Greenlane Renewables Inc.

Good afternoon ladies and gentlemen. Welcome to the Green Lane Renewables Incorporated third quarter 2022 results conference call. At this time all participants are in a listen only mode. Following the results we will conduct a question and answer session. To join the question queue you may press star then one on your telephone keypad. Should you need assistance during the conference call you may signal an operator by pressing star then zero. Today's call is being recorded, and a replay will be available on the GreenLane website. I will now turn the call over to Darren Seed from Insight Capital Markets. You may begin your conference.

Thank you, operator, and good afternoon. Welcome to the GreenLane Renewables Third Quarter 2022 conference call. I'm joined today by Brad DeVille, GreenLane's President and Chief Executive Officer, and Monty Balderson, GreenLane's Chief Financial Officer. Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that may reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Green Lane Renewables does not undertake to update any forward-looking statements except as may be required by applicable laws. Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with Canadian securities regulators. Lastly, while this conference call is open to the public, and for the sake of brevity, questions will be prioritized for analysts. Now, I'll turn the call over to Brad.

Good afternoon. Thank you, everyone, for participating on today's call. I'd like to start off with a few financial and business highlights from the third quarter, as well as provide some industry commentary before I turn the call over to Monty for a more detailed review on the numbers. Greenland delivered another quarter of record revenue generation with $19.9 million in the top line, and we remain optimistic about the growth of the R&D industry and our role in its success. Adding to this top line success, we had a consistent gross margin of 25% in the third quarter alongside an adjusted EBITDA of over $400,000. With increasing global focus on impactful solutions to decarbonize our planet, the RNG industry has experienced significant consolidation this year, together with new support of regulations and funding, pointing to the scale-up of the number of RNG projects. The acquisition by BP of US-based Archea is particularly noteworthy, as several of the energy supermajors have announced decarbonization efforts and have both the capital and the capacity to amalgamate existing RNG development platforms into their business models. It was never a matter of if, it was always a matter of when. We anticipate further consolidation in the sector which together with supportive regulations and policies such as the Inflation Reduction Act and the We Power EU Plan are expected to provide additional capital to help expedite RNG industry's growth. We expect this will have a positive effect on the pace of development for R&D project developers and owners, increasing market strength for project financing, and subsequently new sales opportunities for Greenland. Our success in winning new biogas upgrading system supply awards continued in the third quarter as Greenland announced over $13 million with two new contracts with South America. This highlights not only the competitive advantage of our multiple core technology approach, but also that we are benefiting from our singular focus on the global RNG market, which continues to build momentum and size. We continue to build out our talented GreenLane team and enhance our internal systems and processes that will further position GreenLane for future growth. We maintain a strong financial position with no debt, and over $21 million of cash on hand, which provides us with ample flexibility to invest in our core business, to fund our deployment of development capital program, and to pursue strategic growth initiatives, including evaluating acquisition opportunities that can expand our market presence and technology offerings. As I previously alluded to, the R&D industry has experienced significant consolidation this year, as well as new supportive regulations and funding, which we believe points to a meaningful escalation of RNG projects and production. The BP-Archaea energy transaction for $4.1 billion marks the largest ever RNG transaction, with BP announcing plans to increase Archaea's current RNG production five-fold by 2030. Global Energy Supermajor Shell is rumored to be one of several companies involved in a second-round bidding to acquire one of Europe's largest biomethane producers, Danish-based Nature Energy, in a transaction that could be worth $2 billion. In another highly supportive RMG transaction, U.S. renewable energy leader Nextera Energy recently revealed the acquisition of a portfolio of approximately 30 operating landfill gas to electric facilities in a $1.1 billion U.S. deal. with plans to spend about $400 million US to convert the portfolio to RMG. We are also seeing transactions announced in Europe as global infrastructure player Macquarie announced that its green investment group has acquired German biogas platform BayWa Bioenergy. As we noted in the news release, it is important to highlight the US Inflation Reduction Act, which was signed into law during the quarter and which will provide $369 billion over the next 10 years on spending and tax policies to reduce greenhouse gas emissions and spur the expansion, the expanded production and use of domestic clean energy. This legislation also contains provisions for biogas property, which includes biogas upgrading equipment as qualifying equipment for purposes of the Section 48 Energy Investment Tax Credit, which can reach 40%. Also in the U.S., the whiskey industry is looking to RNG as an important tool to help decarbonize operations, as both Jack Daniels and Jim Beam have announced recent RNG-related projects involving over 429 million. In Canada, a revised legislation in Quebec centered on the minimum RNG volumes in the natural gas grid now require gas distributors like Energier to deliver 5% RNG volumes by 2025 and 10% by 2030. with energyers subsequently openly asking RNG producers across North America for interest in long-term commitments to supply the necessary RNG volumes. In Italy, the European Commission announced that it had approved plans put forward by the Italian government to help increase domestic production of biomethane in the country, backed by funding of 4.5 billion euros. I want to draw your attention to these significant industry developments as Greenland is very well positioned to take advantage of the opportunities they create and the anticipated ramp-up in demand for RNG and related biogas operating solutions. I'd like to thank, once again, to take this opportunity to thank the Greenland team for their dedication and commitment to our mission of helping to decarbonize the world's energy systems, as well as our customers for choosing Greenland as a trusted partner.