Q2 2024 Perma-Fix Environmental Services Inc Earnings Call

August 8, 2024

Greetings and welcome to the Perma-Fix Fiscal Second Quarter 2024 Earnings Conference Call.

Operator: in the year 2024 Earnings Conference Call. At this time, all participants are in other synonymous mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded.

Operator: This is a 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. David Waldman, of Crescendo Communications. Mr. Waldman, you may begin.

Speaker Change: at this time all participants or another inon mote and a question -and answer session will follow the form of presentation

Speaker Change: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

David Waldman: Are we allowed to turn the conference over to your host, Mr. David Waldman, for Shendo Communications? Sir, you may begin. Great. Thank you, and good morning, everyone. Welcome to Perma-Fix Environmental Services' second quarter 2024 conference call. On the call of us this morning are Mark Duff, President and CEO, Dr. Louis Centofani, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing second quarter 2024 financial results, which is also posted on the company's website.

Speaker Change: Please note, this conference is being recorded.

Speaker Change: I will now turn the conference over to your host, Mr. David Waldman, Crescendo Communications. Sir, you may begin.

David Waldman: Great, thank you, and good morning, everyone, and welcome to Perma-Fix Environmental Services' second 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 second 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.

Speaker Change: Great, thank you and good morning everyone and welcome to Perma-Fix Environmental Services second 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.

Speaker Change: The company issued a press release this morning containing second quarter 2024 financial results.

Operator: If you have any questions after the call or like any additional information about the company, please contact Shendo Communications at 212-671-1020.

Speaker Change: which is also posted on the company's website.

Speaker Change: 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.

Operator: I'd also like to remind everyone that certain statements contained within this conference call may begin forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and include certain on-depth financial measures. All statements on this conference call, other than the statement to start a call, factor forward-looking statements that are subject to known on-on-on-risk uncertainties and other factors which could cause actual results in performance of the company to differ materially from such statements. These written uncertainties are detailed in the company's filing to the Securities and Exchange Commission, as well as this morning's press release.

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

Speaker Change: I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Security Codification Reform Act of 1995, and include certain non-GAF financial measures. All statements on this conference call, other than a statement of historical fact, are forward-looking statements that are subject to no known risks, uncertainties, and other factors which could cause actual results and performance of the company to differ materially from such statements.

David Waldman: These risks and uncertainties are detailed in the company's filing 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.

Speaker Change: These risks and uncertainties are detailed in the company's filing to the 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.

Operator: The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the day hereof that bear upon forward-looking statements.

David Waldman: In addition, today's discussion will include references to non-GAF measures. Permafix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAF measures to the most directly comparable GAF measures is available in today's news release on our website. Now, I'd like to turn the call over to Mark Duff. Please go ahead, Mark.

Operator: In addition, today's discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available on today's news release on our website.

Speaker Change: In addition, today's discussion will include references to non- GAAP measures . Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance.

Speaker Change: A Reconciliation of the Non- GAAP measures to the Most Directly Comparable GAAP measures is available in today's news release on our website. Now I'd like to turn the call over to Mark Duff. Please go ahead, Mark.

Mark Duff: Now, I'd like to turn the call over and mark Duff.

Mark Duff: Please go ahead, Mark. All right, David.

Mark Duff: All right, David, thanks, and good morning, everyone. As anticipated, we continue to experience weakness in Q2 due to ongoing government delays in waste shipments, awarding new task orders, and procuring other projects within our services segment. In addition, we experienced an extended equipment failure at one of our facilities that has taken nearly seven weeks to repair. Those repairs will be completed this week, and we expect to be fully operational by mid-August. Lastly, our earnings during the quarter were impacted by deliberate investments in our R&D, sales, marketing, and engineering to support the launch of our newest technology to treat PFAS, which I'll talk about more in a moment.

Mark Duff: Thanks, and good morning, everyone. As anticipated, we continue to experience weakness in Q2 due to ongoing government delays and waste shipments, awarding new task orders, and procuring other projects within our services segment. In addition, we experience an extended equipment failure at one of our facilities that has taken nearly seven weeks to repair. Those repairs that we completed this week, and we expect to be fully operational by mid-August. Lastly, our earnings during the quarter were impacted by deliberate and breastaments in our R&D, sales, marketing, and engineering to support the launch of our newest technology to treat PFAS, which I'll talk about more in a moment.

Mark Duff: All right David, thanks and good morning everyone. As anticipated, we continue to experience weakness.

Speaker Change: Q2 due to ongoing government delays and waste shipments.

Mark Duff: awarding new task orders and procuring other projects within our services segment.

Speaker Change: In addition...

Speaker Change: We experienced an extended equipment failure at one of our facilities that has taken nearly seven weeks to repair.

Speaker Change: of those repairs that we completed this week, and we expect to be fully operational by mid-August. Lastly, our earnings...

Speaker Change: During the quarter we're impacted by deliberate embrassments in our R&D, sales, marketing, and engineering to support the launch of our newest technology to treat PFAS, which I'll talk about more in a moment.

Mark Duff: While we were disappointed with the quarter's results, we consider the government issues to be temporary, and we're starting to see improvement heading into the second half of 2024 with improving revenues and productivity each month over the past several months. In the meantime, as we've discussed, we're making progress on a number of potentially transformative initiatives. I'd like to first talk in more detail about some of the government headwinds we've faced, and then I'll discuss the outlook, including our large projects that we're working on and why we remain so encouraged.

Mark Duff: While we were disappointed with the quarter's results, we consider the government issues as being temporary and we're starting to see improvement heading into the second half of 2024 with improving revenues and productivity each month over the past several months. In the meantime, as we've discussed,

Mark Duff: In the meantime, as we've discussed, we discussed we're making progress on a number of potentially transformative initiatives.

Mark Duff: I'd like to first talk in more detail about some of the government headwinds we faced, and then I'll discuss the outlook, including the large projects that we're working on, and why we remain so encouraged. As previously discussed, we completed our two largest service projects, the Princeton Plasma Physics Lab and the US Eximate Key project of the Navy in March. However, with those projects completed, coupled with delays in new task orders, we did not have the replacement revenue to make up the gap. It's important to note that the government delays we experience were not unique to Perma-Fix, and have been industry-wide. Much of this drag was due to the extended continuing resolution in Congress's inability to pass a federal budget until March of this year, which led to delays in procurements, project starts, and waste shipments due to funding limitations.

Mark Duff: We're making progress on a number of potentially transformative initiatives.

Mark Duff: i'd like to first talk in more detail about some of the government headwinds we faced and then i'll discuss the outlook including a large projects that we' working on and why we remain so encouraged as prely this previously discussed

Mark Duff: As previously discussed, we completed our two largest service projects, the Princeton Plasma Physics Lab and the U.S. Exma-Key project for the Navy, in March. However, with those projects completed, coupled with delays in new task orders, we did not have the replacement revenue to make up the gap. It's important to note that the government delays we experienced were not unique to Perma-Fix and have been industry-wide. Much of this drag was due to the extended continuing resolution and Congress' inability to pass a federal budget until March of this year, which led to delays in procurements, project starts, and waste shipments due to funding limitations.

Mark Duff: We completed our two largest service projects, the Princeton Plasma Physics Lab and the U.S. Exma-Key project for the Navy in March. However, with those projects completed, coupled with delays in new task orders,

Mark Duff: We did not have the replacement revenue to make up the gap.

Mark Duff: It's important to note that the government delays we experienced were not unique to Perma-Fix.

Mark Duff: and have been industry-wide. Much of this drag was due to the extended continuing resolution.

Mark Duff: and Congress's inability to pass a federal budget until March of this year, which led to delays in procurements, project starts, and waste shipments due to funding limitations.

Mark Duff: These factors, which had a direct impact on our base business, have begun to subside and were not anticipated to be long-term trends within the industry. In fact, Congress has approved healthy funding levels for the government fiscal year of 25, particularly at the Hanford, and we expect to see pen-up demand for our offering in both services and waste treatment in the coming months. At the same time, we continue to diversify our broader commercial international markets, including both radioactive and hazardous waste. For these reasons and others, I'm confident that the worst is now behind us, and we're encouraged by the trends in early Q3, evidenced by our increase in waste shipments or waste receipts and bidding activity.

Mark Duff: These factors, which had a direct impact on our base business, have become the... subside, and we're and we're not anticipated to be long-term trends within the industry. In fact, Congress has approved healthy funding levels for the government for Fiscal Year 25, particularly at Hanford, and we expect to see pent-up demand for our offering in both services and waste treatment in the coming months. At the same time, we continue to diversify our broader commercial and international markets, including both radioactive and hazardous waste.

Mark Duff: These factors, which had a direct impact on our base business, have begun to subside and were not anticipated to be long-term trends within the industry.

Mark Duff: In fact, Congress has approved healthy funding levels for the government fiscal year 25, particularly at Hanford, and we expect to see pent-up demand for our offering in both services and waste treatment in the coming months.

Mark Duff: At the same time, we continue to diversify our broader commercial and international markets, including both radioactive and hazardous waste.

Mark Duff: For these reasons and others, I'm confident that the worst is now behind us, and we're encouraged by the trends in early Q3, evidenced by our increase in waste shipments or waste receipts and bidding activity. Within the treatment segment, waste receipts were nearly $7 million in Q2 and appear to be regaining momentum with the first half of Q3 trending toward receipts of $10 to $20 million, with several large shipments anticipated. Within the services segment, we're benefiting from increased bidding opportunities. In addition, our profitability is steadily improving in both segments.

Mark Duff: For these reasons and others, I'm confident that the worst is now behind us and we're encouraged by the trends in early Q3, evidenced by our increase in waste shipments or waste receipts and bidding activity.

Mark Duff: Within the treatment segment, waste receipts were nearly $7 million in Q2. I had appeared to be regaining momentum, with the first half of Q3 trending toward receipts of 10 to 20 million range, with several large shipments anticipated. Within these services, the segment were benefiting from increased bidding opportunities and addition, our profitability is steadily improving in both segments.

Mark Duff: Within the treatment segment, waste receipts were nearly $7 million in Q2 and appear to be regaining momentum with the first half of Q3 trending toward receipts of $10 to $20 million range with several large shipments anticipated.

Mark Duff: Within the services segment, we're benefiting from increased bidding opportunities. In addition, our profitability is steadily improving in both segments.

Mark Duff: Looking ahead, we were made focused on several large growth initiatives, including new services, procurements, expansions, international waste program, as well as deployment of our PFAS technology and capability and the Hanford initiatives. More specifically, we're positioned for mid-size and large ongoing procurement initiatives at DOE, DOD, and EPA. Today, we've been able to secure strong teaming positions for both potential awards anticipated within or throughout 2025 that would potentially represent substantial increases in sustainable revenue for the next five to 10 years. For example, we're participating in large procurement opportunities as part of larger teams for the operations and the mission support contract, as well as the West Valley demonstration project in your Buffalo, New York, and Navy projects, which are all expected to be awarded.

Mark Duff: Looking ahead, we remain focused on several large growth initiatives, including nuclear services procurements, expansions in our International Waste Program, as well as deployment of our PFAS technology and capability in the Hanford Initiative. More specifically, we're positioned for mid-size and large ongoing procurement initiatives at DOE, DOD, and EPA. We've been able to secure strong teaming positions for both potential awards anticipated within or throughout 2025 that would potentially represent substantial increases in sustainable revenue for the next five to ten years.

Mark Duff: More specifically, we're positioned for mid-size and large ongoing procurement initiatives at DOE, DOD, and EPA.

Mark Duff: We've been able to secure strong teaming positions for both potential awards anticipated within or throughout 2025 that would potentially represent substantial increases in sustainable revenue for the next five to ten years.

Mark Duff: For example, we're participating in large procurement opportunities as part of larger teams for the operations and the mission support contract, as well as the West Valley Demonstration Project near Buffalo, New York, and Navy projects, which are all expected to be awarded over the next several quarters. In addition, I'm pleased to report we've achieved several significant milestones by successfully completing two pivotal Department of Energy audits of our Perma-Fix Northwest facility and our DSSI facility over the past few months.

Mark Duff: For example, we're participating in large procurement opportunities as part of larger teams for the operations and the mission support contract as well as the West Valley Demonstration Project near Buffalo, New York, and Navy projects, which are all expected to be awarded.

Mark Duff: Over the next several quarters.

Mark Duff: In addition, on pleased report, we've achieved several significant milestones by successfully completing two pivotal Department of Energy audits of our perfect Northwest facility and our DSSI facility over the past few months. Completing these comprehensive audits were essential for our involvement in crucial projects like the cleanup efforts at Hanford and Oak Ridge Reservation and to find our ability to safely and comply with ultimately support the DOE mission regarding the treatment of their waste. We remain committed to supporting the DOE's priorities at Hanford, including the treatment of the effluent, following the hot commission of the DF Law facility, currently anticipated in August of 25, and reiterated by DOE and public meetings and agreements that the program remains on schedule for this milestone.

Mark Duff: over the next several quarters.

Mark Duff: In addition, I'm pleased to report we've achieved several significant milestones by successfully completing two pivotal Department of Energy audits of our Perma-Fix Northwest facility and our DSSI facility over the past few months. Completing these

Mark Duff: Completing these comprehensive audits was essential for our involvement in crucial projects like the cleanup efforts at Hanford and Oak Ridge Reservation and to demonstrate our ability to safely and compliantly support the DOE mission regarding the treatment of their waste.

Mark Duff: Comprehensive audits were essential for our involvement in crucial projects like the cleanup efforts at Hanford and Oak Ridge Reservation.

Mark Duff: and to find our ability to safely and compliantly support the DOE mission regarding the treatment of their waste.

Mark Duff: We remain committed to supporting the DOE's priorities at Hanford, including the treatment of the effluent, following the hot commissioning of the DF Law Facility, currently anticipated in August of 2025, and reiterated by DOE in public meetings and agreements that the Department remains on schedule for this milestone. In addition to the effluent program, the April 29th Tri-Party Settlement Agreement between DOE and the State of Washington and the EPA, DOE is committed to implementing a grouting program that will support retrieval of 22 tanks in the next 15 years, including treatment through commercial off-site grouting.

Mark Duff: In addition to the effluent program, the April 29th Tri-Party Settlement Agreement between DOE and the State of Washington and the EPA, DOE is committed to implementing a grouting program that will support retrieval of 22 tanks in the next 15 years to include treatment through commercial offsite grouting. We remain extremely confident in the likelihood of these programs, which we believe will save millions of taxpayer dollars in support of the Hanford closure mission. Our Perma-Fix Northwest facility located adjacent to the Hamper site is the only regional permit of facility that offers the ability to grow out the tank waste and ship out of state disposal using rail.

Mark Duff: in the next 15 years to include treatment through commercial off-site grouting. We remain extremely confident.

Mark Duff: We remain extremely confident in the likelihood of these programs, which we believe will save millions and billions of taxpayer dollars in support of the Hanford Closure Mission. Our Perma-Fix Northwest facility, located adjacent to the Hanford site, is the only regional permitted facility that offers the ability to grout the tank waste and ship it out of state for disposal using rail. Alternative facilities will require a large number of shipments of liquid that's untreated waste out of state with higher environmental risk.

Mark Duff: and the likelihood of these programs, which we believe will save millions, billions of taxpayer dollars in support of the Hanford Closure Mission.

Speaker Change: Our Perma-Fix Northwest facility, located adjacent to the Hanford site, is the only regional permitted facility that offers the ability to grout the tank waste and ship out-of-state disposal using rail.

Mark Duff: Alternative facilities will require a large number of shipments of liquid that's untreated waste out of state with higher environmental risk. It's difficult to define the exact quantity of waste to be removed from these tanks for grouting. But unofficial estimates include expectations for up to approximately 3 million gallons of waste through process annually to meet these goals that they've defined for 2040 to be completed. The agreement is unclear about when these operations would commence. However, the recent Hanford System's 10 document published last winter defines retrieval operations beginning in January of 26. The tri-party settlement agreement also underscores the U.S.

Mark Duff: Alternative facilities will require a large number of shipments of liquid that's untreated waste out-of-state with higher environmental risk.

Mark Duff: It's difficult to define the exact quantity of waste to be removed from these tanks for grouting, but unofficial estimates include expectations for up to approximately 3 million gallons of waste to be processed annually to meet these goals that they've defined for 2040.

Speaker Change: It's difficult to define the exact quantity of waste to be removed from these tanks for grouting, but unofficial estimates include expectations for up to approximately 3 million gallons of waste to be processed annually to meet these goals that they've defined for 2040 to be completed.

Mark Duff: The agreement is unclear about when these operations would commence, however, the recent Hanford Systems 10 document published last winter defines retrieval operations beginning in January of 2026. The Tri-Party Settlement Agreement also underscores DOE's commitment to start DF Law Vitrification Plan operations following the completion of the HOT Commissioning Program scheduled for August of 2025. This is one of DOE's highest priorities as the Department continues to communicate its progress in meetings in regards to their operational milestones.

Mark Duff: The agreement is unclear about when these operations would commence, however the recent Hanford Systems 10 document published last winter defines retrieval operations beginning in January of 2026.

Mark Duff: commitment to start D.F. law of vitrification plan operations following the completion of the hot commission program scheduled for August of 25. This is one of the U.S. highest priorities as the Department continues to communicate its progress in meetings in regards to their operational milestones. D.F. is committed to D.F. We committed in the January 23 record of decision to shift the effluent from D.F. law to pervix North West for a minimum of 10 years with D.F. estimating up to 8,000 cubic meters of waste to be generated annually from D.F. law when the facility meets full capacity of operations.

Mark Duff: The Tri-Party Settlement Agreement also underscores DOE's commitment to start DFLAW vitrification plan operations.

Mark Duff: following the completion of the HOT commissioning program scheduled for August of 2025. This is one of DOE's highest priorities as the Department continues to communicate its progress in meetings in regards to their operational milestones.

Mark Duff: DEWI committed in the January 23 record of decision to ship the effluent from D'If Law to Perma-Fix Northwest for a minimum of 10 years, with DEWI estimating up to 8,000 cubic meters of waste to be generated annually from D'If Law when the facility reached full capacity.

Speaker Change: vie was committed to january twenty we committed in the january twenty-three record decision to shipt the eflllent from the of law two perfect northwest peraminimum of ten years

Mark Duff: with the U.S. demanding up to 8,000 cubic meters of waste to be generated annually from DEFLAW when the facility meets full capacity of operations.

Mark Duff: As I've mentioned in the past, the volume of waste would be more than double the current production of our plants altogether combined on an annual basis.

Mark Duff: As I've mentioned in the past, the volume of waste would be more than double the current production of our plants all together combined on an annual basis. Perma-Fix also continues to advance a number of international waste programs, including the Joint Research Center in Italy, with the first shipment expected in January of 2025. We're also progressing on other promising opportunities in Europe. Additionally, we've secured new contracts in both Canada and Mexico to treat waste in our U.S. facilities.

Speaker Change: As I've mentioned in the past, the volume of waste would be more than double the current production of our plants altogether combined on an annual basis.

Mark Duff: Pervix also continues to advance a number of international waste programs, including the Joint Research Center in Italy, where the first shipment is anticipated in January of 2025. We're also progressing on other promising opportunities in Europe, additionally. We've secured new contracts in both Canada and Mexico to treat waste in our U.S. facilities. These projects are valued in excess of $5 million over the next 18 months.

Speaker Change: Perma-Fix also continues to advance a number of international waste programs.

Speaker Change: including the Joint Research Center in Italy, where the first shipment is anticipated in January of 2025. We're also progressing on other promising opportunities in Europe . Additionally, we've secured new contracts in both Canada and Mexico to treat waste in our U.S. facilities.

Mark Duff: These projects are valued in excess of $5 million over the next 18 months. On a separate note, we recently announced that we purchased the Environmental Waste Operations Center, also known as EWOC, located just outside of Oak Ridge, Tennessee.

Speaker Change: These projects are valued in excess of $5 million over the next 18 months.

Mark Duff: In a separate note, we recently announced that we purchased the Environmental Waste Operations Center, also known as EWOC, located just outside Oak Ridge, Tennessee. The strategic value of this purchase is significant both for us, our customers as well. We previously released this facility for EWOC over the past several years, and we've been acquiring the facility to support our plans to invest in facility upgrades and capitalize on a number of opportunities, including large-scale decontamination projects, waste processing, and transloading from rail to rail for disposal out west. This facility's strategically located in close proximity to both the Y-12 National Security Complex and the Oak Ridge National Laboratory.

Speaker Change: in a separate no we recentlyannounced that we purchas the environmental waste operation center also known as ewalk located just outside oage tennessee the strategic value of this purchase a significant both for us our customers

Mark Duff: The strategic value of this purchase is significant both for us and our customers. We previously released this facility for EWOC over the past several years, and we've been acquiring the facility to support our plans to invest in facility upgrades and capitalize on a number of opportunities, including large-scale decontamination projects, waste processing, and transloading from truck to rail for disposal out west. This facility is strategically located in close proximity to both the Y-12 National Security Complex and the Oak Ridge National Laboratory, as cleanup programs begin to address large volumes of mercury and other difficult radioactive materials.

Speaker Change: as well. We previously released this facility.

Speaker Change: for EWOC over the past several years.

Speaker Change: and...

Speaker Change: We've been acquiring the facility to support our plans to invest in facility upgrades and capitalize on a number of opportunities, including large-scale decontamination projects, waste processing, and transloading from truck to rail for disposal out west.

Speaker Change: This facility is strategically located in close proximity to both the Y-12 National Security Complex and the Oak Ridge National Laboratory.

Mark Duff: As cleanup programs begin to address large volumes of mercury and other difficult radioactive materials, EWOC has also targeted for future implementation of PFAS waste processing capabilities, including regional treatment of PFAS-contaminated liquids, as we begin to receive larger volumes of these waste following deployment of our first commercial unit in Florida. In terms of our PFAS technology, we've made significant progress in the design and fabrication of our first Perma-FAS commercial unit in collaboration with our partner, Process Baron. This unit is expected to be fully operational later this year, and the process Baron has proven to be an ideal partner in working closely with us in our engineering team to define design.

Speaker Change: as cleanup programs begin to address large volumes of mercury and other difficult radioactive materials.

Mark Duff: EWOC is also a target for future implementation of PFAS waste processing capabilities, including regional treatment of PFAS-contaminated liquids, as we begin to receive larger volumes of these wastes following deployment of our first commercial unit in Florida. In terms of our PFAS technology, we've made significant progress in the design and fabrication of our first Permafast commercial unit in collaboration with our partner, Process Baron. This unit is expected to be fully operational later this year, and the Process Baron has proven to be an ideal partner in working closely with us and our engineering team to define the design, and to complete the final design concurrently with fabrication to reduce time for complete production.

Speaker Change: you walk is also targeted for future implementation of p fwaste processing capabilities including regional treatment of pref conttimidated liquids as we begin to receive larger volummees to these ways followiling deployment of our first commercial unit in florida

Speaker Change: In terms of our PFAS technology, we've made significant progress in the design and fabrication of our first PERMAFAST.

Speaker Change: commercial unit.

Speaker Change: in collaboration with our partner Process Barron. This unit is expected to be fully operational later this year.

Process Barron: The process parent has proven to be an ideal partner in working closely with us and our engineering team to complete final design concurrently with fabrication to reduce time for completion.

Mark Duff: It's a complete final design, concurrently with fabrication, to reduce time for completion. As a result, we expect our prototype system to be capable of destroying PFAS in batches of 700 gallons. Most importantly, we're on track and expecting to be fully operational in accepting commercial waste for destruction by Q4 this year. We've established several goals for additional units to be installed at each of our facilities throughout 2025. Based on the performance results defined by our prototype, we will engineer a second generation system to increase throughput and productivity to address larger volumes of PFAS liquids. 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.

Mark Duff: As a result, we expect our prototype system to be capable of destroying PFAS in batches of 700 gallons. Most importantly, we're on track and expect to be fully operational and accepting commercial waste for destruction by Q4 this year. We've established several goals for additional units to be installed at each of our facilities throughout 2025. Based on the performance results defined by our prototype, we will engineer two, or excuse me, a second generation system to increase throughput and productivity to address larger volumes of PFAS liquid.

Speaker Change: As a result, we expect our prototype system to be capable of destroying PFAS in batches of 700 gallons.

Speaker Change: Most importantly, we're on track and expect to be fully operational and accepting commercial waste for destruction by Q4 this year. We've established several goals for additional units to be installed at each of our facilities throughout 2025.

Speaker Change: Based on the performance results defined by our prototype, we will engineer a second generation system to increase throughput and productivity to address larger volumes of PFAS liquids.

Speaker Change: 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.

Mark Duff: This designation enables the agency to compel responsible parties to pay for or conduct investigations and clean-up. We believe our process is extremely unique, and we've been actively sharing information with EPA about our new process. Unlike traditional disposal methods for PFAS contaminated materials, which compose environmental threats and can be extremely energy intensive. The hours will be the first known sealed chemical destruction unit that can accept and destroy PFAS to acceptable levels in the U.S. As we've stated previously, our process achieved PFAS destruction levels of 69 or 99.999 percent, exceeding anticipated regulatory requirements. This was demonstrated in our bench scale and our pilot scale approaches.

Speaker Change: This designation enables the agency to compel responsible parties to pay for or conduct investigations and cleanup. We believe our process is extremely unique, and we've been actively sharing information with EPA about our new process.

Mark Duff: We believe our process is extremely unique, and we've been actively sharing information with the EPA about our new process. Unlike traditional disposal methods for PFAS-contaminated materials, which pose environmental threats and can be extremely energy-intensive, ours will be the first known sealed chemical destruction unit that can accept and destroy PFAS to acceptable levels in the U.S. As we stated previously, our process achieved PFAS destruction levels of 69 or 99.9999%, exceeding anticipated regulatory requirements.

Speaker Change: unlike traditional disposal method for pfas containammentated materials which composeed environmental threats and can be extremely energy intensive hours be the first known sealed chemical destruction unit can accept in destro p fast to accept able levels in the u s

Speaker Change: As we stated previously, our process achieved PFAS destruction levels of six nines or 99.9999% exceeding anticipated regulatory requirements. And this was demonstrated in our bench scale and our pilot scale approaches.

Mark Duff: This is demonstrated in our bench scale and our pilot scale approach. In advance of the commercial operation, we're making significant progress in raising industry awareness and developing backlog anticipation of a Q4 start. We've already received PFAS liquid samples from over a dozen clients, including the federal government.

Mark Duff: In advance of the commercial operation, we're making significant progress in raising industry awareness and developing backlog anticipation of a Q4 start. We've already received PFAS liquid samples from over a dozen clients, including the Federal government. In addition, we're developing several partner agreements with larger firms and clients that will quickly align our technology with the market demand in early Q4. Once we demonstrate that we're able to achieve the same performance metrics that we've already achieved in our pilot facility. We're confident we can replicate these high performance levels with our operational plan, as discussed.

Speaker Change: In advance of the commercial operation, we are making significant progress in raising industry awareness and developing backlog anticipation of a Q4 start. We have already received PFAS.

Mark Duff: In addition, we're developing several partnering agreements with larger firms and clients that will quickly align our technology with market demand in early Q4, once we demonstrate that we're able to achieve the same performance metrics that we've already achieved in our pilot facility. We're confident we can replicate these high-performance levels with our operational plan, as discussed. In parallel with this effort, we're rapidly progressing development of both our soil and our bio-sludge applications, which will use the same technology but require much different engineering considerations overall. We've completed our bench scale demonstrations successfully and are now moving towards our pilot plant testing at 55-gallon volume.

Speaker Change: liquid samples from over a dozen clients, including the federal government. In addition, we're developing several.

Speaker Change: Partnering agreements with larger firms and clients that will quickly align our technology with the market demand in early Q4 Once we demonstrate that we're able to achieve the same performance metrics that we've already achieved in our pilot facility

Speaker Change: We're confident we can replicate these high-performance levels with our operational plan as discussed. In parallel with this effort, we're

Mark Duff: In parallel with this effort, we're rapidly progressing development over both our soil and our biosludge applications, which will use the same technology but require much different engineering considerations overall. We've completed our bench scale demonstration successfully and are now moving towards our pilot plant testing at 55-gallon volumes.

Speaker Change: Rapidly progressing development over both our soil and our bio-sludge applications, which will use the same technology but require much different engineering considerations overall. We've completed our bench scale demonstrations successfully and are now moving towards our pilot plant testing at 55 gallon volumes.

Mark Duff: So to wrap up, we're truly encouraged by the outlook for the business given the level of understanding or outstanding business awaiting award, as well as our growing waste receipts. In addition, we have a number of active projects that we believe will be transformative to the company in 2025 and beyond. At the same time, we've maintained a solid balance sheet and ended the quarter with over 18.1 million in cash, which we believe provides us the sufficient resource to execute our growth strategy. While we were hesitant to raise funds, and particularly the amount we raised, we ultimately decided that, given the magnitude of these projects we're working on, we needed the flexibility to ramp up quickly while these projects start.

Mark Duff: So to wrap up, we're extremely encouraged by the outlook for the business given the level of understanding for outstanding bids awaiting award, as well as our growing waste receipts. In addition, we have a number of active projects that we believe will be transformative for the company in 2025 and beyond. At the same time, we've maintained a solid balance sheet and entered the quarter with over $18.1 million in cash, which we believe provides us with sufficient resources to execute our growth strategy.

Speaker Change: so to wrap up we' tremely encouraged by the outlook for the business given the level of understanding or outstanding bids awaiting award as well as our growing waste receipts in addition we have a number of active projects that we believe will we transformative to the company intwo thousand and twenty five and beyond

Speaker Change: At the same time, we've maintained a solid balance sheet and entered the quarter with over $18.1 million in cash, which we believe provides us the sufficient resource to execute our growth strategy.

Mark Duff: While we were hesitant to raise funds, and particularly the amount we raised, we ultimately decided that given the magnitude of these projects we're working on, we needed the flexibility to ramp up quickly while these projects started. It was also important to show our customers that we had the balance sheet to support the potentially massive projects ahead of us. While I'm disappointed in our financial performance in the first half of the year, I'm very proud of our team and our ability to navigate through this storm while preparing for what we believe will be an unprecedented opportunity in 2025 and beyond. On that note, I'll turn the call over to Ben, who will discuss the financial results in more detail.

Speaker Change: While we were hesitant to raise funds, and particularly the amount we raised, we...

Speaker Change: ultimately decideedthat given the magnitude of these projects ' wor how we needed the fxibility to ramp up quickly while these projects start

Mark Duff: It was also important to show our customers that we have the balance sheets to support the potentially massive projects ahead of us.

Speaker Change: It was also important to show our customers that we have the balance sheet to support the potentially massive projects ahead of us.

Mark Duff: While I'm disappointed in our financial performance in the first half of the year, I'm very proud of our team and our ability to navigate through this storm. While preparing for what we believe will be an unprecedented opportunity in 2025 and beyond.

Speaker Change: Well, I'm disappointed in our financial performance in the first half of the year. I'm very proud of our team and our ability to navigate through this storm while preparing for what we believe will be an unprecedented opportunity in 2025 and beyond.

Ben Naccarato: On that note, I'll turn the call over to Ben, who will discuss the financial results in more detail. Thanks, Mark. Starting with revenue, our total revenue from continuing operations was in the second quarter was 14.0 million compared to last year's 25 million. A decrease of 11 million, or 44 percent. The revenue decreased in both our segments as the treatment segment was down 4.5 million, and services segment was down 6.6 million. The shortfall at treatment was primarily volume related to the lower race receipts received in the quarter and in equipment failure that negatively altered our production at one of our plans.

Speaker Change: On that note, I'll turn the call over to Ben, who will discuss the financial results in more detail, Ben.

Ben Naccarato: Thanks, Mark. Starting with revenue, our total revenue from continuing operations in the second quarter was $14.0 million compared to last year's $25 million, a decrease of $11 million, or 44 percent. The revenue decreased in both our segments as the treatment segment was down $4.5 million, and the services segment was down $6.6 million. The shortfall at treatment was primarily volume-related due to the lower waste receipts received in the quarter and an equipment failure that negatively altered our production at one of our plants.

Ben Naccarato: Thanks, Mark. Starting with revenue, our total revenue from continuing operations in the second quarter was $14.0 million, compared to last year's $25 million, a decrease of $11 million, or 44%.

Ben Naccarato: The revenue decreased in both our segments as the treatment segment was down $4.5 million and services segment was down $6.6 million.

Speaker Change: The shortfall at treatment was primarily volume-related due to the lower waste receipts received in the quarter and an equipment failure that negatively altered our production at one of our plants.

Ben Naccarato: The sales are also impacted; revenue from a pricing standpoint, as our waste mix was impacted, leading to the processing of lower price waste. In the services segment, our customer delays in the start-up of new projects and the completion of two larger projects in late 23 early 24 that haven't been replaced with similar value contracts led to the decrease in revenue in services.

Ben Naccarato: Equipment failure also impacted revenue from a pricing standpoint as our waste mix was impacted, leading to the processing of lower-priced waste in the services segment. Customer delays in the startup of new projects and the completion of two larger projects in late 23, early 24, that haven't been replaced with similar value contracts, led to the decrease in revenue in services. Our gross profit for the quarter was a loss of $1.3 million compared to $4.5 million in revenue in 2020 in Q2. The biggest impact to the negative gross profit was from the treatment segment, where the lower waste volume, the revenue mix, and the high fixed cost burden at our treatment plants significantly impacted the gross profit.

Speaker Change: The equipment failure also impacted revenue from a pricing standpoint as our waste mix was impacted leading to the processing of lower priced waste.

Speaker Change: in the services segment.

Speaker Change: Our customer delays in the startup of new projects and the completion of two larger projects in late 23, early 24 that haven't been replaced with similar value contracts led to the decrease in revenue in services.

Ben Naccarato: Our gross profit for the quarter was a loss of 1.3 million compared to 4.5 million income in 2020 in Q2 of 23. The biggest impact from the to the negative gross profit was from the treatment segment where the lower waste volume, the revenue mix, and the high fixed cost burden at our treatment plants significantly impacted the gross profit. Our services segment also had lower revenues, which impacted gross profit negatively. Our SG&A costs for the quarter were 3.5 million, which is slightly down from prior year by about 96,000. Our lower marketing, travel, and legal costs were offset by higher payroll and stock option expense.

Speaker Change: Our gross profit for the quarter was a loss of $1.3 million compared to $4.5 million income in Q2 of 2023.

Speaker Change: The biggest impact to the negative gross profit was from the treatment segment where the lower waste volume, the revenue mix, and the high fixed cost burden at our treatment plants significantly impacted the gross profit.

Ben Naccarato: Our services segment also had lower revenues, which impacted gross profit negatively. Our SG&A costs for the quarter were $3.5 million, which is slightly down from the prior year by about $96,000. Our lower marketing, travel, and legal costs were offset by higher payroll and stock options. Our net loss for the quarter was $4 million compared to last year's net income of $4 million. 474,000.

Speaker Change: our services segment also had lower revenues which impacted gross profit negative

Speaker Change: Our SG&A costs for the quarter were $3.5 million, which is slightly down from prior year by about $96,000.

Speaker Change: our lower marketing travel and legal costs were offset by higher payroll and stock option expense

Ben Naccarato: Our net loss for the quarter was $4 million compared to last year's net income of $474,000. Our total basic and diluted loss per share for the quarter is 27 cents compared to basic income per share of 4 cents and diluted income per share of 3 cents in the prior year.

Speaker Change: Our net loss for the quarter was $4 million compared to last year's net income of $474,000.

Speaker Change: Our total basic and diluted loss per share for the quarter is $0.27 compared to basic income per share of $0.04 and diluted income per share of $0.03 in the prior year.

Ben Naccarato: Our total basic and diluted loss per share for the quarter was $0.27 compared to basic income per share of $0.04 and diluted income per share of $0.03 in the prior year. EBITDA from continuing operations for the quarter was, as we defined it in this morning's press release, a negative $4.6 million compared to EBITDA of $4.6 million and $1.5 million last year.

Ben Naccarato: EBITDA from continuing operations for the quarter was, as we defined it in this morning's press release, a negative 4.6 million compared to EBITDA of 1.5 million last year. Turning to the balance sheet, cash on the balance sheet was 18.1 million compared to 7.5 million at year end, with the increase due to, of course, the equity. Our accounts receivable and unbilled receivables were down 4.7 million due to the lower revenues and the receipt in full of our long outstanding receivable from our Canadian project. Our AP accrued expenses and accrued disposal collectively were down 2.1 million, reflecting lower operating costs and the timing of payments.

Speaker Change: ebitda for the from continuing operations for the quarter was as we defined it in this morning's press release was a negative four point six million compared to ebitda of one point five million last year

Ben Naccarato: Turning to the balance sheet, cash on the balance sheet was $18.1 million, compared to $7.5 million at year end, with the increase due, of course, to the equity raise. Our accounts receivable and unbilled receivables were down $4.7 million due to lower revenues and the receipt in full of our long outstanding receivable from our Canadian project. Our RAP accrued expenses and accrued disposal collectively were down $2.1 million, reflecting lower operating costs and timing of payments.

Speaker Change: Turning to the balance sheet, cash on the balance sheet was $18.1 million compared to $7.5 million at year-end with the increase due to, of course, to the equity raise.

Speaker Change: Our accounts receivable and unbilled receivables were down $4.7 million due to the lower revenues and the receipt in full of our long outstanding receivable from our Canadian project.

Speaker Change: Our RAP accrued expenses and accrued disposal collectively were down $2.1 million reflecting lower operating costs and timing of payments.

Ben Naccarato: Our under-and-revenue was down approximately a million compared to prior year.

Ben Naccarato: Our unearned revenue was down approximately $1 million compared to the prior year. Our backlog at June 30th was $8.7 million, down from $10.7 million in December of 2023. And our total debt for the quarter, which is entirely to PNC Bank, was at $2.4 million, and that excludes debt issuance costs, which are cash used from Continuing Operations with $6.1 million. Cash used by our disc ops is $245,000. Cash used for investing in continuing operations, mostly related to capital spending, was $840,000.

Speaker Change: Our unearned revenue was down approximately $1 million compared to prior year. Our backlog at June 30th was $8.7 million, down from $10.7 million in December of 2023.

Ben Naccarato: Our backlog at June 30 was 8.7 million, down from 10.7 million in December of 23, and our total debt for the quarter, which is entirely to PNC Bank, was at 2.4 million, and then that excludes debt issuance costs. Our cash used from continuing operations was $6.1 million. Cash used by our discops is 245,000. Cash used for investing in continuing operations mostly related to capital spending was 840,000. Cash used for investing in discontinued operations was 49,000. Cash provided by financing was 18.1 million, which represents the net proceeds of 8.6 million from the equity raise and receipts from other option and warrant exercises of approximately 218,000, and that's reduced by monthly payments to our term and capital loans of 520,000 and payments related to financing leases and other debt of 207,000.

Speaker Change: And our total debt for the quarter, which is entirely to PNC Bank, was at $2.4 million, and that excludes debt issuance costs.

Speaker Change: Our cash used from continuing operations was $6.1 million. Cash used by our disc ops is $245,000.

Speaker Change: cash used for investing in continuing operations mostly related to capital spending as a eight hundred and forty thousand

David Waldman: Are we allowed to turn the conference over to your host, Mr. David Waldman, for Shendo Communications, sir, you may begin. Great. Thank you, and good morning, everyone.

Speaker Change: Cash used for investing in discontinued operations was $49,000.

Ben Naccarato: Cash used for investing in discontinued operations was $49,000. Cash provided by financing was $18.1 million, which represents the net proceeds of $8.6 million from the equity raise and receipts from other option and warrant exercises of approximately $218,000. And that's reduced by monthly payments to our term and capital loans of $520,000 and payments related to financing leases and other debt of $207,000. With that, Operator, I'll now turn the call over to questions.

David Waldman: Welcome to Perma-Fix Environmental Services Second Quarter 2024 Conference Call. On the call of us this morning are Mark Duff, President and CEO, Dr. Louis Centofani, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing second quarter 2024 financial results, which is also posted on the company's website. If you have any questions after the call or like any additional information about the company, please contact Shendo Communications at 2126711020.

Speaker Change: Cash provided by financing was $18.1 million, which represents the net proceeds of $8.6 million from the equity raise.

Speaker Change: and recepts from other option and war and exercises of approximatelyate two hundred and eighteen thousand and that's reduced by monthly payments to our term and capital loans of five hundred twenty thousand and payments related to financing leases another deatht of two hundred and seven thousand

Operator: With that operator, I'll now turn the call over to questions. Thank you. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question key, and you may press star two if you would like to remove your question from the keypad. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you.

Speaker Change: With that, operator, I'll now turn the call over to questions.

David Waldman: I'd also like to remind everyone that certain statements contained within this conference call may begin forward-looking statements within the meeting of the private security litigation reform act in 1995, and include certain on-depth financial measures. All statements on this conference call other than the statement to start a call factor forward-looking statements that are subject to known on-on-on-risk uncertainties and other factors which could cause actual results in performance of the company to differ materially from such statements.

Operator: Thank you. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue, and you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.

Speaker Change: thank you at this time we will be conducting our question-and answer session

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad.

David Waldman: These written uncertainties are detailed in the company's filing to the 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 day hereof that bear upon forward-looking statements. In addition, today's discussion will include references to non-gap measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-gap measures to the most directly comparable gap measures is available on today's news release on our website.

Speaker Change: The confirmation tone will indicate your line is in the question queue. And you may press star 2 if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the stir keys.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is coming from Howard Brous with Wellington Shields. Your line is: Thank you, Mark, Ben, Lou. I hope everybody is well.

Speaker Change: One moment, please, while we poll for questions.

Howard Brous: Our first question is coming from Howard Bros. with Wellington Shields. Your line is live. Thank you. Mark Benloo of everybody, as well families.

Speaker Change: Thank you. Our first question is coming from Howard Brouse with Wellington Shields. Your line is live.

Howard Brous: Thank you. Mark, Ben, and Lou. Hope everybody is well, family. For full disclosure, I was the investment banker of Wellington Shields on the last equity raise, and secondly, my family owns shares in Perma-Fix. First question, can you provide details about the partnerships you have developed with PFAS?

Howard Brouse: Thank you. Mark, Ben, Lou, I hope everybody is well, families.

Mark Duff: For full disclosure, I was the investment banker of Wellington Shields on the last equity raise, and secondly, my family owns shares in Premises. First question: can you provide details about the partnerships you have developed with PFAS?

Speaker Change: For full disclosure, I was the investment banker of Wellington Shields on the last equity raise.

Mark Duff: Now, I'd like to turn the call over and mark Duff. Please go ahead, Mark. All right, David.

Speaker Change: and secondly my family owns shares in Perma-Fix.

Mark Duff: Thanks, and good morning, everyone. As anticipated, we continue to experience weakness in Q2 due to ongoing government delays and waste shipments, awarding new task orders, and procuring other projects within our services segment. In addition, we experience an extended equipment failure at one of our facilities that has taken nearly seven weeks to repair those repairs that we completed this week, and we expect to be fully operational by mid-August. Lastly, our earnings during the quarter were impacted by deliberate and breastaments in our R&D sales, marketing, and engineering to support the launch of our newest technology to treat PFAS, which I'll talk about more in a moment.

Speaker Change: First question, can you provide details about the partnerships you have developed with PFAS?

Mark Duff: Mark, you might be on mute. So thanks, I was. Thank you, Ben.

Mark Duff: Mark, you might be on mute.

Mark Duff: Thanks, I was. Thank you, Ben. Good morning, Howard, and thank you for the question. Our partnership agreements are a critical component of our strategy for PFAS, and particularly to get very quick revenue and to really understand how our technology capabilities fit into this huge market that's moving in all different directions and is developing. So we basically have four types of Agreements we're putting into place; the first is with universities to support securing grants directly focused on the expansion of our technology into the soil market and demonstrating that this technology will work in solid media.

Mark Duff: Good morning, Howard, and thank you for the question. Our partner agreements are a critical component of our strategy for PFAS and particularly to get a very quick revenue and to really understand how our technology capabilities fit into this huge market that's moving in all different directions and is developing. So we basically have four types of agreements. We're putting it in place. The first is with universities to support securing grants directly focused on the expansion of our technology into the soil market and demonstrating that the technology will work in solid media. The second is we're discussing our technology with our competitors to understand how it fits together with them.

Speaker Change: Mark, you might be on mute.

Mark Duff: Thanks, I was. Thank you, Ben. Good morning, Howard, and thank you for the question. Good morning. Our partnering agreements are a critical component of our strategy for PFAS and particularly to

Speaker Change: get very quick revenue and to really understand how our technology and capabilities fit into this huge market that's moving in all different directions and is developing. So we basically have four types of

Mark Duff: While we were disappointed with the court of results, we consider the government issue as being temporary, and we're starting to see improvement heading into the second half of 2024 with improving revenues and productivity each month over the past several months. In the meantime, as we've discussed, we discussed we're making progress on a number of potentially transformative initiatives.

Howard Brouse: Agreements we're putting into place. The first is with universities.

Howard Brouse: to support securing grants.

Howard Brouse: directly focused on the expansion of our technology into the soil market and demonstrating that this technology will work in solid media. The second is we're discussing our technology

Mark Duff: The second is we're discussing our technology with our competitors to understand how it fits together with them. There are actually several competitors that we're talking to that complement each other for mutual benefit where we have greater strengths from our technology for high concentration PFAS and less capability, at this point in time, at least for very large volumes of lower concentrations like groundwater or other lower concentrations that are high volume. So, working together with several of our competitors to see how we align and how we can work together to jump into this market in a big way.

Howard Brouse: with our competitors.

Mark Duff: There's actually several competitors. We're talking to that a couple of many each other from mutual benefit, where we have greater strengths from our technology for high concentration, PFAS, and less capability at this point in time at least for a very large volume lower concentration like groundwater or other lower concentrations that are high volumes. We're working together with several of our competitors to see how we align and how we can work together to jump into this market in a big way. Third, we're working with larger firms that have large client bases, and these client bases include firms that have a lot of customers that they manage their facilities for, typically in the client's area or waste.

Howard Brouse: to understand how it fits together with them. There's actually several competitors that we're talking to that complement each other for mutual benefit. We have greater strength from our technology for high concentration PFAS and less capability at this point in time at least.

Mark Duff: It's important to note that the government delays we experience were not unique to permafix, and have been industry-wide much of this drag was due to the extended continuing resolution in Congress's inability to pass a federal budget until March of this year, which led to delays in procurements, project starts and waste shipments due to funding limitations. These factors, which had a direct impact on our base business, have begun to subside and were not anticipated to be long-term trends within the industry.

Howard Brouse: for very large volume, lower concentration, like groundwater.

Howard Brouse: or other lower concentrations that are high volume. So, working together with several of our competitors to see how we align and how we can work together to jump into this market in a big way. Third, we're working with larger firms that have large client bases.

Mark Duff: Third, we're working with larger firms that have large client bases, and these client bases include firms that have a lot of customers that they manage their facilities for, typically in the compliance area or waste, and they know that their clients have a desire to get the PFAS off-site and address compliance concerns or address compliance concerns and liabilities. We're also working with federal agencies, and currently, we have several samples from different agencies that we're working on right now that open the door to showing that we can develop performance data for future larger volumes once we get operational and begin the process of being approved by those agencies as a go-to vendor for destruction of their inventory. So, partnership is really important to us, and it's going really well at this point. We're very encouraged by it.

Howard Brouse: These client bases include firms that have a lot of customers that they manage their facilities for, typically in the compliance area or waste.

Mark Duff: In fact, Congress has approved healthy funding levels for the government fiscal year of 25, particularly at the Hanford, and we expect to see pen-up demand for our offering in both services and waste treatment in the coming months. At the same time, we continue to diversify our broader commercial international markets, including both radioactive and hazardous waste. For these reasons and others, I'm confident that the worst is now behind us and we're encouraged by the trends in early Q3, evidence by our increase in waste shipments or waste receipts and bidding activity.

Mark Duff: They know that their clients have a desire to keep the PFAS off-site and maintain compliance concerns or addresses, compliance, and liabilities. We're also working with federal agencies, and currently we have several samples from different agencies that we're working on right now that open the door for showing that we can develop performance data for future larger firms. Once we get operational and begin the process of being approved by other agencies as a go-to vendor for destruction of their inventory. So, partners are really important to us, and it's going really well at this point. We're very encouraged by it.

Speaker Change: and they know that their clients have a desire to get the PFAS off-site and maintain compliance concerns or address compliance concerns and liabilities.

Howard Brouse: We're also working with federal agencies and currently we have several samples from

Howard Brouse: from different agencies that we're working on right now that open the door for Showing that we can develop performance data for future larger volumes once we get operational and begin the process of

Mark Duff: Within the treatment segment, waste receipts were nearly $7 million in Q2. I had appeared to be regaining momentum with the first half of Q3 trending toward receipts of 10 to 20 million range with several large shipments anticipated. Within these services, the segment were benefiting from increased bidding opportunities and addition, our profitability is steadily improving in both segments.

Howard Brouse: being approved by those agencies as a go-to vendor for destruction of their inventory. So partnering is really important to us and it's going really well at this point. We're very encouraged by it.

Howard Brous: Thank you.

Howard Brous: Thank you. The second question is whether there is a settlement agreement, a contract, between all of the parties at hand. And in that contract, they discussed building a second vitrification plant for high-level waste, the operational date, I believe, in 2030, although that date is, and from my perspective with the DOE, possibly they, But they discuss that they will operate both plants, from 2025, August, if you will, or possibly sooner to 2016, with the effluent to be handled basically by one company, and that one company seems to be a sole source, Perm

Howard Brous: Second question, is there a settlement agreement, a contract, between all of the parties that hands it? And in that contract, they discuss building a second certification plan for high-level waste, the operational, I believe, in 2030, although that date is, from my perspective, with a DOE, possibly vague. But they discuss that they will operate both plans from 2025, August, if you will, or possibly sooner, through 2060, with the excellent to be handled basically by one company, and that one company seems to be a sole source from a fix. That's my understanding.

Speaker Change: Thank you. Second question is there is a settlement agreement, a contract

Speaker Change: between all of the parties at Hanford.

Speaker Change: And in that contract, they discuss building a second vitrification plant for high-level waste.

Mark Duff: For example, we're participating in large procurement opportunities as part of larger teams for the operations and the mission support contract as well as the West Valley demonstration project in your Buffalo, New York and Navy projects, which are all expected to be awarded. Over the next several quarters.

Speaker Change: The operational, I believe, in 2030, although that date is, from my perspective with the DOE, possibly vague. But, they discuss that they will operate both plants.

Speaker Change: from 2025 August if you will or possibly sooner through 2060.

Howard Brouse: with the effluent to be handled basically by one company and that one company seems to be a sole source Perma-Fix.

Mark Duff: Can you discuss that? Yeah, right now the way it works, Howard, is we provide our rates to the take operations contract, what they call the talk. And that coming right now is the WRPS, the winner of the ITDC bid that's indisputed for several years now, would be the future contract holder for that. And we provide our rates to them for all the different types of waste that we'll see from the DF Law affluent. And you're correct, my understanding is the DF Law facility has a built-in life for through 2060, where they plan to do about a million gallons a year through that period.

Speaker Change: That's my understanding. Can you discuss that?

Mark Duff: Yeah, right now, the way it works, Howard, is we provide our rates to the tank operations contract, what they call the TOC, and that company right now is WRPS. The winner of the ITDC bid, that's been in dispute for several years now, would be the future contract holder for that. And we provide our rates to them for all the different types of waste that we'll see from the DF Law effluent. You're correct; my understanding is the DF Law facility has a design life through 2060, and they plan to do about a million gallons a year through that period.

Mark Duff: In addition, on pleased report, we've achieved several significant milestones by successfully completing two pivotal Department of Energy audits of our perfect Northwest facility and our DSSI facility over the past few months, completing these comprehensive audits were essential for our involvement in crucial projects like the cleanup efforts at Hanford and Oak Ridge Reservation and to find our ability to safely and comply with ultimately support the DOE mission regarding the treatment of their waste. We remain committed to supporting the DOE's priorities at Hanford, including the treatment of the effluent, following the hot commission of the DF Law facility, currently anticipated in August of 25 and reiterated by DOE and public meetings and agreements that the program remains on schedule for this milestone.

Speaker Change: Yeah, right now the way it works, Howard, is we provide our rates to the take operations contract, that's what they call it.

Speaker Change: talk and

Speaker Change: That company right now is WRPS, the winner of the ITDC bid.

Speaker Change: that's been in dispute for several years now would be the future contract holder for that. We provide a rate to them for all the different types of waste that we'll see from the DF law effluent.

Speaker Change: You're correct, my understanding is that the DFLOF facility has a design life through 2060 where they plan to do about a million gallons a year. Through that period, DOE has stated publicly that they have no other...

Mark Duff: The DOE has stated publicly, they have no other viable options currently available to meet that treatment obligation for the DF Law affluent facility, and that they're not currently pursuing any construction line items for any new buildings or facilities to support that. So we're pretty comfortable that right now we're the preferred alternative at minimum of 10 years, and we would expect to go longer than that as we've got the facilities available right now with the flexibility to support it, and the capacity to support it through 2060. So that is the current thinking that we'll be able to provide that support throughout that period.

Mark Duff: Ideally, it should have stayed publicly, they have no other... We have a number of viable options currently available to meet that treatment obligation for the DFL effluent facility, and they're not currently pursuing any construction line items for any new buildings or facilities to support that. So we're pretty comfortable that right now we're the preferred alternative for at least 10 years, and we would expect to go longer than that, as we've got the facilities available right now with the flexibility to support it and the capacity to support it through 2016. So that is the current thinking that we'll be able to provide that support throughout that period.

Speaker Change: bible options currently available to meet that

Speaker Change: Treatment obligation for the DFL office effluent facility

Speaker Change: and that they're not currently pursuing.

Speaker Change: Any construction line items for any new buildings or facilities.

Speaker Change: to support that.

Speaker Change: so we're pretty comfortable that right now where deferred alternative at minimum ten years and we would expect to go longer than that as we'vegot the facilityities avail right now with a flexibility to support it in the capacity to support it through two thousand and sixty

Speaker Change: So that is the current thinking that we'll be able to provide that support throughout that period.

Howard Brous: Going off on a tangent, when we talk about... TBI. In one of those documents, and there are basically three important operative documents, one the rod, two the December of last year, and then the contract, basically talks about starting in 20, I guess, January 2026, for TVI. Can you comment about the time frame and the magnitude of what you expect to get out of that, please? And that's my last question. Yeah, there's a lot in that one question, Howard. I know.

Mark Duff: Going off on a tangent, when we talk about TBI, in one of those documents, basically three important operative documents, one, the Rod to the December of last year, and as a contract, basically talks about starting in 20, I guess January 20, 26, or TBI. Can you comment about the time frame and the magnitude of what you expect to get out of that, please, and that's my last question. Yeah, there's a lot of, in that question, Howard, there are several documents as you know, the systems document, the systems document, and then more important of the confirmation of the systems document with the regulators as defined in the April 29 settlement agreement, which is well, likely to be a consent order later, once it's finalized, and what they committed in there to do is 22 tanks, over 15 years, basically.

Mark Duff: Our Perma-Fix Northwest facility located adjacent to the Hamper site is the only regional permit of facility that offers the ability to grow out the tank waste and ship out of state disposal using rail. Alternative facilities will require a large number of shipments of liquid that's untreated waste out of state with higher environmental risk. It's difficult to define the exact quantity of waste to be removed from these tanks for grouting. But unofficial estimates include expectations for up to approximately 3 million gallons of waste through process annually to meet these goals that they've defined for 2040 to be completed.

Speaker Change: Going off on a tangent, when we talk about...

Speaker Change: TBI. In one of those documents, and there are basically three important operative documents, one the ROD, two the December of last year, and then the contract.

Speaker Change: basically talks about starting in 20 I guess January 2026

Speaker Change: or TVI. Can you comment about the time frame and the magnitude of what you expect to get out of that, please?

Mark Duff: The agreement is unclear about when these operations would commence. However, the recent Hanford System's 10 document published last winter defines retrieval operations beginning in January of 26. The tri-party settlement agreement also underscores the U.S, commitment to start D.F, law of vitrification plan operations following the completion of the hot commission program scheduled for August of 25. This is one of the U.S, highest priorities as the Department continues to communicate its progress in meetings in regards to their operational milestones.

Mark Duff: There are several, several documents, as you know, the system's document, and then, more importantly, the confirmation of the system's document with the regulators as defined in the April 29th settlement agreement, which..., will likely be a consent order later once it's finalized. And what they committed to do is 22 tanks over 15 years, basically. They are out for procurement right now with the systems to extract the waste from those tanks. Our understanding is the design for those systems is about 3.5 million gallons a year or so is what they're anticipating, and they'll basically be pumping that waste out of the tanks into totes for commercial off-site treatment.

Speaker Change: And that's my last question. Yeah. There's a lot in that question, Howard. I know. There are several documents, as you know. It's a systems document, and then, more importantly, the confirmation of the systems document with the regulators, as defined in the April 29th settlement agreement, which is...

Speaker Change: will likely be a consent order later once it's finalized and what they committed in there to do is 22 tanks over 15 years basically. They are out for procurement right now with the systems to extract the waste from those tanks.

Mark Duff: They are out for procurement right now with the systems to extract the waste from those tanks. Our understanding is the design for those systems is about 3.5 million gallons a year or so, is what they're anticipating, and they'll basically be pumping that waste out of the tanks into totes for commercial offsite treatment, and those extraction units are to be delivered, installed, in operational in December of 25, and Dewey has said before that they're shooting for January of 26, as the potential start date for that. Now, my understanding is not necessarily a consent order, a milestone for that, so that could slip, but they are moving in that direction.

Mark Duff: D.F, is committed to D.F, we committed in the January 23 record of decision to shift the effluent from D.F, law to pervix North West for a minimum of 10 years with D.F, estimating up to 8,000 cubic meters of waste to be generated annually from D.F, law when the facility meets full capacity of operations. As I've mentioned in the past, the volume of waste would be more than double the current production of our plants altogether combined on the annual basis.

Speaker Change: Our understanding is the design for those systems is about three and a half million gallons a year or so, is what they're anticipating, and they'll basically be pumping that waste out of the tanks into totes for commercial off-site treatment.

Mark Duff: Those extraction units are to be delivered, installed, and operational in December of 2025. And DOE has said before that they're shooting for January of 2026 as the potential start date for that. Now, my understanding is that this is not necessarily a consent order, a milestone for that, so that could slip, but they are moving in that direction.

Speaker Change: oh

Speaker Change: Those extraction units are to be delivered, installed, and operational in December of 2025. And DOE has said before that they're shooting for January of 2026.

Mark Duff: Pervix also continues to advance a number of international waste programs, including the Joint Research Center in Italy, where the first shipment as anticipated in January of 2025. We're also progressing on other promising opportunities in Europe additionally. We've secured new contracts in both Canada and Mexico to treat waste in our U.S, facilities. These projects are valued in excess of $5 million over the next 18 months.

Speaker Change: as the potential start take for that my understanding is not necessarily consent order a milsoon for that so that could slip but they are moving in that direction it'a lot of pressure on de we to begin closing tanks retrieving tanks as they call it

Mark Duff: There's a lot of pressure on Dewey to begin closing tanks, retrieving tanks, as they call it, and I would expect to be in close to that timeframe. As you mentioned, TBI, the TBI right now, the initials that are doing for that, 2000 gallons, is to define any potential alternative out there commercially so that they are trying to other companies. We have already demonstrated that we're viable, and Dewey has noted that, so we expect to be playing a large role. As I said in my notes, a few minutes ago, we are the only one that's local and provide some obvious advantages associated with environmental risk of being able to ship solids by rail opposed to liquids.

Howard Brous: There's a lot of pressure on DOE to begin closing tanks, retrieving tanks, as they call it, and I would expect to be in close to that time frame. As you mentioned, TBI right now, the initiative they're doing for that 2,000 gallons is to define any potential alternative out there commercially, so they are trying two other companies. We have already demonstrated that we're viable, and DOE has noted that. So we expect to be playing a large role in that, and as I said in my... my notes a few minutes ago, we are the only one that's local and provides some obvious advantages associated with the environmental risk of being able to ship solids by rail as opposed to liquids.

Speaker Change: And I would expect to be in close to that time frame. As you mentioned, TBI, TBI right now, the initiative they're doing for that, 2,000 gallons.

Speaker Change: is to define any potential...

Mark Duff: In a separate note, we recently announced that we purchased the Environmental Waste Operations Center, also known as EWOC, located just outside Oak Ridge, Tennessee. The strategic value of this purchase is significant both for us, our customers as well. We previously released this facility for EWOC over the past several years, and we've been acquiring the facility to support our plans to invest in facility upgrades and capitalize on a number of opportunities, including large-scale decontamination projects, waste processing and transloading from rail to rail for disposal out west.

Speaker Change: alternative out there commercially.

Speaker Change: So they are trying two other companies. We have already demonstrated that we're viable and DOE has noted that. So we expect to be, you know, playing a large role in that, and as I said in my

Speaker Change: My notes, a few minutes ago, we are the only one that's local and provide some

Speaker Change: and the other people. So, obvious advantages associated with environmental risk of being able to ship solids by rail as opposed to liquids. We expect to get a significant portion of that waste. I wouldn't suppose that we'd get all of it because DOE will want alternative ways of getting that waste out.

Mark Duff: So we expect to get us to giving a portion of that waste. I wouldn't suppose that we'd get all of it, because Dewey will want alternative backups, or along the line, but we do expect that we can get at least half. That's our estimate, a disspeculation, and that would be a million, a million, a million, a half gallons a year, which would be a great revenue stream for us. That's a lot to all of us.

Howard Brous: So, we expect to get a significant portion of that waste. I wouldn't suppose that we'd get all of it because DOE will want alternative backups or along the line, but we do expect that we can get at least half. That's our estimate. That is speculation, and that would be a million and a half gallons a year, which would be a great revenue stream for us. Best of luck to all of us. Thank you very much.

Speaker Change: backups or you know along the line, but we do expect that we we get at least half That's our estimate this speculation And that would be you know a million minute million and a half gallons a year, which would be a great revenue stream for us

Mark Duff: This facility's strategic located in close proximity to both the Y-12 national security complex and the Oak Ridge National Laboratory. As cleanup programs begin to address large volumes of mercury and other difficult radioactive materials, EWOC has also targeted for future implementation of PFAS waste processing capabilities, including regional treatment of PFAS contaminated liquids, as we begin to receive larger volumes of these waste following deployment of our first commercial unit in Florida. In terms of our PFAS technology, we've made significant progress in the design and fabrication of our first Perma-FAS commercial unit in collaboration with our partner, Process Baron.

Howard Brous: Thank you very much. Thank you, Maher. Thank you.

Speaker Change: Best of luck to all of us. Thank you very much. Thank you, Howard.

Operator: Thank you. Our next question is coming from Aaron Spychalla with Craig Hallam. Your line is live.

Aaron Spichala: Our next question is coming from Aaron Spichala with Craig Hallum. Your line is... Live. Yeah, hi, Mark and Ben. Thanks for taking the questions. First, so it sounds like you know, DF Law is on track to start up by August of 2025, saw you noted kind of mid-2025 in the release. Can you just talk about how you're thinking about, you know, the timing of initial volumes as they work to start that up? Your latest thoughts on what that opportunity could look like for you from a contribution standpoint. And then also just what you're doing to prepare the Richland plant and other plants as those volumes begin.

Speaker Change: Thank you. Our next question is coming from Aaron Spichala with Craig Hallam. Your line is live.

Aaron Spychalla: Yeah, hi, Mark and Ben. Thanks for taking the questions. First, so it sounds like, you know, DF Law is on track to start up by August of 2025. I saw you noted kind of mid-2025 in the release. Can you just talk about how you're thinking about, you know, timing of initial volumes as they work to start that up? And your latest thoughts on what that opportunity could look like for you from a contribution standpoint? And then also just what you're doing to prepare the Richland plant and other plants as those volumes begin.

Speaker Change: yeah himark and ben thanks for for taking the questions first so it sounds like you know df laws isa

Speaker Change: on track to start up by August of 2025, saw you noted kind of mid-2025 in the release.

Mark Duff: This unit is expected to be fully operational later this year, and the process Baron has proven to be an ideal partner in working closely with us in our engineering team to define design. It's a complete final design, concurrently with fabrication, to reduce time for completion. As a result, we expect our prototype system to be capable of destroying PFAS in batches of 700 gallons. Most importantly, we're on track and expecting to be fully operational in accepting commercial waste for destruction by Q4 this year.

Speaker Change: Can you just talk about how you're thinking about timing of initial volumes as they work to start that up? Your latest thoughts on what that opportunity could look like for you from a contribution standpoint and then also just what you're doing to prepare the Richland plant and other plants as those volumes begin.

Mark Duff: Yeah, thanks, Aaron. I'd appreciate your question. Yeah, what it comes down to is, VUE has been very difficult to communicate with in regards to what happens between now and August of 25. As you know, in the settlement agreement, it's very specific that they will be completed hot commissioning by August 1st of '25. Hot commissioning in our minds typically is means radioactive waste or radioactive Syrigas or something or radioactive is included in the process to show that it works and it meets all of the, you know, the shieldings in place and all the security or safety and security components are operable.

Mark Duff: Yeah, thanks, Aaron. I appreciate your question.

Speaker Change: Yeah, thanks Aaron. I appreciate your question. Yeah, what it comes down to is DOE has been very difficult to communicate with in regards to what happens between now and August of 25.

Mark Duff: Yeah, what it comes down to is DOE has been very difficult to communicate with in regards to what happens between now and August of 25. As you know, in the settlement agreement, it's very specific that they will be... completed hot commissioning by August 1st of 25. Hot commissioning, in our minds typically means radioactive waste or radioactive surrogates or something radioactive is included in the process to show that it works and it meets all of the shieldings in place, and all the security or safety and security components are operable.

Mark Duff: We've established several goals for additional units to be installed at each of our facilities throughout 2025. Based on the performance results defined by our prototype, we will engineer two or excuse me, a second generation system to increase throughput and productivity to address larger volumes of PFAS liquids.

Speaker Change: As you know, in the settlement agreement, it's very specific that they will be...

Speaker Change: completed hot commissioning by august first of twenty five

Speaker Change: Hot commissioning in our minds typically is

Speaker Change: means radioactive waste or radioactive surgances or something radioactive included in their process to show that it works and it meets all of the all the shieldings in place and ever all the

Mark Duff: So one would assume that somewhere along the line in the hot commissioning process, they'd start generating waste. But again, they haven't confirmed this, but typically, what hot commissioning means, and we're anticipating that they'll start that process in the summer of 25, or earlier, somewhere in that time, and they'll start one melter up in August based on the agreement to start operating after hot commissioning. That will run for a while.

Mark Duff: 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. This designation enables the agency to compel responsible parties to pay for or conduct investigations and clean-up. We believe our process is extremely unique, and we've been actively sharing information with EPA about our new process. Unlike traditional disposal methods for PFAS contaminated materials, which compose environmental threats and can be extremely energy intensive.

Mark Duff: So, one would assume that somewhere along the line in the hot commissioning process, they'd start generating waste. One, you know, again, they haven't confirmed this, but hot combat's with typically hot commissioning means, and we're anticipating that they'll start that process in the summer of 25 or earlier, somewhere in that timeframe. And they'll start one malther up in August based on the agreement to start operating after hot commissioning. That will run for a while. We're not sure when the second malther is going to come online, but we know that they have a commitment. I think it's a milestone buried in that system agreement settlement agreement that they must be fully operational with both Malther's running full speed within several years.

Speaker Change: security or safety and security components are operable so one would assume that somewhere along the line in the hot commissioning process they'd start generating waste

Speaker Change: Again, they haven't confirmed this, but hot combats are typically what hot commissioning means, and we're anticipating that they'll start that process in the summer of 2025 or earlier, somewhere in that time frame.

Speaker Change: and they'll start one melter up in in August based on the agreement to start operating after our commissioning that that will run for a while we're not sure when the second melter is going to come online but we know that they have a commitment

Mark Duff: The hours will be the first known sealed chemical destruction unit that can accept and destroy PFAS to acceptable levels in the U.S. As we've stated previously, our process achieved PFAS destruction levels of 69 or 99.999 percent exceeding anticipated regulatory requirements. This was demonstrated in our bench scale and our pilot scale approaches. In advance of the commercial operation, we're making significant progress in raising industry awareness and developing backlog anticipation of a Q4 start.

Mark Duff: We're not sure when the second melter is going to come online, but we know that they have a commitment. I think it's a milestone buried in that settlement agreement that they must be fully operational with both melters running full speed within several years. I want to say three years. So somewhere between those two times, they will be fully operational. Right now, we know that if they're testing everything, you know, very close to parallel.

Speaker Change: I think it's a milestone buried in that settlement agreement that they must be fully operational with both melters running full speed.

Mark Duff: I want to say three years. So, somewhere between those two times, they will be fully operational. Right now, we know that if they're testing everything, you know, very close to parallel, in other words, both malther's are going through the testing together and everything's going well. And so, to answer your question, we would expect to see, you know, a couple of million dollars a month coming into the plant in waste treatment once it certs operations and ramp up from there to what we've estimated to be the 70 to 80 million dollar range annually once both malther's are fully operational, running at a million gallons a year.

Speaker Change: within several years, I want to say three years.

Speaker Change: Somewhere between those two times they will be fully operational.

Mark Duff: In other words, both melters are going through the testing together, and everything is going well, and so to answer your question, we would expect to see, you know, a couple million dollars a month coming into the plant for waste treatment once it starts operations, and then ramp up from there to what we've estimated to be the 70 to 80 million dollar range annually once both melters are fully operational.

Speaker Change: right now we know that they're testing everything ' very close parallel on other words both melters aregoing through testing together and everything 'is going well

Mark Duff: We've already received PFAS liquid samples from over a dozen clients, including the federal government. In addition, we're developing several partner agreements with larger firms and clients that will quickly align our technology with the market demand in early Q4. Once we demonstrate that we're able to achieve the same performance metrics that we've already achieved in our pilot facility. We're confident we can replicate these high performance levels with our operational plan as discussed.

Speaker Change: And so to answer your question, we would expect to see, you know, a couple million dollars a month.

Speaker Change: coming into the plant in waste treatment once it starts operations and ramp up from there to what we've estimated to be the 70 to 80 million dollar range annually once both melters are fully operational running at a million gallons a year.

Mark Duff: All right.

Aaron Spychalla: All right, and then just can you kind of expand on that a little bit with, you know, what you're doing from an operational standpoint at Richland to handle both volumes? Oh, I'm sorry, yeah, sure, yeah, we've assigned one of our executives to focus exclusively on this project. He's working through right now the design of the systems we need to expand to meet the capabilities for DFLAW as well as grouting and including some automation and some newer technologies particularly for grouting large volumes and that's part of what we're using the RAISE for will be the capital requirements to get this online so we're in design early design phases understanding trying to understand what types of waste we're going to be receiving what it's going to require we're going to have to do a permit mod later on for larger volumes of grouting and what that's going to entail so we're putting together the schedules and the cost of budgets for the deployment of the systems in the next quarter actually and hope to have that plan laid out by the end of the year of what we're going to be doing so we are pulling together an engineering team we're looking at working with some subs on that and some consultants for that design capacity and moving in that direction so we're fully operational here to handle those larger volumes next year it'll start out slow so our current facility right now if we did nothing we could handle it probably through 25 but we need to be have our new systems in place in the 26 time frame to support where things are heading All right, thanks for the color on that.

Mark Duff: And then just can you kind of expand on that a little bit with, you know, what you're doing from an operational standpoint and Rich. Oh, I'm sorry. Yeah, we've assigned one of our executives to focus exclusively on this project. He's working through right now the design of the systems we need to expand to meet the capabilities for DF Law as well as grouting and including some automation and some newer technologies, particularly for grouting large volumes. And that's part of what we're using the raise for; will be the capital requirements to get this online. So, we're in design early design phases understanding trying to understand what types of waste we're going to be receiving, what it's going to require.

Speaker Change: Alright, and then just, can you kind of expand on that a little bit with, you know, what you're doing from an operational standpoint at Richland to handle those volumes?

Speaker Change: We've assigned one of our executives to focus exclusively on this project. He's working through right now the design of the systems we need to expand.

Speaker Change: to meet the capabilities for DFLAW as well as grouting.

Speaker Change: and including some automation and some newer technologies, particularly for grouting large volumes.

Speaker Change: And that's part of what we're using the rays for.

Speaker Change: will be the capital requirements to get this online.

Speaker Change: So we're in design, early design phases, understanding, trying to understand what

Mark Duff: While we were hesitant to raise funds, and particularly the amount we raised, we ultimately decided that given the magnitude of these projects we're working on, we needed the flexibility to ramp up quickly while these projects start. It was also important to show our customers that we have the balance sheets to support the potentially massive projects ahead of us. While I'm disappointed in our financial performance in the first half of the year, I'm very proud of our team and our ability to navigate through this storm. While preparing for what we believe will be an unprecedented opportunity in 2025 and beyond.

Mark Duff: We're going to have to do a permit mod later on for larger volumes of grouting, and what that's going to entail. So, we're putting together schedules and the cost of budgets for the deployment of the systems in the next quarter, actually, and hope to have that plan laid out by the end of the year of what we're going to be doing. So, we are pulling together an engineering team looking at working with some subs on that and some consultants for the design capacity and moving in that direction. So, we're fully operational here to handle this larger volumes next year.

Speaker Change: Types of waste we're going to be receiving, what it's going to require. We're going to have to do a permit mod later on for larger volumes of grouting.

Speaker Change: and what that's going to entail. So we're putting together the schedules and the...

Speaker Change: The cost of budget

Speaker Change: for deployment of the systems in the next quarter actually and hope to have that plan laid out by the end of the year of what we're going to be doing. So we are pulling together an engineering team, we're looking at working with some subs on that and some consultants.

Ben Naccarato: On that note, I'll turn the call over to Ben, who will discuss the financial results in more detail. Thanks, Mark. Starting with revenue, our total revenue from continuing operations was in the second quarter was 14.0 million compared to last year's 25 million. A decrease of 11 million or 44 percent. The revenue decreased in both our segments as the treatment segment was down 4.5 million and services segment was down 6.6 million. The shortfall at treatment was primarily volume related to the lower race receipts received in the quarter and in equipment failure that negatively altered our production at one of our plans.

Speaker Change: for the design capacity and moving in that direction so we're fully operational here.

Mark Duff: It'll start out slow. So, our current facility right now, if we did nothing, we could handle it probably through 25, but we need to be have our new systems in place in the 26-time frame to support where things are headed. All right, thanks for the color on that.

Speaker Change: to handle those larger volumes next year. It'll start out slow, so our current facility right now...

Speaker Change: If we did nothing, we could handle it probably through 25, but we need to have our new systems in place in the 26 timeframe to support where things are heading.

Ben Naccarato: And then can you just give a little bit more detail on the Equipment Failure cost to repair there, you know, confidence it sounds like that'll be up and running here in a couple of weeks. And then just a little more broadly on CAPEX, you know, with the offering. Talk about areas of investment given the growth initiatives in front of you and some of these new waste streams that you're kind of targeting. Is that still a back after this year? And into 2025 for those? Yeah, okay, the first one was the RTO is going out. So we have a regenerative thermal oxidation unit, which is basically the unit at Florida.

Aaron Spychalla: And then can you just give a little bit more detail on the equipment failure, the cost to repair it there, you know, confidence, it sounds like that'll be up and running here in a couple weeks. And then just a little more broadly on CapEx, you know, with the offering, talk about areas of investment, given the growth initiatives in front of you and some of these new waste streams that you're kind of targeting. Is that still the back half of this year and into 2025 for those?

Speaker Change: Alright, thanks for the color on that. And then can you just give a little bit more detail on the equipment failure, cost to repair there, you know, confidence, it sounds like that'll be up and running here in a couple weeks.

Speaker Change: And then just a little more broadly on CapEx with the offering, talk about areas of investment given the growth initiatives in front of you and some of these new waste streams that you're kind of targeting. Is that still back half of this year and into 2025 for those?

Ben Naccarato: The sales are also impacted revenue from a pricing standpoint as our waste mix was impacted leading to the processing of lower price waste. In the services segment, our customer delays in the start-up of new projects and the completion of two larger projects in late 23 early 24 that haven't been replaced with similar value contracts led to the decrease in revenue in services. Our gross profit for the quarter was a loss of 1.3 million compared to 4.5 million income in 2020 in Q2 of 23.

Mark Duff: Okay, the first one was... with the RTOs going out. So we have a regenerative.

Speaker Change: Yeah, uh, okay, the first one was, uh...

Mark Duff: The Thermal Oxidation Unit, which is basically the unit at Florida, and you have a stack; everything goes through your stack whenever you heat anything up, heat waste up. The RTO, we call it, went out on June 8th; it basically shuts your whole stack down. It had run for 20 years without any problems, which is a pretty long life for that unit, and when it went down on June 8th, we could do no more thermal waste treatment.

Speaker Change: with the r is going out so we have a regenerative

Mark Duff: Can you have a stack? Everything goes through your stack whenever you heat anything up and heat waste up? The RTO we call it, went out on June 8th. It basically shuts your whole stack down. It had run for 20 years without any problems, which is a pretty long life for that unit. And when it went down to June 8th, we could do no more thermal waste treatment. And it took us a while to get the repair guys to come in. There's not a lot of RTO repairmen out there. And we made those fixes. I can't say exactly what the capital costs were for repairing that unit.

Speaker Change: Thermal Oxidation Unit, which is basically the unit at Florida when you have a stack Everything goes through your stack whenever you heat anything up, heat waste up

Mark Duff: And it took us a while to get the repair guys to come in; there aren't a lot of RTO repairmen out there, and we made those repairs. I can't say exactly what the capital costs were for repairing that unit, but the repairmen are gone as of yesterday, and we're rebalancing the system now and expect to be operational next week. I can't say, it costs us... About $500,000 to $700,000 in revenue loss. However, we were able to get a couple new waste streams in in August.

Speaker Change: The RTO, we call it, went out on June 8th. It basically shuts your whole stack down. It had run for 20 years without any problems.

Speaker Change: which is a pretty long life for that unit and when it went down June 8th

Ben Naccarato: The biggest impact from the to the negative gross profit was from the treatment segment where the lower waste volume, the revenue mix and the high fixed cost burden at our treatment plants significantly impacted the gross profit. Our services segment also had lower revenues which impacted gross profit negatively. Our SG&A costs for the quarter were 3.5 million which is slightly down from prior year by about 96,000. Our lower marketing travel and legal costs were offset by higher payroll and stock option expense.

Speaker Change: We could do no more thermal

Speaker Change: waste treatment. And it took us a while to get the repair guys to come in. There's not a lot of RTO repairmen out there and we made those fixes.

Speaker Change: I can't say exactly what the capital costs were for repairing that unit, but the repairmen are gone as of yesterday. We're rebalancing the system now.

Ben Naccarato: But the repairmen are gone as of yesterday. We're rebalancing the system now and expect to be operational next week. I can't say it costs us about five to 700 K in June in revenue loss. We were able to get a couple of new waste streams in early in August. Actually, it's in July that we could do in parallel with our thermal treatment that would soften the blow significantly in Q3. But we did not have that opportunity in June. Ben, do you have any numbers on what the capital cost might have been to make it up to make the upgrade fix on the RTO?

Speaker Change: and expect your operational next week i can't sa a cast us

Speaker Change: About $500,000 to $700,000 in June in revenue loss. We were able to get a couple new waste streams in in August .

Ben Naccarato: Our net loss for the quarter was 4 million compared to last year's net income of 474,000. Our total basic and deluded loss per share for the quarter is 27 cents compared to basic income per share of 4 cents and deluded income per share of 3 cents in the prior year. EBITDA from continuing operations for the quarter was as we defined it in this morning's press release was a negative 4.6 million compared to EBITDA of 1.5 million last year.

Speaker Change: actually it's in July , that we could do in parallel without thermal treatment that would soften the blow significantly in Q3 but we did not have that opportunity in June .

Ben Naccarato: Ben, do you have any numbers on what the capital costs might have been to make the upgrade and fix on the RTO? Yeah, and it's going to be maintenance, expense, and it wasn't a big number.

Ben Naccarato: Yeah, and it wasn't caught. It's going to be a maintenance expense. And it wasn't, it wasn't a big number. And you know, I want to say around about 100 K something in that range. So not it's it's repair and maintenance. It's not capital replacement on that one. Gotcha.

Ben Naccarato: Yeah, and it wasn't caught. It's going to be a maintenance expense, and it wasn't, Aaron. I want to say around about $100,000, something in that range. It's repair and maintenance, it's not capital replacement on that.

Ben Naccarato: Turning to the balance sheet, cash on the balance sheet was 18.1 million compared to 7.5 million at year end with the increase due to of course to the equity. Our accounts receivable and unbilled receivables were down 4.7 million due to the lower revenues and the receipt in full of our long outstanding receivable from our Canadian project. Our AP accrued expenses and accrued disposal collectively were down 2.1 million reflecting lower operating costs and the timing of payments.

Ben Naccarato: You know, I want to say around about 100k.

Ben Naccarato: something in that range. So not, it's repair and maintenance, it's not capital replacement on that one.

Aaron Spychalla: Gotcha. And then, I guess quickly, could you just kind of touch on some of the other CapEx areas for some of those new waste streams that you've been pursuing here?

Ben Naccarato: And then I guess quickly, could you just kind of touch on some of the other capex areas for some of those new waste streams that you've been pursuing here? Yeah, we have a couple upgrades we're doing at the SSI for a classified waste for the Dewey complex and working to expand the current facility we've got to handle larger volumes and larger components. And we're in, that's a couple million dollar upgrade. We just finished the ones at Florida. We are deploying right now, as I mentioned, beginning in September, the PFAS unit as well in Florida. And then the upgrades in Northwest will be largely associated with what I just mentioned.

Ben Naccarato: then

Speaker Change: Gotcha and then and then I guess quickly could you just kind of touch on some of the other CAPEX areas for some of those new waste streams that you've been pursuing here?

Mark Duff: Yeah, we have a couple upgrades we're doing at the SSI for classified waste for the DOE complex and working to expand the current facility. We've got to handle larger volumes and larger components, and we are in, that's a couple million dollar upgrade. We've just finished the ones at Florida. We are deploying right now, as I mentioned, beginning in September, the PFAS unit as well in Florida, and then the upgrades at Northwest Those will begin, most likely, around the first of the year but will include design and engineering in the next couple of quarters. We expect right now the total number for the facility upgrades relative to the capital raise to be about 11 million total, all combined between PFAS and the other systems that we're planning to upgrade.

Speaker Change: Yeah, we have a couple upgrades we're doing at DSSI for classified waste for the DOE complex and working to expand the current facility we've got to handle larger volumes and larger components.

Ben Naccarato: Our under-and-revenue was down approximately a million compared to prior year. Our backlog at June 30 was 8.7 million down from 10.7 million in December of 23 and our total debt for the quarter which is entirely to PNC bank was at 2.4 million and then that excludes debt issuance costs. Our cash used from continuing operations was 6.1 million. Cash used by our discops is 245,000. Cash used for investing in continuing operations mostly related to capital spending was 840,000.

Speaker Change: and that's a couple million dollar upgrade.

Speaker Change: We just finished the ones at Florida. We are deploying right now, as I mentioned, beginning in September, the PFAS unit as well in Florida. And then the upgrades.

Ben Naccarato: Those will begin most likely around the first of the year, but include design and engineering in the next couple of quarters. We expect right now the total number for the facility upgrades relative to the capital raise to be about 11 million total all combined between PFAS and the other. The systems that we're playing to upgrade. and Aaron, I'll add to that the RTO going down is kind of an example of we did allocate probably in the short-term couple million over the next probably 12 to 18 months on just sustenance repair of sort of our older equipment that just needs replacing to try to avoid something like what happened in Florida.

Speaker Change: Northwest will be largely associated with with what I just mentioned. Those will begin most likely around the first of the year but include design and engineering.

Speaker Change: We expect right now the total number for the facility upgrades relative to the capital raise

Speaker Change: to be about $11 million total, all combined, between PFAS and the other systems that we're planning to upgrade.

Ben Naccarato: Cash used for investing in discontinued operations was 49,000. Cash provided by financing was 18.1 million which represents the net proceeds of 8.6 million from the equity raise and receipts from other option and warrant exercises of approximately 218,000 and that's reduced by monthly payments to our term and capital loans of 520,000 and payments related to financing leases and other debt of 207,000.

Ben Naccarato: And I'll add to that, you know, the RTO going down is kind of an example of how we did allocate, probably in the short term, a couple million over the next probably 12 to 18 months to just maintenance repair of sort of our older equipment that just needs replacing to try to avoid something like what happened in Florida.

Speaker Change: And there, and I'll add to that, you know, the RTO going down is kind of an example of we did allocate

Speaker Change: probably in the short term a couple million over the next probably 12 to 18 months on just sustenance repair of sort of our older equipment that just needs needs replacing to try to avoid something like what happened to Florida.

Aaron Spychalla: Okay. And then maybe just last for me, you kind of talked about a pickup here in backlog and bidding activities in the third quarter. Can you just kind of talk a little bit about how you expect results to trend for the segments in the back half of the year?

Ben Naccarato: Understood. Okay, thanks for that.

Mark Duff: And then maybe just last for me, you know, you kind of talked about a pickup here in backlog and bidding activities in the third quarter. Can you just kind of talk a little bit about how you expect results to trend for the segments in the back half of the year? Yeah, we're getting good, exceptionally good receipts coming in right now. Q3 is always the best quarter, really, for receipts. Which typically you don't get to a process all of it. So you don't get all your revenue, which leads into Q4 typically. But you know, typical government last quarter fiscal year, they get their waste off site.

Operator: With that operator I'll now turn the call over to questions. Thank you.

Speaker Change: Understood. Okay, thanks for that. And then maybe just last for me, you know, you kind of talked about a pickup here in backlog and bidding activities in the third quarter. Can you just kind of talk a little bit about how you expect results to trend for the segments in the back half of the year?

Operator: At this time we will be conducting our question and answer session. If you would like to ask a question please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question key and you may press star two if you would like to remove your question from the keypad. For participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Thank you.

Mark Duff: Yeah, we're getting good, exceptionally good receipts coming in right now. You know, Q3 is always pretty, is always the best quarter really for receipts, which typically you don't get to process all of it, so you don't get all your revenue, which bleeds into Q4. But you know, typical government, last quarter of the fiscal year; they get, they want their waste off site. They are spending some of the money they got budgeted late in the year as well.

Speaker Change: We're getting exceptionally good receipts coming in right now. Q3 is always the best quarter, really, for receipts.

Speaker Change: which typically you don't get to process all of it, so you don't get all your revenue, which bleeds into Q4 typically.

Speaker Change: But, you know, typical government.

Mark Duff: They are spending some of the money they got budgeted late in the year as well. So we're seeing a real surge right now. Some of these waste streams are larger, which will not necessarily all be processed this year. And we'll flow in the next year, particularly one dimension from Canada and Mexico. Those are larger and we'll trickle in on a more sustained level for the next 12 months or so and begin here in the October timeframe on the services side of the house. We are putting a lot of bids in. I think we have eight, maybe going in in the next three weeks, and we do have to win them.

Speaker Change: Last quarter of the fiscal year, they went their waste off-site. They are spending some of the money they got budgeted late in the year as well. So we're seeing a real surge right now. Some of these waste streams are larger, which will not necessarily all be...

Howard Brous: Our first question is coming from Howard Bros with Wellington Shields. Your line is live. Thank you. Mark Benloo of everybody as well families. For full disclosure I was the investment banker of Wellington Shields on the last equity raise and secondly my family owns shares in premises.

Mark Duff: So we're seeing a real surge right now. Some of these waste streams are larger, which will not necessarily all be processed this year and will flow into next year, particularly the ones I mentioned from Canada and Mexico.

Speaker Change: processed this year and will flow into next year, particularly ones I mentioned from Canada and Mexico. Those are larger and will trickle in on a more sustained level for the next 12 months or so and begin here in the October time frame. On the services side of the house

Mark Duff: Those are larger and will trickle in on a more sustained level for the next 12 months or so and begin here in the October time frame. On the services side of the house, we are putting in a lot of bids. I think we have eight games maybe going in in the next three weeks, and we do have to win them. We feel like we'll win our share, as usual, of these ones that are between 1 and 3 million in value.

Mark Duff: First question can you provide details about the partnerships you have developed with PFAS? Mark you might be on mute. So thanks I was. Thank you Ben. Good morning Howard and thank you for the question. Our partner agreements are critical component of our strategy for PFAS and particularly to get a very quick revenue and to really understand how our technology capabilities fit into this huge market that's moving in all different directions and is developing.

Speaker Change: We are putting a lot of bids in. I think we have eight maybe going in in the next three weeks.

Aaron Spichala: We feel like we'll win our shares, usual of these ones that are between one and three million value. You have a couple that are closer to 10, but hopefully those will be awarded as scheduled, which are all scheduled to be awarded before the end of the quarter of this quarter and support funding and start up in Q4. So we do have high confidence that the second half of the year will be much better. And you know, this quarter, we're going to be hoping to come in close to break even, maybe a little better if all things go as planned, and be more healthy as we head into the end of the year.

Speaker Change: And we do have to win them We feel like we'll win our share as usual of these ones that are between 1 and 3 million in value You have a couple that are

Mark Duff: We have a couple that are closer to 10, but hopefully those will be awarded as scheduled, which are all scheduled to be awarded before the end of the quarter this quarter, and we will support funding and start up in Q4. So we do have high confidence that the second half of the year will be much better. And, you know, this quarter, we're going to be... Hoping to come in close to breaking even, maybe a little better if all things go as planned and be more healthy as we head into the end of the year, the last quarter.

Speaker Change: Closer to 10, but hopefully those will be awarded as scheduled, which are...

Speaker Change: are all scheduled to be awarded before the end of the quarter, this quarter, and support funding and start-up in Q4. So we do have high confidence that the second half of the year will be much better.

Speaker Change: and you know this quarter we're we're going to be hoping to come in you know close to break even maybe a little better if all things go as planned and be more healthy as we head into the end of the year, the last quarter.

Mark Duff: So we basically have four types of Agreements. We're putting it in place. The first is with universities to support securing grants directly focused on the expansion of our technology into the soil market and demonstrating that the technology will work in solid media. The second is we're discussing our technology with our competitors to understand how it fits together with them. There's actually several competitors. We're talking to that a couple of many each other from mutual benefit, where we have greater strengths from our technology for high concentration, PFAS, and less capability at this point in time at least for a very large volume lower concentration like groundwater or other lower concentrations that are high volumes.

Aaron Spichala: Next last quarter. All right. Thanks for taking the questions. I'll turn it over. Thanks, Aaron. Thank you.

Aaron Spychalla: All right. Thanks for taking the questions. I'll turn it over to Aaron.

Speaker Change: all right thanks for taking thequestions i'll turn over thanks s

Operator: Thank you. Our next question is coming from Aaron Warwick with Breakout Investors. Your line is live.

Aaron Warwick: Our next question is coming from Aaron Warwick with Breakout Investors. Your line is life. Hey, good morning. Thanks for taking my call. Obviously, a rough quarter. You'd mentioned the equipment failure as part of it, as well as the delays with the government. But how much of that is also related to if I'm understanding correctly, you have one of your facilities pretty much down or mostly down just to focus on PFAS. Is that accurate? Yeah, no. Florida is still operating. They were down because of that RTO outage. But so there wasn't necessarily down for PFAS. The PFAS installation will begin in September, but it's kind of give you a sense, Aaron.

Speaker Change: Thank you. Our next question is coming from Aaron Warwick with Breakout Investors. Your line is live.

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

Mark Duff: Obviously, a rough quarter. You mentioned the equipment failure as part of it, as well as the delays with the government. But how much of that is also related to, if I understand correctly, you had one of your facilities pretty much down, or mostly down, just to focus on PFAS? Is that accurate? Oh, yeah.

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

Aaron Warwick: Obviously a rough quarter, you'd mentioned the equipment failure as part of it as well as the delays with the government, but how much of that is also related to, if I'm

Speaker Change: understanding correctly you have one of your facilities pretty much down and or mostly down just to focus on PFAS is that accurate?

Mark Duff: Yeah, no, Florida is still offering, they were down, but so it wasn't necessarily down for PFAS. The PFAS installation will begin in September, but just to kind of give you a sense, Aaron, we spent between 600 and 700K in Q2 on PFAS between the capital expenditures and labor. And we do see that ramping up, and that's built into our numbers. You know, we have about 15 people working exclusively on it. They're expensive people, and it's going very well between the engineers and the chemists and the sales folks.

Speaker Change: Yeah, no, Florida is still operating. They were down because of that RTO outage.

Mark Duff: We're working together with several of our competitors to see how we align and how we can work together to jump into this market in a big way. Third, we're working with larger firms that have large client bases and these client bases include firms that have a lot of customers that they manage their facilities for, typically in the client's area or waste. They know that their clients have a desire to keep the PFAS off-site and maintain compliance concerns or addresses, compliance, and liabilities.

Speaker Change: but so it wasn't necessarily down for PFAS. The PFAS installation will begin in September .

Mark Duff: We spent between 600 and 700K in Q2 on PFAS between the capital expenditures and labor. And we do see that ramping up, and that's built in our numbers. You know, we have about 15 people working exclusively on it. They're expensive people, and it's going very well between the engineers and the chemists and the sales folks. So that is part of our expenditures as planned, and it will be a challenge to meet all the goals we have until we start seeing revenue from those systems, particularly PFAS, which, as I mentioned, we started seeing it in Q4, but it didn't, that was not the reason that the Florida plant took a step back.

Speaker Change: But just to kind of give you a sense, Aaron,

Speaker Change: We spent between $600,000 and $700,000.

Speaker Change: In Q2

Speaker Change: on PFAS between the capital expenditures and labor.

Speaker Change: And we do see that ramping up, and that's built into our numbers. You know, we have about 15 people working exclusively on it. They're expensive people.

Mark Duff: We're also working with federal agencies and currently we have several samples from different agencies that we're working on right now that open the door for showing that we can develop performance data for future larger firms. Once we get operational and begin the process of being approved by other agencies as a go-to vendor for destruction of their inventory. So, partners are really important to us and it's going really well at this point.

Speaker Change: It's going very well between the engineers and the chemists and the sales folks.

Mark Duff: So, that is part of our expenditures as planned, and it will be a challenge to meet all the goals we have until we start seeing revenue from those systems, particularly PFAS, which, as I mentioned, we should start seeing in Q4. But that was not the reason that the Florida plant took a step back. It was because of that exhaust stack issue.

Speaker Change: So that is part of our expenditures as planned.

Speaker Change: and it will...

Speaker Change: It'll be a challenge to meet all the goals we have until we start seeing revenue from those systems, particularly PFAS, which as I mentioned, we should start seeing it in Q4.

Speaker Change: But that was not the reason that the Florida plant took a step back. It was because of that exhaust stack issue.

Mark Duff: It was because of that exhaust stack issue. Okay. Stick with PFAS, I guess since we're talking about that. You still expect in a couple million dollars of revenue in Q4? What's your current thinking around that? I think it's going to be closer to a million, and I'd be thrilled if we got to a million right now. Our system, as I mentioned, is expected to do about 700 gallons a day. If prior calls, we thought it was going to do several batches a day and it's a thousand gallon reactor. So we have to put the chemicals in there that we need to put in there, and we need some head space.

Mark Duff: We're very encouraged by it. Thank you.

Mark Duff: Stick with PFAS, I guess, since we're talking about that. Are you still expecting a couple million dollars of revenue in Q4? What's your current thinking around that?

Mark Duff: Second question, is there is a settlement agreement, a contract, between all of the parties that hands it? And in that contract, they discuss building a second certification plan for high-level waste, the operational, I believe in 2030, although that date is from my perspective with a DOE, possibly vague. But they discuss that they will operate both plans from 2025, August, if you will, or possibly sooner, through 2060, with the excellent to be handled basically by one company, and that one company seems to be a sole source from a fix.

Speaker Change: Okay.

Speaker Change: Stick with PFAS, I guess, since we're talking about that. Are you still expecting a couple million dollars of revenue in Q4? What's your current thinking around that?

Mark Duff: I think it's going to be closer to a million, and I'd be thrilled if we got to a million. Right now, our system, as I mentioned, is expected to produce about 700 gallons a day. Prior calls, we thought it was going to do several batches a day, and it's a 1,000-gallon reactor, so we have to put the chemicals in there that we need to put in there, and we need some head space, so it's going to be more like 700.

Speaker Change: I think it's going to be closer to a million, and I'd be thrilled if we got to a million right now. Our system, as I mentioned, is...

Speaker Change: is expected to do about 700 gallons a day. Prior calls, we thought it was going to do several batches a day.

Speaker Change: and there's a thousand-gallon reactor.

Mark Duff: So it's going to be more like 700. We're not sure how fast we're going to be able to move a batch through. So we're being conservative at this point in thinking one a day, maybe two, and if we can do multiple shifts, we can do better. We're not sure how long it's going to take to cool down and eat up, and all that kind of stuff. So we're still working through those numbers on the engineering side of the house, and what we really determined, the most important thing is to get the performance data from the unit and to be able to document and verify and validate it so that we can build up our inventory and we'll be prepared to take on a significant inventory and storage while we're building our Gen 2 unit.

Speaker Change: We have to put the chemicals in there that we need to put in there, and we need some headspace, so it's going to be more like 700. We're not sure how fast we're going to be able to move a batch through. So we're being conservative at this point in thinking one a day, maybe two, and if we could do multiple shifts.

Mark Duff: We're not sure how fast we're going to be able to move a batch through, so we're being conservative at this point in thinking one a day, maybe two, and if we could do multiple shifts, we can do better. We're not sure how long it's going to take to cool down and heat up and all that kind of stuff, so we're still working through those numbers on the engineering side of the house, and what we've really determined, the most important thing, is to get the performance data from the unit and to be able to document it and verify it and validate it so that we can build up our inventory, and we'll be prepared to take on a significant inventory and storage while we're building our Gen 2 unit, and that unit will be designed, it's already in design right now based on what we've already learned and studied, to do much, much more than that, and that should be operational in Q2 of next year at the latest and hopefully earlier, and that will have a lot larger throughput. But to answer your question, Based on what we're seeing, it's going to be closer to $1 million in revenue for...

Mark Duff: That's my understanding. Can you discuss that? Yeah, right now the way it works, Howard, is we provide our rates to the take operations contract, what they call the talk. And that coming right now is the WRPS, the winner of the ITDC bid that's been indisputed for several years now, would be the future contract holder for that. And we provide our rates to them for all the different types of waste that we'll see from the DF law affluent.

Speaker Change: We can do better.

Speaker Change: We're not sure how long it's going to take to cool down and heat up and all that kind of stuff. So we're still working through those.

Speaker Change: There's numbers on the engineering side of the house.

Speaker Change: and

Speaker Change: What we really determined, the most important thing is to get...

Speaker Change: the performance data from the unit and to be able to document it and verify it and validate it so that we can build up our inventory and we'll be prepared to take on a significant inventory and storage.

Mark Duff: And your correct, my understanding is the DF law facility has a built-in life for through 2060, where they plan to do about a million gallons a year through that period. The DOE has stayed publicly, they have no other viable options currently available to meet that treatment obligation for the DF law affluent facility, and that they're not currently pursuing any construction line items for any new buildings or facilities to support that. So we're pretty comfortable that right now we're the preferred alternative at minimum of 10 years, and we would expect to go longer than that as we've got the facilities available right now with the flexibility to support it, and the capacity to support it through 2060. So that is the current thinking that we'll be able to provide that support throughout that period.

Mark Duff: And that unit will be designed, is already in design right now based on what we've already learned and studied to do much more than that, and that should be operational in Q2 of next year at the latest and hopefully earlier, and that will have a lot larger throughput. But the answer question, based on what we're seeing, is it's going to be closer to a million dollars in revenue for Q4 this year. Sounds like you don't have any lack of interest in inventory or possible customers. The area, it's just shocking, you know, this market moves all over the place.

Speaker Change: while we're building our Gen 2 unit.

Speaker Change: And that unit will be designed, is already in design right now, based on what we've already learned and studied, to do much, much more than that. And that should be operational.

Speaker Change: in Q2 of next year, at the latest, and hopefully earlier, and that will have a lot larger throughput. But to answer your question, based on what we're seeing, it's going to be closer to a million dollars in revenue for Q4 this year.

Mark Duff: Sounds like you don't have any lack of interest in inventory or possible customers.

Speaker Change: Sounds like you don't have any lack of interest in inventory or possible customers.

Mark Duff: Aaron, it's just shocking, you know, this market moves all over the place, there are some competitors out there that have all kinds of claims, and what it comes down to is the people we're targeting and talking to all have a large need, and I'm very confident if we were operating today, Aaron, we would have an enormous backlog of frack tanks at our Florida facility, and that's why the rush is just to get the performance data No, we're very encouraged by that; we're encouraged by how we fit into the market and what our technology does in comparison to our competition, and it's different, and it addresses a different phase of overall PFAS material management.

Speaker Change: Aaron, it's just shocking, you know, this market moves all over the place. There are some competitors out there that have all kinds of claims.

Mark Duff: There's some petters out there that have all kinds of claims. And what it comes down to is the people we're targeting and talking to all have a large need. And I'm very confident, if we were operating today, Aaron, we would have an enormous backlog and frack tanks at our sort of facility. And that's why the rush is just to get the performance data. And then we can start signing contracts. And that's really where we're at. And we're very encouraged by that. We're encouraged by how we fit into the market and what our technology does in comparison to our competition.

Speaker Change: And what it comes down to is the people we're targeting and talking to all have a large need. And I'm very confident if we were operating today, Aaron, we would have an enormous backlog and frack tanks.

Mark Duff: Going off on a tangent, when we talk about TBI, in one of those documents, basically three important operative documents, one, the Rod to the December of last year, and as a contract, basically talks about starting in 20, I guess January 20, 26, or TBI, can you comment about the time frame and the magnitude of what you expect to get out of that, please, and that's my last question. Yeah, there's a lot of, in that question, Howard, there are several documents as you know, the systems document, the systems document, and then more important of the confirmation of the systems document with the regulators as defined in the April 29 settlement agreement, which is, well, likely to be a consent order later, once it's finalized, and what they committed in there to do is 22 tanks, over 15 years, basically.

Speaker Change: at our Florida facility.

Aaron Spichala: That's why the rush is just to get the performance data and then we can start.

Aaron: Signing contracts and that's really where we're we're heading. No, we're very encouraged by that We're encouraged by how we fit into the market and what our technology does in in comparison to our competition And it's different and it addresses a different

Mark Duff: And it's different, and it addresses a different phase of the overall PFAS material management. As I mentioned, with more strength in higher concentrations that fits very well into where some of our petters and team partners are, which is very encouraged us to. So it's really a race to get the operational unit built in operational at this point.

Mark Duff: As I mentioned, with more strength and higher concentrations, it fits very well into where some of our competitors and teaming partners are, which is very encouraging to us. So it's really a race to get the operational unit built and operational at this point in time.

Speaker Change: phase of the overall PFAS material management, as I mentioned, with more strength and higher concentrations.

Speaker Change: that fits very well into where some of our competitors and teaming partners are which is very encouraging to us. So it's really a race to get the operational unit built and operational at this point in time.

Mark Duff: Yeah, I mean given the state of the market and the demand, is there part of these partnerships? Is it possible to license out your technologies that you're looking into? What are your thoughts around that? It's very possible. We're definitely considering that. We get that question a lot from the vendors we're talking to. Our position has been that we're not going to pursue that until the end of '25. We want to get our Gen 2 system deployed and show how fast they can operate and refine it. As I mentioned before, we're designing this thing while we're fabricating the prototype, which is not a normal way to do it, but we're kind of rushing it along if they have done.

Aaron Warwick: Yeah, I mean, given the state of the market and the demand, Uh, is there... Part of these partnerships, is it possible to license out your technology? Is that something you're looking into? What are your thoughts around that? It's very possible.

Speaker Change: Yeah, I mean, given the state of the market and the demand...

Mark Duff: They are out for procurement right now with the systems to extract the waste from those tanks. Our understanding is the design for those systems is about 3.5 million gallons a year or so, is what they're anticipating, and they'll basically be pumping that waste out of the tanks into totes for commercial offsite treatment, and those extraction units are to be delivered installed in operational in December of 25, and Dewey has said before that they're shooting for January of 26, as the potential start date for that.

Speaker Change: Is there...

Speaker Change: Part of these partnerships, is it possible to license out your technology? Is that something you're looking into? What are your thoughts around that? It's very possible. It's very possible. We're definitely considering that. We get that question a lot from...

Mark Duff: It's very possible. It's very doable.

Mark Duff: We're definitely considering that. We get that question a lot from the vendors we're talking to. Our position has been that we're not going to pursue that until... the end of 25.

Speaker Change: The vendors we're talking to. Our position has been that we're not going to pursue that until the end of 25.

Mark Duff: We want to get our Gen 2 system deployed and show how fast it can operate and refine it. As I mentioned before, we're designing this thing while we're fabricating the prototype, which is not a normal way to do it, but we're kind of rushing it along to get it done. The Gen 2 is really going to be a much more methodical system that addresses all kinds of improvements, significant improvements, and we expect it to run a lot faster and a lot more efficient and all those things.

Speaker Change: We want to get our Gen 2 system deployed.

Speaker Change: show how fast it can operate.

Speaker Change: and Refine-It. As I mentioned before,

Speaker Change: We're designing this thing while we're fabricating the prototype, which is not a normal way to do it.

Mark Duff: The Gen 2 is really going to be a much more methodical system that addresses all kinds of improvements, significant improvements, and we expect to run out faster and more efficient. All this things. We want to get this built deployed at several facilities so we can show folks, say this is what it does, is how you operate it, and then towards the second half of 25 start considering licensing and technology. I do see that as a real option for us, and we're looking at all different types of approaches to treating GAC in situ, like in people's facilities, to other types of things, cleaning out some and filtering system and those kinds of things at people's locations, as well as treating effluent at landfills. So there's all kinds of applications that require you to have a lot of units deployed in the field. That's when the licensing technology looks more attractive overall, and we're certainly giving that a lot of thought.

Speaker Change: But we're kind of rushing it along to get it done.

Mark Duff: Now, my understanding is not necessarily a consent order, a milestone for that, so that could slip, but they are moving in that direction. There's a lot of pressure on Dewey to begin closing tanks, retrieving tanks as they call it, and I would expect to be in close to that timeframe. As you mentioned, TBI, the TBI right now, the initials that are doing for that, 2000 gallons, is to define any potential alternative out there commercially so that they are trying to other companies.

Speaker Change: The Gen 2 is really going to be a much more methodical system that addresses all kinds of improvements, significant improvements, and we expect it to run a lot faster and a lot more efficient and all those things.

Mark Duff: We want to get this built and deployed at several facilities so we can show folks, hey, this is what it does, this is how you operate it, and then, towards the second half of 2025, start considering licensing and technology. But I do see that as a real option for us, and we're looking at all different types of approaches to treating GAC in situ, like at people's facilities, to other types of things, cleaning out sumps and filtration systems, those kinds of things at people's locations, as well as treating effluent at landfills. So there are all kinds of applications that would require you to have a lot of units deployed in the field. That's when licensing technology looks more attractive overall. And we're certainly giving that a lot of thought.

Speaker Change: We want to get this built, deployed at several facilities so we can show folks, hey, this is what it does, this is how you operate it, and then towards the second half of 25 start considering licensing and technology. But I do see that as a real option for us.

Mark Duff: We have already demonstrated that we're viable, and Dewey has noted that, so we expect to be playing a large role. As I said in my notes, a few minutes ago, we are the only one that's local, and provide some obvious advantages associated with environmental risk of being able to ship solids by rail opposed to liquids. So we expect to get us to giving a portion of that waste. I wouldn't suppose that we'd get all of it, because Dewey will want alternative backups, or along the line, but we do expect that we can get at least half, that's our estimate, a disspeculation, and that would be a million, a million, a million, a half gallons a year, which would be a great revenue stream for us. That's a lot to all of us. Thank you very much. Thank you, Maher. Thank you.

Speaker Change: We're looking at all different types of approaches to treating GAC in situ, like at people's facilities.

Speaker Change: to other types of things, cleaning out sumps and filtration systems, those kinds of things at people's locations, as well as treating effluent at landfills. So there's all kinds of...

Speaker Change: applications that would require you to have a lot of units deployed in the field, that's when licensing technology looks more attractive overall and we're certainly giving that a lot of thought.

Aaron Warwick: Okay, thank you. One thing I had heard about much recently for anybody is the OSMS. What's the status of that? What's the current thinking? You know, Aaron, that's a really difficult one to even discuss because we have no information either to our competitors or team parties or anyone; it's just total silence. That with Dewey folks, headquarters back in early June, they said their goal was to have an award by the end of the fiscal year, but they've said that on other milestones as well. No one really understands why it's being held up. I mean, it's been submitted, I want to say two years ago, August. It was submitted and just no word at all. There's lots of implications to the award, you know, it impacts a lot of people and other contracts that are waiting for it to be awarded. I just have no idea, I don't think anyone outside of Dewey procurement has any idea what the hold up is, but right now it's looking like another month or two.

Aaron Warwick: Okay, thank you. One thing I haven't heard about much recently from anybody is the OSMS. What's the status of that? What's the current thinking, you know?

Speaker Change: Okay, thank you. One thing I haven't heard about much recently from anybody is the OSMS.

Mark Duff: You know, Aaron, that's a really difficult one to even discuss because we have no information. And either to our competitors or team partners or anyone, it's just total silence. I met with DOE folks at headquarters back in early June. They said their goal was to have an award by the end of the fiscal year, but they've said that at other milestones as well. No one really understands why it's being held up.

Speaker Change: What's the status of that? What's the current thinking?

Speaker Change: You know, Aaron, that's a really difficult one to...

Aaron Spichala: to even discuss because we have no information and either to our competitors or our team partners or anyone. It's just total silence.

Aaron Spychalla: Our next question is coming from Aaron Spichala with Craig Hallum. Your line is... Live. Yeah, hi, Mark and Ben. Thanks for taking the questions. First, so it sounds like, you know, DF Law is an on track to start up by August of 2025, saw you noted kind of mid-2025 in the release. Can you just talk about how you're thinking about, you know, timing of initial volumes as they work to start that up?

Aaron Spichala: I met with DOE folks at headquarters back in early June .

Speaker Change: They said their goal was to have an award

Aaron Spichala: by the end of the fiscal year. But they've said that on other milestones as well. No one really understands why it's being held up. I mean, it's been submitted, I want to say, two years ago. August , it was submitted. And just no word at all. There's lots of...

Mark Duff: I mean, it's been submitted, I want to say, two years ago, August, it was submitted, and just no word at all. Implications for the award, you know, it impacts a lot of people and other contracts that are waiting for it to be awarded. I have no idea; I don't think anyone outside of DOE procurement has any idea what the holdup is, but right now, it's looking like another month or two.

Aaron Spychalla: Your latest thoughts on what that opportunity could look like for you from a contribution standpoint. And then also just what you're doing to prepare the Richland plant and other plants as those volumes begin. Yeah, thanks, Aaron. I'd appreciate your question. Yeah, what it comes down to is, VUE has been very difficult to communicate with in regards to what happens between now and August of 25. As you know, in the settlement agreement, it's very specific that they will be completed hot commissioning by August 1st of 25.

Aaron Spichala: Implications to the award, you know, it impacts a lot of people and other contracts that are waiting for it to be awarded.

Speaker Change: I just have no idea. I don't think anyone outside of DOE procurement has any idea what the holdup is, but right now it's looking like another month or two.

Mark Duff: And then also you mentioned the JRC, but I didn't hear much else; maybe I just missed it about other opportunities in Central Europe and where you stand there. At last conference call, it sounded like you were pretty positive that there were some things brewing there that would be good for you. What's the status of that right now? Yeah, we're continuing to work on the new plant potential; we're working with some alternatives, and so it is kind of a little behind schedule and changing a couple of approaches for the new plant that will slide that back a little bit, not a lot, but a little bit.

Mark Duff: And then also, you mentioned the JRC, but I didn't hear much else. Maybe I just missed it about other opportunities in Central Europe and where you stand there. On the last conference call, it sounded like you were pretty positive that there were some things brewing there that would be good for you. What's the status of that right now? Yeah, we're

Speaker Change: And then also, you mentioned the JRC, but I didn't hear much else, maybe I just missed it, about other opportunities in Central Europe and where you stand there. Last conference call, it sounded like you were pretty...

Speaker Change: positive that that there were some things brewing there that would be good for you. What's the status of that right now?

Mark Duff: Yeah, we're continuing to work on our new plant potential. We're working with some alternatives. And so it is kind of a little behind schedule and changing a couple of approaches for the new plant. We'll slide that back a little bit, not a lot, but a little bit.

Aaron Spychalla: Hot commissioning in our minds typically is means radioactive waste or radioactive Syrigas or something or radioactive is included in the process to show that it works and it meets all of the, you know, the shieldings in place and all the security or safety and security components are operable. So, one would assume that somewhere along the line in the hot commissioning process, they'd start generating waste. One, you know, again, they haven't confirmed this, but hot combat's with typically hot commissioning means and we're anticipating that they'll start that process in the summer of 25 or earlier, somewhere in that timeframe.

Speaker Change: Yeah, we're continuing to work on our new, the new plant potential. We're working with, uh, on some alternatives, uh, and so it is kind of a little behind schedule, uh, and, uh, changing a couple of approaches for the new plant.

Mark Duff: And hopefully, we can disclose what those agreements are sometime in this quarter publicly. We are bidding on several RFPs right now over there for different types of applications and continue to see growth. Hopefully, with some new clients in Hungary and Norway in the coming months and other clients in Italy as well. So things continue to move. You know, it's interesting working in Europe.

Aaron Spichala: We'll slide that back a little bit, not a lot, but a little bit, and hopefully we can disclose what those agreements are sometime in this quarter publicly. We are bidding on several RFPs right now over there for different types of applications.

Mark Duff: And hopefully we can disclose what those agreements are sometime in this quarter publicly. We are bidding on several RFPs right now over there for different types of applications and continue to see growth hopefully with some new clients in Hungary and Norway in the coming months and other clients in Italy as well. So things continue to move; you know, it's interesting working in Europe. Things just absolutely shut down in the summer as they burn their five or six weeks of mandatory vacation, or holiday as they call it, and things get really slow through the summer. So we're anticipating that to pick up; it's already started in the last week or two and expect to get full blast again in September, and hopefully we can have some press releases about how it's progressing.

Aaron Spichala: and continue to see growth, hopefully with some new clients in Hungary and Norway.

Aaron Spychalla: And they'll start one malther up in August based on the agreement to start operating after hot commissioning. That will run for a while. We're not sure when the second malther is going to come online, but we know that they have a commitment. I think it's a milestone buried in that system agreement settlement agreement that they must be fully operational with both malther's running full speed within several years. I want to say three years.

Aaron Spichala: in the coming months, and other clients in Italy as well.

Mark Duff: Things just absolutely shut down in the summer as they burn through their five or six weeks of mandatory vacation or holiday, as they call it. And things get really slow through the summer. So we're anticipating that to pick up. It's already started in the last week or two, and we expect it to get full blast again in September. Hopefully, we can have some press releases about how it's progressing, but Mexico and Canada have been a big surprise for both of those, particularly Canada.

Aaron Spichala: Things continue to move, it's interesting working in Europe , things just absolutely shut down in the summer.

Speaker Change: as they burn their...

Aaron Spichala: five or six weeks of mandatory vacation, or holiday as they call it.

Aaron Spichala: and things get really slow through the summer. So we're anticipating that to pick up, it's already started in the last week or two, and expect to get full blast again in September and hopefully we can have some.

Mark Duff: But Mexico and Canada have been a big surprise for both of those, particularly Canada. Great waste streams for us that will be sustained through, you know, 12-month period and really good revenue for us, the type of work we really like to do. So those are all start here in the next couple of weeks.

Aaron Spychalla: So, somewhere between those two times, they will be fully operational. Right now, we know that if they're testing everything, you know, very close to parallel and other words, both malther's are going through the testing together and everything's going well. And so, to answer your question, we would expect to see you know, a couple of million dollars a month coming into the plant in waste treatment once it certs operations and ramp up from there to what we've estimated to be the 70 to 80 million dollar range annually once both malther's are fully operational running at a million gallons a year.

Aaron Spichala: press releases about how it's progressing, but Mexico and Canada have been a big surprise for both of those, particularly Canada Great waste streams for us

Mark Duff: Great waste streams for us that will be sustained through a 12-month period, and really good revenue for us, the type of work we really like to do. So those all start here in the next couple weeks.

Aaron Spichala: that will be sustained through a 12-month period and really good revenue for us, the type of work we really like to do. So those all start here in the next couple of weeks.

Mark Duff: Okay, and the final thing for me, then I guess just on hand for it, I mean, I've been hearing some things that indicate that perhaps they're going to be starting the DF law facility quite a bit earlier than August of 2025. Are you hearing anything about that, or what's the, you know, they had an announcement a couple weeks ago that they had some delays in cold commissioning, but they said specifically that that would not address hot commissioning, so I'm not sure what that means. I think they had some type of system issues that is going to require a couple of months to get some additional parts or some changes.

Aaron Warwick: Okay, and the final thing for me then, I guess, just on hand for it. I mean, I've been hearing some things that indicate that perhaps... They're going to be starting the DFLOF facility quite a bit earlier than August of 2025. Are you hearing anything about that or what's the status on that?

Speaker Change: Okay and the final thing for me then I guess just on hand for it I mean I've been hearing some things that indicate that perhaps

Speaker Change: They're going to be starting the the DFLA facility quite quite a bit earlier than than August of

Mark Duff: They had an announcement a couple weeks ago that they had some delays in cold commissioning, but they said specifically that that would not address hot commissioning, so I'm not sure what that means. I think they had some type of system issue that is going to require a couple months to get some additional parts or some changes. I can't remember exactly what the situation was.

Speaker Change: 2025. Are you hearing anything about that or what's the...

Speaker Change: You know, they had an announcement a couple weeks ago that they had some delays in cold commissioning.

Aaron Spychalla: All right. And then just can you kind of expand on that a little bit with, you know, what you're doing from from an operational standpoint and rich. Oh, I'm sorry, yeah, we've we've assigned one of our executives to focus exclusively on this project. He's working through right now the design of the systems we need to expand to meet the capabilities for DF Law as well as grouting and including some automation and some newer technologies, particularly for grouting large volumes.

Speaker Change: but they said specifically that that would not address hot commissioning so I'm not sure what that means.

Speaker Change: I think they had some type of system issue that was going to require a couple months to get some additional parts or some changes. I can't remember exactly what the situation was.

Mark Duff: I can't remember exactly what the situation was. And a hot commissioning would begin at some time a Q1 time frame, I want to say, and so it seems like it's on track. Dewey is very optimistic. Congress is very optimistic, you know. If you follow the House Senate funding packages, they all include significant increases in hand for funding, like hundreds of millions. I want to say 300 million dollar range that would go towards these projects. So they all look very attractive; you never know how the fund is going to come out, but right now that's where the plus-ups are, as a handful.

Aaron Warwick: Hot commissioning would begin at some time in the Q1 time frame, I want to say. So it seems like it's on track, DOE is very optimistic, and Congress is very optimistic. If you follow the House and Senate funding packages, they all include significant increases in Hanford funding, like hundreds of millions, I want to say the $300 million range, that would go towards these projects. So they all look very attractive; you never know how the funding is going to come out, but right now, that's where the plus-ups are Hanford. So we're optimistic, DOE's optimistic, they're very focused on success, and so we're waiting as far as that facility is concerned.

Speaker Change: And hot commissioning would begin sometime in the Q1 time frame, I want to say. And so it seems like it's on track. DOE is very optimistic. Congress is very optimistic. You know, if you follow the...

Aaron Spichala: House and Senate funding packages.

Aaron Spychalla: And that's part of what we're using the raise for will be the capital requirements to get this online. So, we're in design early design phases understanding trying to understand what types of waste we're going to be receiving what it's going to require. We're going to have to do a permit mod later on for larger volumes of grouting and what that's going to entail. So, we're putting together schedules and the cost of budgets for the deployment of the systems and the next quarter actually and hope to have that plan laid out by the end of the year of what we're going to be doing.

Aaron Spichala: They all include significant increases in Hanford funding, like hundreds of millions, I want to say $300 million range, that would go towards these projects, so they all look very attractive. We never know how the funding is going to come out, but right now, that's where the plus-ups are at Hanford.

Mark Duff: So we're optimistic; Dewey's optimistic; they're very focused on success, and so are we in as far as that facility operating is planned. I think it seems like that's kind of bipartisan, is that accurate? So would yes accurate. Yeah, completely. Yeah, no, it is. I think that no matter what everyone sees, the investment that Dewey has made out there, you know, they're planning a total cost for about 18 billion dollars. They want to start showing some progress. And the grounding program also kind of underscores the fact that there's pressure from Congress for on Dewey to search showing some progress on overall mission completion, which is closing some tanks.

Aaron Spichala: So we're optimistic. DOE is optimistic. They're very focused on success and so are we as far as that facility operating as planned.

Mark Duff: I guess it seems like that's kind of bipartisan. Is that accurate? So when it's accurate, yeah. Completely, yeah. Yeah, no. It is.

Speaker Change: I guess it seems like that's kind of bipartisan. Is that accurate? It's accurate, yeah. Completely, yeah.

Aaron Spychalla: So, we are pulling together an engineering team looking at working with some subs on that and some consultants for the design capacity and moving in that direction. So, we're fully operational here to handle this larger volumes next year. It'll start out slow. So, our current facility right now if we did nothing we could handle it probably through 25 but we need to be have our new systems in place in the 26-time frame to support where things are headed.

Aaron Warwick: I think that no matter what, everyone sees the investment that DOE has made out there. You know, that plant's looking at a total cost of about $18 billion. They want to start showing some progress, and the grouting program also kind of underscores the fact that there's pressure from Congress on DOE to start showing some progress on overall mission completion, which is closing some tanks. Yeah, I think they just put out something recently saying that they're gonna do this 2000 gallon testing with these other entities and get that started before the end of the year.

Speaker Change: Yeah, no, it is. I think that no matter what, everyone sees the investment that DOE has made out there, you know, that plants...

Speaker Change: Looking at a total cost of about $18 billion, they want to start showing some progress. And the grouting program also kind of underscores the fact that there's pressure from Congress on DOE to start showing some progress on the overall mission.

Mark Duff: Yeah, I think they just put out something recently saying that they're going to do this 2000 gallon testing with these other entities. Get that started before the end of the year. Yeah, that's more another step to get into the grounding, grounding system going, ground program going and supporting that 26 day. So that that'll be good to see that happen too, so they can think of start making progress and get some contracts in place and get rolling for the large scale grounding.

Speaker Change: Completion, which is closing some tanks.

Aaron Spychalla: All right, thanks for the color on that. And then can you just give a little bit more detail on the Equipment Failure cost to repair there, you know, confidence it sounds like that'll be up and running here in a couple weeks. And then just a little more broadly on CAPEX, you know, with the offering. Talk about areas of investment given the growth initiatives in front of you and some of these new waste streams that you're kind of targeting.

Speaker Change: Yeah I think they just put out something recently saying that they're going to do this 2,000 gallon testing with these other entities, get that started before the end of the year.

Mark Duff: Yeah, that's another step to getting the grounding system going, the ground program going, supporting that 26 date. So that'll be good to see that happen, too, so they can... start making progress and get some contracts in place and get rolling for the large-scale grouting.

Speaker Change: Yeah, that's another step to getting the grounding system going, the grounding program going.

Speaker Change: Supporting that 26 date, so that'll be good to see that happen too so they can start making progress and get some contracts in place and get rolling for the large-scale grouting.

Mark Duff: Good, thank you guys. Appreciate your time and hope to back after here is good. Thank you.

Aaron Warwick: Good. Thank you guys. I appreciate your time and hope to be back after the year is good.

Aaron Spychalla: Is that still a back after this year? And into 2025 for those? Yeah, okay, the first one was the RTO is going out. So we have a regenerative thermal oxidation unit, which is basically the unit at Florida. Can you have a stack? Everything goes through your stack whenever you heat anything up and heat waste up? The RTO we call it, went out on June 8th. It basically shuts your whole stack down.

Speaker Change: Good, thank you guys. Appreciate your time and hope to be back after a year is good. Thank you.

Operator: Our next question is coming from Anthony Harpel, who is an investor.

Anthony Harpel: Our next question is coming from Anthony Harpel, who is an investor. Your line is life.

Speaker Change: Thank you. Our next question is coming from Anthony Harpo, who is a investor. Your line is live.

Anthony Harpel: Hi gentlemen, good morning. Thanks for taking my call. I'd like to talk about the hand for tank cleanup. Setting aside the fact that it would present enormous and, meanwhile, completely unnecessary environmental and human health risks to local communities, setting aside the strong objections of the Umatilla tribes. And setting aside the fact that you would need to send literally thousands of trucks. Over the lifetime of the Tank Cleanup Project, given that there are millions of gallons of low activity tank waste to treat. Let's nevertheless imagine that the DOE stupidly decides that it wants to truck untreated tank waste from Hanford to Andrews, Texas, or to Clive, Utah.

Anthony Harpel: Hi, gentlemen. Good morning. Thanks for taking my call.

Anthony Harpo: Hi gentlemen, good morning. Thanks for taking my call I'd like to talk about that the Hanford tank cleanup Setting aside the fact that it would present enormous and meanwhile

Mark Duff: I'd like to talk about the Hanford tank cleanup. Setting aside the fact that it would present enormous and, meanwhile, completely unnecessary environmental and human health risks to local communities, setting aside the strong objections of the Umatilla tribes, and setting aside the fact that you would need to send literally thousands of trucks, over the lifetime of the Tank Cleanup Project, given that there are millions of gallons of low-activity tank waste to treat.

Aaron Spychalla: It had run for 20 years without any problems, which is a pretty long life for that unit. And when it went down to June 8th, we could do no more thermal waste treatment. And it took us while to get the repair guys to come in. There's not a lot of RTO repairmen out there. And we made those fixes. I can't say exactly what the capital costs were for repairing that unit. But the repairmen are gone as of yesterday.

Speaker Change: Completely unnecessary environmental and human health risks to local communities, setting aside the strong objections of the Umatilla tribes, and setting aside the fact that you would need to send literally thousands of trucks

Speaker Change: over the lifetime of the tank cleanup project given that there are millions of gallons of low-activity tank waste to treat. Let's nevertheless imagine

Mark Duff: Let's nevertheless imagine that the DOE stupidly decides that it wants to truck untreated tank waste from Hanford to Andrews, Texas, or to Clive, Utah. In such a scenario, can you please discuss whether the DOE would be required first to secure permits to do so from each state and each municipality across which this untreated tank waste would travel?

Aaron Spychalla: We're rebalancing the system now and expect to be operational next week. I can't say it costs us about five to 700 K in June in revenue loss. We were able to get a couple of new waste streams in early in August. Actually it's in July that we could do in parallel with out thermal treatment that would soften the blow significantly in Q3. But we did not have that opportunity in June. Ben, do you have any numbers on what the capital cost might have been to make it up to make the upgrade fix on the RTO?

Aaron Spichala: that the DOE stupidly decides that it wants to truck untreated tank waste from Hanford to Andrews, Texas or to Clive, Utah. In such a scenario

Mark Duff: In such a scenario, can you please discuss whether the DOE would be required first to secure permits to do so from each state and each municipality across which this untreated tank waste would travel? I don't know Anthony; all the permits that have to be addressed. When we ship radioactive material across state lines, you have to have permits in place. Liquid waste is shipped within the DOE system on a pretty regular basis from site to site. What's not done is shipping liquid waste when you don't have to. It is very limited. Still being recognized as being much more dangerous than shipping solids, particularly when you compare it to rail.

Aaron Spichala: Can you please discuss whether the DOE would be required first to secure permits to do so from each state and each municipality across which this untreated tank waste would travel?

Mark Duff: I don't know, Anthony, all the permits that have to be addressed for radioactive material across state lines; you have to have permits in place. Liquid waste is shipped within the DOE system on a pretty regular basis from site to site. What's not done is shipping liquid radioactive waste when you don't have to. And I think that's kind of the difference. So it is very limited, you know, it's definitely recognized as being much more dangerous than shipping solids, particularly when you compare it to rail. Rail is always the preferred method if you're going, you know, over long distances, particularly.

Aaron Spichala: I don't know, Anthony, all the permits that have to be addressed. When you ship...

Aaron Spychalla: Yeah, and it wasn't caught. It's going to be maintenance expense. And it wasn't it wasn't a big number. And you know, I want to say around about 100 K something in that range. So not it's it's repair and maintenance. It's not capital replacement on that one. Gotcha. And then I guess quickly, could you just kind of touch on some of the other capex areas for some of those new waste streams that you've been pursuing here?

Anthony: radioactive material across state lines, you have to have permits in place. Liquid waste is shipped.

Speaker Change: within the DOE system.

Speaker Change: You know, on a pretty regular basis, from site to site, what's not done is shipping liquid radioactive waste when you don't have to.

Speaker Change: And I think that's kind of the difference.

Speaker Change: So it is very limited. It's definitely recognized as being much more dangerous than shipping solids.

Aaron Spychalla: Yeah, we have a couple upgrades we're doing at the SSI for a classified waste for the Dewey complex and working to expand the current facility we've got to handle larger volumes and larger components. And we're in that's a couple million dollar upgrade. We just finished the ones at Florida. We are deploying right now as I mentioned beginning in September the PFAS unit as well in Florida. And then the upgrades in Northwest will be largely associated with what I just mentioned.

Mark Duff: Rail is always a preferred method if you're going to the long distances, particularly. You do have to have support by the states. They do have a say in it. Organ, as you know, has been very vocal about shipping untreated waste through their state when you don't have to. Particularly, as you astutely mentioned, the number of shipments is very large if they commit to doing large volumes. So, we still feel very strongly that our opportunity or our offering is the lowest environmental risk, and that makes the most sense. DOE's position is; they understand. They don't argue that.

Speaker Change: particularly when you compare it to rail. Rail is always the preferred method if you're going, you know, to long distances particularly.

Mark Duff: And so you do have to have support from the states. They do have a say in it, and Oregon, as you know, has been very vocal about shipping untreated waste through their state when they don't have to. Particularly, as you have correctly mentioned, the number of shipments is very large if they commit to doing large volumes. So we still feel very strongly that our opportunity or our offering is the lowest environmental risk and that it makes the most sense.

Speaker Change: and so you do have to have support by the states. They do have a say in it and Oregon as you know has been very vocal about shipping untreated waste through their state when you don't have to.

Speaker Change: Particularly as you

Speaker Change: As Steve mentioned, the number of shipments are very large if they commit to doing large volumes.

Steve: So we still feel very strongly that our opportunity, our offering is the lowest environmental risk.

Aaron Spychalla: Those will begin most likely around the first of the year, but include design and engineering in the next couple quarters. We expect right now the total number for the facility upgrades relative to the capital raise to be about 11 million total all combined between PFAS and the other. The systems that we're playing to upgrade, and Aaron, I'll add to that the RTO going down is kind of an example of we did allocate probably in the short-term couple million over the next probably 12 to 18 months on just sustenance repair of sort of our older equipment that just needs replacing to try to avoid something like what happened in Florida.

Mark Duff: DOE's position is that they understand, they don't argue that, they want alternatives, and I would expect them to have alternatives. I don't know if there's going to be... one award, three awards for the grouting waste, or how that's going to be procured, really all they haven't told us, but I would expect them to have backups.

Speaker Change: and that it makes the most sense.

Speaker Change: DOE's position is that they understand, they don't argue that, they want alternatives, and I would expect them to have alternatives. I don't know if there's going to be...

Mark Duff: They want alternatives, and I would expect then to have alternatives. I don't know if there's going to be one award, three awards for the grouting waste, or how that's going to be procured really at all; they haven't told us. But I would expect them to have backups. If we go down, if there's an issue, they want to keep things moving, and they want alternatives to apply pressure on competition to a certain degree as well. I still believe that we'll be able to do very well price-wise with the cost savings we have in transportation, as well as our system is so mature and we've done it for so long.

Speaker Change: won three awards for the grouting waste.

Speaker Change: or how it's going to be procured, really all they haven't told us.

Mark Duff: If we go down, if there's an issue, they want to keep things moving, and they want alternatives to apply pressure on competition to a certain degree as well. I still believe that we'll be able to do very well price-wise with the cost savings we have in transportation, as well as the fact that our system is so mature and we've done it for so long, but there are advantages to those guys, our competition, by having the landfill. So, we're hoping we can partner with both landfills and work something out that our approach makes the most sense. We speculate that in the long run, we will be the preferred alternative.

Speaker Change: If we go down, if there's an issue, they want to keep things moving.

Speaker Change: and they want alternatives.

Speaker Change: to apply pressure on competition to a certain degree as well. I still believe that we'll be...

Speaker Change: I'll be able to do very well price-wise with the cost savings we have in transportation as well as our system is so mature and we've done it for so long. But there's advantages to those guys, our competition, by having landfills.

Mark Duff: But there's advantages to those guys that are competition having landfills. So we're hoping we can compartment with both landfills and work something out that our approach makes the most sense. And I think we speculate that, in the long run, we will be the preferred alternative.

Aaron Spychalla: Understood. Okay, thanks for that. And then maybe just last for me, you know, you kind of talked about a pickup here in backlog and bidding activities in the third quarter. Can you just kind of talk a little bit about how you expect results to trend for the segments in the back half of the year? Yeah, we're getting good, exceptionally good receipts coming in right now. Q3 is always the best quarter really for receipts.

Speaker Change: So we're hoping we can can partner with both landfills and work something out that our our approach makes the most sense and I think

Speaker Change: We speculate that in the long run, we will be the preferred alternative.

Anthony Harpel: Okay, thanks for that clarification.

Anthony Harpel: Okay, thanks for that clarification. Secondly, it looks like the Hanford Tank Disposition Alliance, of which you are a team member, has now filed a federal lawsuit over the DOE's $45 billion ITDC award to Hanford Tank Waste Operations and Closure. I gather that legal arguments are scheduled to begin on August 8th. Now, at the same time...

Anthony Harpel: Secondly, it looks like the Hanford Tank Disposition Alliance, of which you are a team member, has now filed a federal lawsuit over the DOE's $45 billion ITDC award to Hanford Tank waste operations enclosure. And I gather that legal arguments are scheduled to begin on August 8th. Now, at the same time, the recently legally binding tri-party settlement agreement commits to treating a significant portion of the Hanford site tank waste through routing as a supplement to vitrification. So all parties, DOE, EPA, Washington State have now formally recognized routing as a preferred supplement to vitrification. In addition, you have the Hanford Systems Rod 10 document released earlier this year, and that essentially says that half the Hanford low activity tank waste will go to the DF Law plant and half will be shipped to commercial routing facilities for disposal off site.

Speaker Change: Okay, thanks for that clarification. Secondly, it looks like that Hanford Tank Disposition Alliance, of which you are a team member,

Aaron Spychalla: Which typically you don't get to a process all of it. So you don't get all your revenue, which leads into Q4 typically. But you know, typical government last quarter fiscal year, they get they went their waste off site. They are spending some of the money they got budgeted late in the year as well. So we're seeing a real surge right now. Some of these waste streams are larger, which will not necessarily all be processed this year.

Speaker Change: has now filed a federal lawsuit over the DOE's $45 billion ITDC award to Hanford Tank Waste Operations and Closure.

Speaker Change: I gather that legal arguments are scheduled to begin on on August 8th. Now at the same time...

Mark Duff: The recently legally binding tri-party settlement agreement commits to treating a significant portion of the Hanford site tank waste through grouting as a supplement to vitrification. Thus, all parties DOE, EPA, and Washington State have now formally recognized grouting as a preferred supplement to vitrification. In addition, we have the Hanford Systems R.O.D. 10 document released earlier this year, and that essentially says that half the Hanford low-activity tank waste will go to the D.F. Law Plant, and half will be shipped to commercial grouting facilities for disposal off-site.

Aaron Spychalla: And we'll flow in the next year, particularly one dimension from Canada and Mexico. Those are larger and we'll trickle in on more sustained level for next 12 months or so and begin here in the October timeframe on the services side of the house. We are putting a lot of bids in. I think we have eight, maybe going in in the next three weeks and we do have to win them. We feel like we'll win our shares usual of these ones that are between one and three million value.

Speaker Change: The recently legally binding Tri-Party Settlement Agreement commits to treating a significant portion

Aaron Spychalla: You have a couple that are closer to 10, but hopefully those will be awarded as scheduled, which are all scheduled to be awarded before the end of the quarter of this quarter and support funding and start up in Q4. So we do have high confidence that the second half of the year will be much better. And you know, this quarter, we're going to be hoping to come in close to break even maybe a little better if all things go as planned and be more healthy as we head into the end of the year. Next last quarter. All right. Thanks for taking the questions. I'll turn it over. Thanks, Aaron. Thank you.

Speaker Change: of the Hanford site tank waste through grouting as a supplement to vitrification. So all parties, DOE, EPA, Washington State, have now formally recognized grouting as a preferred supplement to vitrification.

Speaker Change: In addition, we have the Hanford Systems R.O.D. 10 document released earlier this year, and that essentially says that

Speaker Change: Half the Hanford low-activity tank waste will go to the DF Law Plant and half will be shipped to commercial grouting facilities for disposal off-site.

Mark Duff: So can you please give us a sense of the expected timeline for this ITDC legal case to play out? And can you please clarify what impact, if any, this legal case will have on DOE's timeline for off-site treatment of the low-activity tank waste? Well, so, first of all, the ITDC bid procurement, I don't see having any impact on the start-up of the DF law, and I say that with confidence because the start-up of DF law is being done by Bechtel. So Bechtel has the responsibility to getting it fired up, getting it working. And I don't know, have any idea what DOE is thinking in regards to how the ITDC contract fits in with Bechtel and how they're integrated.

Mark Duff: So, Can you please give us a sense of the expected timeline for this ITDC legal case to play out? And can you please clarify what impact, if any, this legal case will have on DOE's timeline for off-site treatment of the low-activity tank waste.

Speaker Change: So...

Speaker Change: Can you please give us a sense of the expected timeline for this ITDC legal case to play out and can you please clarify what impact, if any,

Speaker Change: This legal case will have on DOE's timeline for off-site treatment of the low-activity tank waste.

Anthony Harpel: Well, first of all, the ITDC bid procurement, I don't see having any impact on the startup of DIAFLAW. And I say that with confidence because the startup of DIAFLAW is being done by Beck.

Speaker Change: Well, so first of all the ITDC bid procurement I don't see having any impact on the startup of DIAFLAW and I say that with confidence because the startup of DIAFLAW is being done by Bechtel.

Aaron Spychalla: Our next question is coming from Aaron Warwick with breakout investors. Your line is life. Hey, good morning. Thanks for taking my call. Obviously a rough quarter. You'd mentioned the equipment failure as part of it as well as the delays with the government. But how much of that is also related to if I'm understanding correctly, you have one of your facilities pretty much down or mostly down just to focus on PFAS. Is that accurate?

Mark Duff: So, Bechtel has the responsibility of getting it fired up, getting it working, and I don't know, I have no idea what DOE is thinking in regards to how the ITDC contract fits in with Bechtel and how they're integrated. The way I remember it was, I hate to be quoted on this, but the ITDC included a handoff from Bechtel to the ITDC, a contractor, when they were in place. You know, that's... Obviously, in 2025, as we've discussed, if they don't have it in place by then, I'm not sure if the existing contractor to BRPS who's got the ITDC contract or the equivalent will step in and do that or what will happen.

Speaker Change: So Bechtel has the responsibility of getting it fired up, getting it working, and I don't know, I have any idea what DOE is thinking in regards to how the ITDC

Mark Duff: The way I remember it being, don't need to be quoted on this, but is that the ITDC included a handoff from Bechtel to the ITDC, a contractor when they're in place. Now, that's obviously in 25, as we've discussed. If they don't have it in place by then, I'm not sure if the existing contractor to be RPS, who's got the ITDC contract or the equivalent, will step in and do that or what will happen. If they repercure the ITDC contract, which is rumored to be one of the options, the other two options are being to award it to the original awardee, H2C, I think it is, or the protesting bitter as a third, or rebit.

Speaker Change: The IPTC included a handoff from Bechtel to the ITDC contractor when they're in place.

Aaron Spychalla: Yeah, no. Florida is still operating. They were down because of that RTO outage. But so there wasn't necessarily down for PFAS. The PFAS installation will begin in September, but it's kind of give you a sense, Aaron. We spent between 600 and 700K in Q2 on PFAS between the capital expenditures and labor. And we do see that ramping up and that's built in our numbers. You know, we have about 15 people working exclusively on it.

Speaker Change: That's it.

Speaker Change: You know, obviously in 25, as we've discussed, if they don't have it in place by then, I'm not sure if the existing

Speaker Change: contractor WRPS who's got the ITDC contract or the equivalent will step in and do that or what will happen if they re-procure the ITDC contract which is

Mark Duff: If they re-compete the ITDC contract, which is rumored to be one of the options, the other two options being to award it to the original awardee, H2C, I think it is, or the protesting bidder as a third option, or re-bid it. So those three options are on the table.

Speaker Change: Rumored to be one of the options

Speaker Change: The other two options being to award it to...

Speaker Change: The original awardee, H2C, I think it is, or the protesting...

Aaron Spychalla: They're expensive people and it's going very well between the engineers and the chemists and the sales folks. So that is part of our expenditures as planned and it will be a challenge to meet all the goals we have until we start seeing revenue from those systems, particularly PFAS, which as I mentioned, we started seeing it in Q4, but it didn't that was not the reason that the Florida plant took a step back.

Mark Duff: So those three options are on the table. I think DOE has made it pretty clear they want to award it to the guys they've chosen, but as you know, the court case relative to the procurement process has to consider whether the... The infraction or the alleged infraction on the winner is incurable or not. So if it's curable, then I see them getting the word. If the judge's term is not curable, then they can get a goff-free bid or award to the second-place team. I don't know how it's going to play out. I don't think anybody really does at this point, but I don't expect it to impact the efflong, but it could potentially impact the grouting.

Speaker Change: or re-bid it. So those three options are on the table. I think DOE has made it pretty clear they want to award it to

Mark Duff: I think DOE has made it pretty clear they want to award it to the guys they've chosen, but as you know, the court case relative to the procurement process has to consider whether the infraction or the alleged infraction on the winner is incurable or not. So if it's curable, then I see them getting the award. If the judge determines it's not curable, then they can either go out for a rebid or award it to second place.

Speaker Change: to the guys they've chosen, but as you know, the court case relative to the procurement process has to consider whether the...

Speaker Change: The infraction, or the alleged infraction, on the winner is incurable or not. So if it's curable, then I see them getting the award. If the judge determines it's not curable, then they can either go out for a rebid or award it to the second place team.

Mark Duff: It was because of that exhaust stack issue. Okay. Stick with PFAS, I guess since we're talking about that, you still expect in a couple million dollars of revenue in Q4? What's your current thinking around that? I think it's going to be closer to a million and I'd be thrilled if we got to a million right now. Our system, as I mentioned, is expected to do about 700 gallons a day. If prior calls, we thought it was going to do several batches a day and it's a thousand gallon reactor.

Mark Duff: I don't know how it's going to play out. I don't think anybody really does at this point. But I don't expect it to impact DF Law much. It could potentially impact the grouting. But, you know, it... Just thinking this through, Anthony, I haven't really talked about it very much. I would anticipate that DOE would modify the existing contractor's contract to align with that settlement agreement, and, you know, if they're in a procurement situation, WRPS is very, very knowledgeable about this type of scope and what we're talking about here, they would be able to just simply pick up that scope without missing a So it would be unlikely, in my mind, that any of these scenarios would have any impact on meeting these milestones.

Speaker Change: I don't know how it's going to play out. I don't think anybody really does at this point. But I don't expect it to impact DF Law. It could potentially impact the grouting.

Mark Duff: But just thinking this through, Anthony Harpel talked about it very much. I would anticipate that DOE would modify the existing contractor's contract to align with that settlement agreement, and if they're in a procurement situation, WRPS is very, very knowledgeable of this type of scope and what we're talking about here. That they would be able to simply pick up that scope without missing a B. So I'd be unlikely, in my mind, that any of these scenarios would have any impact on meeting these milestones.

Speaker Change: Just thinking this through, Anthony, I haven't really talked about it very much. I would anticipate that DOE would modify the existing contractor's contract to align with

Mark Duff: So we have to put the chemicals in there that we need to put in there and we need some head space. So it's going to be more like 700. We're not sure how fast we're going to be able to move a batch through. So we're being conservative at this point in thinking one a day, maybe two, and if we can do multiple shifts, we can do better. We're not sure how long it's going to take to cool down and eat up and all that kind of stuff.

Anthony Harpo: that settlement agreement and you know if they're in a procurement situation WRPS is very very

Anthony Harpo: knowledgeable of this type of scope and what what we're talking about here that they would be able to just simply pick up that scope without missing a beat so I'd be unlikely in my mind that any of these scenarios would have any impact on meeting these milestones.

Mark Duff: Well, Perma-Fix is formally part of the Hanford Tank Dispositional Alliance. Am I correct that whichever bidding consortium ultimately wins the ITDC contract does not affect your opportunity to treat Hanford's supplemental low activity tank waste and secondary waste as a subcontractor or third-party treatment provider? That's a good question. And quite unequivocally, I do not see any impact on our ability to grow out no matter what happens with that contract. Correct. That would not impact. I can't think of a scenario where whatever award is considered here that would have any impact on us doing that. Okay.

Anthony Harpel: While Perma-Fix is formally part of the Hanford Tank Disposition Alliance, am I correct that whichever bidding consortium ultimately wins the ITDC contract does not affect your opportunity to treat Hanford's supplemental low-activity tank waste and secondary waste as a subcontractor or third-party treatment provider?

Mark Duff: So we're still working through those numbers on the engineering side of the house and what we really determined, the most important thing is to get the performance data from the unit and to be able to document and verify and validate it so that we can build up our inventory and we'll be prepared to take on a significant inventory and storage while we're building our Gen 2 unit. And that unit will be designed, is already in design right now based on what we've already learned and studied to do much more than that and that should be operational in Q2 of next year at the latest and hopefully earlier and that will have a lot larger throughput.

Speaker Change: While Perma-Fix is formally part of the Hanford Tank Disposition Alliance, am I correct that

Speaker Change: Whichever bidding consortium ultimately wins the ITDC contract does not affect your opportunity to treat Hanford Supplemental Low-Activity Tank Waste and Secondary Waste as a subcontractor or third-party treatment provider.

Mark Duff: That's a good question and unequivocally, I do not see any impact on our ability to grow out no matter what happens with that contract. Correct, that would not impact. I can't think of a scenario where whatever award. Please consider here if it would have any impact on us doing so.

Speaker Change: That's a good question. Unequivocally, I do not see any impact on our ability to grow out no matter what happens with that contract. Correct.

Speaker Change: I can't think of a scenario where whatever award is considered here would have any impact on us doing that.

Anthony Harpel: Okay, and what is the minimum percentage of the cumulative value of task orders issued under the ITDC that must be subcontracted to small businesses, of which you are one?

Anthony Harpel: And what is the minimum percentage of the cumulative value of task orders issued under the ITDC that must be subcontracted to small businesses, of which you're one? I believe that number is 20%. Okay. So that's 20% of a $45 billion number. Is that correct? Yeah. Okay.

Mark Duff: But the answer question, based on what we're seeing is it's going to be closer to a million dollars in revenue for Q4 this year. Sounds like you don't have any lack of interest in inventory or possible customers. The area, it's just shocking, you know, this market moves all over the place. There's some petters out there that have all kinds of claims. And what it comes down to is the people we're targeting and talking to all have a large need.

Speaker Change: Okay, and what is the minimum percentage of the cumulative value of task orders issued under the ITDC that must be subcontracted to small businesses of which you're one?

Mark Duff: I believe that number is 20%.

Speaker Change: I believe that number is 20%.

Anthony Harpel: Okay, so that's 20% of a $45 billion number. Is that correct? Correct. And then just one last question, and then I'll hand it off. You all in Westinghouse have been working on the parameters of an agreement related to building a UK treatment plant that, from what I understand, would use your treatment technology. Where are we in terms of these discussions and any decisions that have been made? That's what I was referring to earlier, Anthony; we are

Speaker Change: Okay, so that's 20% of a 45 billion dollar number, is that correct?

Mark Duff: And then just last question, and then I'll hand it off. You all in Westinghouse have been working on the parameters of an agreement related to building a UK treatment plant. That from what I understand would use your treatment technology. Where are we in terms of these discussions and any decisions that have been made? That's what I was referring to earlier, Anthony. We are in discussions, looking at alternatives, and keeping this discussions going with Westinghouse as well. And I just can't get into the details right now where we are on those. We still are on track to hopefully have a facility up and operating in the next 18 months or so.

Speaker Change: Okay, and then just last question and then I'll hand it off. You all in Westinghouse have been working on the parameters of an agreement related to building a UK treatment plant.

Mark Duff: And I'm very confident, if we were operating today, Aaron, we would have an enormous backlog and frack tanks at our sort of facility. And that's why the rush is just to get the performance data. And then we can start signing contracts. And that's really where we're at. And we're very encouraged by that, we're encouraged by how we fit into the market and what our technology does in comparison to our competition. And it's different and it addresses a different phase of the overall PFAS material management. As I mentioned, with more strength in higher concentrations that fits very well into where some of our petters and team partners are, which is very encouraged us to.

Speaker Change: that, from what I understand, would use your treatment technology. Where are we in terms of these discussions and any decisions that have been made?

Mark Duff: That's what I was referring to earlier, Anthony. We are in discussions looking at alternatives and keeping this discussion going with Westinghouse as well. And I just can't get into the details right now about where we are on those. But we still are on track to hopefully have a facility up and operating in the next 18 months or so. But we're working out some details that might change some things based on things that have occurred at Westinghouse relative to the plant we were going to build it at and the fact that the world has changed so much in regards to the nuclear fuel markets and the fact that they're doing very, very well with fuel fabrication right now over there.

Speaker Change: That's what I was referring to earlier, Anthony, we are in discussions looking at alternatives and keeping these discussions going with Westinghouse as well.

Speaker Change: and I just can't get into the details right now where we are on those. We still are on track to hopefully have

Speaker Change: facility up and operating in the next 18 months or so.

Mark Duff: And we're working out some details that might change some things based on things that have occurred at Westinghouse relative to the plant we're going to build it at. And the fact that the world has changed so much in regards to the nuclear fuel markets and the fact that they're doing very, very well with the fuel fabrication right now over there. So. All I can tell you is we're working through that. We're hoping to have an announcement here in September and provide specific details as to how that agreement has changed and how it's moving forward. But if I could go back one second and do your prior question, as you mentioned, it is important to understand, and you hit an important point.

Mark Duff: So it's really a race to get the operational unit built in operational at this point.

Speaker Change: and we're working out through some details.

Speaker Change: that might change some things.

Speaker Change: based on things that have occurred at Westinghouse relative to

Mark Duff: Yeah, I mean given the state of the market and the demand, is there part of these partnerships is it possible to license out your technologies that you're looking into, what are your thoughts around that? It's very possible. We're definitely considering that. We get that question a lot from the vendors we're talking to. Our position has been that we're not going to pursue that until the end of 25. We want to get our Gen 2 system deployed and show how fast they can operate and refine it.

Speaker Change: The plant we're going to build it at and the fact that

Speaker Change: ah

Speaker Change: The world has changed so much in regards to the nuclear fuel markets and the fact that they're doing very, very well with the fuel fabrication right now over there.

Mark Duff: All I can tell you is we're working through that, and we're hoping to have an announcement here in September and provide specific details as to how that agreement has changed and how it's moving forward. But if I could go back one second, Anthony, to your prior question, as you mentioned, it's important to understand, and you hit an important point, it is a 20% small business requirement. And keep in mind, we are a small business, and our competitors are not.

Speaker Change: All I can tell you is we're working through that. We're hoping to have an announcement here in September and provide specific details as to how that agreement has changed and how it's moving forward.

Speaker Change: But if I could go back one second, Anthony, to your prior question, as you mentioned. It's important to understand, and you hit an important point, it is a 20% small business requirement. And keep in mind, we are a small business, and our competitors are not.

Carol Weiss: It is a 20% small business requirement and keep in mind we are a small business and our competitors are not. So meeting that 20% goal of 45 billion is a big number, and Perma-Fix doing the treatment of that grouting that waste would go towards that goal. So it provides them a little incentive to consider that if they have to meet that 20% goal, whoever the winner is. And you can get there in a fast way by Perma-Fix treating that grouting that waste through grouting. Thank you. Okay, thank you. Thank you.

Mark Duff: As I mentioned before, we're designing this thing while we're fabricating the prototype which is not a normal way to do it, but we're kind of rushing it along if they have done. The Gen 2 is really going to be a much more methodical system that addresses all kinds of improvements, significant improvements and we expect to run out faster and more efficient all this things. We want to get this built deployed at several facilities so we can show folks, say this is what it does, is how you operate it, and then towards the second half of 25 start considering licensing and technology.

Mark Duff: Meeting that 20% goal of $45 billion is a big number. Perma-Fix doing the treatment for grouting that waste would go towards that goal. So it does provide them with a little incentive to consider that they have to meet that 20% goal, whoever the winner is, and you can get there in a fast way by Perma-Fix treating that drought, treating that waste through grouting.

Speaker Change: Meeting that 20% goal of $45 billion is a big number.

Speaker Change: Perma-Fix doing the treatment for grouting that waste would go towards that goal. So it does provide them a little incentive to consider that, that they have to meet that 20% goal, whoever the winner is.

Speaker Change: And you can get there in a fast way by Perma-Fix treating that drought, treating that waste through grouting.

Mark Duff: I do see that as a real option for us, and we're looking at all different types of approaches to treating GAC in situ, like in people's facilities, to other types of things, cleaning out some and filtering system and those kinds of things at people's locations as well as treating effluent at landfills, so there's all kinds of applications that require you to have a lot of units deployed in the field, that's when the licensing technology looks more attractive overall, and we're certainly giving that a lot of thought.

Speaker Change: Thank you.

Operator: Thank you. Our final question today will come from Kyle Reis with GrowFunds. Your line is live.

Speaker Change: Okay, thank you.

Mark Duff: Our final question today will come from Carol Weiss with Girl Funds. Your line is live. Hey guys, thanks for taking my question. There's been a lot asked, obviously, but just on the West Valley contract, can you give us an update there? And then, assuming that the Gen 2 unit gets the throughput that you're looking for, how would you size the PFAS market one year out and then further out, kind of five years out? Some of your competitors have done that. Yeah, West Valley, again, obviously in the middle of the procurement process, like OSMS is, can't talk much about the procurement itself, but the sort of status of it goes, was what your question was.

Speaker Change: Thank you. Our final question today will come from Karl Weiss with GrowFunds. Your line is live.

Kyle Reis: Hey guys, thanks for taking my question. There's been a lot asked, obviously, but just on the West Valley contract, can you give us an update there? And then, assuming that, you know, the Gen 2 unit gets the throughput that you're looking for, how would you size the PFAS market, you know, one year out and then, you know, further out, kind of five years out? Some of your competitors have done.

Karl Weiss: Hey guys, thanks for taking my question. There's been a lot asked, obviously, but just on West Valley contract, can you give us an update there?

Karl Weiss: And then assuming that, you know, the Gen 2 unit, you know, gets the throughput that you're looking for, how would you size the PFAS market, you know, one year out and then, you know, further out, kind of five years out? Some of your competitors have done that.

Aaron Spychalla: Okay, thank you, one thing I had heard about much recently for anybody is the OSMS, what's the status of that, what's the current thinking? You know, Aaron, that's a really difficult one to even discuss because we have no information either to our competitors or team parties or anyone, it's just total silence. That with Dewey folks, headquarters back in early June, they said their goal was to have an award by the end of the fiscal year, but they've said that on other milestones as well.

Mark Duff: Yeah, West Valley, again, obviously, in the middle of the procurement process like OSMS is, can't talk much about the procurement itself, but as far as the status of it goes, which was your question, DOE has stated several times that they expect to make an award by the end of the calendar year, so I have to believe they're on track for that. I do understand there are three bidders, so it's not a large number of proposals to consider, and it was a very simple proposal, unlike the OSMS proposal, which was a very, very comprehensive cost volume. The West Valley contract, or RFP, did not include that.

Speaker Change: Yeah, West Valley, again, obviously in the middle of the procurement process like OSMS is.

Speaker Change: I can't talk much about the procurement itself, but sort of the status of it goes, was what your question was.

Mark Duff: DOE has stated several times that they expect to make an award by the end of the calendar year. So I have to believe they're on track for that. I do understand there's three bitters. So it's not a large number of proposals to consider. And it was a very simple proposal, unlike the OSMS proposal, which was very, very comprehensive. Cost volume, the West Valley contract or RFP did not include that.

Speaker Change: DOE has stated several times that they expect to make an award by the end of the calendar year, so I have to believe they're on track for that. I do understand there's three bidders.

Speaker Change: So it's not a large number of...

Aaron Spychalla: No one really understands why it's being held up. I mean, it's been submitted, I want to say two years ago, August, it was submitted and just no word at all, there's lots of implications to the award, you know, it impacts a lot of people and other contracts that are waiting for it to be awarded, I just have no idea, I don't think anyone outside of Dewey procurement has any idea what the hold up is, but right now it's looking like another month or two.

Speaker Change: proposal to consider and it was a very simple proposal unlike the OSM's proposal which was very very comprehensive cost volume. The West Valley contract or RFP did not include that.

Mark Duff: So all expectations are in the next four or five months to hear about West Valley. The Gen 2, as far as what we can expect, is about, we're assuming about $10 million in revenue in the latter half of the second half last two quarters of 25. And that includes an assumption that we'll have our Gen 2 system operating along with potentially some revenue for soils as well. I think it's a little bit more of a stretch goal, but we do expect Gen 2 to be generating about $10 million a year in the second half of '25 and about $20 million a year in '26.

Mark Duff: So I'll All expectations are in the next four or five months to hear about West Valley. The Gen 2, as far as what we can expect, is about, we're assuming about $10 million in revenue in the latter half of the second half, last two quarters of 2025. That includes an assumption that we'll have our Gen 2 system operating, along with potentially some revenue for soils as well. I think it's a little bit more of a stretch goal, but we do expect Gen 2 to be generating about $10 million a year in the second half of 2025 and about $20 million a year in 2026.

Speaker Change: All expectations are in the next four or five months to hear about West Valley.

Speaker Change: The Gen 2, as far as what we can expect, is about, we're assuming about $10 million in revenue in the latter half of the second half, last two quarters, of 2025.

Mark Duff: And then also you mentioned the JRC, but I didn't hear much else, maybe I just missed it about other opportunities in central Europe and where you stand there, at last conference call it sound like you were pretty positive that there were some things brewing there that would be good for you, what's the status of that right now? Yeah, we're continuing to work on the new plant potential, we're working with some alternatives and so it is kind of a little behind schedule and changing a couple of approaches for the new plant that will slide that back a little bit, not a lot, but a little bit.

Speaker Change: And that includes an assumption that we'll have our Gen 2 system operating.

Speaker Change: along with potentially some...

Speaker Change: revenue for soils as well. I think it's a little bit more of a stretch goal but we do expect Gen 2 to be generating about 10 million dollars a year in the second half of 25 and about 20 million a year in 26.

Mark Duff: I think that's really conservative, and that is a very conservative number. And I expect to do much better than that if the Gen 2 system works the way we are designing it to, where it will have more of a continuous feed as opposed to just a thousand gallons of time, whatever the number of gallons that we're putting into time as. And we'll have multiple units, and you know, we get much more simpler and quicker to build a system if you have a design that's been proven with minimal changes. We can get through fabrication much faster and have one of the two of our facilities, where we have trained staff and infrastructure to support these units.

Mark Duff: I think that's really conservative, and that is a very low number, and I expect to do much better than that if the Gen 2 system works the way we are designing it to, where it will have more of a continuous feed as opposed to just 1,000 gallons at a time, whatever the number of gallons that we're putting in at the time is, and we'll have multiple units. It gets much simpler and quicker to build a system if you have a design that's been proven with minimal changes.

Speaker Change: I think that's really conservative.

Speaker Change: And that is a very conservative number, and I expect to do much better than that if the Gen 2 system...

Mark Duff: And hopefully we can disclose what those agreements are sometime in this quarter publicly. We are bidding on several RFPs right now over there for different types of applications and continue to see growth hopefully with some new clients in Hungary and Norway in the coming months and other clients in Italy as well. So things continue to move, you know, it's interesting working in Europe. Things just absolutely shut down in the summer as they burn their five or six weeks of mandatory vacation or holiday as they call it and things get really slow through the summer.

Speaker Change: works the way we...

Speaker Change: We are designing it to where it will have more of a continuous feed, as opposed to just a thousand gallons at a time, whatever the number of gallons that we're putting in at the time is.

Speaker Change: And we'll have multiple units. And you know, it gets much more simpler and quicker to build a system if you have a design that's been proven with minimal changes. We can get through fabrication much faster and have one at each one of our facilities where we have trained staff and infrastructure to support these units.

Mark Duff: We can get through fabrication much faster and have one at each one of our facilities where we have trained staff and infrastructure to support these units. Basically, the answer to your question, $10 million to $25 million in the last two quarters. Roughly, frankly, $5 million a quarter is what we're shooting for.

Mark Duff: So basically the answer question, 10 million to 25, and the last two quarters, roughly frankly, it's 5 million a quarter as well or shouldn't.

Speaker Change: Basically, the answer to your question, $10 million to $25 million in the last two quarters, roughly, frankly, $5 million a quarter is what we're shooting for.

Mark Duff: Warwick. Okay, and then beyond that, it's just how many units you're able to fabricate. And how long does it take to, I guess it's six to nine months? Is that how long it takes to go one together? You know, the prototype was 12 weeks, but as I said, we made a significant number of changes in the first six to eight weeks to the point of driving our partner crazy because we're constantly making changes. But in a certain different pieces, the system to go together, we're making some changes to one piece and the other three were fine, to ensure that we can still maintain our schedule.

Kyle Reis: Okay, and then beyond that, it's just how many units you're able to... Fabricate. And how long does it take to, I guess it's six... 6 to 9 months, is that how long it takes to... Put one together? You know, the prototype.

Mark Duff: So we're anticipating that to pick up, it's already started in last week or two and expect to get full blast again in September and hopefully we can have some press releases about how it's progressing. But Mexico and Canada have been a big surprise for both of those, particularly Canada, great waste streams for us that will be sustained through, you know, 12-month period and really good revenue for us, the type of work we really like to do. So those are all start here in the next couple of weeks.

Speaker Change: Okay, and then beyond that, it's just how many units you're able to...

Speaker Change: to fabricate, and how long does it take to, I guess it's six...

Speaker Change: 6 to 9 months, is that how long it takes to...

Mark Duff: You know, the prototype was 12 weeks, but as I said, we have... We made a significant number of changes in the first, 6-8 weeks, to the point of driving our partner crazy because we're constantly making changes. Pieces to the system that go together. We're making some changes to one piece, and the other three were fine, to ensure that we could still maintain our schedule. But to answer your question, once we have a final design put together.

Speaker Change: Put one together.

Speaker Change: You know, the prototype was 12 weeks, but as I said, we made a significant number of changes in the first 12 weeks.

Speaker Change: six to eight weeks, to the point of driving our partner crazy because we're constantly making changes. But there's certain, there's different, different

Mark Duff: Okay, and the final thing for me, then I guess just on hand for it, I mean, I've been hearing some things that indicate that perhaps they're going to be starting the DF law facility quite quite a bit earlier than than August of 2025. Are you hearing anything about that or what's the you know they had an announcement a couple weeks ago that they had some delays in cold commissioning, but they said specifically that that would not address hot commissioning so I'm not sure what that means.

Speaker Change: Pieces to the system that go together, we're making some changes to one piece and the other three were fine to ensure that we can still maintain our schedule.

Mark Duff: We're thinking 12 weeks from the sign of a contract to delivery and then you have to install it. So yeah, four months, five months maybe by the time you get it commissioned from the time you start the contract.

Mark Duff: But the answer question, once we have a final line for together, we're thinking 12 weeks from sign of a contract to delivering. And then you have to install it. So yeah, four, four months, five months, maybe, by the time you get a commission from the time you start to the contract.

Mark Duff: I think they had some type of system issues that is going to require a couple months to get some additional parts or some changes. I can't remember exactly what what the situation was. And a hot commissioning would begin at some time a Q1 time frame, I want to say, and so it seems like it's on track. Dewey is very optimistic. Congress is very optimistic, you know, if you follow the House Senate funding packages, they all include significant increases in hand for funding, like hundreds of millions, I want to say 300 million dollar range that would go towards these projects.

Speaker Change: But to answer your question, once we have a final design put together, we're thinking...

Speaker Change: 12 weeks from sign of a contract to delivery and then you have to install it So yeah, four months, five months maybe by the time you get it commissioned From the time you you start the the contract

Mark Duff: Great, thank you. Thank you.

Speaker Change: Great, thank you.

Mark Duff: At this time, I will hand it back over to management for any closing comments they may have. All right, I'd like to thank everyone for participating in a second quarter conference call. As you can hopefully see, we're quite confident in the outlook for the business of the next few years. We look forward to providing further updates as we continue to execute our strategy along the way. We appreciate the continuous support and patience of our shareholders, and we look forward to providing further updates as developments unfold.

Operator: At this time, I will hand it back over to management for any closing comments they may have.

Speaker Change: it

Speaker Change: Thank you.

Speaker Change: At this time, I will hand it back over to management for any closing comments they may have.

Mark Duff: All right, I'd like to thank everyone for participating in our second quarter conference call. As you can hopefully see, we're 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 along the way. We appreciate the continued support and patience of our shareholders, and we look forward to providing further updates as developments unfold.

Speaker Change: All right, I'd like to thank everyone for participating in our second quarter conference call. As you can hopefully see, we're quite confident in the outlook for the business over the next few years.

Speaker Change: We look forward to providing further updates as we continue to execute our strategy along the way. We appreciate the continued support and patience of our shareholders, and we look forward to providing further updates as developments unfold. Thank you.

Mark Duff: So they all look very attractive, you never know how the fund is going to come out, but right now that's where the plus-ups are as a handful. So we're optimistic, Dewey's optimistic, they're very focused on success and so are we in as far as that facility operating is planned. I think it seems like that's kind of bipartisan, is that is that accurate? So would yes accurate. Yeah, completely. Yeah, no, it is, I think that no matter what everyone sees, the investment that Dewey is made out there, you know, they're plants looking at a total cost for about 18 billion dollars, they want to they want to start showing some progress.

Mark Duff: Thank you. This concludes today's conference call, and you may disconnect your lines at this time. We thank you for your purchase.

Operator: Thank you. This concludes today's conference call, and you may disconnect your lines at this time, and we thank you for your participation.

Speaker Change: Thank you. This concludes today's conference call and you may disconnect your lines at this time and we thank you for your participation.

Mark Duff: And the the grounding program also kind of underscores the fact that there's pressure from Congress for on Dewey to search showing some progress on overall mission completion, which is closing some tanks. Yeah, I think they just put out something recently saying that they're going to do this 2000 gallon testing with these other entities get that started before the end of the year. Yeah, that's more another step to get into the grounding, grounding system going, ground program going and supporting that 26 day. So that that'll be good to see that happen too, so they can think of start making progress and get some contracts in place and get rolling for the large scale grounding.

Mark Duff: Good, thank you guys appreciate your time and hope to back after here is good. Thank you.

Anthony Harpel: Our next question is coming from Anthony Harpel, who is a investor. Your line is life.

Mark Duff: Hi gentlemen, good morning. Thanks for taking my call. I'd like to talk about the hand for tank cleanup. Setting aside the fact that it would present enormous and meanwhile, completely unnecessary environmental and human health risks to local communities, setting aside the strong objections of the umatillic tribes. And setting aside the fact that you would need to send literally thousands of trucks, over the lifetime of the Tank Cleanup Project given that there are millions of gallons of low activity tank waste to treat.

Mark Duff: Let's nevertheless imagine that the DOE stupidly decides that it wants to truck untreated tank waste from Hanford to Andrews, Texas or to Clive Utah. In such a scenario, can you please discuss whether the DOE would be required first to secure permits to do so from each state and each municipality across which this untreated tank waste would travel? I don't know Anthony, all the permits that have to be addressed. When we ship radioactive material across state lines, you have to have permits in place.

Mark Duff: Liquid waste is shipped within the DOE system on a pretty regular basis from site to site. What's not done is shipping liquid waste when you don't have to. It is very limited. Still being recognized as being much more dangerous than shipping solids, particularly when you compare it to rail. Rail is always a preferred method if you're going to the long distances, particularly. You do have to have support by the states. They do have a say in it.

Mark Duff: Organ, as you know, has been very vocal about shipping untreated waste through their state when you don't have to. Particularly as you astutely mentioned, the number of shipments are very large if they commit to doing large volumes. So, we still feel very strongly that our opportunity or our offering is the lowest environmental risk and that makes the most sense. DOE's position is, they understand. They don't argue that. They want alternatives and I would expect then to have alternatives.

Mark Duff: I don't know if there's going to be one award, three awards for the grouting waste or how that's going to be procured really at all they have it told us. But I would expect them to have backups. If we go down, if there's an issue, they want to keep things moving and they want alternatives to apply pressure on competition to a certain degree as well. I still believe that we'll be able to do very well price-wise with the cost savings we have in transportation as well as our system is so mature and we've done it for so long.

Mark Duff: But there's advantages to those guys that are competition having landfills. So we're hoping we can compartment with both landfills and work something out that our approach makes the most sense. And I think we speculate that in the long run we will be the preferred alternative.

Mark Duff: Okay, thanks for that clarification.

Mark Duff: Secondly, it looks like the Hanford Tank Disposition Alliance of which you are a team member has now filed a federal lawsuit over the DOE's 45 billion ITDC award to Hanford Tank waste operations enclosure. And I gather that legal arguments are scheduled to begin on August 8th. Now, at the same time, the recently legally binding tri-party settlement agreement commits to treating a significant portion of the Hanford site tank waste through routing as a supplement to vitrification.

Mark Duff: So all parties, DOE, EPA, Washington State have now formally recognized routing as a preferred supplement to vitrification. In addition, you have the Hanford Systems Rod 10 document released earlier this year and that essentially says that half the Hanford low activity tank waste will go to the DF law plant and half will be shipped to commercial routing facilities for disposal off site. So can you please give us a sense of the expected timeline for this ITDC legal case to play out?

Mark Duff: And can you please clarify what impact, if any, this legal case will have on DOE's timeline for off-site treatment of the low activity tank waste? Well, so, first of all, the ITDC bid procurement, I don't see having any impact on the start-up of the DF law and I say that with confidence because the start-up of DF law is being done by Bechtel. So Bechtel has the responsibility to getting it fired up, getting it working.

Mark Duff: And I don't know, have any idea what DOE is thinking in regards to how the ITDC contract fits in with Bechtel and how they're integrated. The way I remember it being, don't need to be quoted on this, but is that the ITDC included a handoff from Bechtel to the ITDC, a contractor when they're in place. Now, that's obviously in 25, as we've discussed, if they don't have it in place by then, I'm not sure if the existing contractor to be RPS, who's got the ITDC contract or the equivalent, will step in and do that or what will happen.

Mark Duff: If they repercure the ITDC contract, which is rumored to be one of the options, the other two options are being to award it to the original awardee, H2C, I think it is, or the protesting bitter as a third, or rebit. So those three options are on the table. I think DOE has made it pretty clear they want to award it to the guys they've chosen, but as you know, the court case relative to the procurement process has to consider whether the...

Mark Duff: The infraction or the alleged infraction on the winner is incurable or not. So if it's curable, then I see them getting the word. If the judge terms is not curable, then they can get a goff-free bid or award to the second-place team. I don't know how it's going to play out. I don't think anybody really does at this point, but I don't expect it to impact the efflong, but it could potentially impact the grouting.

Mark Duff: But just thinking this through, Anthony Harpel talked about it very much, I would anticipate that DOE would modify the existing contractors contract to align with that settlement agreement and if they're in a procurement situation, WRPS is very, very knowledgeable of this type of scope and what we're talking about here. That they would be able to simply pick up that scope without missing a B. So I'd be unlikely in my mind that any of these scenarios would have any impact on meeting these milestones.

Mark Duff: I can't think of a scenario where whatever award is considered here that would have any impact on us doing that. Okay. And what is the minimum percentage of the cumulative value of task orders issued under the ITDC that must be subcontracted to small businesses of which you're one? I believe that number is 20%. Okay. So that's 20% of a $45 billion number. Is that correct? Yeah. Okay.

Mark Duff: And then just last question, and then I'll hand it off. You all in Westinghouse have been working on the parameters of an agreement related to building a UK treatment plant. That from what I understand would use your treatment technology, where are we in terms of these discussions and any decisions that have been made? That's what I was referring to earlier Anthony. We are in discussions, looking at alternatives and keeping this discussions going with Westinghouse as well.

Mark Duff: And I just can't get into the details right now where we are on those. We still are on track to hopefully have a facility up and operating in the next 18 months or so. And we're working out some to some details that might change some things based on things that have occurred at Westinghouse relative to the plant we're going to build it at. And the fact that the world has changed so much in regards to the nuclear fuel markets and the fact that they're doing very, very well with the fuel fabrication right now over there.

Mark Duff: So. All I can tell you is we're working through that. We're hoping to have an announcement here in September and provide specific details as to how that agreement has changed and how it's moving forward. But if I could go back one second and do your prior question, as you mentioned, it is important to understand and you hit an important point. It is a 20% small business requirement and keep in mind we are a small business and our competitors are not.

Mark Duff: So meeting that 20% goal of 45 billion is a big number and Perma-Fix doing the treatment of that grouting that waste would go towards that goal. So it provides them a little incentive to consider that if they have to meet that 20% goal, whoever the winner is. And you can get there in a fast way by Perma-Fix treating that grouting that waste through grouting. Thank you. Okay, thank you. Thank you.

Carol Weiss: Our final question today will come from Carol Weiss with Girl Funds. Your line is live. Hey guys, thanks for taking my question. There's been a lot of asked, obviously, but just on West Valley contract, can you give us an update there? And then assuming that the Gen 2 unit gets the throughput that you're looking for, how would you size the PFAS market one year out and then further out kind of five years out?

Carol Weiss: Some of your competitors have done that. Yeah, West Valley, again, obviously in the middle of the procurement process, like OSMS is, can't talk much about the procurement itself, but the sort of status of it goes, was what your question was. DOE has stated several times that they expect to make an award by the end of the calendar year. So I have to believe they're on track for that. I do understand there's three bitters.

Carol Weiss: So it's not a large number of proposals to consider. And it was a very simple proposal unlike the OSMS proposal, which was very, very comprehensive, cost volume, the West Valley contract or RFP did not include that.

Mark Duff: We can get through fabrication much faster and have one of the two of our facilities, where we have trained staff and infrastructure to support these units. So basically the answer question, 10 million to 25, and the last two quarters, roughly frankly, it's 5 million a quarter as well or shouldn't.

Mark Duff: But in a certain different pieces, the system to go together, we're making some changes to one piece and the other three were fine, to ensure that we can still maintain our schedule. But the answer question, once we have a final line for together, we're thinking 12 weeks from sign of a contract to delivering. And then you have to install it. So yeah, four, four months, five months, maybe, by the time you get a commission from the time you start to the contract.

Mark Duff: Great, thank you. Thank you.

Mark Duff: At this time, I will hand it back over to management for any closing comments they may have.

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

Operator: Thank you. This concludes today's conference call and you may disconnect your lines at this time and we thank you for your purchase.

Q2 2024 Perma-Fix Environmental Services Inc Earnings Call

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