan and Security Agreement Between Hudson Technologies Company and PNC Bank,National Association, dated July 1, 2015 (25)10.46 Guarantor’s Ratification, dated July 1, 2015, by Hudson Technologies, Inc. and Hudson Holdings, Inc. (25)10.47 Second Amended and Restated Employment Agreement with Kevin J. Zugibe. (26)*10.48 Amended and Restated Agreement with Brian Coleman (26)*10.49 Fifth Amendment to Revolving Credit, Term Loan and Security Agreement between Hudson Technologies Company and PNC, datedApril 8, 2016. (27)10.50 Second Amended and Restated Revolving Credit Note, dated April 8, 2016 by Hudson Technologies Company as borrower in favor ofPNC. (27)10.51 Guarantor’s’ Ratification, dated April 8, 2016 by the Registrant and Hudson Holdings, Inc. (27)10.52 Agreement, dated September 5, 2016 between Hudson Technologies, Inc. and Nat Krishnumurti. (28)*10.53 Underwriting Agreement among William Blair & Company, L.L.C. and Craig-Hallum Capital Group LLP, for themselves and asrepresentatives of several underwriters, and Hudson Technologies, Inc. dated December 8, 2016. (29)14 Code of Business Conduct and Ethics. (8)21 Subsidiaries of the Company. (30)23.1 Consent of BDO USA, LLP. (30) 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (30) 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (30) 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Actof 2002. (30) 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Actof 2002. (30) 101 Interactive data file pursuant to Rule 405 of Regulation S-T. (30) (1) Incorporated by reference to the comparable exhibit filed with the Company's Registration Statement on Form SB-2 (No. 33-80279-NY).(2) Incorporated by reference to the comparable exhibit filed with the Company's Quarterly Report on Form 10-QSB for the quarter endedJune 30, 1999.(3) Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year endedDecember 31, 1999.(4) Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year endedDecember 31, 2000. (5) Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-KSB for the year endedDecember 31, 2001.(6) Incorporated by reference to the comparable exhibit filed with the Company's Annual Report on Form 10-KSB for the year endedDecember 31, 2002. 52 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (7) Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-QSB for the quarter endedJune 30, 2005.(8) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K, for the event dated March 3,2005, and filed May 31, 2005.(9) Incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed August 18, 2004. (10) Incorporated by reference to Appendix I to the Company’s Definitive Proxy Statement on Schedule 14A filed July 29, 2008.(11) Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December31, 2008.(12) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated July 1,2010 and filed July 2, 2010.(13) Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December31, 2010.(14) Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form-10-Q for the quarter ended June30, 2011.(15) Incorporated by reference to the comparable exhibit filed with the Company’s Report on Form 8-K for the event dated June 22, 2012 andfiled June 28, 2012.(16) Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2012.(17) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated February15, 2013 and filed February 20, 2013.(18) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated October 25,2013 and filed October 31, 2013.(19) Incorporated by reference to the comparable exhibit filed with the Company’s Annual Report on Form 10-K for the year ended December31, 2013.(20) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed on June 6, 2014.(21) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed on July 7, 2014.(22) Incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed August 12, 2014. (23) Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2014.(24) Incorporated by reference to the comparable exhibit filed with the Company’s Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2015.(25) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K for the event dated July 7,2015 and filed July 8, 2015.(26) Incorporated by reference to the comparable exhibit filed with the Company Annual Report on form 10-K for the year ended December 31,2015.(27) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed April 14, 2016.(28) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed September 9, 2016.(29) Incorporated by reference to the comparable exhibit filed with the Company’s Current Report on Form 8-K filed December 9, 2016.(30) Filed herewith(*) Denotes Management Compensation Plan, agreement or arrangement. 53 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 21: Subsidiaries of the Registrant Hudson Technologies Company d/b/a Hudson Technologies of Tennessee incorporated in the State of Tennessee. Hudson Holdings, Inc. incorporated in the State of Nevada. Safety Hi-Tech USA, LLC, a Delaware limited liability company, of which Hudson Holdings, Inc. owns 50% of the equity. Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 23.1: Consent of Independent Registered Public Accounting Firm Hudson Technologies, Inc.Pearl River, New York We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No.333-17133, No.333-38598, No.333-129057, No.333-164650 and No.333-202955) and Registration Statements on Form S-3 (No.333-182526, No.333-185490 and No.333-207969) of Hudson Technologies, Inc.of our reports dated March 10, 2017 relating to the consolidated financial statements and the effectiveness of Hudson Technologies Inc.’s internal controlover financial reporting, which appear in this Form 10-K. /s/ BDO USA, LLP Stamford, CT March 10, 2017 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 31.1: Hudson Technologies, Inc.Certification of Principal Executive Officer I, Kevin J. Zugibe, certify that: 1.I have reviewed this annual report on Form 10-K of Hudson Technologies, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 10, 2017 /s/ Kevin J. Zugibe Kevin J. Zugibe Chief Executive Officer and Chairman of the Board Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 31.2: Hudson Technologies, Inc.Certification of Principal Financial Officer I, Nat Krishnamurti, certify that: 1.I have reviewed this annual report on Form 10-K of Hudson Technologies, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 10, 2017 /s/Nat Krishnamurti Nat Krishnamurti Chief Financial Officer Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 32.1: CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Hudson Technologies, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2016 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Zugibe, as Chief Executive Officer and Chairman of the Board of theCompany, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of myknowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. /s/ Kevin J. Zugibe Kevin J. Zugibe Chief Executive Officer and Chairman of the Board March 10, 2017 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 32.2 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Hudson Technologies, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2016 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Nat Krishnamurti, as Chief Financial Officer of the Company, certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. /s/ Nat Krishnamurti Nat Krishnamurti Chief Financial Officer March 10, 2017 Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: HUDSON TECHNOLOGIES INC /NY, 10-K, March 10, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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