Greenlane Renewables Inc.

Welcome to the GreenLane Renewables First Quarter 2025 video conference. My name is Darren Seed, President of Insight Capital Markets, responsible for investor relations at GreenLane. I'm joined today by Brad DeVille, GreenLane's Chief Executive Officer, and Stephanie Mason, GreenLane's Chief Financial Officer. We'll begin with prepared remarks, followed by Q&A, which I will moderate. Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect the 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 the canadian securities regulators please feel free to submit any questions you have through our investor email address at ir greenlanerenewables.com now over to brad good afternoon and thank you everyone for joining us today

Let me begin by updating you on the execution of our 2025 strategic plan. In short, we're on track. As a reminder, I set out in my letter to shareholders earlier this year three pillars of Greenlane's 2025 strategic plan. Those include one, continued sales growth in the most profitable segments of our business, including biogas to sulfurization products, parts and service and technology licensing to development of our compelling next generation landfill gas upgrading product line and three improvement of profitability of our core operating system segment. Our aim as a company is making renewable natural gas projects more accessible and scalable by solving the industry's most challenging problems. From a technology perspective, the most important problems that need solving are coming down the cost curve and climbing up the performance curve for biogas desulfurization and landfill gas upgrading technology. Every biogas project has hydrogen sulfide that must be removed. And of the various feedstock sources for RNG production, in the Americas, 60 to 70% of it is from landfill gas. We've solved the hydrogen sulfide removal problem with our biogas to sulfurization product line that has set the standard in Italy and is increasingly being adopted in global markets. The problem with today's landfill gas upgrading technology is achieving low cost and high methane recovery at the same time when high levels of oxygen and nitrogen, which are commonly found in landfill gas, need to be removed. Greenlane is solving this problem by developing and bringing to market our next generation landfill gas upgrading product line that incorporates the content of new patent applications we filed in December. As we strive to advance the state of the art of technology in our industry, we are not only actively expanding our intellectual property portfolio, we are also deepening strategic partnerships and advancing plans to localize manufacturing in key markets, including the US and Brazil, positioning us for long term growth and operational resilience. During the current period of economic uncertainty driven by new and changing U.S. tariffs, the focus of infrastructure investors in the U.S. appears to be on optimization of the large number of R&D producing assets constructed over the last few years while taking a wait and see approach on new project starts. In Canada, with the newly elected Liberal government, who campaigned in part on building a clean economy and tackling climate change, we are optimistic about new support for RNG projects. In Brazil, the new biomethane legislation under the Fuel for Future law calls for a 20-fold production increase. In Europe, a market increasingly dominated by anaerobic digestion of agricultural residues, we see continued investor enthusiasm for biomethane and demand for our products and services. All of this bodes well for our strategy because our biogas desulphurization products and our parts and service offerings play an important role not only in new projects, but also in optimizing existing ones. And the time is now to be developing and bringing to market our next generation landfill gas upgrading product line. I appreciate your continued support, especially given the short time frame between our last call and today's. And I look forward to keeping the public informed of our progress. Also, I want to thank the GreenLane employees for the continued hard work, passion and drive for results. With that, I'll now turn the call over to Stephanie.

Thanks, Brad. And good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated, and all comparisons are for the first quarter of 2025 against the first quarter of 2024. As Brad noted earlier, and I stated in our release, we are on track with our strategic plan for the year. In the first quarter, we delivered $7 million in revenue and a solid gross margin of 40%, reflecting the shift in our focus to profitable revenue. During the quarter, we saw a $0.4 million improvement in services and spare parts sales. This was offset by a $10.7 million reduction in system sales and a $0.8 million reduction in revenue from royalty contracts in comparison to the same period last year. While we reported an adjusted EBITDA loss of $1.1 million, our $21.2 million sales order backlog compared to $21.8 million as at December 31, 2024, and strong cash position of $16.2 million consistent with the cash position as at December 31, 2024, along with no debt, underscore the strength of our fundamentals. Our gross margin in Q1 2025 of 40% improved from 26.5% in the first quarter of 2024, which is about a 1400 basis point increase. This reflects the updated company strategy and was largely the result of a change in product mix and expired warranty provisions. The company has a portfolio of active projects at different stages of completion and at different gross margin levels. As I noted, we reported an adjusted EBITDA loss in the first quarter of 1.1 million versus a 0.8 million loss in the first quarter of 2024. The company incurred an operating loss from continuing operations of 1.4 million in Q1 2025 compared to a loss of 1 million in Q1 2024. Net loss and comprehensive loss from continuing operations in the first quarter was 1 million compared to a loss of 0.8 million in the comparative quarter of 2024. We maintain our optimistic outlook on the year and look to improve these adjusted EBITDA results. While there was no royalty revenue recognized from technology licensing contracts in Q1 2025, Advanced payments of $3.3 million received under the Technology Licensing Agreement with ZEGG Biogas that are included in deferred revenue were considered fully earned in April 2025 and will be recognized as revenue at a gross margin excluding amortization of $2.8 million in the company's second quarter 2025 results. Further to my comment on the company's sales order backlog of 21.2 million, the sales order backlog is a snapshot at one moment in time, which varies from quarter to quarter. The sales order backlog increases by the value of new system sales contracts and is drawn down over time as projects progress towards completion and amounts recognized in revenue. Note that sales order backlog does not include revenue from contracts in connection with services and spare parts, given their small individual contract values or royalties. We remain focused on operational discipline and execution as we work to convert our backlog into profitable revenue, grow sales in our most profitable segments, and drive long-term value for our shareholders. We look forward to keeping you appraised on our progress. And with that, let's go over to Darren for the Q&A.