Thank you, Jenny. Good morning, everyone, and welcome to Perma-Fix Environmental Services fourth quarter and year-end 2025 conference call.

On the call with us this morning are Mark Duff, President and CEO; Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer.

The company issued a press release this morning containing fourth quarter and 2025 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

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

These risks and uncertainties are detailed in the company's filings with the US Securities and Exchange Commission, as well as this morning's press release. The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements.

In addition, today's discussion will include references to non-GAAP measures. 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 in today's news release on our website. I'd now like to turn the call over to Mark Duff.

Please go ahead, Mark.

All right. Thanks, David, and good morning, everyone, and thank you for joining us today.

2025 was an important year for Perma-Fix as we focused on strengthening our operational foundation and positioning the company for the next phase of growth tied to the Department of Energy's Hanford cleanup mission. For the full year, revenue totaled approximately $61.7 million, reflecting stronger performance in our treatment segment and improving waste volumes across several of our treatment facilities.

While the timing of certain government programs affected activity levels during the year, we made significant progress preparing our facilities, workforce, and infrastructure to support the increased waste volumes expected as the direct feed low-activity waste, or DFLAW, program transitions into its operational phase. Throughout the year, we also made targeted investments in personnel, infrastructure, and plant capabilities to ensure we're fully prepared to support the next phase of activity at Hanford and across other DOE cleanup programs.

As many of the DFLAW program and the Hanford tank waste program represents one of the most significant environmental remediation efforts currently underway in the United States, and we believe Perma-Fix is uniquely positioned to support this mission given our specialized treatment capabilities and our long history of supporting DOE waste management programs. One of the most significant milestones during the year was the renewal of the permit for our Perma-Fix Northwest facility.

This permit significantly expands our permitted processing capacity to approximately 1.2 million gallons of liquid mixed waste annually, effectively tripling our liquid processing capacity, and also authorizes treatment of up to 175,000 tons of waste through macroencapsulation annually. Combined with our investments in automation, facility upgrades, and workforce expansion, these improvements meaningfully strengthen the role Perma-Fix Northwest can play in support of multiple Hanford-related waste streams and other DOE mission objectives as activity ramps in the coming quarters.

In a recent press release, DOE announced the need to extend the DFLAW hot commissioning phase. However, waste is expected to be received through the DFLAW liquid waste treatment processes beginning in May at our Northwest facility, with dry waste expected to be received in April.

The anticipated waste streams are expected to grow above original estimates by as much as 20% as described by DOE based on changes made in the process flow, which will include grouting a portion of the effluent waste instead of using DFLAW vitrification processes as originally designed. A regulatory supplemental analysis is under review that includes using Perma-Fix Northwest grouting capacity to treat the effluent to enhance production levels at the DFLAW facility.

The DFLAW facility has processed about 50,000 gallons of tank waste through February, and the melters remain hot, which produces steam resulting in generation of waste to be included as effluent to Perma-Fix Northwest. For investors trying to better frame the timing of the DFLAW opportunity, DOE planning documents indicate the system is expected to ramp progressively through hot commissioning, which began in October of 2025, and within 12 to 18 months of that start date, DOE plans to reach an operational phase at approximately 40% capacity before increasing towards 80% capacity as additional systems come online.

That's required to be done within three years based on the Tri-Party Agreement at Hanford. We view this as an important indicator of the size and durability of the opportunity in front of us while also recognizing the exact pace of that ramp remains completely dependent on DOE execution and site operating conditions.

Initial estimates regarding revenue potentials remain at about $1 to $2 million per month beginning in Q2 and ramping up through the year. At a recent waste management conference in March, DOE leadership specifically addressed the importance of implementing a grouting program to supplement DFLAW towards meeting the department's goals for achieving tank closures by 2040.

DOE stated that this program is working towards treating up to 200 million gallons of waste by 2040 from the Hanford tanks through the DFLAW program, supplemented by the grouting program to be initiated in 2026. The number has grown from the original 56 million gallons estimated based on DOE expectations due to the fact that they'll be generating 1 to 3 gallons of waste water from each gallon retrieved due to the need to add liquids to the tank to retrieve the waste.

Over the past several months, Perma-Fix Northwest has continued to make significant investments in automation, information systems, and personnel training to ensure the facility can operate efficiently at high throughput levels and meet or exceed expected production rates as a broader range of waste streams begin to arrive. The Hanford remediation programs are expected to generate sustainable waste streams over time, which we believe can create consistent, long-term treatment demand and recurring activity for our facilities.

In addition to supporting DFLAW program, we expect to participate in several other Hanford-related waste streams and site programs that will generate additional treatment demand over time. These increases in receipts include providing solidification treatment support to high volume contaminated water from the Hanford site, as well as increasing our transuranic waste processing program by 100% beginning this month, supported by additional shifts at the Perma-Fix Northwest facility.

As waste receipts increase, we expect to utilize this expanded capacity to support a growing volume of treatment activity tied to both Hanford mission and other DOE programs. Operationally, our treatment segment delivered meaningful improvement during the year.

We saw higher waste volumes, improved plant throughput, and stronger waste mix, which together drove significant year-over-year growth in treatment revenue. As a result, treatment revenue increased approximately 29% year-over-year, reflecting both higher activity levels and stronger pricing dynamics associated with the waste streams we processed.

Importantly, our treatment backlog increased by approximately 51% year-over-year, in approximately one—to approximately $1.9 million in revenue, providing improved visibility as we enter 2026. This backlog growth reflects increasing demand for our specialized treatment capabilities across both government and commercial waste streams.

Another area of progress during the year was international activity. Revenue from foreign entities increased approximately 163% year-over-year to approximately $6.4 million, reflecting growing global demand for our specialized waste treatment services.

International markets continue to represent an attractive growth opportunity for us as many countries face similar challenges related to complex nuclear and hazardous waste management, and we continue to see an expanding pipeline of potential treatment projects in Canada and other international markets. Turning to project activity more broadly, we have seen a number of encouraging developments over the past several months that we believe support our growth outlook for 2026.

These include opportunities tied to soil sorting work for a commercial uranium mining client, additional treatment work related to Canada and other international markets, weapons production-related waste treatment programs, and remediation work supporting a major university laboratory environment. Some of these opportunities are already moving into execution, while others remain in final award and startup phases, and together they reinforce our confidence in improving activity as we move through the year.

We also want to set expectations appropriately for the first quarter. While Perma-Fix does not typically provide formal guidance, it's important to recognize that factors are expected to make the first quarter softer than the stronger activity we tend to expect begin for the second quarter.

These factors include recent delays in the DFLAW effluent receipts, which shifted expected waste receipts out by several months; also normal seasonal weaknesses in field activity during January and February; and ongoing efforts at Perma-Fix Northwest to process stored waste, to prepare all of our resources for the increase in Hanford-related activity expected later in the coming months. While the Q1 numbers are not finalized, losses in Q1 will likely exceed $4 million in negative EBITDA on about $13 million in revenue.

Despite those near-term impacts, we've seen stronger activity in March and believe the second quarter should represent an inflection point as additional waste receipts and project activity begin to ramp. The focus on stored waste I mentioned has resulted in a timing-related shift in revenues from Q1 to Q2 due to applicable revenue recognition rules, resulting in a movement of approximately $2 million in revenue generated at Perma-Fix Northwest to be recognized in Q2, while they're actually processed in Q1.

We also continue advancing the development and commercialization of our PFAS destruction technology. During the quarter, our engineering team focused on completing construction and installation of our new Generation 2 2.0 PFAS destruction system at our Oak Ridge facility.

The upgraded system is designed to increase our PFAS destruction capacity by up to three times our current rate while incorporating engineering improvements intended to reduce operating costs and improve reliability and production rates. PFAS contamination continues to receive increasing regulatory and environmental attention worldwide, and we believe technologies capable of permanently destroying these compounds will play an important role in the future remediation efforts.

We also continue to see strong interest in our technology as an alternative to incineration, with our PFAS Perma-FAS system providing permanent destruction of PFAS compounds at a lower total cost while avoiding air emissions. We believe the ability to permanently destroy PFAS compounds and eliminate long-term environmental liability represents a compelling advantage for our customers evaluating alternatives to traditional disposal methods.

Over the past several months, we've secured several field projects supporting PFAS remediation at regional airports, and continue to see additional airport-related opportunities currently moving through procurement processes. More broadly, we're continuing to develop strategic relationships with companies involved in PFAS remediation and AFFF removal as we work to expand the deployment of our technology across both government and commercial markets.

Taken together, we believe these developments position our PFAS platform to support increasing demand for cost-effective, permanent destruction solutions as remediation activities continue to expand. In our Services segment, revenue declined during the year primarily due to the timing of project mobilizations and procurement cycles, including delays earlier in the year associated with the transition to the new administration and related policy adjustments.

The partial federal government shutdown in October also impacted procurement for timing of government-related customers. In addition, we've seen the normal seasonal timing efforts of weather and delayed project mobilizations during the first quarter.

Importantly, our Services business remains project-based and therefore quarterly activity levels can vary depending on project timing and scopes. Nevertheless, we continue to see opportunities in this segment tied to nuclear services, decommissioning work, and government remediation programs, and we believe the progress we've made during the year positions us well as activity levels increase.

In fact, I'm pleased to report we've won over $30 million in new services backlog and submitted over $40 million in new bids just during Q1. We look forward to providing further updates on our bid pipeline in the future.

Finally, I want to highlight what we believe is one of the most significant long-term opportunities in front of the company. In December, the Hanford tank contractor issued an RFP tied to the Tri-Party Agreement to retrieve 22 tanks over approximately the next 12 years for commercial grouting and off-site disposition of the waste as part of a long-term remediation effort tied to the retrieval and stabilization of tank waste at the Hanford site.

The RFP estimated that this contract will begin in January 2028 for a volume of tank waste up to 50 million gallons to be grouted at commercial facilities. Perma-Fix Northwest is exceptionally well-positioned for this opportunity given its location within a mile of the Hanford site, its current permitting profile, and its expanding processing capability currently available.

While this opportunity is not expected to begin until later in the development cycle, we believe it underscores the scale of the long-term duration of Hanford-related work and is now taking shape, and the strategic advantage Perma-Fix can provide and is recognized by DOE. When we step back and we look at the broader picture, we see the recent delays in DFLAW effluent receipts from hot commissioning activities as relatively modest in relation to the size of the opportunities in front of us.

Between the DFLAW ramp, additional Hanford-related waste streams, the grouting program now in development for up to 200 million gallons of waste to be treated, expanding international work, a growing treatment backlog, and advancing PFAS and remediation opportunities, we believe the opportunity for Perma-Fix to deliver meaningful growth and improved profitability beginning in the second quarter and continuing into the coming years has never been stronger. Thank you, and I'll now turn the call over to Ben for the financial discussion.

Thank you, Mark. Beginning with revenue, our total revenue from the continuing operations in the fourth quarter was $15.7 million compared to last year's fourth quarter of $14.7, an increase of $1 million or 6.9%.

Our Treatment segment revenue increased by $2.6 million, while Services segment was down $1.6. In the Treatment segment, the increase was the result of higher volume offset by lower average price, which was the result of a change in waste mix.

The reduction to Services segment revenue was due to lower startup of new projects to replace completed projects from prior year. For the year ended 2025, our revenue was $61.7 million compared to $59.1 million in 2024, an increase of $2.6 million or 4.3%.

In the Treatment segment, revenue was up $10.1 million, while the Services segment dropped by $7.6 million. As with the quarter, the Treatment segment benefited from increased volume, and it also had higher average pricing related to waste mix.

The Services segment continued to feel the effects of reduced project work related to timing of project startups and awards. Turning to our gross profit, for the fourth quarter, gross profit was $1.2 million compared to $594,000 in Q4 2024.

Gross profit in the Treatment segment increased by $983,000 as a result of increased revenue offset by higher labor and maintenance expense. Services segment gross profit was below prior year by $365,000 due to lower revenue and lower margin projects.

However, that was offset partially by reduced fixed overhead costs. For the year ended 2025, gross profit was up by $6 million.

Most of the improvement came from the Treatment segment where higher revenue and improved margins were partially offset by the increase in fixed costs at plants. Gross profit from the Services segment was relatively flat as the impact of lower revenue was offset by drops in both variable expenses and drops in fixed overhead.

Our total SG&A costs for the fourth quarter were $4.2 million compared to $3.9 million in the fourth quarter last year, while SG&A for the full year was $16.4 million compared to in 2025 compared to $14.4 million in 2024. Our SG&A expenses in the quarter were up from higher marketing costs related to payroll and trade shows, while administrative expenses increased due to payroll and legal expenses.

Our SG&A costs for the fiscal year 2025 were up by $1.9 million from higher payroll expenses in both marketing and admin, as well as higher trade show and legal expenses. Our net loss for the quarter was $5.7 million compared to last year's net loss of $3.5 million.

Note that the current year results include an adjustment to one of the company's discontinued operations of $2.7 million related to a long-term remediation cleanup. For the year ended 2020—December 2025, net loss was $13.8 million compared to a net loss of $20 in the prior year.

Again, our net loss for 2025 included the $2.7 million recorded in a remediation reserve for our discontinued operations, as previously discussed. Note also that in 2024, our net loss included approximately $8.2 million of income tax expense remained related to the full valuation allowance established on our US tax deferred tax assets.

Our basic and diluted net loss per share for the quarter was 31 cents compared to a loss per share of 22 in the prior year. This includes the impact of 15 cents per share from the adjustment to the remediation reserve within our discontinued operations.

Loss per share for the year ended December 31 was 75 cents per share compared to a loss per share of $1.33 per share in 2024. EBITDA from continuing operations, as we described in this morning's press release, was a loss of $2.7 million compared to a loss of $3 million last year.

For the year ended 2025, EBITDA was a loss of $9.7 million compared to a loss of $13.8 million in 2024. Turning to balance sheet, in comparison to 2024, cash on the balance sheet was $11.8 million compared to $29 million in the year ended 2024.

Unbilled receivables were higher in '25 compared to '24 by $3.8 million, primarily due to the timing of waste shipments in the Treatment segment. Our net property and equipment was up $3.5 million, primarily from capital spending, which included the construction of our PFAS reactors.

Intangible and other assets were up $1.4 million from interest earned on the finite risk sinking fund, as well as increase to permits and joint venture investments. Our waste treatment backlog for the year end was $11.9 million compared to $7.9 million in the prior year.

Long-term liabilities related to discontinued ops were up $2.7 million, again due to the increase in the remediation liability at one of our disc ops facilities. Total debt at quarter end was $2 million, excluding debt issuance costs, which is mostly owed to PNC Bank.

Finally, I'll summarize our cash flow activity. Cash used by continuing operations was $10.3 million.

Cash used by discontinued operations, $441,000. Cash used for investing of continuing operations was $4.9 million, primarily for capex spending and permits.

Cash used for investing of discontinued ops was $54,000. Cash used for financing was $981,000, representing monthly payments to our term and capital loans of $631,000, payments related to finance lease and other debt of $327,000, the payment of offering costs from last year's equity raise of $195,000, and offset by net proceeds from option exercises of $172,000.

With that, operator, I'll now turn the call over for questions.

Thank you. I just have a couple of quick questions.

You started talking about Q2 and the performance. Can you give us a better sense of what you're referring to?

Sure. Good morning, Howard.

We have a lot of confidence in Q2, Howard, based on a couple things. One is, as it's really been about 2.5 years since our Services group has really established a strong backlog of projects.

For numerous different reasons, a lot of it was just a cyclical thing with changing of contractors at the prime levels and and other market conditions. That's really changed significantly in the last several months, and we're excited about where the Service group is going.

First, we've just received a new contract award for a demolition project for a radiological facility at a national lab. We hope to be announcing that in details, some details on that, in the next a few days.

We've also mobilized three new projects into the field in the last two weeks that will generate waste that will will receive and process, and those are projects that have better margins than most. We've also got pretty significant backlog of—or I should say pipeline of of opportunities we've submitted bids on with that are squarely within our our core competencies for radiological facility demolition and remediation, as well as decontamination.

Those look really good for the summer, and it puts Services in a back in a position of of carrying more weight than it has, and will that typically bolsters our our treatment shop as well. Along with that, we're also the other component toward why we believe Q2 will be better is related to Northwest.

Just a little more detail on Northwest: we there's a there's a a project up there that includes taking all the surface water waste that that Hanford accumulates in settling ponds on site, and they evaporate that and make a brine out of it, and they send us the brine. That that program will start up—is planned to start April 1st, and we'll start receiving waste a few days after that.

That's about a $1.5 million or so a month revenue stream that's that's very important to us, and that will will go for an extended period of time. It's very sustainable waste stream as runoff and from rainfall as well as from groundwater treatment activities and those types of things all comes to us, and we submit we treat it and send it back.

Secondly, DFLAW, as a as I briefly mentioned, and it's somewhat complicated, but bottom line is that they're in hot commissioning now, and they're running some they're still running waste through the facility in smaller quantities, not at a sustainable level, but they do generate blow—what they call blowdown water. That's the water they use to in the scrubber systems to address their effluent requirements.

That waste was going to be pumped back into into DFLAW and make glass out of it. In a press release a couple weeks ago, about a month ago, DOE said, "You know, instead of us making glass out of that blowdown water, why don't we treat it and then we can do more tank waste?"

20% more. They worked with us, and they're going to be shipping us that waste here as soon as the supplemental analysis gets through the public comment period, which is mid late April, and then we should start seeing that sometime in May.

That should also be an additional waste stream from DFLAW along with some dry waste from processing. Lastly, the TRU waste program, as I mentioned, has doubled in size.

Going from one shift to two shifts, that's added about $750,000 to a million a month as well. All of it together along with the the $2 million I mentioned is going to be bumped from Q1 to Q2 due to rev revenue recognition rules.

April looks like a great month, and the Q2 altogether and and Q3 look like a very sustainable return back to profitability based on what we're seeing right now. We're excited about Q2, Howard.

Going back to grouting, it seems that the 200 East Area where the waste treatment plant is, they had a plan to grout the waste in the 200 West Area. Can you comment about that?

It's important to understand there's two different components to the Hanford site. The West Area is where DFLAW does not have infrastructure included.

It's a good distance from the actual DFLAW plant. DOE's determined that they're going to basically commercially grout all the tanks out there.

Under the Trump administration, they're being very aggressive about it. That's what the large RFP I mentioned in my script is all about.

That's basically a $4 billion estimated value. There's a lot of flexibility in that.

In other words, they may use other contract vehicles, they may make multiple awards, but the bottom line is they're set up to really begin high-volume grouting at about the 3 to 4 million gallon a year range, but that is expandable beyond that in the next 2 to 4 years. We're in a great position for that being the only facility local, and I'm sure they'll want backups to us, or maybe supplementals to us.

That's remains to be awarded here sometime in the third quarter. In parallel with that, the East side where DFLAW is, DOE's been somewhat vocal that instead of all the waste going to DFLAW that's currently being pumped into staging tanks to go to DFLAW, they can start grouting some of that waste.

In other words, they have a million gallons of storage for DFLAW, while that's sitting there, they could be pumping it out for grouting as well as pumping into DFLAW. There's an opportunity for supplemental grouting to occur, and we're in a real good position for that as well.

That's something they're looking at doing in the third quarter or fourth quarter if they get through the regulatory hurdles they're planning to. Both those components could start impacting us in the next 12 months, and certainly in the next couple years, but presents a very significant backlog opportunity for the company.

Last question. I want to address PFAS.

In terms of volume and capacity, where are we headed?

The new system's been delayed a couple months due to supply chain issues, which we seem to be facing all the time. Everything's on site now.

We're going through the installation process. We've poured concrete, things things are rolling, we're we're really on track for late April, early May to start testing.

As once that new system comes on online, we'll be basically in a in a position to do about 3,000 gallons a day. Backlog has been pretty good.

It's the Gen 1 system. We made some improvements through the last quarter, two quarters really, where we are able to start recycling our our chemistry, and that allows us to lower our rates.

As I mentioned before, our target is really to undercut incineration. We can do PFAS treatment cheaper than incinerators can, and that's been kind of the shift in industry to total destruction.

That's kind of our competition. Our our sales focus is squarely right now on making sure we're we're getting as much incineration competitor waste as we possibly can.

It's going real well, and again, we continue to do a lot of partnering on that. We believe once we get the capacity up to 3,000 gallons a day, a total capacity with the new system and the old system as well, that we'll be able to get even greater backlog because we can store more and and commit to to higher throughput.

That's really where we're going. We're still doing some R&D on the smaller components, smaller systems to be field-deployed, but right now we're really focused on on the new system and getting it operationally ready and rolling.

Mark, thank you. Best.

Thanks, Howard.

Good morning, Mark, Ben, and Lou. Thanks for taking the questions.

Maybe first on DFLAW, can you just kind of speak to the visibility into that waste stream starting? You mentioned some solids in April and liquids in May, and it sounds like still expecting that $3 to $6 million a quarter as that ramps.

Maybe just kind of walk through that timeline as well.

Sure, Aaron. It's been difficult.

DOE has not been real public on the operations of DFLAW overall other than it's operating. It's difficult to understand how much waste is going in, what the issues are they're dealing with to get to an operational phase.

In other words, getting through their punch list to make sure everything is working at capacity. It's difficult to project it, but we do know that blowdown water, the EMF water I mentioned, should be as soon as this supplemental analysis is done to change the direction where it was originally intended on going, we should start to see that at about 10,000 gallons a month, and ramp to four times that as the operations gets underway.

That's an important waste stream for us. That's a big portion of the overall DFLAW waste generation itself, not all of it, probably not even half of it.

There's a lot of other wastes that are being generated that are basically being stored at the Bechtel facility that we expect to start receiving in April. We don't have a lot of clarity on that at this point, Aaron, in regards to the volumes and that type of thing, what the overall impact will be.

We know between the two that we should be, as I mentioned, in the million, million two, or million to $2 million a month here, particularly by mid-quarter of Q2. The clarity on that I think will increase as they get through some of these punch list items.

DOE is totally dedicated to getting this facility up and running as fast as safely possible, and so it's difficult to really nail down schedules on when the waste will really begin to flow like we anticipate it will.

Understood. Thanks.

Then maybe on international volumes, you kind of highlighted growth there in 2025. Just how are you thinking about the opportunities there as we look to 2026 and beyond?

We just won some work, Aaron, from Canada again to do some liquid treatment, and at our Florida facility, as well as DSSI facility here in Oak Ridge. That's going to be pretty good backlog.

That will begin here mid-April and run pretty much through the summer, and could go longer than that. We've also got several other projects for different clients throughout Canada that would be likely to begin in Q3.

The Mexico waste we did last year, there'll be another tranche of that out for bid here. It's already been out for bid.

That won't likely get rolling probably until Q3 or Q4. We continue to get strong waste from Germany, and that also is expected to be sustainable here through the latter part of the year.

Then our JRC project is going very well in Italy. Unfortunately, even though it's ahead of schedule actually, the remediation processes for pulling the drums out of the ground, that'll start here in April.

All the permits are done, all the paperwork's done, now it's actually fieldwork. That's not our scope, that's another company, another contract.

Our scope will be to characterize those drums as they come out, and that won't start until Q3, and we won't start seeing any of that waste probably until Q1 of '27. To answer your question, we probably won't see the same revenue levels as last year, but they'll be close, but probably 25, 30% less than we saw last year with it ramping up in Q4 and to have a stronger '27 of international waste.

All right. Thanks for that.

Then on the permit, expanding the capacity, with everything going on at Hanford, just maybe talk about, you've made investments, but just how you're preparing to handle all the volumes there?

Aaron. We just submitted our proposal on that a few weeks ago, and we've been pretty vocal about what our capacity expectations are.

Right now, as I mentioned, we can do 1.2 million gallons a year of liquids, and what we're proposing to DOE is that we will be submitting a permit mod to that permit here in the next few weeks. That permit mod will include ramping that up to an additional 3 million gallons on top of that.

In other words, a total of 4.2 million gallons total capacity for liquid treatment. That'll cover all the waste streams we're talking about plus the 3 to 4 million in grouting for the tanks.

That permit mod is expected to take 6 to 6 to 9 months to get through the system, and we will be beginning to install or modify our facility to support that as well with investments here beginning in the second half of the year to get to that level. The big deal about that permit renewal, there's a lot of things that are important to it, but the one that's probably most important, since it's approved, now we can do permit mods.

While they were reviewing that renewal application, for the last 16 years, we couldn't do mods to it because they kept saying, "If you want to do a mod, we're going to stall on your or put your renewal down and pick up your mods, you won't get your renewal." Now that we have a renewal, we can do mods, and they'll be quicker and more efficient because they're not that complicated, and allows us to be flexible on these things and to implement some new technologies, expand our current capacities and those kinds of things.

We really feel like being at a capacity of 4.2 million gallons a year, based on the fact that the new administration is looking at such a large volume of waste, that we should be able to get pretty much full capacity in the future. I don't know when that'll be.

A lot of it depends on how fast they can get it out of the tanks, but our capacity is not going to be the critical path, and we'll be very aggressive on what we can produce and what we can treat based on our capability.

Thanks for that. Then just maybe one last one on the balance sheet.

Can you kind of talk about cash flow expectations? Sounds like there's some receivables at year-end, and then just how you're thinking about capex and investments in '26?

You kind of talked about some maybe in the back half. Thanks for taking the questions.

Hey, Aaron. The balance sheet, we still have a number of capital initiatives to support the increased productivity expected.

Our working capital remains in good shape. We don't normally comment on any kind of cash raises at this time.

Right now, we're comfortable with our balance sheet at 12/31, and we will evaluate that as the opportunities and the capital needs come about.

All right. Thanks.

I'll turn it over.

Thank you. Just to get back to PFAS, the original unit is operating commercially and treating waste streams currently while you build the second unit?

That's

correct, Walter. It does about 650 gallons a day, and it's running about 4 days a week consistently.

There's some downtime associated with it, so that average is around 4 4 days a week. Again, we've taken what we've learned from that system and the engineering issues with that, and perfected it for the next system so that the next system will be even more efficient in operations.

Yes, it does about 650 gallons a day.

As a range, not a specific number, for your ability to eliminate those PFAS chemicals, pricing is roughly where per gallon?

It depends on volume, but if we get a big volume, we typically discount. It also depends on the characteristics of the PFAS concentrations and those types of things.

To give you a range, for bigger totes, we can do between $11 and $15 a gallon. For smaller quantities like a drum or buckets, a lot of that AFFF comes in smaller quantities, it can be above $30 a gallon.

It just depends on the quantities we're getting. As we get to the larger volumes that we can handle with the new system, we'll be pushing for larger volumes to receive, we don't have to handle as much.

Just to kind of give you a range, Walter, $10 to $15 a gallon is a pretty good range for higher volumes.

On higher volumes with that price range, a range for some sort of operating profit margin?

We try to design our system from the very beginning to stay in alignment with our other waste treatment margins, which incrementally, our target is 60 to 70% incremental margins on average. Some may be more, some may be less depending on a lot of different factors, but it's generally, Walter, in line with our treatment margins across the company.

My last question, the second unit to get you up to 3,000 gallons, the capex to build that was roughly what, or is roughly what since it's not up yet?

It's correct me if I'm wrong, Ben, the $5 million for the $4 to $5 million range, yeah.

Okay. Thank you.

Thank you, Walter.

Okay. Thank you, Jenny.

Overall, we believe that Perma-Fix is entering a period where the strategic investments we've made over the past several years are beginning to translate into meaningful growth opportunities. We've significantly expanded our treatment capacity at our Perma-Fix Northwest facility, strengthened our operational infrastructure, increased our treatment backlog, and expanded our international project activity.

At the same time, we continue to advance our additional opportunities across government and commercial markets, including projects related to nuclear remediation, weapons production and waste treatment, international waste streams, and emerging PFAS destruction solutions. Importantly, the transition of the DFLAW system into its operational phase along with several additional Hanford-related waste streams and long-term remediation initiatives currently under development represent meaningful catalysts for increased activity at our Northwest facility.

While the timing of certain waste receipts and project mobilizations may create some variability in near-term quarterly results, we believe the second quarter should mark the beginning of a broader ramp in activity as additional waste streams begin moving through the Hanford cleanup system, and new project work begins contributing to the revenue. As activity levels increase and we utilize more of this expanded treatment capacity, we believe higher throughput across our facilities should allow us to better absorb fixed operating costs and achieve meaningful margin improvement.

When we consider the combined impact of the DFLAW ramp, additional Hanford cleanup programs, the tank retrieval and grouting initiatives currently under development, expanding international opportunities, and the continued advancement of our PFAS technology, we believe the long-term opportunity for Perma-Fix has never been stronger. With that, operator, thank you.