Birchtech Corp.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Birch Tech 4th Quarter 2025 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, Tuesday, March 31, 2026, and the earnings press release accompanying this conference call was issued after market closed today. On our call today is Birch Tech President and CEO Richard McPherson and CFO Fiona Fitzmaurice. 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 Birch Tech. Forward-looking statements include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions, or 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 risk, 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 BERTCHECK'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 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 a company's performance and exclusive of certain items that the company believes do not reflect the core operations 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 arrive 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 fourth quarter and full year 2025 financial results conference call. I want to start with a few milestones that reshaped the company's trajectory over the past several months. In February of 2026, we completed our uplisting to the New York American Stock Exchange with a concurrent public offering, raising a gross amount of proceeds of approximately $16.6 million, including the partial exercise of the underwriter's overall allotment option. That capital raise, combined with a senior exchange listing, material strengthened our balance sheet and broadened our investor base at a critical time in Birch Tech's growth. Now, on the legal front, the U.S. District Court for the District of Delaware entered our patent infringement judgment in December of 2025, which increased our judgment amount to approximately $78 million, up from the original $57 million unanimous jury verdict. Post-judgment interest will continue to accrue until this judgment is paid. Although defendants have filed an appeal, they have not posted a bond. Therefore, we have initiated collection proceedings, are pursuing enforcement of our judgment now. Since launching our IP enforcement strategy in 2019, Approximately $37 million in license fees and settlements have been received, but we expect to invert other prior infringers into long-term commercial partners. Now, turning to operations, our business delivered fourth-quarter revenues of $3.8 million, with a 31% gross margin driven by our expanding base of license 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. And let me go deeper now into our air business. The SEA platform continues to anchor the company, and this quarter's results reflect the durability of that franchise. What has changed is the nature of the revenue. As existing supply contracts expire for those utilities now under Birch Tech's license agreements, we will actively work toward gaining their reoccurring product supply as utilities embed our sorbent formulations into the processes and directly benefit from our operational expertise and know-how. Fourth quarter air revenues totaled over $3 million, close to four, and mostly derived from product supply. Importantly, we expect to see a change in how utilities engage with us, with our goal being that licenses that began as enforcement targets can transition to purchasing activated carbon directly. And we expect the pipeline of supply conversions to continue to grow 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 patent enforcement efforts that began over six years ago. Now, over the past year, we've signed several new license agreements, bringing us closer to a critical mass of licensed coal-fired utilities. Each agreement not only validates the uniqueness of our RCA process, but extends revenue visibility to a multi-year procurement cycle. As licensees incorporate our solvent formulations into their ongoing operations, we expect activated carbon sales to become an increasingly significant portion of our revenue, a shift that should drive meaningful year-over-year growth. As I noted earlier, our $78 million final judgment represents the culmination of years of patent enforcement. The defendants have appealed. but we are confident in the strength of our ruling and the thorough judicial review behind it. Collection efforts, as I mentioned, are actively underway. Now, related to our business, U.S. coal power generation is holding steady within a diversified energy mix that values grid reliability as well as domestic fuel supply. Federal policy continues to support the operational longevity of coal-fired plants which in turn sustains demand for mercury emissions control. Our SEA technology remains the most effective solution globally recognized, and that positions us as an essential partner for utilities committed to running cleaner baseload power. With U.S. mercury emissions the lowest in the world relative to coal power generation, we're pleased to play a significant role in America's clean coal economy. and will continue to do so as long as coal power is produced. For 2026, the Air Division's roadmap centers on three objectives. Continue converting unlicensed users to our technology into licensees and long-term supply customers while protecting our patent. Second, grow reoccurring activated carbon sales to our expanding base of licensed utilities. And thirdly, channel the cash flow from this mature high margin segment into our scaling of our water purification business. Now taken together, the Air Division is a self-funded growth engine generating the cash and credibility that allow us to invest aggressively in water while continuing to deliver for shareholders. So now let me turn to water, where the story shifted meaningfully since last year. we moved from laboratory validation to real commercial activity, booking our first revenues, signing our first strategic partnership, and launching new products. The commercialization of our water treatment solutions began with approximately 0.9 million in purchase orders from a large mid-Atlantic power utility for filtration system media replacement at two locations, removing contaminants from wastewater using our proprietary shoreboard media. That engagement validated our technology in a real utility environment and gave us a reference account to build from. We then expanded our reach through a collaboration with Civil and Environmental Consultants, a national engineering firm with over 30 offices and 1,600 team members. Under this arrangement, we provide rapid, small-scale column testing through our analytical design center in Grand Forks, North Dakota, giving CEC's hundreds of water utility clients nationwide access to our testing and analysis capabilities. This effectively creates a pipeline of future system design and media supply opportunities without Birch Tech having to build a direct sales force from scratch. For those less familiar, RSFCT replicates full-scale filter performance in a compressed timeframe, enabling utilities to evaluate carbon media options and PFAS removal strategies quickly and cost-effectively. Our center is one of the few independent RSSCT labs in the country with the capacity to serve the national market at this level. Beyond those two anchors, we hit several additional milestones. In January of 2026, we demonstrated that thermally rejuvenated granular activated carbon performs comparably to virgin carbon for PFAS removal. It was a breakthrough for our carbon rejuvenation program that could dramatically lower lifecycle costs for utilities. This week, we just announced our SEAIX nuclear-grade ion exchange rosin product line, targeted at an approximate 220 million addressable market, spanning nuclear power, coal-fired utilities, and municipal water treatment. Birchtek's water platform covers a broad range of media supply, filtration services, our design centers are SSCT testing and analysis, along with carbon rejuvenation, and now ion exchange resin. So we have a comprehensive offering that didn't exist 12 months ago. Our approach to the market is completely different than our competitors. We work closely with and through engineering firms such as CEC and others alongside utilities to fully integrate the procurement of appropriate equipment, media, and other NSIL resurfacing. This collaborative approach to the market will ensure water utilities with an affordable, high effective clean water solution and will secure BirdStack's strong market position as we continue to build customers and strategic relationships. Now speaking of our design centers that launched our position into the water treatment market with our data-first approach, we are now generating a growing pipeline of lab-scale engagements with water utilities and engineering firms. We are currently participating in a grant-funded research project with a leading national engineering firm evaluating strategies for managing PFAS, contaminated drinking water waste, where Birch Tech is leading advanced bench and pile scale testing of thermal GAC reactivation using our proprietary rotary kiln system that we established in Pennsylvania. Other key projects include our role in the initial phase of a multi-phase project where we are collaborating with another major national engineering firm, and a large utility focused on carbon reactivation to identify the most appropriate media solutions for the removal of multiple contaminants. Our expertise in activated carbons provides our competitive edge and our ability to support both the engineering firm and the large water utility. And additionally, we're conducting water quality analysis, spent carbon evaluations, and RSSCT testing for numerous other utilities to optimize media selection, reactivation protocols, and overall treatment performance for PFAS and other contaminants. Each of these engagements is building relationships that have the potential to convert into long-term thermal reactivation partnerships or feed directly into our water treatment services pipeline. This data-first approach ensures that these utilities and engineering firms gain highly accurate and more effective media recommendations, and receive full benefit from our unique industry expertise. We look forward to this area of our business becoming a key market differentiator and growth driver. The next chapter is about conversion and scale, turning these early engagements into reoccurring service and product revenue, progressing the development of our first GAC rejuvenation facility, and expanding our water treatment solution offerings. Regulatory pressure around PFAS is only intensifying and utilities are actively seeking affordable solutions. Birch Tech is now in position to meet that demand with a full suite of water purification technologies that complement our established air business and open a second significant revenue stream for the company. With that, I'd now like to turn the call over to Fiona Fitzmore, our Chief Financial Officer, to walk through some key financial details from the fourth quarter of 2025. Fiona?