Birchtech Corp.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Birch Tech's first quarter 2026 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions for dial-in participants. This conference is being recorded today, Wednesday, May 13, 2026. and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Birch Tech's President and CEO, Richard McPherson, and CFO, Michael Mioska. Before we get started, I'll read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements that are made pursuant to the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 or forward-looking information under applicable Canadian securities laws regarding Merch Tech. Forward-looking statements include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings, activities, events, or conditions. These statements are based on current expectations, estimates, and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted. in the forward-looking statements due to numerous factors discussed from time to time in BERTCHTEC's periodic filings with the U.S. Securities and Exchange Commission or Canadian securities regulators. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control that may cause actual results to differ materially from those in the forward-looking statements. During today's call, the company will discuss adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is presented as a supplemental measure of the company's performance and exclusive of certain items that the company believes do not reflect the core operation of the company. Such non-GAAP measures should not be considered in isolation or as a substitute for GAAP financial information. Additionally, the company's definition of these measures may differ from those used by other companies, making comparisons across organizations difficult. And finally, this conference call contains time sensitive information that reflects management's best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information, or circumstances that arise after the date of this conference call. At this time, I'd like to turn the call over to President and CEO, Richard McPherson. Richard, the floor is yours.

Thank you, operator, and good afternoon, everyone. Welcome to our first quarter, 2026 Financial Results Conference Call. I want to start with a few milestones that reshaped the company's trajectory during the first quarter. In February 2026, we completed our uplisting to the New York Stock Exchange American with a concurrent public offering raising aggregate gross proceeds of approximately $16.4 million, including the partial exercise of the underwriter's over-allotment option. That capital raise, combined with a senior exchange listing, materially strengthened our balance sheet and broadened our investor base at a critical time in Birch Tech's growth. Now, on the legal front, during the first quarter, we advanced enforcement of our approximate 78 million final patent infringement judgment entered by the U.S. District Court for the District of Delaware in December of 2025. On February 2nd, 2026, following the lapse of the 30-day automatic stay, we submitted a formal payment request to the cert defendants. Post-judgment interest continues to accrue until the judgment is paid. The defendants filed a notice of appeal but have not posted a bond, and we are actively pursuing our enforcement options, including discovery of assets, seizures, liens, garnishments, and clawbacks if necessary. Since launching our OIP enforcement strategy in 2019, approximately $37 million in license fees and settlements have been received, and we have the potential to convert other prior infringers to long-term commercial partners. Now turning to operations, our business delivered first quarter revenues of approximately 4.2 million with an approximate 33% gross margin driven by our expanding base of licensed utilities and growing product supply relationships. The U.S. coal market has stabilized and recent federal support for continued coal plant operation reinforces demand for proven emissions control solutions like our patented SEA platform. We believe this creates a longer operational runway for our core air quality business. Now, allow me to provide additional color on our air business. Our SEA platform remains the legacy cornerstone of the company, and the quarter's results underscore the resilience of that franchise. What is evolving is the character of the revenue itself. As incumbent supply arrangements conclude for utilities already licensed under Birchdeck's agreements, Our focus turns to converting them to ongoing product supply customers as they adopt our formulations into their day-to-day operations and realize the benefits of our applied expertise. First quarter air revenues total approximately $3.5 million, mostly derived from product supply. Importantly, we continue to see a change in how utilities engage with us, with our goal being that licensees that began as enforcement targets can now transition to purchasing activated carbon directly. And we expect the pipeline of supply conversions to continue growing as power demand increases in the coming years. That transition from legal resolution to commercial partnership was our core objective in our business-first approach to patent enforcement efforts that we began over six years ago. Now, across the past 12 months, we've executed a series of additional license agreements moving us ever closer to a critical mass of licensed coal-fired utilities. Every new agreement reaffirms the distinctiveness of our SEA process. As licensees fold our sorbent formulations into their day-to-day operations, we anticipate activated carbon sales comprising a progressively larger share of total revenue and a mixed shift that will translate into meaningful year-over-year growth. As referenced earlier, the $78 million final judgment is the payoff of a multi-year patent enforcement campaign. While the defendants have filed an appeal, we remain confident in the ruling strength and in the rigorous judicial review supporting it. Enforcement and collection activity is now underway in earnest. On the macro side of our air business, U.S. coal-fired generation is holding steady with an energy mix that increasingly prioritizes grid reliability and domestic fuel security. Federal policy continues to favor extending the useful life of coal plants, which in turn underpins ongoing demand for mercury emissions control. Globally recognized as the most effective solution available for capturing mercury emissions, our SEA technology positions us as an indispensable partner for utilities committed to operating cleaner baseload power. Given that the U.S. mercury emissions per unit of coal-fired generation are the lowest in the world, we take pride in our role in America's clean coal story, and we intend to continue filling that role for as long as coal-fired power remains on the grid. Now, for 2026, the Air Division's roadmap centers on three objectives. We'll continue transitioning unlicensed users of our technology into licensees and long-term supply customers while vigilantly defending our patent portfolio. We'll expand reoccurring activated carbon sales across our growing roster of licensed utilities and redeploy the cash flow generated by this mature high-margin segment into the scale-up of our water business. Put simply, The air segment functions as a self-funding growth engine, producing both the capital and the market credibility that enable us to invest aggressively in water while continuing to deliver value to shareholders. Speaking of water, let me turn now to the water, where momentum continued to build during the first quarter. We moved from laboratory validation into real commercial activity over the prior year. And during Q1, we expanded that activity materially, booking additional revenue, adding new projects, and launching a new product line. Our national footprint was further extended through our collaboration with civil and environmental consultants. A national engineering firm operating more than 30 offices with approximately 1,600 professionals on staff. Under that arrangement, rapid small-scale column testing is performed at our Analytical Design Center in Grand Forks, North Dakota. making our testing and analytical capabilities available to the hundreds of water utility clients CEC serves across the country. That single relationship effectively creates a downstream pipeline of future system design and media supply engagements without Verge Tech having to stand up a dedicated nationwide sales force. We're working to replicate this approach by establishing collaborative relationships with other leading environmental consultants and engineering firms across the country. And by way of background, RSSCT reproduces the performance of a full-scale filter on a compressed timeline, giving utilities a fast and cost-effective means of evaluating alternative carbon media options and PFAS removal strategies. There are very few independent RSSCT labs currently operating in the United States, yet the market need for this more pilot-scale test is massive to ensure appropriate media selection for containment removal. Our key differentiators among the handful of labs offering RSSCT is test timing and expert analysis. Our analytical design center completes RSSCTs much faster than the others, due to our continuous sampling technology. More importantly, our unique experience in activated carbons, coupled with Dr. Nicholas Lentz's keen expertise in PFAS removal, allows for thorough expert analysis of RSSCT results that produce highly accurate media recommendations for utilities. In contrast to other labs, our expert analysis and collaborative approach with utilities and engineering firms allows for a more affordable contaminant removal solution. We look forward to gaining traction across the water industry with this new innovative design center and data-driven methodology. From our partner design centers focused on analytics and carbon development, in January of this year, we demonstrated that thoroughly rejuvenated granular activated carbon performs comparably to virgin carbon for PFAS removal. a breakthrough for our carbon rejuvenation program that could dramatically lower lifecycle costs for utilities. Turning to March of 2026, we launched our SEAIX nuclear-grade ion exchange rosin product line, targeting an estimate $220 million addressable market, spending nuclear power, coal-fired utilities, and municipal water treatment. We're off to a very strong start, We've already received approximately a million in purchase orders to date, including 0.4 million order received in March of this year from a large coal-fired power plant with supply underway. BirchTAC's water platform now covers a broad range of media supply and related services, while our design centers, RSSCT testing and analysis, along with the carbon rejuvenation together form a comprehensive offering that did not exist 12 months ago. Our approach to the market is completely different than that of our competitors. We have worked closely with engineering firms such as CEC and others alongside utilities to fully integrate the procurement of appropriate equipment, media, and other ancillary services. This collaborative approach will provide water utilities with an affordable, highly effective clean water solution. and will secure Verge Tech's strong market position as we continue to build customers and strategic relationships. Our design centers remain the cornerstone of our data-first entry into water treatment, and the pipeline of lab-scale engagements with utilities and engineering firms continues to expand. We are leading bench and pilot-scale testing of thermal GAC reactivation in a grant-funded research project with a leading national engineering firm focused on PFAS-laden drinking water residuals and have recently completed the opening phase of a multi-phase program with a second major engineering firm and a large utility centered on carbon reactivation and multi-contaminant media selection. In parallel, we are running water analysis, spent carbon evaluations, and RSSCT testing for a range of additional utilities. Each of these engagements lays the groundwork for substantial reactivation partnerships and feeds directly into our water treatment services funnel. Now the story from here is conversion and scale. Turning these early engagements into reoccurring service and product revenues, advancing the build out of our first dedicated GAC rejuvenation facility, and continuing to broaden our water pipeline. With PFAS regulatory pressure intensifying and utilities actively shopping for cost-effective answers, Burschach is well-positioned to meet that demand with a complete set of water purification technologies that complement our established air business and open a second substantial revenue stream. Before we proceed in handing the call off, I'd like to introduce our new CFO, Michael Mioska. who joined us full-time last week. Mike is a chartered professional accountant with over 20 years of accounting, audit, M&A, and financial reporting experience across the US and Canada, and has worked closely with the Birch Tech Finance Function as an independent consultant since 2023. That deep familiarity with our business has enabled an exceptionally smooth transition, and he brings the technical expertise Capital markets and especially the M&A discipline and reporting experience needed to support our next phase of growth. I'd like also to take this time to thank Fiona Fitzmaurice for her dedicated service as our fractional CFO, including her contributions through our uplift to the New York Stock Exchange American. And with that, I'd now like to turn the call over to Mike to walk through some key financial details from the first quarter of 2026. Mike?

Thank you, Rick, and good afternoon, everyone. It is my pleasure to join my first Birch Tech earnings call as CFO. I will constrain my section to a concise review of the financial results for the first quarter of 2026. For a full breakdown of our financial results, please view our regulatory filings. In Q1 of 2026, revenues increased 32% to 4.2 million as compared to 3.2 million in the same year ago quarter. The increase in revenues from the prior period was primarily due to growth in the water treatment area along with increased revenue from our air business. This growth was partially offset by a decrease in licensing revenue as the company had entered into a licensing agreement in the first quarter of 2025 with a one-time upfront license fee for which there was no comparable revenues in the first quarter of 2026. Gross profit totaled $1.4 million as compared to $1.2 million in the same year-ago quarter. The increase in gross margin was primarily attributable to the increase in revenue partially offset by the decrease in high margin licensing revenue. Selling, general, and administrative expenses decreased to $2 million in the first quarter of 2026 as compared to $2.2 million in the same year-ago quarter. The decrease in expenses was primarily due to lower legal fees in the period. R&D expenses totaled $0.6 million in the first quarter of 2026 as compared to $0.4 million in the same year-ago quarter. R&D expenses relate to research conducted to develop water treatment products utilizing new sorbent technologies. Net loss for the first quarter of 2026 totaled $1.3 million, or $0.06 per basic and diluted share, as compared to $1.7 million, or $0.09 per basic and diluted share in the comparative period. Adjusted EBITDA loss, a non-GAAP measure, totaled $1 million in the first quarter of 2026, compared to $1.2 million for the first quarter of 2025. Cash as of March 31, 2026, totaled $14.7 million with no debt as compared to $2.2 million as of December 31st, 2025. The increase in cash reflects the $16.4 million capital raise completed in February 2026 concurrent with the company's up listing to the NYSE American. This completes my prepared comments. Now before we begin our question and answer session, I'd like to turn the call back to Rick for some closing remarks. Rick?