Q1 2024 Perma-Fix Environmental Services Inc Earnings Call

Good day and welcome to the Perma fix fiscal first quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session I would now like to turn the call over to David Waldman Investor Relations. Please go ahead.

Operator: Good day and welcome to the Perma-Fix Fiscal First Quarter 2024 Earnings Conference Call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to turn the call over to David Waldman, Director of Investor Relations. Please go ahead.

David K. Waldman: Thank you good morning, everyone and welcome to Perma fix environmental services first quarter 2024 conference call on the call with US. This morning are Mark Duff, President and CEO, Dr. Lou Centofanti Executive Vice President of strategic initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing first.

David K. Waldman: Thank you. Good morning, everyone.

David K. Waldman: Welcome to Perma-Fix Environmental Services' first quarter 2024 conference call. On the call with us this morning are Mark Duff, President and CEO, Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing its first quarter 2024 financial results, which are also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

David K. Waldman: Quarter 2024 financial results, which is also posted on the company's website. If you have any questions. After the call or would like any additional information about the company. Please contact crescendo communications at 2126711020, I'd also like to remind everyone that certain statements contained within the conference call maybe deemed forward looking statements within them.

David K. Waldman: I'd also like to remind everyone that certain statements contained in this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call, other than a statement of historical fact, are forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause actual results and performance of the company to differ materially from such statements.

David K. Waldman: These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission as well as this morning's press release. The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements. In addition, today's discussion will include references to non-GAAP measures. ThermoFix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.

David K. Waldman: Meaning of the private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call other than a statement of historical fact are forward looking statements that are subject to known and unknown risks uncertainties and other factors, which could cause actual results and performance of the company to differ materially from such statements.

Mark J. Duff: These risks and uncertainties are detailed in the company's filings with the U S Securities and Exchange Commission as well as this morning's press release the company makes no commitment to disclose any revisions to forward looking statements or any facts events or circumstances. After the date hereof that bear upon forward looking statements. In addition, today's discussion will include references.

Mark J. Duff: As to non-GAAP measures Perma fix believes that such information provides an additional measurement and consistent historical comparison of its performance.

David K. Waldman: A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website I'd now like to turn the call over to Mark Duff. Please go ahead Marc.

Mark J. Duff: All right. Thanks, David. And good morning.

Mark J. Duff: Alright, Thanks, David and good morning.

Mark J. Duff: Discussing our year end conference call, our finance financial performance in the first quarter of 'twenty 'twenty four was impacted by several temporary headwinds, which had a significant impact on the first quarter and to a lesser extent the second quarter. However, we believe these challenges are one off impacts are largely behind US now as a result, we're regaining her.

Mark J. Duff: As discussed in our year-end conference call, our financial performance in the first quarter of 2024 was impacted by several temporary headwinds, which had a significant impact on the first quarter and, to a lesser extent, the second quarter. However, we believe these challenges were one-off impacts and are largely behind us now. As a result, we're regaining our momentum with improving Q2 performance, and we anticipate a strong second half of 2024. At the same time, we continue to invest in our 2025 vision, which we believe has the potential for significant growth and even transformative performance.

Mark J. Duff: Our momentum with improving Q2 performance and we anticipate a strong second half of 2024 at the same time, we continue to invest in our 2025 vision, which we believe has the potential for significant growth and even transformative performance.

Mark J. Duff: The weakness we experienced in Q1 was due, in part, to delayed project starts. As previously discussed, during the fourth quarter of 2023, we completed our two largest service projects at Princeton Plasma Physics Lab and the Exma-Key project for the Navy. These two large projects have completed all fieldwork now; however, they were not replaced in time by new projects due to delays in mobilization activities until late April. We also experienced challenging weather conditions during the first quarter of 2024, which resulted in the closure of two of our facilities for a week, including delays in waste shipments to support the backlog. In addition, due to the inability of Congress to pass a federal budget on schedule, the government had been operating under a continuing resolution, which contributed to delays in procurements, project starts, and waste shipments.

Mark J. Duff: The weakness we experienced in Q1 was due in part to delayed project starts. It's probably just previously discussed during the fourth quarter of 2023, we completed our two largest service projects at principal plasma physics lab and the extra key project for the Navy. These.

Mark J. Duff: These two large projects have.

Mark J. Duff: <unk> completed all field work now however, they were not replaced in time by new projects due to delays and mobilization activities until late April we also experienced challenging weather conditions. During the first quarter of 'twenty 'twenty, four which resulted in the closure of two of our facilities for a week, including delays in waste shipments to support backlog. In addition.

Mark J. Duff: Due to the inability of Congress to pass a federal budget on schedule. The government had been operating under a continuing resolution, which contributed to delays in procurements of project starts and waste shipments since government clients were holding back budgets due to uncertainty in the potential of a shutdown.

Mark J. Duff: Since government clients were holding back budgets due to uncertainty and the potential, we used this period for equipment replacement and repairs, treatment program and operational enhancements, and testing to support permanent expansion and broader market penetration. We believe these headwinds are now largely behind us, and as things normalize, we remain confident in getting back to and surpassing our business-based goal of $25 million in revenue per quarter. Our earnings during the quarter were also impacted by deliberate investments in research and development.

Mark J. Duff: Last year, we got last March however, we use this period for equipment replacement and repairs treatment program.

Mark J. Duff: Operational enhancements and testing to support permanent expansion and broader market penetration. We believe these headwinds are now largely behind us and as things normalize we remain confident in getting back to and surpassing our business base goal of $25 million in revenue per quarter.

Mark J. Duff: Our earnings during the quarter were also impacted by deliberate investments in research and development for instance, we are investing in our soul sorting technology, including the fabrication of a second unit to redeploy this summer and potentially a third unit to be deployed before the end of the year.

Mark J. Duff: For instance, we are investing in our soil sorting technology, including the fabrication of a second unit to be deployed this summer and potentially a third unit to be deployed before the end of the year. Most importantly, we are investing in our new technology to treat PFAS contamination. As a result of these investments, we have completed the pilot plant testing with PFAS destruction levels and have seen them exceed anticipated regulatory requirements, and we are now in the process of final design and fabrication of the first operational unit in late Q3. We plan to begin accepting PFAS contaminated liquids for destruction before the end of the year.

Mark J. Duff: Most importantly, we are investing in a new technology to treat P. Fast contamination as a result of these investments. We have completed we have completed the pilot plant testing with P fast destruction levels.

Mark J. Duff: And so you have seen them exceed anticipated regulatory requirements and are now in the process of final design and fabrication of the first operational unit in late Q3, we plan to begin accepting PFS contaminate liquids for destruction before the end of the year.

Mark J. Duff: We believe these investments are prudent and I couldn't be more excited about this new Pea bus business lie, which I will discuss further in a moment. In addition, as we have discussed in the past we are advancing several very large initiatives that we expect will begin to materialize in the second half of this year.

Mark J. Duff: We believe these investments are prudent, and I couldn't be more excited about this new PFAS business line, which I will discuss further in a moment. In addition, as we have discussed in the past, we are advancing several very large initiatives that we expect will begin to materialize in the second half of this year and set the stage for very significant growth beginning late this year and into 2025. First, let me begin by providing an update on our services and treatment segments by addressing some of our recent wins, and then I'll provide updates on some of the larger initiatives that are underway.

Mark J. Duff: And and set the stage for a very significant growth beginning late this year and into 2025.

Mark J. Duff: First let me begin by providing an update on our services and treatment segments by addressing some of our recent wins.

Mark J. Duff: And then I'll provide updates on some of the larger initiatives that are underway.

Mark J. Duff: Within the services segment, we're benefiting from an increased bidding opportunities right now, including both the government and commercial sectors. We're positioned for large ongoing procurements within D or we are in.

Mark J. Duff: Within the services segment, we're benefiting from increased bidding opportunities right now, including both the government and commercial sectors. We're positioned for large, ongoing procurements within DOE and the U.S. Navy, as well as other mid-sized procurement initiatives at DOE, DOD, and EPA. We've been able to secure strong teaming positions for awards for potential awards anticipated through 2025 that would potentially represent substantial increases in sustainable revenue for the next five to ten years.

Mark J. Duff: In the U S Navy.

Mark J. Duff: As well as other midsize procurement initiatives at D O E D D.

Mark J. Duff: O N E P a.

Mark J. Duff: We've been able to secure strong teaming positions for awards for potential awards anticipated through 2025 that would potentially represent substantial increases in sustainable revenue for.

Mark J. Duff: For the next five to 10 years for example were participating in large procurement opportunities as part of larger teams on the operations insight mission support contract, which we referred to in the past as the O S. M. S bid along with the West Valley demonstration project near Buffalo, New York and upcoming Navy projects would you expect it to be a war.

Mark J. Duff: For example, we're participating in large procurement opportunities as part of larger teams on the Operations and Site Mission Support Contract, which we referred to in the past as the OSMS bid, along with the West Valley Demonstration Project near Buffalo, New York, and upcoming Navy projects, which are expected to be awarded over the next several quarters. In addition, I'm proud to report that we were recently selected by DOE's Office of Environmental Management to participate in a 10-year, small business set-aside, multiple award IDIQ contract to provide nationwide deactivation, decommissioning, and removal services for the Office of Environmental Management, the National Nuclear Security Administration, and the Office of Naval Reactors and Office of Sciences, all within DOE.

Mark J. Duff: Over the next several quarters.

Mark J. Duff: In addition, I'm proud to report that were we were recently selected idea was office of environmental management to participate in a 10 year, a small business set aside multiple ward I D. IQ contract to provide nationwide the activation decommissioning and removal services for the office of environmental management, the nuclear the National Nuclear Security administration.

Mark J. Duff: Australian and the office of Naval reactors and office of Science is all within D. O N E.

Speaker Change: Perfect. Just team is among a select group of small business has chosen making us eligible to compete for firm fixed price and cost Reimbursable task orders the maximum ceiling on the overall contract with $2 billion.

Mark J. Duff: Perma-Fix's team is among a select group of small businesses chosen, making us eligible to compete for firm-fixed price and cost-reimbursable task orders with a maximum ceiling on the overall contract of $2 billion. While this is an IDIQ contract, which means basically that it's a hunting license, we believe this award provides us several opportunities for revenue growth within our base business. Even if we were to win just a proportional share of the awards, it would provide meaningful revenue for the company over the next 10 years.

Mark J. Duff: While this is an IV acute contract, which means basically that it is a hunting license. We believe this award provides us several opportunities for revenue growth within our base business.

Mark J. Duff: Even if we were to win just a proportion proportional share of the awards. It would provide meaningful revenue to the company over the next 10 years.

Mark J. Duff: That said, we believe that based on our growing reputation our technical capabilities and our proven track record relative to some of the small other small businesses participating in this idea of Q the potential opportunity could be much greater.

Mark J. Duff: That said, we believe that based on our growing reputation, our technical capabilities, and our proven track record relative to some of the other small businesses participating in this IDIQ, the potential opportunity could be much greater. We expect that recent wins of these and numerous projects currently in our pipeline will continue to support our long-term growth plan and help us further diversify our revenues. Overall, we're encouraged by the long-term outlook for the services segment, as seven new projects are mobilizing in May to support increased revenues in the latter half of the year.

Mark J. Duff: We expect that recent wins of disease and numerous projects currently in our pipeline will continue to support our long term growth plan and help us further diversify our revenue stream.

Mark J. Duff: Overall, we're encouraged by the long term outlook of our services segment as seven new projects are mobilizing in may to support increased revenues in the latter half of the year. Several of these projects include soil sorting technology deployments and we continue to realize the growth of these applications on larger projects both in the U S and in Europe.

Mark J. Duff: Several of these projects include soil sorting technology deployments, and we continue to see the growth of these applications on larger projects, both in the U.S. and in Europe. Within our treatment segment, the backlog for waste treatment has been growing over the past few months, which has resulted in increasing revenues through the second quarter of 2024. This included increased waste shipments within the commercial sector, along with steady sales from our industrial waste programs as well.

Mark J. Duff: Within our treatment segment the backlog for waste treatment has been growing over the past few months, which we which has resulted in increasing revenues through the second quarter of 2024. This included increased waste shipments within the commercial sector, along with steady sales from our industrial waste programs as well.

Mark J. Duff: We've also been implementing facility upgrades at each of our waste treatment facilities to support modernization, new technology deployments in preparation for upcoming target waste streams with larger inventories defined and several client sites in March the long awaited Tosca V T D or vacuum thermal desorption system treat.

Mark J. Duff: We've also been implementing facility upgrades at each of our waste treatment facilities to support modernization, new technology deployments, and preparation for upcoming target waste streams with larger inventories defined at several client sites. In March, the long-awaited Tosca VTD, or Vacuum Thermal Desorption System, treatment took place at our Perma-Fix Florida facility along with members of the US EPA Region 4. However, final review and verification analysis are still

Mark J. Duff: <unk> took place at a perfect of a Florida facility along with members of the U S. EPA region four while final review and verification analysis are still pending.

Mark J. Duff: Acknowledgement of successful testing by the EPA in a few months will provide a basis for Perma-Fix of Florida to obtain a Tosca treatment permit to provide generators a path forward for difficult-to-treat, higher-activity Tosca-contaminated waste. We estimate this backlog of waste within the industry to generate approximately $10 million in incremental annual revenue beginning in Q4. I'd now like to turn our attention to several of the larger projects we're working on. As we've discussed previously, we believe that these initiatives should contribute to meaningful growth in revenue and earnings. I would like to briefly discuss each of these initiatives and provide our investors with an overview of our vision for the balance of the rest of the year and next year.

Mark J. Duff: Knowledge women of successful testing by the EPA in a few months will provide a basis for perma fix of Florida to obtain a task of treatment permit to provide generators a path forward for difficult to treat higher activity Tosca contaminated waste streams.

Mark J. Duff: We estimate this backlog of waste within the industry and generate approximately $10 million in incremental annual revenue beginning in Q4.

Mark J. Duff: I would now like to turn your attention to several of the larger projects. We're working towards as we've discussed previously we believe that these initiatives should contribute to meaningful growth in revenue and earnings I would like to briefly discuss each of these initiatives and provide our investors with an overview of the vision for the balance of the rest of the year and next year.

Mark J. Duff: First, let me start with the developments at Hanford. As many of you may be aware, DOE has been involved in what is known as the holistic negotiations for nearly five years with members of the Tri-Party Agreement at Hanford, which includes state regulators, EPA, and the DOE. The purpose of these negotiations, as defined in the Hanford Settlement Agreement published for public comment just a few weeks ago on April 29th, is to develop the strategic commitments by all the parties to clean up handling.

Mark J. Duff: First let me start with the developments at Hanford as many of you may be aware do you has been involved in what is known as the holistic negotiations for nearly five years with members of the Tri Party agreement at Hanford, which includes the state of regulators state regulators E. P. A N. The Doa.

Mark J. Duff: The purpose of these negotiations as defined in the Hanford settlement agreement published for the public are published for public comment.

Mark J. Duff: Just a few weeks ago on April 29th is.

Mark J. Duff: Is to develop the strategic commitments by all the parties to cleanup Hanford.

Mark J. Duff: I'd like to congratulate DOE for defining an agreement that adapts new technologies to accelerate the tank cleanup program while leveraging existing commercial capabilities to be an integral part of the program over the next several decades. Under the settlement agreement, DOE states that the DF Law Hot Commissioning Program will be completed no later than August of 2025. While this is a few quarters later than anticipated, DOE is committed to this schedule in a legally binding agreement and may complete the milestone sooner.

Mark J. Duff: I would like to congratulate the UE for defining an agreement that adopts new technologies to accelerate the tank cleanup program, while leveraging existing commercial capabilities to be an integral part of integral part of the program over the next several decades.

Mark J. Duff: Under the settlement agreement.

Mark J. Duff: States that the D F. La Hot commissioning program will be completed no later than August of 2025. While this is a few quarters later than anticipated. He was committed to the schedule in a legally binding agreement I may complete the milestone sooner as we've discussed the D flow affluent will be processed by perfect northwest.

Mark J. Duff: As we've discussed, the DF Law effluent will be processed by Perma-Fix Northwest to include any potential waste generated during the Hot Commissioning Program as well, and along with supporting the DF Law operations for at least the initial 10 years of its operational life.

Mark J. Duff: Yes.

Mark J. Duff: To include any potential waste generated during the hot commissioning program as well.

Mark J. Duff: And Oh, along with supporting the Diablo operations.

Mark J. Duff: For at least the initial 10 years of its operational life.

Mark J. Duff: We believe we are well positioned to treat all of the effluent waste from the operations as defined in the January 2023 Record of Decision by DOE, which estimates up to 8,000 cubic meters of waste to be generated annually upon the hot start-up of the vitrification plant. As I've mentioned in the past, the volume of this waste would be more than double the current production of all of our plants combined on an annual basis.

Mark J. Duff: We believe we are well positioned to treat all of the effluent waste from the operations as defined in the January of 2023 record of decision by the UE, which estimates up to 8000 cubic meters of ways to be generated annually upon hot start up of the vitrification.

Mark J. Duff: As I've mentioned in the past the volume of this waste will be more than double the current production of all of our plants combined.

Mark J. Duff: On an annual basis.

Mark J. Duff: Also, to find a new settlement agreement, DOE is committed to complete waste retrieval from 22 tanks within the West Tank Farm for grouting off-site and disposal off-site by 2040. It's difficult to define the exact quantity of waste to be removed from this inventory during that period, but unofficial estimates include expectations for up to approximately 3 million gallons of waste to be processed annually to meet these goals for 2040. The agreement is unclear about when these operations would commence.

Mark J. Duff: Also defined a new settlement agreement do you always committed to complete waste retrieval from 'twenty two tanks within the waste West tank farm for Grouting, Offsite and disposal off site by 2040.

Mark J. Duff: It's difficult to define the exact quantity a waste of your move from this inventory during that period, but unofficial estimates include expectations for up to approximately 3 million gallons of waste to be processed annually to meet these goals.

Mark J. Duff: 2040, the agreement is unclear about when these operations would commence however.

Mark J. Duff: However, the recent Hanford Systems 10 document defines retrieval operations beginning in the January 26 timeframe. This is critically important as the DOE has formally recognized grouting's importance relative to the overall closure strategy as a preferred supplement to the current DOE vitrification strategy. And while DOE will continue to develop multiple pathways for grouting, we remain confident that our existing Perma-Fix Northwest facility in Richland, Washington, adjacent to the site, will continue to provide the lowest risk, best value strategy for grouting this waste for transport in a solid form via rail to out-of-state disposal facilities.

Mark J. Duff: The recent Hanford systems 10 document defines retrieval operations beginning in the January 26 timeframe. This is critically important as a D. O is formally recognized grouting importance relative to the overall closure strategy.

Mark J. Duff: Preferred supplement to the current deal we'd vitrification strategy.

Mark J. Duff: Well D. We will continue to develop multiple pathways for.

Mark J. Duff: For Grouting, we remain confident that our existing perma fix northwest facility in Richland, Washington adjacent to the site will continue to provide the lowest risk best value strategy for grouting. This waste for transport and a solid form via rail to out of state disposal facilities.

Mark J. Duff: We believe that our location is ideally suited to treat a large portion of this waste given its proximity, its permits, and our proven track record overall for safety. Moreover, we believe we can provide a highly cost-effective solution to these wastes that could potentially save taxpayers billions of dollars as an alternative to vitrification alone. The Hanford mission and planning that has unfolded to include grouting of tank waste is a huge validation of our capabilities.

Mark J. Duff: We believe that our location is ideally suited to treat a large portion of this waste given its proximity as permits and our proven track record overall for safety.

Mark J. Duff: Moreover, we believe we can provide a highly cost effective solution for these ways that could potentially save taxpayers billions of dollars as an alternative to vitrification alone.

Mark J. Duff: Hanford mission and planning that has unfolded to include grouting of tank waste is a huge validation of our capabilities as such we plan to increase from a current capacity of 300000 gallons per year.

Mark J. Duff: As such, we plan to increase from our current capacity of 300,000 gallons per year for grouting to levels of around 3 million gallons per year as the program progresses over the next several years. However, as I mentioned, the agreement is unclear about when these operations would commence.

Mark J. Duff: For grouting to levels around 3 million gallons per year as the program progresses over the next several years as I mentioned the agreement is unclear about when these operations would commence however, the hanford systems.

Mark J. Duff: However, the Hanford System... Rev 10 document published in January by DOE is currently being implemented to include two new Tank Waste Removal Systems to be installed and operating in late 2025 and early 2026. One of these removal systems will be built, installed, and operated to support the DF Law Facility, while the other will be dedicated to the removal of tank waste for shipment to commercial grouting facilities for off-site disposal. This is a very significant development and reaffirms our strategy and outlook for our involvement in these transformative projects.

Mark J. Duff: <unk> 10 document published in January of Ideally is currently being implemented to include two new tank.

Mark J. Duff: Tank waste removal systems to be installed and operating in late 2025.

Mark J. Duff: In early 'twenty six.

Mark J. Duff: One of these removal systems will be built installed and operated to support the D F La facility.

Mark J. Duff: While the other will be dedicated to the removal of tank waste for shipment to commercial grouting facilities for off site disposal.

Mark J. Duff: This is very significant development and reaffirms our strategy and.

Mark J. Duff: In outlook for our involvement in these transformative projects.

Mark J. Duff: Overall, we look forward to working closely with the UE to support this mission of Remediated Hanford, both through vitrification and through routing as well as leveraging these capabilities at our other critical sites around the country.

Mark J. Duff: Overall, we look forward to working closely with DOE to support this mission of remediating Hanford both through vitrification and through grounding as well as leveraging these capabilities that are available at other critical sites around the country. On a separate note, we're expanding our waste treatment offering within the commercial and international markets, including Europe, Mexico, and Canada. As announced last year, our joint venture was awarded a 50 million euro, seven-year contract by the Joint Research Council through the European Union at the ISPRA facility in Italy.

Mark J. Duff: Yeah.

Mark J. Duff: On a separate note, we're expanding our waste treatment offering within the commercial and international markets, including Europe, Mexico, and Canada that was announced last year. Our joint venture was awarded a 50 million Euro seven year contract by the joint Research Council.

Mark J. Duff: The European Union at the <unk> facility in Italy.

Mark J. Duff: Work on this project is progressing at JRC as we continue to work on the design and business model for a proposed new facility in the UK, with the initial waste shipments projected for that JRC contract to begin in late Q4 2025 to the US until the new facility in the UK is This and other international opportunities in Germany and other European countries, along with Mexico, are expected to generate sustained receipts beginning in 2025, providing combined revenues estimated to be over $10 million annually.

Mark J. Duff: Work on this project is progressing at J F. C. As we continue to work on the design of business model for our proposed new facility in the U K with initial waste shipments projected for that JRC contract to begin in late.

Mark J. Duff: Our Q4 2025 to the U S until the new facility in the U K as commission.

Mark J. Duff: This award is very important to us and it opens up substantial opportunities throughout Europe.

Mark J. Duff: This and other international opportunities in Germany.

Mark J. Duff: In other European countries, along with Mexico are expected to generate sustained receipts beginning in 2025, providing combined revenues are estimated to be over $10 million annually.

Mark J. Duff: On one final note I'd like to discuss the rapid and significant progress, we're making in advancing our new patent pending technology to treat P fast contamination, which we recently recently trademark as Perm a fast are both the white house any P. A have made this a major focus I do the hazards associated with these.

Mark J. Duff: On one final note, I'd like to discuss the rapid and significant progress we're making in advancing our new patent-pending technology to treat PFAS contamination, which we recently trademarked as PERMAFAST. Both the White House and EPA have made this a major focus due to the hazards associated with these forever chemicals. Thousands of sites across the country and the world have large inventories of these chemicals, not to mention all the sites with PFAS contamination that would require remediation.

Mark J. Duff: Quote forever chemicals.

Mark J. Duff: Thousands of sites across the country.

Mark J. Duff: In the world have large inventories of these chemicals not to mention all the sites with P. Foster contamination that would require remediation.

Mark J. Duff: Estimates of this market vary widely, but the opportunity to provide services and treat PFAS contaminated waste for government, municipal, and commercial applications is estimated to exceed $100 billion over the next 10 years. In addition, initial estimates associated with impacted soils include more than 200 million acres of contaminated farmland in the U.S. alone. In addition to earmarking billions of dollars in federal funding, the EPA has taken decisive action to address this problem, including the recent designation of PFAS as a hazardous substance, which enables the agency to compel responsible parties to pay for or conduct investigations and cleanup, as well as the addition of seven additional PFAS to the list of chemicals covered by the Toxics Release Inventory.

Mark J. Duff: Estimates of this market very widely however, the opportunity to provide services and treat paphos contaminated waste for government municipal and commercial applications is estimated to exceed $100 billion over the next 10 years.

Mark J. Duff: In addition.

Mark J. Duff: Initial estimates associated with impact of soils include more than 200 million acres of contaminated farmland in the U S. Alone. In addition to earmarking billions of dollars in federal funding. The EPA has taken decisive action to address this problem, including the recent designation of P. Faas as a hazardous substance, which enables that agency to compel.

Mark J. Duff: Responsible parties to pay for or conduct investigations and cleanup as well as the addition of seven additional P. Fast to list to the list of chemicals covered by the toxic release inventory.

Mark J. Duff: EPA has also issued a circular enforcement discretion policy that makes it clear that EPA will focus enforcement on parties who significantly contribute to the release of PFAS chemicals into the environment, including parties that have manufactured PFAS or used PFAS in the manufacturing process, along with federal facilities and other industrial parties.

Mark J. Duff: EEP has also issued a circle enforcement discretion policy that makes it clear that EPA will focus enforcement on parties, who significantly contribute to the release of <unk> chemicals into the environment, including parties that are manufactured P fast or use P fast.

Mark J. Duff: In the manufacturing progress process, along with federal facilities and other industrial parties.

Mark J. Duff: Importantly, current and former waste producers are now beginning to understand that liability ultimately resides with the generator of the waste, and that they are not absolved of this liability if the waste is not properly remediated. In contrast to our process, which offers a sustainable and environmentally responsible solution, traditional disposal methods for PFAS-contaminated materials such as deep well injection and landfilling pose substantial environmental risk, including the potential for groundwater contamination. Toward this end, we continue to scale the process, and with the pilot plant test now complete, we have a very high degree of confidence in moving forward. The pilot plant testing was not only successful, but it exceeded our expectations. In fact, our process achieved PFAS destruction levels of 69 or 99.9999%. Anticipated Regulatory Requirements These tests affirm that...

Mark J. Duff: Importantly, current and former waste producers producers are now beginning to understand that liability ultimately resides with the generator of the waste and that they are not absolved of this liability of the waste is not properly remediated.

Mark J. Duff: In contrast to a party or excuse me in contrast to our process, which offers a sustainable and environmentally environmentally responsible solution.

Mark J. Duff: Traditional disposal methods for PFS contamination materials, such as depot injection.

Mark J. Duff: In landfilling post substantial environmental risks, including the potential for groundwater contamination.

Mark J. Duff: Towards this end, we continue to scale the process and with the pilot plant tests now complete we have a very high degree of confidence to move forward.

Mark J. Duff: The pilot plant testing was not only successful but exceeded our expectations. In fact, our process achieved PFS destruction levels of six nines or $99 90, 999%.

Mark J. Duff: Exceeding our anticipated regulatory requirements.

Mark J. Duff: These tests are firm.

Mark J. Duff: I'll reaffirm our prior bench scale testing which indicated our process should effectively destroy these harmful chemicals at high levels of efficiency and can be applied to a variety of potential markets including liquids, soils, biosolids, solids, and sludges. The initial feedback from potential customers we've been talking to has been extremely positive, given the increasing pressure to treat and dispose of waste from these waste streams. In addition to the costs associated with storing these materials, as I mentioned, there are significant growing legal and regulatory requirements to treat these wastes, not to mention the potential liabilities associated with these harmful and dangerous waste streams.

Mark J. Duff: I will reaffirm our prior bench scale testing, which indicated our process should effectively destroy these harmful chemicals at high levels of efficiency and can be applied to a variety of potential markets, including liquids soils.

Mark J. Duff: Biosolids solids and sludges.

Mark J. Duff: The initial feedback from customer from potential customers. We've been talking to has been extremely positive given the increasing pressure to treat and dispose of waste Oh for these waste streams. In addition to the costs associated with storing these materials.

Mark J. Duff: As I mentioned, there are a significant growing legal and regulatory requirements to treat these waste not to mention the potential liabilities associated with these harmful and dangerous waste streams that are.

Mark J. Duff: Permeated Landfills and Water, We're now in the process of the final design of the operational unit, and we've also selected a build partner for the fabrication of our initial operational system and look forward to providing updates on this shortly. As a result, we're aiming for startup in September of a system that can destroy PFAS at approximately 1,000 gallon batches up to three times a day. We anticipate this system will receive a variety of modifications and upgrades as we optimize performance and make adjustments to the treatment framework.

Mark J. Duff: Permitted landfills and water supplies.

Mark J. Duff: We're now the proxy process of the final design of the operational unit and we've also selected a build partner for the fabrication of our initial operations system operational system and look forward to.

Mark J. Duff: Providing updates on this shortly as a result, we're aiming for startup in September of a system that can destroy P. Fast at approximately a thousand gallon batches for up to three times a day.

Mark J. Duff: The system will receive a variety of modifications and upgrade.

Mark J. Duff: As we optimize performance and make adjustments to the treatment parameters.

Mark J. Duff: We have established goals for additional units to be installed in each of our existing treatment plants in 2025.

Mark J. Duff: We have established goals for additional units to be installed at each of our existing treatment plants in 2025. In parallel with this effort, we're rapidly progressing the development of both soil and bio-sludge applications, which will use the same technology but require different engineering considerations. We have completed bench scale demonstrations successfully on the solids and are now moving towards pilot scale testing at a 55-gallon volume. We also continue to develop partnerships with industry leaders in remediation as well as universities to provide R&D breadth and verification of services and performance while expanding on new ideas and applications. As I mentioned, given the low cost.

Mark J. Duff: Parallel with this effort we are rapidly progressing the development of both soil and bio sledge applications.

Mark J. Duff: Which will use the same technology, but require different.

Mark J. Duff: Engineered considerations.

Mark J. Duff: We have completed bench scale demonstration successfully on all new solids and are now moving towards pilot scale testing a 55 gallon volume.

Mark J. Duff: We also continue to develop partnerships with industry leaders in remediation as well as universities to provide R&D breath in verification of services and performance, while expanding on new ideas and applications.

Mark J. Duff: As I mentioned, given the low cost.

Mark J. Duff: As well as the technological and environmental advantages of our new process, we are already witnessing significant interest from large potential customers as well as regulatory agencies. We expect to begin generating revenue from this process in Q4, and our initial estimate for revenues in 2024 is approximately $1 to $2 million. However, based on discussions with customers, we expect to dramatically expand our revenues from this process in 2025, as we have the ability to ramp up production rapidly, and this process has a very high margin potential.

Mark J. Duff: As well as the technical technological and environmental advantages of our new process. We are already witnessing significant interest from large potential customers as well as regulatory agencies we.

Mark J. Duff: We expect to begin generating revenue from this process in Q4.

Mark J. Duff: Our initial estimate for revenues in 'twenty four is approximately $1 million to $2 million. However, based on discussions with customers, we expect to dramatically expand our revenues from.

Mark J. Duff: This process in 2025, as we have the ability to ramp up production rapidly in this process as it has a very high margin potential.

Mark J. Duff: So to wrap up, we're extremely encouraged by the outlook for the business, the foundation we have laid over the past several years, and the investments we've undertaken in the first half of 2024 should position Perma-Fix for solid growth in the second half of the year and set the stage for a potential breakout year in 2025 and beyond. We've also trimmed certain costs and have built a highly scalable business model that we expect will drive very meaningful returns for our shareholders. All right, on that note, I'll now turn it over to Ben, who will discuss the financial results in more detail. Ben. Thank you.

Speaker Change: So to wrap up we're extremely encouraged by the outlook for the business. The foundation, we have laid over the past several years and the investments we've undertaken in the first half of 'twenty 'twenty four should position perma fix for solid growth in the second half of the year and set the stage for a potential breakout year in 2025 and beyond.

Ben: We've also trimmed certain cost and have built a highly scalable business model, which we will expect our we expect will drive very meaningful returns for our shareholders.

Mark J. Duff: Right on that note I'll now turn it over to Ben who will discuss the financial results in more detail.

Ben: Thank you Mark.

Benio Annaldo Naccarato: Let me start with revenue. Our total revenue from continuing operations for the first quarter was $13.6 million compared to last quarter, and the year's first quarter of $20.1 million, a decrease of 6.5 million or 32 percent. Revenue decreased in both our operating segments as treatment revenue was down $885,000 as a result of lower volume of waste treated as well as lower average price, lower average prices related to the waste mix. In the services segment, our revenue was down $5.6 million, primarily due to the two large projects which were effectively completed at the end of 2023 and were not replaced by similar-sized projects due to the timing of contract wins and delays in startup new projects, partly in part from continuing

Ben: Let me start with revenue our total revenue from continuing operations for the first quarter was $13 6 million compared to last.

Benio Annaldo Naccarato: Years' first quarter of $20 1 million, a decrease of $6 5 million or 32%.

Benio Annaldo Naccarato: Revenue decreased in both our operating segments as treatment was down 885000, as a result of lower volume of waste treated as well as lower average prices.

Benio Annaldo Naccarato: Lower average prices related to the waste mix in our services segment. Our revenue was down $5 6 million, primarily due to the two large projects, which were effectively complete.

Benio Annaldo Naccarato: In 2023 and were not replaced by similar sized projects due to the timing of contract wins and delays in start up new projects.

Benio Annaldo Naccarato: Finally in part from continuing resolution impacts.

Benio Annaldo Naccarato: Our gross profit for the quarter was a negative $620,000 compared to $3 million in gross profit in Q1 of 2023. In both segments, lower revenue had a significant impact on our gross profit, with a cumulative total of approximately $2.1 million, and in addition... Lower margin waste slash project mixes also impacted gross profit by about 1.7%. As we've previously disclosed, especially in the treatment segment, we carry significant fixed costs, which have a big impact on our gross profit when revenue is low.

Benio Annaldo Naccarato: Our gross profit for the quarter was a negative 620000 compared to $3 million of gross profit in Q1 of 2023.

Benio Annaldo Naccarato: In both segments lower revenue had a significant impact on our gross profit with accumulative total of approximately $2 1 billion.

Benio Annaldo Naccarato: And in addition.

Benio Annaldo Naccarato: Lower margin waste Slash project mixes also impacted gross profit by about $1 seven.

Benio Annaldo Naccarato: As we've previously as we've previously disclosed, especially in the treatment segment, we carry significant fixed costs, which have a big impact on our gross profit when revenue is low.

Benio Annaldo Naccarato: Our G&A costs for the quarter were $3.5 million, which is higher than the prior year by $58,000. This modest increase in costs was a result of higher business development costs, which offset lower legal fees and utility expenses.

Benio Annaldo Naccarato: Our G&A costs for the quarter were $3 5 million, which is higher than prior year by 58000. This modest increase in cost was a result of higher business development costs, which offset lower legal fees and utility expenses.

Benio Annaldo Naccarato: Our net loss for the quarter was $3.6 million compared to last year's net loss of $411,000. Total basic and diluted loss per share for the quarter was $0.26 compared to a loss per share of $0.03 in the prior year. EBITDA continuing operations for the quarter as defined in this morning's press release was negative $4 million, compared to EBITDA of $171,000. Turning to the balance sheet, cash on the balance sheet was $2.4 million compared to $7.5 million at year-end 2023.

Benio Annaldo Naccarato: Our net loss for the quarter was $3 6 million compared to last year's net loss of 411000.

Benio Annaldo Naccarato: Total basic and diluted loss per share for the quarter was 26.

Benio Annaldo Naccarato: Compared to a loss per share of <unk> in the prior year.

Benio Annaldo Naccarato: EBITDA from continuing operations for the quarter as defined in this morning's press release was negative $4 million.

Benio Annaldo Naccarato: Compared to EBITDA of 171000.

Benio Annaldo Naccarato: Turning to the balance sheet cash on the balance sheet was $2 4 million compared to $7 5 million at year end 2023.

Benio Annaldo Naccarato: Our current liabilities were down $1.3 million, reflecting decreased costs associated with production as well as the timing of vendor payments. Our waste backlog at the end of March was $10.6 million, up from $8.7 million at the end of last year and up from $9.4 million in March 2023. Our total debt for the quarter is $2.7 million, excluding our debt issuance costs, most of which is owed to PNC Bank. Finally, I'll summarize our cash flow activity for 2024.

Benio Annaldo Naccarato: Our current liabilities were down $1 $3 million, reflecting decreased costs associated with production as well as timing of vendor payments our.

Benio Annaldo Naccarato: Our waste backlog at the end of March was $10 6 million up from $8 7 million at the end of last year and up from $9 4 million in March 2023.

Benio Annaldo Naccarato: Our total debt for the quarter is $2 7 million, excluding our debt issuance costs, most of which is owed PNC bank.

Benio Annaldo Naccarato: Finally, I'll summarize our cash flow activity for.

Benio Annaldo Naccarato: For 2024.

Benio Annaldo Naccarato: Our cash used by continuing operations was $4.4 million, and our cash used by discontinued operations was $159,000. Cash used for investing in continuing operations was $244,000, and that relates to capital spending. Our cash used for financing was $125,000. This is representative of our monthly payments on our term and capital loans of $259,000 and payments to our finance leases of $75,000, offset by receipts from option and warrant exercises of $209,000. With that, I will now turn the call over to the operator for questions.

Benio Annaldo Naccarato: Cash used by continuing operations was $4 4 million, our cash used by discontinued operation of 159000 cash used for investing.

Benio Annaldo Naccarato: And continuing operations was 244000 and that relates to capital spending.

Benio Annaldo Naccarato: Our cash used for financing was 125000. This is representative of our monthly payments on our term in capital loans of 259000 and payments to our finance leases of 75000 offset by receipts from option and warrant exercises of 209000.

Benio Annaldo Naccarato: Yeah.

Benio Annaldo Naccarato: With that I will now turn the call over to the operator for questions.

Benio Annaldo Naccarato: Certainly the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we ask that will posing your question. Please pickup your handset.

Operator: The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we poll for questions. Your first question is coming from Howard Brous with Wellington Shields. Please ask your question. Your line is live.

Howard Brous: Speaker phone could you provide the optimal sound quality.

Operator: Just a moment, while we poll for questions.

Howard Brous: Your first question is coming from Howard <unk> with Wellington Shields. Please pose your question your line of sight.

Howard Brous: Thank you.

Howard Brous: Thank you. Mark, Ben, Lou, first of all, congratulations on creating a myriad of opportunities that we're looking at. So, congratulations. The Hanford Settlement, State of Washington, Department of Ecology, DOE, EPA.

Howard Brous: Mark then Lew first of all congratulations on creating a myriad of opportunities.

Howard Brous: We're looking at Oh congratulations.

Howard Brous:

Howard Brous: Enhancements settled in state of Washington Department of Ecology Daily E. P. A M.

Mark J. Duff: Mark, the document you were referring to, I certainly read the document. I need for you to confirm my understanding that this is a legally binding agreement amongst all these parties. Is that a correct statement?

Howard Brous: Mark what you were referring to.

Mark J. Duff: Certainly read the documents.

Mark J. Duff: For you to confirm my understanding that this is a legally binding agreement amongst all these parties is that a correct statement.

Mark J. Duff: That is a true statement, Howard. It is a legally binding document. It has taken a long time, as I mentioned, almost five years with a mediator to come to these conclusions, and there's been a lot of give and take between the regulators and DOE. There's a lot of funding considerations that go into it, schedule considerations. So the commitments in there are really written in stone. However, do keep in mind it's a draft document. It's going to be coming out for public comment. I can't remember when it comes out, but it's soon, in 60 days.

Mark: That is a true statement Howard it is a legally binding document.

Mark J. Duff: It's taken a long time as I mentioned, almost five years of with the mediator.

Mark J. Duff: To come these conclusions.

Mark J. Duff: And there's a lot of give and take between the regulators and D O N E.

Mark J. Duff: There's a lot of funding considerations go into it schedule considerations. So the commitments and there are really written in stone, how Rick do keep in mind, It's a draft document.

Mark J. Duff: There's going to be coming out for public comment I can't remember when it comes out but soon.

Mark J. Duff: For 60 days.

Mark J. Duff: And I do believe it's going to be very well received. I'm sure there will be many comments. But the reason it's going to be well received is unlike some of the prior agreements between the Tri-Party, this one has a lot of action in it. And I know from talking to DOE that that was their intent, to be able to show real progress, meaningful progress, beginning with this administration, and to show that there's an end state or end goal that's defined. And a way to get there that recognizes what the technologies they've selected will do. In other words, what vitrification can actually do, plus grouting.

Mark J. Duff: And I.

Speaker Change: I do believe it can be very well received I'm.

Mark J. Duff: Truly many comments, but the reason it's gonna be well received is unlike some of the prior agreement.

Mark J. Duff: Agreements between the Tri Party. This one has a lot of action on it and I know from talking to D. O E that that was their intent is to be able to show real progress meaningful progress.

Mark J. Duff: Beginning with this administration.

Mark J. Duff: And to show that there is a dozen and Theres an end state of our end goal.

Mark J. Duff: Define in a way to get there that recognizes.

Mark J. Duff: What the technology that they've selected will do in other words, what what vitrification can actually do a plus crowding. So to answer your question, yes, it's legally binding Doc but once it gets through public comment then.

Mark J. Duff: So to answer your question, yes, it's a legally binding document. Once it gets through public comment, then it will be commitments on all three parties.

Mark J. Duff: And then it'll be it'll be commitments on all three parties.

Howard Brous: One comment in the document: the parties agree that the settlement agreement is not subject to public comment, and that clearly means that this is effectively locked in stone. And if I refer to, first of all, the rod that was put out on January 20, 23.

Mark J. Duff: One comment in the documents the parties agreed that the settlement agreement is not subject to public comment.

Howard Brous: And that clearly means.

Howard Brous: Effectively locked in stone.

Howard Brous: I referred to first of all the Rod that was put out.

Howard Brous: January 'twenty one.

Howard Brous: Three.

Speaker Change: Yeah, all the documents that was put in January of 'twenty.

Howard Brous: The other documents that were put in on January 23, and the most recent settlement agreement. It basically locks in, first of all, the rod locks you in, Perma-Fix, for 10 years, but, D.F. Law and the affluent will be treated, from 2025, the latest August, possibly earlier, to 2060. I know you don't have a contract other than the rod, but effectively, is there any competition? So, your question is, I'm sorry, I don't understand, Howard, your question is, is there..., is what is the competition associated with treating the effluent from DF law? Right. Yeah, right now, the rod does commit to 10 years. And upon startup, and, The reason is...

Howard Brous: Sorry.

Howard Brous: Most recent settlement agreement.

Howard Brous: It basically locks in.

Howard Brous: First of all the Rod locks you in permitting.

Howard Brous: Yeah.

Howard Brous: Right.

Howard Brous: He has a lot of fluid.

Howard Brous: It will be treated.

Howard Brous: From 2025, the latest August possibly early 2016.

Howard Brous: I know you don't have a contract with.

Howard Brous: Other than the Rod.

Howard Brous: Secondly is there any competition.

Howard Brous: So you're quite right.

Speaker Change: Your question is to make sure I understand how are your question is is there.

Howard Brous: What is the competition associated with the treating the effluent from D. A floor right.

Howard Brous: Yeah, right now the Rod does commit to 10 years and upon startup.

Howard Brous: And and.

Howard Brous: And the reason is.

Mark J. Duff: Less competition for pretty much any of the other opportunities at Hanford relative to waste management is because the waste gets disposed of. After we treat the waste or anyone treats the waste, it gets disposed of at the Hanford landfill locally. So it would not make any sense to have anyone outside of the area of the region ship it to and then ship it back while we're just 10 miles down the road from the actual sites themselves.

Howard Brous: Less competition for any any pretty much into the other opportunities at Hanford relative to waste management is because the waste gets disposed of after we treat their waste or any retreat choice. It gets disposed of at the Hanford landfill locally so it would not make any sense to have anyone outside of the area of the region.

Mark J. Duff: Shipped to them this <expletive> of ship it back well, we're just 10 miles down the road.

Mark J. Duff: From the actual sites themselves. So yes, it would be very difficult as I've mentioned before.

Mark J. Duff: For someone to get a permit it takes upwards of 10 years to get a permit.

Mark J. Duff: I'd also take significant investment in the facility itself and citing it and licensing it and going through all the processes to get it commissioned.

Mark J. Duff: So.

Mark J. Duff: [inaudible] It's very solid for 10 years, and most likely, I don't see any or very limited risk the DOE would decide to build these facilities on their site as long as we're providing value and doing the job efficiently.

Mark J. Duff: It's a very it's very solid for 10 years, and most likely I don't see any any or very limited risk. The deal we would decide to build these facilities on their site.

Mark J. Duff: As long as we're providing value and doing the job efficiently.

Mark J. Duff: Secondly.

Mark J. Duff: So, effectively... You're going to be treating the effluent for the next 35 years starting no later than August of next year. Is that basically a fair statement? That's true. That's the truth. Again, I can't, I can't commit, you know, beyond 10 years, but it would be a very high probability that there'll be, it'll be supporting that plant through the life of the plant, which is 2016. In addition, in the settlement, they also discussed other opportunities, certainly with the high-level waste; they plan on building a second vitrification plant. So it's not just the split between, and I hope I get this correct. The East Tank is supposed to be, the East Tanks are supposed to be vitrified, and the West Tanks are supposed to be grouted.

Mark J. Duff: Yoga is going to be treating the affluent for the next 35 years starting no later than August.

Speaker Change: Yeah, Okay. Thank you.

Mark J. Duff: Cynthia Tan statement is true it's true I forget I cant I cant commit beyond 10 years, but it's a very high probability that there'll be it'll be supporting that plant through the life of the plant which is 2016.

Mark J. Duff: Okay.

Mark J. Duff: In addition on the settlement.

Mark J. Duff: Also discuss.

Mark J. Duff: Other opportunities certainly.

Mark J. Duff: With the high level waste they plan on building.

Mark J. Duff: Second vitrification plant.

Mark J. Duff: So it's not just the split between them.

Mark J. Duff: Hope I get this correct.

Mark J. Duff: These tank is supposed to be chunks are supposed to be vitrify, the west coast as opposed to be crowded.

Mark J. Duff: Do I have that correct.

Howard Brous: You have that correct. It is confusing, though, Howard, the way you brought it up.

Speaker Change: You have that correct. It is a confusing owe Howard I'm glad you brought it up yes. There was originally three vitrification plants planned for this first one was just getting rolling it up that's designed to do a million gallons a year and that was to do the first 40% on the East tank Farm then it was going to be one for the West tank farm. It was going to be you know.

Mark J. Duff: Yes, there were originally three vitrification plants planned. The first one, which is getting rolling, is designed to do a million gallons a year, and that was to do the first 40% of the East Tank. Then there was going to be one for the West Tank Farm that was going to be, you know, constructed. And then there's one that they've already started construction on, which will do the other 20%, which they're viewing as high-level waste.

Mark J. Duff: Constructed and then Theres one is they've already started construction, which will do the other 20%, which they're viewing as the high level waste I love waste. If I remember correctly is supposed to be commissioned or startup in 36 or 34.

Mark J. Duff: The high-level waste, if I remember correctly, is supposed to be commissioned or start up in 36 or 34. And that's a whole different ballgame. We're not sure how much we're participating in anything to do with that yet, so it's premature to speculate. But so it's those three plans. The tri-party agreement, or excuse me, the settlement agreement that was just approved, changes that three vitrification plant approach to two and takes forty percent or fifty percent just about of the west tanks and grouts those.

Mark J. Duff: And that's a whole different ballgame, we're not sure how much we're participating in anything to do with that yet it's just premature to speculate.

Mark J. Duff: But so it's those three plants the Tri Party agreement worsening of the settlement agreement that was just approved.

Mark J. Duff: Changes that three vitrification plant approach to too and it takes a 40% or 50% just about all of the west tanks and grout those.

Mark J. Duff: So effectively if.

Howard Brous: Effectively, if I understand correctly, the high-level waste is about six to eight million gallons. And they're going to split it between the balance 24 million gallons to be vitrified and 24 million gallons to be grouted. That is correct, as I understand it.

Howard Brous: I understand the high level waste is about six 8 million gallons.

Howard Brous: And then the split between the balance 24 million gallons a day.

Howard Brous: <unk> and 24 million gallons to be granted.

Howard Brous: Correct understanding it's pretty darn close that's the right power.

Howard Brous: It's pretty darn close, that's right, Howard. Oh, it says 24.

Howard Brous: So if there are 24 million gallons of low-level waste plus possibly the high-level waste, this effectively will go on for the next 30, 40 years. That's right. That's all I have. Thank you. Best of luck, everybody.

Speaker Change: No. It says 24 million gallons of low level, plus possibly the high level waste.

Howard Brous: Secondly will go on for the next 30 40 years.

Speaker Change: That's right.

Howard Brous: Alright.

Howard Brous: That's all I have thank you best of luck.

Speaker Change: Okay everybody.

Speaker Change: Alright, Thanks Howard.

Howard Brous: Your next question is coming from Ross Taylor with Prs investments. Please pose your question your line is nice.

Ross Taylor: Your next question is coming from Ross Taylor with ARS Investments. Please ask your question; your line is live.

Ross Taylor: Okay.

Ross Taylor: Thank you. And Mark, I would second Howard's comment about setting up a tremendous array of opportunities to push forward. A couple of things I want to get into. You've mentioned Central Europe and the opportunities there. We all know that Germany basically, I think, pulled down their fleet of nuclear reactors. Can you give us an idea of both timing and the magnitude, both size dollar-wise, but also the time horizon over which you expect to see those programs run? And when do we start to see money, revenue, come from them? And how long, once it starts, how long do you think it lasts?

Ross Taylor: And Mark I would second Howard's comment about setting up a tremendous array of opportunities pushing forward.

Ross Taylor: Couple of things when I get into you've mentioned central Europe.

Ross Taylor: <unk>, we all know that Germany, basically I think pulled down their fleet of nuclear reactors can you give us an idea of both timing and magnitude both size dollar wise, but also time horizon that you expect to see those programs.

Ross Taylor: Ron when do we start to see money revenue come from them and how long once it starts how long do you think that lasts.

Speaker Change: Yeah, the way, they're working things in Germany, Ross and thanks for the kind of work the way it works in Germany as well.

Mark J. Duff: Yeah, the way they're working things in Germany, Ross, and thanks for the kind words, but the way it works in Germany is that one central organization is managing the waste that's generated from the decommissioning process, and that's one of the entities we're working with over there to provide the treatment technologies we have here in the U.S. to reduce the volumes of waste they generate by a significant amount. 75% to 90% and put them in a position where they can be stored in the new Germany or German storage facility called the Conrad facility. The Conrad facility is going to provide radioactive waste storage for the whole country.

Mark J. Duff: One central organization is managing the waste that's generated from the decommissioning process and that's who we're work one of them one of the entities were working with over there.

Mark J. Duff: As to provide the treatment technologies, we have here in the U S. A.

Mark J. Duff: To reduce the volumes of waste they generate by a significant amount.

Mark J. Duff: 75% to 90%.

Mark J. Duff: And with them in a position where they can be stored in the new Germany, our German.

Mark J. Duff: Storage facility called the Conrad facility and the Conrad facility is going to provide a radioactive waste storage for the whole country.

Mark J. Duff: It's going to be very large, and what they're basically doing is defining the waste acceptance criteria or the criteria for storing waste there now, and everybody who plans to ship to them has to meet that criteria now. We've already been through this process with a larger client in Germany, which requires a review by German regulators of our facilities and the way we treat waste; they do walk-downs, and there's all kinds of paperwork, permits, and plans. That's all been approved.

Mark J. Duff: It's going to be very large.

Mark J. Duff: And what they are basically doing is defining the waste acceptance criteria, whether the criteria was supposed to put store there now and everybody who had plans to ship to them has to meet that criteria now.

Mark J. Duff: We've already been through this process with a larger client in Europe and in Germany.

Mark J. Duff: Which requires review of the by the German regulators of our facilities and our the way we treat waste and they do walk downs, there's all kinds of paperwork and permits and plans. It's all been approved we're applying for the same things for these for the decommissioning program as well. So that's where we are in the process. So to answer your question.

Mark J. Duff: We're applying for the same things for the decommissioning program as well, so that's where we are in the process. I think we'll start off slow; everyone's moving very slowly over there as we're getting through this permitting process and everything goes along with that and the agreements we have to get in place. So we anticipate starting to see a reasonable increase in German waste to the tune of about five or six million dollars a year in the late 24-month timeframe.

Mark J. Duff: I think it will start off slow everyones.

Mark J. Duff: Moving very slowly over there as we're getting through the permitting process and.

Mark J. Duff: Everything goes along with that and agreements we have to get in place. So.

Mark J. Duff: So we anticipate starting to see a reasonable increase in German waste to the tune of about five or $6 million a year.

Mark J. Duff: In the late 'twenty four time frame.

Mark J. Duff: And.

Mark J. Duff: Once we get the plant that we're proposing in the UK up and running, we see that number at least doubling because it's so much more efficient and economical with the plant over there. It's really difficult to define since we don't have hard and fast contracts in our hands at this point, but we know the waste they've got, and we know the volumes they have. They're very, very large volumes. They have very fast or accelerated timelines they have to implement to remove their waste from storage, put it in stable forms, and then get it in the Conrad facility when it's up and running, which I think is a 28 or 29 timeframe, and there's a real sense of urgency for that. So we see that really increasing in Q4 and through 25.

Mark J. Duff: Once we get the plant that we're proposing on the U K up and running we see that number at least doubling and because it's so much more efficient and economical with the plan over there so.

Mark J. Duff: It's it's really difficult to define says we don't have a hard fast contracts in our hands at this point, but we know the way they've got winter. The volumes you have they are very very large volumes. They are very fast explore accelerated timelines they have to implement to remove their waste.

Mark J. Duff: From a storage I'll put it in a stable form and then get it in the Conrad facility, when it's up and running which I think is 28 or 29 timeframe.

Mark J. Duff: And.

Mark J. Duff: Theres, a real sense of urgency for that so we see that really increasing in Q4 and through 25.

Speaker Change: Your next question is coming from Heron, Warwick with breakout investors again, if you do you have any questions or comments. Please press star one to join the queue. Please pose your question. Your line is open.

Aaron Warwick: Your next question is coming from Aaron Warwick with Breakout Investors. Again, if you do have any questions or comments, please press star 1 to join the queue. Please pose your question. Your line is live.

Aaron Warwick: Hey, good morning, guys. Thanks for taking the call I wanted to ask a little bit more about this.

Aaron Warwick: Hey, good morning, guys. Thanks for taking the call.

Mark J. Duff: Wanted to ask a little bit more about this PFAS opportunity. Wanted to begin just by, I mean, I've been seeing a lot about it lately on the news. Some other companies have been talking about it as well. Just just wanted to get a sense of, you know, and obviously you mentioned enormous. Tam, what is the competition out there for you guys in that market?

Mark J. Duff: It's P fast opportunity.

Mark J. Duff: I wanted to begin just by I mean, I haven't seen a lot about it lately in the news.

Mark J. Duff: Some other companies.

Mark J. Duff: I have been talking about it as well just just wanted to get a sense of you know.

Mark J. Duff: And obviously you mentioned the enormous Tam.

Mark J. Duff: And what what is the competition out there for you guys in that market.

Mark J. Duff: Right now, you know, there are competitors out there. You've seen press releases from some of the big firms that are going to do incineration, which does not necessarily destroy everything, is not preferable for a lot of organizations, particularly the DOE and DOD, which have said they are not allowed to or prohibit incineration as a treatment method. And there's deep well injection, which is largely Texas, which is deep or injecting very, very large quantities, millions of gallons a year into four or five thousand feet into the ground, into the bedrock. Those are both in play and are options now. There's also filtration, which does not apply to a lot of different waste streams because your filters get gummed up too fast.

Mark J. Duff: Right now Theres there are competitors out there you've seen press releases from some of the big firms are there are going to.

Mark J. Duff: Do incineration, which does not necessarily destroy everything is not preferable for a lot of organizations, particularly the D. O E. M. D O D, which has said that they are not allowed to or prohibit.

Mark J. Duff: Incineration as driven method.

Mark J. Duff: And as deep well injection, which is largely Texas, which are deep or injecting very very large quantities of millions of gallons a year.

Mark J. Duff: Four of 5000 feet into the ground into the bedrock.

Mark J. Duff: Those are both in play.

Mark J. Duff: And our options now Theres also filtration.

Mark J. Duff: Which does not apply to a lot of different waste streams, because your filters get get get gummed up too fast, but those are the kind of the existing.

Mark J. Duff: But those are kind of the existing technologies now that are in place. The ones that are coming up that are total destruction technologies, we've been able to identify about a half dozen that are coming up that you can see on the internet, plus other colleagues we know. They all have very innovative approaches. However, we have not seen anything that has our discriminators, which are specifically lower temperature processing with lower pressures. Also, the speed we can do it at, but most importantly, the simplicity of our unit.

Mark J. Duff: Technology now that are in place the ones that are coming up that are total destruction technologies. We've been at two identical been able to identify about a half dozen that are coming up that are you can see on the internet plus our other colleagues we know are.

Mark J. Duff: They all have.

Mark J. Duff: Very innovative approaches we have not seen anything that that has our discriminator, which are specifically a lower temperature processing.

Mark J. Duff: With lower lower pressures are also the speed, we can do it at but most importantly, the simplicity of our unit.

Mark J. Duff: Our unit is so simple that it relies on chemistry and some engineering in the process, but it is an inexpensive unit. Once we get this thing fine-tuned, we can have it mobilized and operated at much higher levels than we're starting with. And it also, as I said earlier, will translate to the soil. So as far as the competition goes, there are several startups that you can read about out there, but each one that describes their technology has something that we don't have in regards to the economy and simplification of the process. Lou, do you have anything you want to add to that? No, but yeah.

Mark J. Duff: Our units so simple that relies on chemistry, and some engineering in the process, but.

Lou: As an inexpensive unit are once we get this thing fine tuned.

Lou: We can have it mobilized.

Lou: And to be operated much much higher levels and we're starting with and I'd also as I said before earlier I will translate to the soil. So as far as the competition goes are there are there are several startups that are you can read about out there but.

Mark J. Duff: But each one that describes their technology is something that that we don't have in regards to our economic and simplification of processes. Lou do you have anything you want to add to that.

Louis Francis Centofanti: No, yeah, we haven't seen anything that economically... One that really destroys the PFAS, just doesn't separate it, and does it in such a simple system that we have. So we're very optimistic about where we can go with this process. Terms of competition.

Lou: Yeah, we haven't seen anything that economically.

Louis Francis Centofanti:

Lou: One that has really destroys the P fast just doesn't separated.

Louis Francis Centofanti: And.

Lou: And does it in such a simple system that we have so we're very optimistic of where we can go with this process in terms of competing competition as I mentioned, there and you know that the real.

Mark J. Duff: As I mentioned, Aaron, you know, the real competitors, and we've talked to most of them, or a lot of them. The significance of the EPA press release we had yesterday and the EPA announcements from last week is really significant in that it sets the foundation for the market and the timing of the market. Not just that everyone who has PFAS knows what's going on, or at least has a sense. But now it's on the doorstep of being promulgated into regulation that will include time-critical requirements as well as acceptance by EPA, and more importantly than anything else, enforcement.

Mark J. Duff: Our competitors and we've talked to most of them are a lot of them.

Mark J. Duff: And the significance of the E. P. A press release, we had yesterday and in the EPA announcements from last week are really significant in that.

Mark J. Duff: It sets the foundation for the market.

Mark J. Duff: And the timing of the market not just that everyone and everyone's got people noticing you know, what's going on or at least a sense, but now it's on the doorstep of being promulgated.

Mark J. Duff: Into regulation that will include time critical requirements.

Mark J. Duff: As well as acceptance by EPA and more importantly, anything else in enforcement.

Mark J. Duff: Once that starts, then the fire will be lit under everyone to get moving, and we see the market really taking off, and it's going to be critical for us to have our systems deployed so we can start handling the volumes that come out.

Mark J. Duff: And once that starts then the fire will be lit under everyone to get moving and we see the market really.

Mark J. Duff: Taken off and it's going to be critical for us.

Mark J. Duff: To have our systems deployed so we can sort of handling the volumes that come out from that.

Mark J. Duff: What sort of independent entities had if any have had verified.

Aaron Warwick: What sort of independent entities, if any, have verified that your process works, besides just what you've mentioned on the calls yourself?

Speaker Change: Process work, Besides just wait and see.

Speaker Change: Cause yourself.

Mark J. Duff: Well, we've used two universities for testing and a variety of private companies now. Again, because of the proprietary nature of the technology being so unique, we haven't had, you know, white papers done on how it works and what's going on here. So we have filed a variety of patents, and we'll be filing a lot more because the further we go with this technology, we see a variety of markets where it could be a

Speaker Change: Well we've used a.

Mark J. Duff: Two universities for testing.

Mark J. Duff: And a variety of private companies now.

Mark J. Duff: Again, because of the proprietary nature of the technology being so unique.

Mark J. Duff:

Mark J. Duff: We haven't had white papers done on how it works and what's going on here. So.

Mark J. Duff: We have filed a variety of patents.

Mark J. Duff: And we'll be filing a lot more because it further we go with this technology, we see a.

Mark J. Duff: A variety of markets, where it could be a value.

Mark J. Duff: So what is the expected timeline on when those patents will be granted, those patents, before you start treating in September or October? We filed the patents. Patents are pending. At this point, you know, patent review, especially on this, these are very fundamental chemistry patents. And they will take... Take some time.

Mark J. Duff: Mhm. So what is the expected timeline on windows would be granted patents before you start trading in September.

Mark J. Duff: We filed the patents patents are pending.

Mark J. Duff: At this point.

Mark J. Duff: Patent review, especially on this these are very fundamentals.

Mark J. Duff: Industry patents and they will take.

Mark J. Duff: It takes some time.

Mark J. Duff: Our experience with <unk> with <unk>.

Mark J. Duff: In our experience with patents, we could see a year or two of review for these patents, especially because of their significance.

Mark J. Duff: Patents or we could see a year or two of review on these patents, especially because of their significance.

Speaker Change: Right makes sense.

Mark J. Duff: So I mean, you've mentioned there is some competition, even though they can't do it.

Mark J. Duff: What you say you can do but my understanding was it kind of what got you on track to begin with us.

Unknown Attendee: [inaudible] The R&D on this PFAS treatment is that you already have some customers, is that? Unknown Attendee, Steve Fein, Klea Theoharis, Perma-Fix Environmental Services Inc.

Mark J. Duff: The R&D on this.

Unknown Attendee: SaaS treatment is that you already have some customers is that.

Speaker Change: And accurate statement that you already have some people that you that are ready for this treatment to proceed once you get that plant up and running we.

Mark J. Duff: We do, Aaron. We don't have contracts for significant volumes in places when we have several clients that we deal with on a regular monthly basis that have very defined inventories and are waiting for us to get the system up and running. So when we get closer to operations, we'll be moving towards those contracts. Some of them, we're actually taking samples from now to make sure that we can perform the way we say we are, and that's been pretty strategic for us.

Speaker Change: We do a fair and we don't have.

Mark J. Duff: Contracts for significant volumes in places, where we have several clients that we deal with on a regular monthly basis.

Mark J. Duff: That have very defined inventories.

Mark J. Duff: And or waiting for us to get the system up and running so when we get closer to operations.

Mark J. Duff: We'll be moving towards.

Mark J. Duff: Those contracts some of them were actually taking samples from now to make sure that we can perform the way we say we are and that's been pretty strategic for us.

Mark J. Duff: And some of the larger folks that have bigger inventories are shooting us or sending us liquid samples for us to run in our pilot scale testing. So yeah, we do have some locked in, we shouldn't say locked in; we have some defined that will be locked in in the next couple weeks, and some that we're also pursuing grants with to do demonstrations as well.

Mark J. Duff: And some of the larger folks that have bigger inventories.

Mark J. Duff: This or sending us liquid samples.

Mark J. Duff: For us to run as our partner pilot scale testing so.

Mark J. Duff: Yes, we do have some locked in I wish as soon as they locked in we would have some defined that we will be locked in in the next couple of weeks.

Mark J. Duff: And some that were also pursuing grants with due to do demonstrations as well.

Mark J. Duff: Oh wonderful.

Aaron Warwick: Oh, wonderful. The last thing, I guess, for me, would be any sort of partnership or licensing interest from any of these larger players in the space that you think could be an additional source of revenue for you besides your own plants.

Speaker Change: Last thing I guess for me would be.

Aaron Warwick: Any sort of partnership or licensing interest from for many of these larger players in.

Aaron Warwick: In the space.

Aaron Warwick: That you think could be a additional source of revenue for you. Besides your own plants.

Mark J. Duff: Yeah, we see licensing as an option, but we have not pursued it or really had discussions about this specifically yet until we can show performance of our operational system. But we've talked to several companies that would align very well with that and have a very wide reach in regards to entering the market and having clients that have significant volumes, or clients themselves that have the volumes, and that'll be a step that we'll be looking to address in the January timeframe.

Aaron Warwick: We see it we see licenses can be an option. We have not pursued that were really had discussions about the specifically yet until we can show performance of our operational system.

Mark J. Duff: Okay, but we've talked to several companies that would align very well with that and they have very far reach in regards to entering the market and have clients that have significant volumes.

Mark J. Duff: Or clients themselves that have the volumes and that'll be a step that will be looking to address in the January timeframe.

Speaker Change: Okay. Thank you guys I appreciate it.

Aaron Warwick: Okay, thank you, guys. I appreciate it.

Speaker Change: Thanks Aaron.

Speaker Change: There are no further questions in queue at this time.

Operator: There are no further questions in queue at this time. I would now like to turn the floor back over to management for any closing remarks.

Speaker Change: Now I'd like to turn the floor back over to management for any closing remarks.

Mark J. Duff: All right. I'd like to thank everyone for participating in our first quarter conference call. As you can see, hopefully, we are quite confident in the outlook for the business over the next few years. We look forward to providing further updates as we continue to execute our strategy. We appreciate the continued support and patience of our shareholders, and we look forward to providing further updates as developments unfold. Thank you.

Speaker Change: Alright, I would like to thank everyone for participating in our first quarter conference call. As you can see hopefully we are quite confident in the outlook for the business over the next few years, we look forward to providing further updates as we continue to execute our strategy. We appreciate the continued support and patient patient.

Mark J. Duff: Patience of our shareholders and we look forward to providing further updates as.

Mark J. Duff: As developments unfold. Thank you.

Speaker Change: Thank you. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.

Operator: Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.