Birchtech Corp. Noble Capital Markets Virtual Equity Investor Conference

Mr. MacPherson. Thank you very much, Richard.

Folks, thanks so much for joining us today. We'll take a quick run-through of the deck as presented. It'll be available online as well post-presentation. But I'll also jump into a couple of other topics that we're working on in order to add some up-to-date color. My assistant, Stacey, will be handling the slide deck for us today. Stacey, if you don't mind, we'll move on to the forward-looking statements. And as shown here on the screen, folks, if you would take the time to read that, because we'll make some financial statements as we go through the presentation. Very much appreciate it. And now we'll move on with the presentation itself. So, as an overview of BirchTech, we are an activated carbon technology company. And we've been providing consulting services both in the air and water business for the past 16, 17 years. So we have always worked on the mercury removal, from coal-fired power plants, but about 3 years ago we started to shift 90% of our efforts into becoming a clean water tech company. And we've made huge strides in that, moving forward both on the drinking water side of things as well as water remediation from wastewaters.

In general, we have in Q2, for example, a 3.8 million revenue base. We also have a final judgment from a previous lawsuit outstanding due to us of $78 million, plus. We expect to be able to collect those monies sometime in 2027, and are waiting for the defendant's appeal to run out before we start in an earnest on-the-collection of those. We have an approximate $12 million balance sheet at this time. And we have zero debt as a company. So we have a good run rate going forward. We don't need to raise capital and, once we move into the water program early in '27, which I'll expand on, our base business, our core air business, will be profitable. We don't expect to have to lean on that to continue to grow the water business as we have been these past 3 years. Once our new facility is up and running in the first quarter of 2027. So, as I mentioned earlier on the air side, all of the challenges to our patents have been terminated, which leaves us also in a position where we'll be moving forward to try to settle out our differences with the Ameren Corporation, which we are scheduled to go to trial with, most likely in early 2027.

The judge has yet to set the actual trial date. We expect that will be set in the coming week or two. And we'll move forward that as necessary. Our hope, however, is that we'll be able to become a partner in supplier to Ameren rather than have to go through the trial process, which is pending. On the clean water side, we've been extremely busy these past 3 years, starting with the construction and operation of our analytical lab in North Dakota, which has been extremely busy of late. Also, through our large-scale pilot project that we have in Pennsylvania, which has been a product development center for us, and also has given us the opportunity to work directly with engineers and their clients in the evaluation and strategic planning necessary for their clients to meet the upcoming PFOA and PFOS regulations. So, combined between our core business and the ramp-up we've had in our water side to date, we're extremely well-poised to move into 2027 as a very aggressive water treatment company. Next slide, please. So, as I mentioned, the legacy air business is a core business which underwrites the operations of the company. It's very solid at this time, given the AI demand on the coal-fired fleet in the U.S. We have a very solid position there, with our patented process, which we'll continue to grow as we complete our protection of our patent package over the next year or two.

It's expected that we'll see some significant growth in the product supply side, either late this year or through '27. But that core business, again, once we take the pressure off it, underwriting the water side, we'll be profitable and grow nicely as we continue to transition into the water side of things. Next slide, please. So, potable—sorry, next slide, please. So, potable and wastewater treatment solutions are key to our future growth. We have the world-class design center that we've spoken about, and also we've been putting together our own branded activated carbon and ion exchange rosins for best available technology approaches to stay ahead of the opportunities on the PFOA, PFOS collection. So we're media-agnostic, we have both the granular activated carbon side of things, and the ion exchange approach that will be bringing to market in 2027. Next slide, please. As we all know, the PFOS and PFOA contamination in the U.S. is widespread, very, very difficult to manage. The new regulations, which start with monitoring in 2027 and ramp up to full compliance in '30 and '31, are going to be very onerous on the communities' water supply systems. And our approach to this is to meet it head-on to reduce the pending costs.

Across the country. We're going to do that with our new patented technologies and our new developed products that we've spent the last 3 years in development. And those new products will be coming to market early in 2027, as we finish off the commercialization efforts and move forward with the discussions that we're now having with water utilities across the country. The PFOA, PFOS problem will be addressing through our new rejuvenation process, which takes spent carbons and rejuvenates them to well up to 100% efficacy and, in some cases, more better performing than the best possible granular activated carbons on the market today. And so we look very much forward to bringing that effort to market, as I say, early in 2027. Our first operation, we plan to have up and running in January of 2027, and that will give us complete full commercialized proof of concept from our early days of design through our testing at the Pennsylvania site, through to our new commercial facility which will be up and running in January. Next slide. So we'll make a big difference in the industry with our approach. Both the design centers and the analytical lab combined will give utilities the opportunity to figure out exactly what kind of challenges they have in this PFOA, PFOS-regulated world, and also allow their engineers to work to develop the best possible strategy.

Our water treatment solutions will be very significant, especially in the rosin side of things, and we'll be bringing that to market, as well as through licensed sellers along with ourselves, in 2027 and beyond. Now, the carbon rejuvenation approach will start in 2027, and it will grow through various facilities as we continue to grow that side of our company through to the full regulation period in 2030, '31. We very much expect to have a significant uptick in growth in 2027 with that first facility up and running. And I look forward to bringing some economic projections to the market once we close on that acquisition and begin the rebuild of that facility later this month. Next slide, please. So the design center has, for the last year or two, bridged the gap between lab results and full-scale utility deployment. We've been testing materials from a variety of different water utilities over these past 2 years, and working with their engineering teams in order to be able to design both specialty products and special processes in order to be able to bring them into compliance with the PFOA, PFOS regulations, at the lowest possible price. We've been very successful with that and are extremely excited to move forward to be able to do that on a commercial level in January of next year.

Everything's in place for us to make that transition, and we very much are looking forward to being able to show the market that we can operate at a full commercial level at high volumes with the same efficacy that we've been able to generate in our design center in Pennsylvania. We have expert leadership driven by Dr. David Mazek, and Dr. Nick Lentz, along with some very key individuals that have worked with us for years: John Pavlish, Jim Treadle in particular, our leaders in the activated carbon industry overall, have specialized in the air side of things, but have been able to get up to speed under the tutelage of David Mazek over the past couple of years, to be able to execute our plan and our build-out as described, so that we will be commercially operable this coming January. Next slide. Ion exchange media to treat PFOS and multiple contaminants is a burgeoning industry in the country, and we expect that it will continue to grow, it's got a 300 to 450 million opportunity. Two to 280 million with water utilities. Another 50 to 70 million with nuclear power opportunities. And 40 to 60 million annually with coal and gas power operations.

And industrial water as well as another area of opportunity for us. And we have developed our own SEA, or Sorbent Enhancing Additive, IX, which we introduced earlier this year, which will be bringing to market in 2027 and beyond. So not only will be working in the activated carbon medium side of things, but also in the rosins and the ion exchange side of things, which will give us a very much broad approach to the market regardless of how each of those solutions grows in market share. Next slide. So we're looking to have a sustainable and more affordable PFOS-compliance, in particular for smaller communities. And when I say smaller, we're looking at the bedroom communities of the major centers around the country. Those are the places that need our hands-on expertise, our analytical expertise, our product design expertise, and our overall ability to provide start-to-finish options for them. So the rejuvenation capabilities that we will be bringing to market will allow these mid to smaller-sized communities to meet these PFOA, PFOS regulations and avoid the horrendous cost of having to replace that granular activated carbon on a regular basis every 9 months or so, as they go forward, to meet their PFOA, PFOS requirements.

We have the ability to generate small-sized operations that will fit nicely in regions around the country that have the requirements but not the capacity to support large massive reactivation facilities that have been the norm. Next slide, please. So from a financial point of view, there's this large settlement, of course, out there: 78 million plus final judgment that's earning interest daily. And we are looking forward to bringing that down, but not running our business waiting for it. We have strong cash management. The balance sheet strengthened with a raise of $16 million in February of this year, and we maintain about $12 million at this point after having paid off all of our debt, so we have zero debt at this point and have completed the uplifting to the New York which we expect in the long run will be very beneficial for the shareholders. So moving forward, we're very much enthused, have a good run rate with that $12 million in hand to carry us over this next year or two of operations. And with our new facility, up and running in February, or I'm sorry, January, of 2027, we expect to be able to provide a very solid profitable future for the company that will be growing quarter over quarter.

So we're in good shape financially. Do not need to raise capital at this time. Do not expect to do any equity raises. In the future, and are looking forward to be able to build these plants out in a very solid fashion given the cash on hand and some very solid debt financing as required as we go forward. Next slide, please. So the recent and upcoming catalysts, just to reiterate, we have strategic growth, settlements with these infringing parties, and an entrance into this $1.5 billion annual water market well underway. So the 78 million judgment is on final appeal, we expect that to see its way through the court system in the coming 6 months or so, to be settled sometime in 2027. All of the challenges against our patents have been terminated, which keeps which opens the door and clears the path for us to proceed with our negotiated settlement or litigation as necessary with the Ameren Corporation. And our water business is commercializing very nicely; we announced $1 million initial in purchase orders. We expect to be adding additional revenues as we go forward. But the main push forward for us will be the rejuvenation of our of the spent carbons through our newly patented process, and also we will be moving into the granular activated carbon sales business, and we'll have product available to the market early in '27.

We do expect more licensing revenue ahead given the situation with Ameren. In particular, and other utilities that are still using our patented technology without paying us a fee. And so we'll bring those that news of those gains to the market as we go forward. Our key centerpiece to our growth, which we are focused on, and we'll have commercially up and running as a proven entity as part of our build-out, is underway. We expect to close on the acquisition that will make that happen and we expect to have that first facility up and running in January of 2027. Next slide. So that brings us to the question and answer part of our session today. Richard, if you don't mind, what we'll do is jump into the questions as necessary. As I mentioned, it's 18 minutes past the hour.

Okay. Well, thank you. And I do have a two-part question here from someone. And the first part, have you had conversations with Ameren about settling before trial with IPR challenge not available to Ameren? Wouldn't it seem odd to go to trial? And the second part, do you have any update on the appeal process in the Delaware case?

Good questions. I have not heard back from Ameren since an initial conversation I had with their senior management. I'm hoping and expecting that as the case develops, we will hear back from them. There is an appeal on the Delaware case, which is still outstanding, perhaps they're waiting to see how that goes. Either way, the court will be assigning a trial date, and moving forward with the trial, in the coming week or two, is what we expect. So if necessary, we'll go to trial. We feel very confident in our prospects of winning at trial. But as always, we would very much prefer to have a business solution because we designed and patented the process that we are arguing about at this point. We would be able to bring some significant efficiencies to their program, their ongoing program that they use. And so at the end of the day, if we have an opportunity to sit with them, I think we can make a lot of sense out of us settling this prior to trial. But again, that's their call. With regards to the collection, we have been advised by legal counsel to let the appeal process finish.