Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Birchtech's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, August 14. Press release accompanying this conference call was issued after the market closed today. On our call today is Birchtech's President and CEO, Richard MacPherson; and CFO, Fiona Fitzmaurice. Before we get started, I will 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 Birchtech. 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 Birchtech'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 supplement 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 comparison 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 MacPherson. Richard, the floor is yours.

Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our second quarter 2025 financial results conference call. Before diving into our financials for the quarter, it's important to reflect on Birchtech's journey and mission. Established in 2008 as Midwest Energy Emissions Corp., our initial focus was on developing and commercializing the Sorbent Enhancement Additive or SEA technology. This innovative approach has been instrumental in assisting coal-fired power plants across North America to effectively reduce mercury emissions, ensuring compliance with environmental regulations for the country. Birchtech's air business built around our patented SEA Sorbent technologies that utilizes activated carbon and various alloys was widely adopted across the coal-fired power industry, due to its proven effectiveness in capturing mercury emissions. The success of this technology led to widespread adoption, but also infringement as numerous industry players began using our patented process without proper licensing or business supply. So in response, since 2019, the company has aggressively defended its patents through legal action, securing significant settlements and a landmark $57 million unanimous jury award. We have continued to convert unlicensed users of our technology into long- term business partners, several of which have entered into license agreements or become direct supply customers. Inclusive of enhancements, interest and legal fees, our patent attorneys, Caldwell Cassady & Curry, have requested a final judgment of $160 million, which is currently pending a final decision by the court. Now recognizing new and evolving environmental challenges, we expanded our activated carbon expertise into water purification with the launch of our new patent-pending water treatment technologies, which are focused on contaminant removal from both potable and wastewater utilities. Spurred by the U.S. EPA regulations, water treatment is a growing market and in critical need of more effective and certainly more…

Thank you, Rick. I will constrain my section to a concise review of the financial results for the second quarter. For a full breakdown of our financial results, please view our regulatory filings. Revenues totaled $3.3 million in the second quarter as compared to $3.4 million in the same year ago quarter. The decrease in revenues from the prior year was primarily due to the mix of plants running unexpected customer forced outages and products sold. Gross profit decreased 8.7% to $1 million or 29.8% of total revenues in the second quarter of 2025 as compared to $1.1 million or 31.6% of total revenues in the same year ago quarter. The change in gross margin was primarily attributable to decreased revenues in the second quarter. Operating expenses consisted of selling, general and administrative expenses and research and development expenses in 2025 and SG&A in 2024. SG&A expenses were approximately $1.7 million and $4.6 million for the 3 months ended June 30, 2025, and 2024, respectively. Total SG&A expenses decreased in the second quarter of 2025 compared to the prior year period as a result of variances in individual categories. Total R&D expenses were approximately $0.5 million and 0 for the 3 months ended June 30, 2025, and 2024, respectively. R&D expenses related to research conducted to develop water treatment products utilizing new sorbent technologies and increased in the second quarter of 2025 compared to the prior year period as the company had not incurred any research-related costs during the year ago quarter. Net loss for the second quarter of 2025 improved to $1.5 million or negative $0.02 per basic and diluted share as compared to a net loss of $6.2 million or negative $0.07 per basic and diluted share in the same year ago quarter. Adjusted EBITDA, a non-GAAP measure,…

Thank you, Fiona. Looking ahead, our focus is to protect the validity of our patents in clean air technologies, laying the foundation for our strategic growth into highly innovative water purification technologies, which we currently have under development. For our core Air business, we expect an accelerated pace of revenue growth, continued IP wins and associated cash receipts and strong positive momentum from our current customers under contract. For our new Water business, we see multiple opportunities to scale as we work to launch in the near term and build the infrastructure to support the future of this business. Taken together, we're on a robust growth trajectory, and I believe are poised to create sustainable long-term value for my fellow shareholders for years to come. We are on track with the necessary parties engaged to move forward with our planned uplisting to a major U.S. exchange in the latter half of 2025. And with that, operator, let's open the line for questions.

[Operator Instructions] The first question comes from the line of Rob Brown from Lake Street Capital.

Good afternoon. First question is on the change in the MATS regulations. Just wanted to get a sense from you on what that sort of means for your business. I assume it means it extends the ultimate duration of the Air business. But does it also step up some of the revenue run rates? Or is it really a duration of the current customer base.

Just to establish that the current MATS would stay status quo and the new regulations that President Biden had proposed have been pushed off a number of years. What that means to us as an operating company is that a number of plants including a number of our clients that were looking at possible closures have foregone those closures. They won't be closing. And indeed, even some of the plants that had recently closed are now considering reopening. So with the lessening of those additional, what we call 2.0 MATS regulations, by those going away, it's actually improved the outlook for about 47 different power plant operators.

Okay. And then on the kind of the group of remaining plants that potential licensees and commercial customers. I think you said that was sort of a market share increase that you could see and kind of gave some numbers on the ultimate run rates there. But is that sort of fully the potential available market there? Or are there further opportunities within that -- in that group that maybe can grow that revenue level as well?

No, that's what I would expect to be a reasonable estimate of the growth potential. There are some others, but they're not significant in size. And so basically, what we're referring to here is the folks that are now defending themselves against the claims we've made. Should we be successful as we expect, then the potential additional business that could come from those accounts through a legal win would generate that additional revenue that we expect. And I think beyond that would be a stretch.

Great. Good. And then kind of switching to the Water business ramp. I think you said commercial availability in '26. And with the design centers in place, I think you're on track for that. What's the -- what's sort of the launching kind of -- how does that progress. Do you have customers working in the design centers this year and then they start to ramp kind of order activity next year? What's just the sort of cadence there of the launch work on that business?

Yes. So we're starting now and are engaged with water utilities in testing their water and providing our services and know-how for them to be able to make the best choices as to how they're going to meet the new regulations. We're also working with them how to improve their present operations before those regulations come in. But on a parallel track, we are moving forward to develop a couple of significant facilities of our own, and we hope to bring material news to the market on that in the coming months. We would expect that we would be able to make significant inroads in as a key operator in the Water business by the end of '26. And we are also, at this point, expecting to be able to generate real water revenues from the water market this year as well. So it's a combination of building the relationships in the utility business through our research and design centers, but simultaneously, with our newly acquired sales force, selling various products into the water market as well and thereby establishing solid customer relationships with a number of different utilities, and that will begin -- has begun and will be reported in the latter half of this year.

Great. And I guess last question here quickly on the EPA. You talked briefly about how they were still quite active on the PFAS work. Are there sort of new regulations they're developing? Or are they -- are they really enforcing the existing thinking and now that there's technologies available that they're really being more active in insisting that those are deployed?

I don't see that they're being more active. I think that what they've done is maybe put the brakes on a little bit with regards to the actual timing of implementation of the final regulations in order to be able to make sure that the regulations are affordable and reasonable in their attainment. And that's really driven our approach to the market by -- and that's why we've stepped back 2 steps, built out the analytical and design center side of our business so that we'd be able to create and work with utilities and the EPA to be able to create new more effective approaches to purifying water, especially PFOA and PFAS and bringing a more affordable route to the market, which is what our plan is. What our expectation to be able to do is, and I think as we get into the coming months, as our strategy is laid out to the market and people see what we're trying to do, I think we should be or could be very successful in that effort. And I think that's really what the EPA is trying to do is not only have the utilities meet these regulations and have a better water supply, but to do so in a reasonable fashion that keeps the cost down and makes it effective and available not just to the major cities, but to the thousands of small communities around the country. And we're focused on that broader reach and appeal for the country.

Ladies and gentlemen, this concludes our question-and-answer session. I will now hand the call back to Chairman and CEO, Richard MacPherson for his closing remarks.

Well, folks, I want to thank you very much for joining us today. As we move forward with our efforts to join a main exchange this year, of which the attorneys have been hired to see that project through in the last quarter of 2025. That will come on the heels of some very significant growth announcements from us starting in September, and we will be following through with growth announcements on not just the air side, but the water side. There's been a lot going on in the firm that is coming to fruition in the latter half of 2025, and I very much look forward to bringing the news to the community as we go forward, and we'll be doing so on a timely basis. So thank you very much. Very much appreciate your interest, and we'll be back bringing our updated story to the market starting in September. Thank you.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your lines.