Q2 2026 Birchtech Corp Earnings Call

August 13, 2026

Speaker #1: Good afternoon , ladies and gentlemen . Thank you for standing by . Welcome to Birchtech Corp. second quarter 2020 Earnings Conference call . During today's presentation , all parties will be in a listen only mode .

Operator: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Birchtech's Q2 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, Thursday, 13 August 2026, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Birchtech President and CEO, Richard MacPherson, 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 US Private Securities Litigation Reform Act of 1995 or forward-looking information under applicable Canadian securities laws regarding Birchtech.

Speaker #1: Following the presentation , the conference will be open for questions for dial in participants . This conference is being recorded today , Thursday , August 13th , 2026 and the earnings press release accompanying this conference call was issued after the market closed today .

Speaker #1: On our call today is Bercek president and CEO Richard McPherson and CFO Michael Miyaoka Before we get started , I'll read a disclaimer about forward looking statements .

Speaker #1: This conference call may contain , in addition to historical information , forward looking statements that are made pursuant to the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995 , or forward looking information under applicable Canadian securities laws regarding Birchtech Corp.

Speaker #1: 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 .

Operator: 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 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 Birchtech's periodic filings with the US 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 statement.

Speaker #1: These statements are based on current expectations , estimates and projections about the company's business , based in part on assumptions made by management .

Speaker #1: These statements are not guarantees of future performance and involve risks , uncertainties and assumptions that are difficult to predict Therefore , actual results , actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in the forward looking statements .

Speaker #1: Due to numerous factors discussed from time to time in Birchtech Corp.'s periodic filings with the U.S. Securities and Exchange Commission, or Canadian securities regulators.

Speaker #1: 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.

Speaker #1: 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 operations of the company , such non-GAAP measures should not be considered in isolation or as a substitute for GAAP financial information .

Operator: 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 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. 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.

Speaker #1: 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 .

Speaker #1: 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.

Speaker #1: At this time , I'd like to turn the call over to president and CEO Richard McPherson Richard , the floor is yours

Operator: At this time, I'd like to turn the call over to President and CEO, Richard MacPherson. Richard, the floor is yours.

Speaker #2: Thank you . Operator , and good afternoon , everyone Welcome to our second quarter 2026 Financial results conference call . I want to start with the milestone that defined the quarter on the legal front .

Richard MacPherson: Thank you, operator, and good afternoon, everyone. Welcome to our Q2 2026 financial results conference call. I want to start with the milestone that defined the quarter on the legal front. In June, we announced the end of all remaining attempts to challenge our patents under inter partes review. Every petition filed with the Patent Trial and Appeal Board against our patented SEA technologies have now been dismissed, removed prior to institution or resolved, and the parties previously involved are permanently barred from bringing further patent validity challenges. After seven years of disciplined enforcement, our patent estate stands well-protected, an outcome that validates the business-first approach we've taken since 2019, through which approximately $37 million in license fees and settlements have been received to date.

Speaker #2: In June , we announced the end of all remaining attempts to challenge our patents under inter partes review Every petition filed with the patent Trial and Appeal Board against our patented CA technologies have now been dismissed , removed prior to institution or resolved , and the parties previously involved are permanently barred from bringing further patent validity challenges After seven years of disciplined enforcement , our patent estate stands well protected and outcome that validates the business first approach we've taken since 2019 , through which approximately $37 million in license fees and settlements have been received to date On collections .

Richard MacPherson: On collections, as a reminder, we remain in position to maintain a $78-plus million final judgment, which was entered by the U.S. District Court for the District of Delaware in December of 2025. The defendants have filed a notice of appeal but have not posted a bond, and post-judgment interest continues to accrue daily until the judgment is paid. Upon the conclusion of the appeals process, we will assess all enforcement options. Turning to operations, our business delivered Q2 revenues of approximately $33.8 million, with an approximate 27% gross margin, driven by increases in both mercury emissions and water treatment product supply, RSSCT testing, and other water treatment sales.

Speaker #2: As a reminder , we remain in position to maintain a 78 plus million final judgment , which was entered by the US District Court for the District of Delaware in December of 2025 .

Speaker #2: The defendants have filed a notice of Appeal but have not posted a bond and Post-judgment interest continues to accrue daily until the judgment is paid upon .

Speaker #2: At the conclusion of the appeals process, we will assess all enforcement options. Turning to operations, our business delivered second quarter revenues of approximately $3.8 million, with an approximate 27% gross margin driven by increases in both mercury emissions and water treatment product supply. Our CT testing and other water treatment sales...

Speaker #2: The increase in revenues from the prior period was primarily due to increased air business demand, driven by the mix of plants that we have running combined, and more extreme weather conditions.

Richard MacPherson: The increase in revenues from the prior period was primarily due to increased air business demand, driven by the mix of plants that we have running combined in more extreme weather conditions and the higher natural gas prices in the current year compared to Q2 2025. Additionally, sales were recognized for the water treatment market in 2026 compared to none in the comparable period of 2025. The U.S. coal market remained stable, and continued federal support for coal plant operation reinforces demand for proven emissions control solutions like our patented SEA platform, creating a longer operational runway for our core air quality business and a solid foundation upon which our growing water treatment business will expand. Now allow me to provide added color on our air business. Our SEA platform remains the legacy cornerstone of the company.

Speaker #2: And the higher natural gas prices in the current year compared to the second quarter of 2025 . Additionally , sales were recognized for the water treatment market in 2026 , compared to none in the comparable period of 2025 .

Speaker #2: The U.S. coal market remained stable, and continued federal support for coal plant operation reinforces demand for proven emissions control solutions like our patented CA platform, creating a longer operational runway for our core air quality business and a solid foundation from which our growing water treatment business will expand.

Speaker #2: Now , allow me to provide added color on our air business . Our CA platform remains the legacy cornerstone of the company , with the IPR process now fully behind us , the distinctiveness of our technologies have never been clearer .

Richard MacPherson: With the IPR process now fully behind us, the distinctiveness of our technologies has never been clearer. As incumbent supply arrangements conclude for utilities already licensed under Birchtech, our focus remains on converting them into ongoing product supply customers as they adopt our sorbent formulations into their day-to-day operations that realize the benefits of our applied expertise. Second quarter air revenues totaled $3.4 million, mostly derived from product supply. Because coal-fired production and the production supply demand that correlates with it fluctuates with weather, there is some seasonality in our business. The second quarter of each year has historically been our lowest mercury emission revenue period. We aim to convert utility licensees that began as patent enforcement targets to direct purchasers of our activated carbon sorbents, and we expect the pipeline of supply conversations to grow as power demand from AI increases in the coming years.

Speaker #2: As incumbent supply arrangements conclude for utilities already licensed under Birchtech Corp. , our focus remains on converting them into ongoing product supply . Customers as they adopt our assortment formulations into their day to day operations and realize the benefits of our applied expertise .

Speaker #2: Second quarter air revenues totaled 3.4 million , mostly derived from product supply . Because coal fired production and the production , supply demand that correlates with it fluctuates with weather .

Speaker #2: There is some seasonality in our business, and the second quarter of each year has historically been our lowest mercury emission revenue period. We aim to convert utility licensees that began as patent enforcement targets to direct purchases of our activated carbon sorbents, and we expect the pipeline of supply conversations to grow as power demand from AI increases in the coming years.

Speaker #2: That transition from legal resolution to commercial partnership has been our core objective in our business . First approach to patent enforcement . That began over seven years ago , and as I mentioned , the June IPR resolution reaffirms the distinctiveness of our CA process .

Richard MacPherson: That transition from legal resolution to commercial partnership has been our core objective in our business-first approach to patent enforcement that began over seven years ago. As I mentioned, the June IPR resolution reaffirms the distinctiveness of our SEA process. We remain confident in the strength of our intellectual property. For the remainder of 2026, the air division's roadmap remains centered on three objectives. Aim transition of unlicensed users of our technology into licensees and long-term supply customers. Expand recurring active carbon sales across our growing roster of newly licensed utilities. Redeploy the cash flow generated by this mature, high-margin segment into the scale-up of our nascent, rapidly growing water business, where we see the highest prospect returns as we invest in the significant opportunity that lies ahead of us.

Speaker #2: We remain confident in the strength of our intellectual property . Now , for the remainder of 2026 , the air Division's roadmap remains centered on three objectives aim transition of unlicensed users of our technology into licensees and long term supply customers .

Speaker #2: Expand recurring active carbon sales across our growing roster of newly licensed utilities and redeploy the cash flow generated by this mature , high margin segment into the scale up of our nascent , rapidly growing water business , where we see the highest prospect returns as we invest in the significant opportunity that lies ahead of us .

Speaker #2: Put simply , the air segment functions as a self-funding growth engine , producing both the capital and market credibility that enable us to invest aggressively in water while continuing to deliver value to shareholders .

Richard MacPherson: Put simply, the air segment functions as a self-funding growth engine, producing both the capital and market credibility that enable us to invest aggressively in water while continuing to deliver value to shareholders. Now let me turn to water, where we continue to build on the commercial foundation established over a year ago, drive initial revenues, and are laying the groundwork for significant growth next year. During the quarter, we put our water platform in front of the industry at scale, exhibiting at leading water industry conferences across May and June, including the AWWA ACE26 Annual Conference & Exposition in Washington, DC, the largest water national industry gathering, as well as various other regional and state water association events, and a national technical lab instrument conference in San Diego, where our Dr. Nicholas Lentz was invited to speak about our innovative analytical instrumentation.

Speaker #2: Now let me turn to water , where we continue to build on the commercial foundation established over a year ago . Drive initial revenues and are laying the ground for significant growth next year During the quarter , we put our water platform in front of the industry at scale , exhibiting at leading water industry conferences across May and June , including the A , w w a ace , 26 annual conference and Exposition in Washington , D.C.

Speaker #2: , the largest water national industry gathering , as well as various other regional and state water Association events and a national Technical Lab instrument conference in San Diego , where our doctor , Nicholas Lynch , was invited to speak about our innovative , analytical instrumentation .

Speaker #2: Dr. Lynch also delivered a presentation on PFAS removal and our CT analytical capabilities at a major industry event, underscoring the depth of our technical expertise that lies behind our platform. Our design centers remain the cornerstone of our data.

Richard MacPherson: Dr. Lentz also delivered a presentation on PFAS removal and our RSSCT analytical capabilities at a major industry event, underscoring the depth of our technical expertise that lies behind our platform. Our design centers remain the cornerstone of our data-first entry into the water market. Through our collaboration with national engineering firm, Sidel and Environmental Consultants, RSSCT testing performed at our analytical design center in Grand Forks, North Dakota, is available now to the hundreds of water utility clients they serve across the country, and we are working to replicate this approach with other leading environmental consultants and engineering firms. We are currently involved in supporting multiple national engineering firms with a combination of our RSSCT analytics and carbon reactivation in research projects with government entities and larger municipalities.

Speaker #2: First entry into the water market through our collaboration with national engineering firm Civil and Environmental Consultants . Our seat testing performed at our Analytical Design Center in Grand Forks , North Dakota , is available now to the hundreds of water utility clients they serve across the country .

Speaker #2: And we are working to replicate this approach with other leading environmental consultants and engineering firms . We are currently involved in supporting multiple national engineering firms with a combination of our analytics and carbon reactivation in research projects with government entities and larger municipalities .

Speaker #2: As expected , our data first approach has been well received by the industry , and we anticipate being a leading contributor to advanced contaminant treatment technologies .

Richard MacPherson: As expected, our data-first approach has been well received by the industry, and we anticipate being a leading contributor to advanced contaminant treatment technologies. Our design centers will become significant profit centers, establishing our credibility and creating a strong market position for our products, services, and highly effective technologies. On the product side, our SEA-IX nuclear-grade ion exchange resin line, which we launched in March, continues to target an estimated $200-plus million addressable market spend of nuclear power, coal-fired utilities, and municipal water treatment. We have recently expanded upon this product portfolio by adding two additional lines focused on removing specific contaminants, boron and heavy metals. Ion exchange resins are used nearly as prevalently as activated carbon, depending on the utility size, configuration, and water makeup. Alongside granular activated carbon, ion exchange resins are also recognized as the best available technology by the U.S. EPA for many contaminants, including PFAS.

Speaker #2: Our design centers will become significant profit centers , establishing our credibility and creating a strong market position for our products , services and highly effective technologies .

Speaker #2: On the product side , our FDA , I X nuclear grade ion exchange resin line , which we launched in March , continues to target an estimated 200 plus million addressable market spend of nuclear power .

Speaker #2: Coal fired utilities and municipal water treatment . We have recently expanded upon this product portfolio by adding two additional lines focused on removing specific contaminants , boron and heavy metals .

Speaker #2: Ion exchange resins are used nearly as prevalently as activated carbon , depending on the utility size , configuration and water makeup . Alongside granular activated carbon ion exchange resins are also recognized as a best available technology by the US .

Speaker #2: EPA for many contaminants, including PFAS, these resins are used in multiple industries to treat wastewater, from coal and nuclear power to water municipalities and other industrial applications.

Richard MacPherson: These resins are used in multiple industries to treat wastewater from coal and nuclear power to water municipalities and other industrial applications. Expanding this product line allows Birchtech to address the growing needs of our customers with wastewater concerns. In addition to product sales in our RSSCT design center, additional revenue comes from our water treatment solutions, which collaborates with engineering firms and utilities to integrate solutions that may include end-to-end media changeout services, vessel replacements, and shorter-term pilot testing. The market for these solutions is primarily wastewater, which affects water utilities as well as coal and nuclear power plants. Through our industry knowledge and strategic partnerships, we are now able to source media and solutions that more affordably and effectively address certain contaminants and unique water environments.

Speaker #2: Expanding this product line allows bridge Tech to address the growing needs of our customers . With wastewater concerns In addition to product sales and our set design center , additional revenue comes from our water treatment solutions , which collaborates with engineering firms and utilities to integrate solutions that may include end to end media change out services , vessel replacements and shorter term pilot testing .

Speaker #2: The market for these solutions is primarily wastewater , which affects water utilities as well as coal and nuclear power plants . Through our industry , knowledge and strategic partnerships , we are now able to source media and solutions that more affordably and effectively address certain contaminants and unique water environments .

Speaker #2: Now , these areas that have just described comprise our current revenue streams , which we expect will significantly increase through the next couple of years .

Richard MacPherson: Now, these areas that I have just described comprise our current revenue streams, which we expect will significantly increase through the next couple of years. We have added staff, increased our presence across the industry to support this growth. Our long-term and larger growth will come from our innovative technologies where we have made strong progress this year. Consistent with our SEA for clean air, we are focused on creating industry-disrupting technologies that are more sustainable, effective, and affordable. Our improved thermal-reactive technology, carbon rejuvenation, has demonstrated that our thermally rejuvenated granular activated carbon performs comparably to virgin carbon for PFAS removal, and it is a breakthrough that could dramatically lower the life cycle cost for utilities. We continue to make meaningful progress establishing carbon rejuvenation capacity and look forward to providing further updates to that end in the very near future.

Speaker #2: We've added staff , increased our presence across the industry to support this growth . Our long term and larger growth will come from our innovative technologies where we have made strong progress this year , consistent with our FDA for clean air , we are focused on creating industry , disrupting technologies that are more sustainable , effective and affordable .

Speaker #2: And will improved thermal , reactive technologies , carbon rejuvenation has demonstrated that our thermally rejuvenated , granular activated carbon performs comparably to virgin carbon for PFAs removal , and it's a breakthrough that could dramatically lower the life cycle cost for utilities .

Speaker #2: We continue to make meaningful progress in establishing carbon rejuvenation capacity and look forward to providing further updates to that end in the very near future.

Speaker #2: The story from here remains conversion and scale—turning early engagements into recurring service and product revenue, advancing our carbon rejuvenation technologies, and continuing to broaden our water product line with regulatory pressure for utilities to address harmful contaminants, including PFAs and other toxins.

Richard MacPherson: The story from here remains conversion and scale, turning early engagements into reoccurring service and product revenue, advancing our carbon rejuvenation technologies, and continuing to broaden our water product line. With regulatory pressure for utilities to address harmful contaminants, including PFAS and other toxins, many utilities have an affordable concern that Birchtech is working to address. Many larger water providers have various water sources and high supply demands. Birchtech is well-positioned to meet these demands and challenges with our complete set of water purification technologies. Complementary to our established air business, our clean water technologies open a second substantial revenue stream that will continue to grow over the next few years. Now, before handing the call off, I want to congratulate Jim Trettel on his promotion to Chief Operating Officer.

Speaker #2: Many utilities have an affordable concern that Birchtech Corp. is working to address many larger water providers have various water sources and high supply demands .

Speaker #2: Byrczek is well positioned to meet these demands and challenges with our complete set of water purification technologies complementary to our established air business , our clean water technologies Open a second substantial revenue stream that will continue to grow over the next few years .

Speaker #2: Now , before handing the call off , I want to congratulate Jim Treadle on his promotion to Chief Operating Officer . Jim has been with since 2014 and brings 36 years of experience in the dry bulk material handling industry to the role .

Richard MacPherson: Jim has been with Birchtech since 2014 and brings 36 years of experience in the dry bulk material handling industry to the role. His deep expertise, both on the technical side and hands-on engineering leadership and oversight of our design center operations, have been instrumental in scaling both our air and clean water platforms. This promotion reflects the critical role he will play in our next phase of growth. As we continue to commercialize our carbon rejuvenation, Jim's expertise is a strong balance to our unique R&D background and capabilities. With that, I would now like to turn the call over to our new CFO, Michael Mioska, to walk through some key financial details from the second quarter of 2026. Mike?

Speaker #2: His deep expertise in both on a technical side and hands on engineering leadership and oversight of our design center operations have been instrumental in scaling both our air and clean water platforms , and this promotion reflects the critical role he'll play in our next phase of growth .

Speaker #2: As we continue to commercialize our carbon rejuvenation . Jim's expertise is a strong balance to our unique R&D background and capabilities . With that , I'll now like to turn the call over to our new CFO , Mike , to walk through some key financial details from the second quarter of 2026 .

Speaker #2: Mike .

Speaker #3: Thank you . Rick , and good afternoon , everyone . I will keep my section to a concise review of the financial statements for the second quarter of 2026 .

Michael Mioska: Thank you, Rick, and good afternoon, everyone. I will keep my section to a concise review of the financial statements for the second quarter of 2026. For a full breakdown of our financial results, please view our regulatory filings. Revenues totaled $3.8 million for the second quarter of 2026, as compared to $3.3 million for the same year ago quarter. The increase in revenues from the comparative period was primarily due to increased air business demand, driven by the mix of plants running, combined with more extreme weather conditions and higher natural gas prices in the current period as compared to the comparative period. Additionally, sales were recognized for the water treatment market in the second quarter of 2026, compared to none in the comparable period of 2025. Gross profit totaled $1 million as compared to $1 million in the same year ago quarter.

Speaker #3: For a full breakdown of our financial results , please view our regulatory filings . Revenues totaled $3.8 million for the second quarter of 2026 , as compared to $3.3 million for the same year ago quarter .

Speaker #3: The increase in revenues from the comparative period was primarily due to increased air business demand, driven by the mix of plants running, combined with more extreme weather conditions and higher natural gas prices.

Speaker #3: In the current period, as compared to the comparative period, additionally, sales were recognized for the water treatment market in the second quarter of 2026, compared to none in the comparable period of 2025.

Speaker #3: Gross profit totaled 1 million as compared to 1 million in the same year ago quarter . Gross profit was comparable to the prior period , despite higher revenues in 2026 , resulting from a shift in revenue mix away from the licensing revenues generated in the second quarter of 2025 , which carry typically higher margins .

Michael Mioska: Gross profit was comparable to the prior period despite higher revenues in 2026, resulting from a shift in revenue mix away from the licensing revenues generated in the second quarter of 2025, which carries typically higher margins. We continue to incur significant expenses as we invest heavily in the expansion of the water division. To that end, SG&A expenses totaled $2.1 million in the second quarter of 2026 as compared to $1.7 million in the same year ago quarter. The increase in expenses was primarily due to increased professional fees driven by increased legal fees in the second quarter of 2026. That, combined with increased public company costs associated with the company's uplisting to the NYSE American. Our R&D expenses totaled $0.6 million for the second quarter of 2026 as compared to $0.5 million in the same year ago quarter.

Speaker #3: We continue to incur significant expenses as we invest heavily in the expansion of the water division . To that end , S , G and expenses totaled 2.1 million in the second quarter of 2026 .

Speaker #3: As compared to $1.7 million in the same year-ago quarter. The increase in expenses was primarily due to increased professional fees, driven by increased legal fees.

Speaker #3: In the second quarter of 2026 . That , combined with increased public company costs associated with the company's Uplisting to the NYSE American Our R&D expenses totaled 0.6 million for the second quarter of 2026 , as compared to 0.5 million in the same year ago quarter .

Speaker #3: R&D expenses relate to research conducted to develop water treatment products utilizing new sorbent technologies . Other expenses totaled 1.4 million in the second quarter of 2026 , as compared to 0.4 million in the same year ago quarter .

Michael Mioska: R&D expenses relate to research conducted to develop water treatment products utilizing new sorbent technologies. Other expenses totaled $1.4 million in the second quarter of 2026 as compared to $0.4 million in the same year ago quarter. The increase in other expenses was mainly the result of license and settlement fees incurred in the second quarter of 2026. No such comparable fees were incurred during the second quarter of 2025. Net loss for the second quarter of 2026 totaled $3 million, or $0.11 per basic and diluted share, as compared to a net loss of $1.5 million or $0.08 per basic and diluted share in the same year ago quarter. Adjusted EBITDA loss, a non-GAAP financial measure, totaled $1.9 million in the second quarter of 2026, compared to a loss of $1 million for the second quarter of 2025.

Speaker #3: The increase in other expenses was mainly the result of license and settlement fees incurred in the second quarter of 2026. No such comparable fees were incurred during the second quarter of 2025.

Speaker #3: Net loss for the second quarter of 2026 totaled $3 million , or $0.11 per basic and diluted share , as compared to a net loss of 1.5 million , or $0.08 per basic and diluted share .

Speaker #3: In the same year ago quarter Adjusted EBITDA loss , a non-GAAP financial measure , totaled 1.9 million in the second quarter of 2026 , compared to a loss of 1 million for the second quarter of 2025 .

Speaker #3: Cash as of June 30th , 2026 totaled 11.8 million , with no debt as compared to 2.2 million as of December 31st , 2025 .

Michael Mioska: Cash as of 30 June 2026 totaled $11.8 million with no debt, as compared to $2.2 million as of 31 December 2025. Also, as our investors understand, but I still wanted to highlight, the liabilities we do have include a $7.3 million profit share liability that is only repayable when the company collects the $78 million-plus final judgment discussed earlier by Rick. This completes my prepared comments. Now, before we begin our question and answer session, I would like to turn the call back to Rick for some closing remarks. Rick?

Speaker #3: Also, as our investors understand, I still wanted to highlight the liabilities we do have, which include a $7.3 million profit share liability that is only repayable when the company collects the $78 million-plus final judgment discussed earlier by Rick.

Speaker #3: 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 .

Speaker #3: Rick

Speaker #2: Thank you . Mike To sum up , the quarter , the second quarter closed the book on all remaining IPR challenges to our patents appeal process underway to support collectability on our 78 plus million final judgment and strengthened our leadership team with Mike Scott joining as Chief Financial Officer in May .

Richard MacPherson: Thank you, Mike. To sum up the quarter, the Q2 closed the book on all remaining IPR challenges to our patents, appeal process underway to support collectability on our $78-plus million final judgment, and strengthened our leadership team with Michael Mioska joining as Chief Financial Officer in May and Jim Trettel promoted to COO as well. We continue to invest in driving forward the water business and look forward to providing updates on this front in the weeks and months ahead. Our plan for the rest of 2026 is straightforward and focused on long-term fundamental growth. Convert more licensed coal power utilities into recurring SEA supply customers, advance offtake agreements for our first plant carbon rejuvenation facility, and deepen our market penetration in water treatment across the industry through enhanced visibility and strategic partnerships.

Speaker #2: And Jim Treadwell promoted to CEO as well . We continue to invest in driving forward the water business and look forward to providing updates on this front in the weeks and months ahead Our plan for the rest of 2026 is straightforward and focused on long term , fundamental growth .

Speaker #2: Convert more licensed coal power utilities into recurring CA supply customers , advance offtake agreements for our first planned carbon rejuvenation facility and deepen our market penetration in water treatment across the industry through enhanced visibility and strategic partnerships , we enter the rest of 26 from a position of strength , and I'm confident in this team's ability to capture the opportunity in front of us .

Richard MacPherson: We enter the rest of 2026 from a position of strength, and I am confident in this team's ability to capture the opportunity in front of us. With that, operator, please open the line for questions.

Speaker #2: With that operator , please open the line for questions .

Speaker #1: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is on the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Rob Brown with Lake Street Capital Markets.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is on the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Rob Brown with Lake Street Capital Markets.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue for participants.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you.

Speaker #1: Our first question is from Rob Brown with Lake Street Capital Markets.

Speaker #4: Good afternoon I guess my first question is on the the air business . Is it seems like you've gotten good progress in getting getting the settlements from the from most of the base .

Rob Brown: Good afternoon. My first question is on the air business. It seems like you've gotten good progress in getting the settlements from most of the base. How much is left in terms of outstanding cases at this point?

Speaker #4: How much how much is sort of left in terms of outstanding cases at this point ?

Speaker #2: Rob, so yeah, we've settled away at this point all but one remaining case, and we're in discussions with them at this time.

Richard MacPherson: Rob, we've settled away with, at this point, all but one remaining case, and we're in discussions with them at this time. The settlements have been put in place, and we're now just waiting for supply contracts to come up for renewal so that we can quote on that business.

Speaker #2: So the settlements have been put in place, and we're now just waiting for supply contracts to come up for renewal, so that we can quote on that business.

Speaker #4: Okay , great . And then , you know , with with what you've settled and the timing of the supply companies , what's how should we think about the , the revenue and the air business ?

Rob Brown: Okay, great. With what you've settled and the timing of the supply contracts, how should we think about the revenue in the air business? How does that play out, and how long, on average, do those supply contracts need to happen, and what's the baseline air business that you think you can get to with what you've settled so far at this point?

Speaker #4: How sort of play out ? And how long does sort of , on average , do those supply contracts need to need to happen ?

Speaker #4: And what's the sort of baseline air business that you think you can get to with what you've settled so far, or at this point?

Speaker #2: So the , the , the opportunity given the , the capacity factor of the plants that we've signed licenses with is quite significant It's difficult to say exactly when that's going to come to fruition .

Richard MacPherson: The opportunity, given the capacity factor of the plants that we've signed licenses with, is quite significant. It's difficult to say exactly when that's going to come to fruition, because we can't control when their present contracts run out. I do expect that we'll see an increase starting in the H2 of this year. I do expect that we'll see a significant increase in the actual product supply revenue on the air side for 2026 over 2025. I just don't have a hard number on what that is at this time.

Speaker #2: Because we can't control when they're present. Contracts run out. I do expect that we'll see an increase starting in the second half of this year.

Speaker #2: I do expect that we'll see a significant increase in the actual product supply revenue on the air side for 2026/2025 . And I just don't have a hard number on what that is at this time

Speaker #4: Okay , great . Got it . And the I think you talked about the , the outstanding judgment , the the defendant has appealed .

Rob Brown: Okay, great. Got it. I think you talked about the outstanding judgment. The defendant has appealed. I know that's not hard to predict, but what are the steps that are left here in the appeal process and just a sense of timing that that could take?

Speaker #4: And I know that's that's not hard to predict . But what's what's sort of the steps that that are left here in the appeal process and just a sense of timing that that could take

Speaker #2: Sure. As with the federal judge, decisions that we waited on for a period of time, it's difficult for me to say when the appellate group will rule.

Richard MacPherson: Sure. As with the federal judge decisions that we waited on for a period of time, it's difficult for me to say when the appellate group will rule. We are very confident in our position and expect we will win the day on that. I am hoping that we will get a decision this year. I just can't, nor can my attorneys, predict exactly when that's going to happen. But I think we'll be in a very favorable position to move forward on the collection once we get a ruling on the appeal.

Speaker #2: We are very confident in our position and expect we will win the day on that. I am hoping that we will get a decision this year.

Speaker #2: I just can't , nor can my attorneys predict exactly when that's going to happen . But I think we'll be in a very favorable position to move forward on the collection once we get a ruling on the appeal

Speaker #4: Okay , great And then I guess moving to the water side , a couple questions there . The , you know , you've had a lot of customers doing testing .

Rob Brown: Okay, great. I guess moving to the water side, a couple questions there. You've had a lot of customers doing testing. What are the latest in terms of getting offtake agreements, and how many people are you in discussions with on that front?

Speaker #4: How , you know , what are sort of the latest in terms of getting offtake agreements and how many people are you sort of in discussions with on , on that front ?

Speaker #2: Sure. So, we've got some really good negotiations going on right now with several significant parties. And we're also involved in a number of research and development programs with utilities that are looking to find solutions for their PFOA, PFAS challenges.

Richard MacPherson: Sure. So we've got some really good negotiations going on right now with several significant parties. We're also involved in a number of research and development programs with utilities that are looking to find solutions for their PFOA, PFAS challenges. So I very much expect to bring some hard news to the market, most likely in Q3. We are getting close to some significant decisions on that front through the work that we've been doing over these past few months. So I'm looking forward to at least bring the market up to speed on what our opportunities are that we've been working on, and have signed agreements on, and the partners that are affiliated with that in this coming quarter. I'm hoping that they will turn into real business by the end of the year.

Speaker #2: So I very much expect to bring some hard news to the market , most likely in the third quarter . We are getting close to some significant decisions on that front through the work that we've been doing over these past few months .

Speaker #2: So I'm looking forward to at least bring the market up to speed on what our opportunities are that we've been working on and have signed agreements on , and the partners that are affiliated with that in this coming quarter .

Speaker #2: I'm hoping that they will turn into real business by the end of the year . But we'll we'll bring a lot more color to our activities there in the third quarter , for sure

Richard MacPherson: We will bring a lot more color to our activities there in Q3 for sure.

Speaker #4: Okay . And then the water business , I think , I think there's a there's a deadline in 2027 . And from the EPA to , to get some reporting out for , for PFAs levels and then and then I know , I think I think one of the big competitors in the market recently increased prices .

Rob Brown: Okay. The water business, I think there is a deadline in 2027 from the U.S. EPA to get some reporting out for PFAS levels. I know, I think one of the big competitors in the market recently increased prices, but how are some of the macro things that are happening driving customer action and how might those things affect you?

Speaker #4: But how are some of the macro things that are happening driving kind of customer action and , and is that how might those things affect you ?

Speaker #2: Yeah. So, what we're finding is a lot of research and development work going on right now as people try to ramp up to get ahead of the regulations.

Richard MacPherson: Yeah. What we are finding is a lot of research and development work going on right now as people try to ramp up to get ahead of the regulations. There are a lot of state regulations that are coming in ahead of the federal regulations on an earlier timeline. So we are working with a number of different utilities right now through the relationships we have with engineering firms, to actually play a part in building out some of our rejuvenation centers in the coming couple of years. We are also very active, as I have mentioned to the market, in moving forward to get our own rejuvenation facility up and running as soon as possible. We are making a great deal of headway on that, and I am hoping most likely sometime by the end of September to be able to bring some material news to the market on that front.

Speaker #2: And there's a lot of state regulations that are coming in ahead of the federal regulations on an earlier timeline. So we're working with a number of different utilities right now through the relationships we have with engineering firms to actually play a part in building out some of our rejuvenation centers in the coming couple of years.

Speaker #2: We're also very active, as I mentioned, in the market and moving forward to get our own rejuvenation facility up and running as soon as possible.

Speaker #2: We're making a great deal of headway on that, and I'm hoping, most likely sometime by the end of September, to be able to bring some material news to the market on that front, which will move us ahead significantly on that side of our business.

Richard MacPherson: We are making a great deal of headway on that, and I am hoping most likely sometime by the end of September to be able to bring some material news to the market on that front. Which will move us ahead significantly on that side of our business. So I am very excited about that. We are just going through the paces right now and trying to get all of the paperwork done to be able to close out the effort that we have embarked on that will allow us to do that.

Richard MacPherson: Which will move us ahead significantly on that side of our business. So I am very excited about that. We are just going through the paces right now and trying to get all of the paperwork done to be able to close out the effort that we have embarked on that will allow us to do that.

Speaker #2: So I'm very excited about that . We're just , you know , going through the paces right now and trying to get all of the paperwork done to be able to close out the effort that we're that we've embarked on that will allow us to do that

Speaker #4: All right. Excellent. Thank you. I'll turn it over.

Rob Brown: All right. Excellent. Thank you. I will turn it over.

Speaker #2: Thank you

Richard MacPherson: Thank you.

Speaker #1: Thank you. There are no further questions at this time. I'd like to hand the floor back over to Richard McPherson for any closing remarks.

Operator: Thank you. There are no further questions at this time. I would like to hand the floor back over to Richard MacPherson for any closing remarks.

Speaker #2: Well , thank you , operator , and thanks much again to everyone for joining us on today's earnings call . Our investor relations firm , Ms. .

Richard MacPherson: Well, thank you, operator, and thanks once again to everyone for joining us on today's earnings call. Our investor relations firm, NZ Group, remains available to assist with any follow-up questions that you might have. We look forward to sharing future updates as we work to create value for my fellow shareholders and advance our vision of leading the specialty activated carbon space, delivering clean air and water more affordably, especially to those utilities in smaller communities, and ensuring the more efficient removal of many harmful toxins from our environment. I especially look forward to addressing the investment community in Q3, where we very much expect the results of a lot of work that we have been doing in the past couple of months will come to fruition. With that, I want to thank everybody once more.

Speaker #2: Group , remains available to assist with any follow up questions that you might have . We look forward to sharing future updates as we work to create value for my fellow shareholders and advance our vision of leading the specialty activated carbon space , delivering clean air and water more affordably , especially to those utilities and smaller communities .

Speaker #2: And ensuring the more efficient removal of many harmful toxins from our environment. I especially look forward to addressing the investment community in the third quarter, where we very much expect the results of a lot of work that we've been doing in the past couple of months will come to fruition.

Speaker #2: So with that, I want to thank everybody once more.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you again for your participation.