CitroTech Inc.

Greetings, and welcome to the Citroën Tech first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brett Moss of Hayden IR. Thank you, sir. You may begin.

Thank you, operator. The call today will be hosted by Wes Bolson, Chief Executive Officer. We will direct all questions to be sent to CITR at HaydenIR.com and answered following this call. We appreciate the opportunity to review the first quarter financial results and recent business highlights. Before we get started, let me remind you this call is being recorded in webcast. During this call, management may make forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings released early today, Friday, May 15th, which applies to the content of the call. I'd like to now turn the call over to Wes Bolson, CEO. Wes, please go ahead.

Thank you, Brett. Good morning, everyone, and thank you for joining Citra Tech's first quarterly earnings call as a NYSE American-listed company. This is an important moment for Citra Tech and a critical time in the markets we serve. Wildfire prevention, infrastructure resilience, and environmentally safer chemistry solutions are no longer emerging themes. They're becoming national and global priorities. Governments, utilities, builders, insurers, and land managers are converging on a shared requirement for solutions that are not only effective, but also environmentally sustainable, scalable, and economically viable. Citratech sits at the intersection of these needs. Our mission is straightforward. We're commercializing environmentally safer chemistry solutions that protect people, infrastructure, forest, utilities, and building materials from fire risk while reducing the environmental liabilities associated with legacy phosphate and borate-based solutions. At a practical level, Citratech delivers this through a platform of fire protection technologies that's chemistry-driven, environmentally safe, scalable, and designed to perform across multiple environments. We're in the early stages of commercialization, transitioning from technology validation into real-world deployment. Over the past several quarters, we've moved from proving the science and securing certifications to building the operational manufacturing and commercial foundation required to scale. That includes developing repeatable use cases across wildfire prevention, advancing manufacturing readiness for industrial applications, and establishing early customer relationships across government, infrastructure, and private sector channels. While we remain early in the revenue ramp, this quarter reflects a meaningful transition in the composition of our business from primarily development stage activities towards initial commercial execution and structured customer engagement. We expect this progression to continue as we move through 2026. At quarter end, we held cash and cash equivalents of 4.3 million, providing us with a solid foundation to execute against our commercialization strategy. Our commercialization strategy is organized around three core pillars, manufactured wood products and lumber treatment, ground-based wildfire applications, and stationary defense systems. Each represents a large and growing market opportunity, unified by the same underlying chemistry platform, shared IP, manufacturing capabilities, and a common objective to deliver scalable, environmentally responsible fire protection solutions across multiple use cases. Let me walk through each pillar, focusing on the long-term market opportunity that is associated with each of these. Let me begin with manufactured wood products and lumber treatment, which we believe represent one of the most transformative long-term commercialization opportunities for Citratech. The construction and the building materials industries are increasingly confronting the realities of wildfire exposure, stricter building codes, rising insurance pressures, and growing demand for environmentally safer fire-resistant materials. At the same time, many existing fire-retardant treated wood solutions rely on borate-based chemistries and pressure treating that can negatively impact wood strength, structural integrity, or long-term performance. Citratech is approaching this differently. Our chemistry platform is designed to create class A fire rated lumber and engineered wood products without weakening the wood fibers or compromising structural performance. This goes beyond being simply a surface coating solution and becomes a product that can soak into the cellulosic fibers of wood products. This opens up possibilities for products like OSB board, plywood, and mass timber to now be produced with fire resiliency built in. The protected chemistry platform is recognized under the EPA's Safer Choice Program and designated to meet stringent environmental and human safety concerns. It penetrates the structure of the material itself, changing combustion behavior throughout the wood rather than just having a coating or something on the surface. That distinction matters significantly for builders, architects, contractors, engineered wood manufacturers, and insurers. In early 2026, we began working with lumber and building material companies to utilize Citratech formulations in the manufacturing of Class A fire rated lumber and building materials. Commercial engagement is growing from OSB board manufacturers, engineered wood producers that are interested in integrating Citratech directly into the production process. Citratech formulations can be applied during manufacturing, included directly into wood strands and veneers, used in panel production, enabling fire protection to become embedded within the product itself. In April, we announced the formation of Hexatech LLC, our joint venture with Hexion. The joint venture aims to rapidly accelerate the sales of Citrotech into some of the largest wood product companies globally. The formation of Hexatech validates both our chemistry platform and the strength of our intellectual property portfolio. Hexion is a globally recognized leader in specialty resins and engineered wood technologies, and their partnership provides substantial industrial credibility and commercialization capability. In the 50-50 JV, CitraTech brings world-leading IP, and Hexion brings all the manufacturing, sales, distribution, and customer relationships. Hexion is owned by American Securities and has a tremendous leadership team in place to deliver on this venture, with both companies being all in. Michael Leffenfeld, the CEO of Hexion, will be joining me on the three-member board of the Delaware LLC. And even in the first few weeks since its formation, we are highly impressed with the engagement of the entire Hexion team. Together, we believe we can fundamentally change how fire-resistant wood products are manufactured. The opportunity in fire retardant treated wood has the potential to generate highly scalable recurring revenues as treated wood products move into broader residential, commercial, infrastructure, and mass timber applications. Near-tier opportunities include a portion of more than 1.2 billion square feet of OSB-related production annually. With additional adjacent expansion opportunities across siding, engineered wood, treated lumber, mass timber, When an end customer decides to adopt Citratech into their manufacturing process for fire retardant treated wood, it's not a $1 or $2 million a year sale, but it could be tens of millions of dollars at full commercial adoption. What I want to make sure the market understands is that Citratech would have been able to form a commercial relationship with a large and highly respected wood product company in the United States, but it might have involved some exclusivity. The joint venture with Hexion enables us to work with many of the largest wood products companies in the world now, all at the same time, given Hexion's global reach and capability. Our second pillar is ground-based retardant fire inhibitor applications. Historically, the wildfire industry has largely centered around reactive suppression, responding to fires after ignition, through aerial deployment of traditional red phosphate-based retardants. Citratech is approaching the market from a prevention-first perspective. Our goal is to deliver what we believe is the only long-term fire inhibitor specifically designed for repeated environmental applications supporting proactive ignition prevention and asset protection, not simply suppression. That distinction is becoming increasingly important. The fire community is recognizing that phosphate-based retardants, while potentially effective in suppression scenarios, are not ideal for repeated environmental deployment due to concerns around aquatic toxicity, heavy metals, long-term environmental impact. Citratech's non-phosphate chemistry was designed specifically to address those concerns. Our products are intended for repeated use in utility corridors, along roadsides and ingress and egress routes, railroad right of way, tribal lands, parks, commercial properties, critical infrastructure and residential areas where environmental stewardship matters just as much as fire protection. We believe this fundamentally changes the economics of wildfire management. Instead of relying solely on event driven suppression spending, Citratech is building toward predictable, recurring wildfire prevention revenues. That recurring prevention model is strategically important. Utilities, state and federal transportation agencies, counties, municipalities, tribal governments, and state and federal firefighting agencies increasingly want non-phosphate proactive mitigation programs, not simply emergency response after ignition. In the event of red flag warnings and pending public safety power shutoffs, utilities are now understanding that Citratech is the first and only EPA Safer Choice recognized solution to help prevent ignitions and protect utility, poles, other assets from an approaching wildfire. Utilities will start to make their own fire breaks by applying Citratech under their lines and around their poles. This can all be funded through their vegetation management, utility wildfire mitigation plans, and even dedicated safety and infrastructure protection teams. Citratech can be deployed through a wide range of methodologies, including existing fire equipment, agricultural sprayers through skid-mounted pickup and utility vehicles, hydroceeders along roadsides, and even new drone applications, given Citratech has a viscosity that is close to water. That flexibility dramatically expands our addressable market and supports scalable deployment across multiple customer segments. Recent fires reinforced the importance of ground-based prevention strategies in areas where aerial suppression alone may not be sufficient or practical. Aerial applications can only be initiated from sunrise to sunset, and when the winds are not blowing too much, which is the worst case scenario for a wildfire. Citratech can be applied through multiple ground-based partnerships, 24 hours a day, seven days a week, even in high wind scenarios to put environmentally safe fire breaks ahead of the fire. This was well demonstrated last fire season where Citratech was the only safe fire inhibitor that was applied around homeless encampments and along some roadsides in San Diego. we will expand the success of what we saw fire chiefs seeing in San Diego into other parts of California during the 2026 fire season. We're also seeing a meaningful shift among service providers historically using phosphate-based solutions. Many are now moving towards Citrotec for ground-based applications due to growing liability concerns associated with knowingly and repeatingly applying phosphate-based retardants around residential areas and critical infrastructure. What is especially encouraging is that we're now seeing meaningful real world adoption across California fire departments and related agencies. California and Citratex home state of Colorado are two of the largest and most environmentally sensitive wildfire locations in the US. Communities, metropolitan fire chiefs, utilities, municipalities are increasingly focused on prevention strategies. that are environmentally responsible and operationally scalable. We believe Citratech is emerging as a clear choice for those customers. Importantly, we already see California fire agencies progressing towards deployment of Citratech for wildfire prevention and protection applications while continuing to use the traditional red retardants primarily for active suppression scenarios. We believe those two markets can coexist. But prevention spending is where we see the largest long-term commercialization opportunity and where phosphates can no longer really be repeatedly applied. Another important development is the formation of the new Office of Wildland Firefighting and broader restructuring efforts around a unified federal wildfire response framework. We believe this modernization creates opportunities for innovation, competition, and new technologies to gain traction. Citratech has established strong relationships with the new Office of Wildland Firefighting, and we believe the market increasingly wants a credible, second public company to bring new technology and innovation into the wildfire prevention space. We're also seeing strong engagement with the Department of Interior ecosystem, including evaluations that involve tribal nations Under the Bureau of Indian Affairs, the communities have expressed significant interest in environmentally safer wildfire prevention technologies that avoid phosphate accumulation in soil and water systems. We believe not only the U.S. Department of Agriculture and CAL FIRE, but also the Department of Interior, is a substantial long-term commercialization opportunity for Citratech. We think the ground-based application opportunity could represent three to $500 million market opportunity in the United States when it's fully adopted where it should be. We think this could go across roadsides, utilities, federal and state corridors. We believe this is importantly a recurring revenue model though. Finally, the third pillar of what Citratech is bringing is around stationary systems. We call this our CitroSafe system, a proactive wildfire defense system designed for residential and commercial properties using self-contained perimeter protection systems integrated with Citratech chemistry solutions. We believe this addresses one of the fastest growing challenges in the wildfire ecosystem today, insurability. Insurance carriers are increasingly reducing coverage or exiting wildfire prone regions entirely. Property owners, communities, and commercial operators are now searching for practical risk mitigation solutions that can improve resiliency and potentially support insurance availability. Citrus Safe was designed specifically to address this challenge. Unlike traditional water-only systems, Citrus Safe uses our long-term fire inhibitor chemistry that remains active after water evaporation and is designed to function independently with dedicated tank systems during power outages and emergency conditions. We believe this creates a differentiated value proposition for homeowners, insurers, builders, HOAs, utilities, and commercial property operators that can't have a water-based system taking precious water away from our firefighting community during an event. Our ongoing proof of concept initiative with a major insurance broker demonstrates the broader opportunity to align wildfire mitigation technologies with insurance risk management strategies. We believe this creates the potential for scalable recurring adoption models extending well beyond just traditional fire agencies and their purchasing cycles. Importantly, it expands Citratech from a product company into a broader wildfire resilience platform. Our strategy is increasingly focused on top-down integration into new developments, commercial construction, HOA communities, insurance-driven deployment models. As outlined in our investor presentation, we're targeting some of the nation's largest home builders, custom builders, architects, HOA developments, home hardening partners. We believe this will lead to recurring Citratech chemical sales and reapplication revenues. What we're really building is a scalable commercialization platform. As we look across these three pillars, what becomes increasingly clear is Citratech is building far more than a single product wildfire company. We're building a scalable commercialization platform around environmentally safer fire protection chemistry. What is particularly important is that each pillar reinforces the others. Lumber protection validates manufacturing scalability. Ground-based deployments validate field performance. Stationary systems validate recurring property protection applications. And together, these initiatives expand market awareness, strengthen commercial relationships, create multiple pathways towards recurring revenue generation. You may have seen that Citrotech is also laying the groundwork for future products through our Citrotech textiles business, or Citrotex. This is based on a promising breakthrough polymer that allows for wash-durable retardant fabrics. The polymer IP was developed under the direction of Dr. Jamie Grunland of Texas A&N University. Dr. Grunland is truly one of the world's foremost polymer chemists. And through a small funded research program, Citratech is exploring opportunities for near-term commercialization of wash-durable fire-retardant fabrics. This platform could allow hospital workers, welders, firefighters and other heroes in the workforce to safely perform their jobs with the best and safest chemistry across a range of textiles. We believe this integrated model positions Citratech to participate across multiple segments of the fire protection and infrastructure resilience markets while leveraging a common technology platform and supply chain. Importantly, We believe we're now moving beyond early-stage validation and into the early stages of scaled commercialization. The long-term market drivers supporting our business have never been stronger. Wildfires are increasing in both frequency and severity. Population growth continues expanding in the wildland-urban interface. Utilities and municipalities are under growing pressure to harden infrastructure, and regulatory standards continue moving towards safer and more environmentally responsible fire protection solutions. We believe Citratech is uniquely positioned within this evolving landscape because our platform addresses multiple high growth segments simultaneously. We're not trying to create demand for a new problem. We're delivering solutions to problems that are already accelerating globally. And with validated technology, meaningful certifications, expanding intellectual property, growing commercial partnerships, and increasing market awareness, we believe Citratech is positioned to capture a meaningful share of this expanding market opportunity. At the parent level, Citratech saw some events announced in the last month. The first is a deep belief in our company by one of our largest investors, Bolt Rock Holdings. who's represented on our board by Mr. Craig Huff. Boltrock made the decision to convert their debt into common shares in April, given the significant upside they see for the company. We've now retired our corporate debt. Looking ahead, our priorities for 2026 are centered on execution, operational scale, and continued market adoption across each of our three growth pillars. As wildfire activity intensifies and commercial channels continue to expand, we expect revenue growth to accelerate alongside broader deployment of our technologies across wildfire prevention, lumber protection, and property defense applications. To support that growth, we anticipate raising some strategic and opportunistic funds for measured investments in manufacturing scale, sales infrastructure, supply chain development, and strategic partnerships, all designed to strengthen our ability to support larger commercial opportunities and long-term customer relationships. At the same time, innovation remains central to our strategy as we continue advancing next generation formulations and evaluating additional applications for our chemistry platform across adjacent industrial and infrastructure markets. While Q1 wildfire prevention activity began somewhat slower, than the extraordinary conditions experienced following the Eaton and Palisades fire last year, the broader market backdrop remains highly constructive. Wildfire risk continues expanding geographically, infrastructure hardening is becoming an increasingly urgent priority, and communities, utilities, and government agencies are continuing to shift toward proactive prevention and resiliency strategies. Those trends continue to support growing demand for environmentally responsible fire protection solutions. As a company, Citratech is approaching an important inflection point. Over the past several years, we've validated the science, secured meaningful certifications, expanded our intellectual property portfolio, and established early commercial traction across multiple end markets. We're now transitioning from technology validation into scaled commercialization and deployment as seen with the Hexion announcement. We're supported by growing industry engagement, expanding strategic relationships, and increasing market awareness. The future of wildfire management will increasingly shift from reactive suppression towards proactive prevention and infrastructure resiliency. Citratech is positioning itself to play a meaningful role in that transition. Thank you again for joining us this morning. I'll now turn the call back over to Brett Moss of Hayden IR to ask a few questions sent by investors. Brett.