Greenlane Renewables Inc.

Welcome to the Greenland Renewables fourth quarter and year-ended December 31st, 2025 video conference. My name is Darren Seed, President of Insight Capital Markets, responsible for investor relations at Greenland. I'm joined today by Brad DeVille, Greenland's Chief Executive Officer, and Stephanie Mason, Greenland's Chief Financial Officer. We'll begin with remarks followed by Q&A, which I will moderate. Before beginning our remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that 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. Greenland 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. Please feel free to submit any questions you may have to our investor email address at ir at greenlanerenewables.com. Now, over to Brad.

Thanks for joining today. So firstly, let's take a look back. Let's look at our strategic initiatives that we had at the start of fiscal year 2025. We had a relentless focus on improving adjusted EBITDA results and maintaining healthy cash reserves. And we would do that with three key strategic initiatives. The first one being continued sales growth in our most profitable business areas, which are proprietary standard products and parts of service. Number two is our improve the profitability of our system integration delivery business area. We would do that by executing our projects on time, on budget, delighting customers. and selling standard products versus one-off engineered solutions. Thirdly, develop Cascade LF, our compelling next-generation landfill gas upgrading product line, capturing additional IP, and planning manufacturing. So how do we do? While we overachieved our 2025 objectives, we generated $2.3 million in adjusted EBITDA versus a loss in 2024, and we increased, not just maintained, but we increased our cash balance over the same period last year. Let's also take a look back, and just as a reminder and maybe a recharacterization, our three business areas, proprietary standard products, system integration and delivery, parts and service. So what are those? Let's start with proprietary standard products. So our product lines beginning on the right of this chart, Cascade H2S, so this is our biogas desulfurization system. Below that, Cascade Water. This is our long-standing water wash product line. It's the foundational technology upon which Greenland was founded more than 35 years ago. And then our new product line. It's built on all the previous products that we had delivered to date. So that's Cascade Aleph, which is our next-generation landfill gas upgrading, higher performance, lower cost. And then Cascade MS, which is our membrane separation line. It's upgrading of anaerobic digester gas for larger flows, and it has low-cost synergy with Cascade LF. So in 2025, the development of our Cascade LF, including our new proprietary linear NRU, marks significant advancement in our technology portfolio. The new product line, which is engineered to improve methane recovery, methane recovery being the number one performance indicator of an upgrading system, Reduce system complexity, lower operating and capital cost, and that spawned four new patent application filings since December of 2024. That, of course, further enhances our intellectual property portfolio. Our system integration and delivery business area. So this is where we take our proprietary standard products, shown on the right, on the upper right, So that is the proprietary portion of our Cascade LF. That's before integration. And then the image below that is after integration. So that's after for those customers that require it. So it's turnkey project delivery where we integrate our proprietary standard products with third-party equipment and deliver to customers complete biogas upgrading systems. So the scope of that is system engineering. Third-party equipment specification, procurement, quality control, project management, installation at site, interconnected piping, wiring, and then of course system integration, performance testing, and ultimately operator training and handover. So in other words, full turnkey. Our third business area, parts and service. So this is an attractive, growing, recurring revenue part of the business. We're adding value with an increased customer base. That increased customer base is from more than 500 systems sold into 32 countries. That gives us a large and growing pool of customers. So the kinds of things that we deliver as services here, remote monitoring, 24-7 technical support, proprietary software upgrades, scheduled and unscheduled maintenance, priority spare parts, priority spare parts supply, and performance optimization. Let's look at the financial performance of all three businesses, and it's easiest to do this in a bit of a build here. So let's start with parts and services, the financial foundation. Our parts and service over the last three years has provided strong, positive adjusted EBITDA growth. And in 2025, approximately 15% adjusted EBITDA was generated on $14 million in revenue. If we layer on top of that the proprietary standard products, so you can see that takes the combined adjusted EBITDA growth up to 28% on $39 million in revenue in 2025. Very strong adjusted EBITDA growth from these two parts of the business. And then we layer in our third business area, the system integration and delivery. You can see in the revenue chart, we're ramping down. We're deliberately ramping down. We're completing legacy low-margin contracts to ramp back up, centered on Cascade LF with lower risk, higher margin. So that, on a consolidated basis, is 5%. So in other words, the system integration and delivery brought down our results from the 28% to the 5%. Looking forward, our 2026 strategic initiatives are aligned with what we had last year, but of course updated because we've made substantial progress. They continue to be underpinned by financial discipline. That's foundational to our objectives for 2026. strategic initiative number one remains unchanged from last year it's working so let's keep doing that which is continue sales growth in our most profitable business areas proprietary standard products and parts and service reconfigure this the second one reconfigure our system integration delivery business area so complete the ramp down of legacy low margin contracts and ramp back up centered on cascade of left we'll enter into new margin and lower overall cost for customers. And then thirdly, add step change profitable growth potential with CascadeOF. So complete the final development, commence manufacturing in Brazil with the aim of being ready to ship of the first unit by the end of this year, and also this year establish our manufacturing plan to serve the North American market. And now over to Steph for the financial results.

Thanks, Brad. I'm going to talk through a highlight of 2025. As a reminder, all amounts are in Canadian dollars unless otherwise stated. 2025 saw Green Lane back to a positive adjusted EBITDA, ending the year at $2.3 million, which was an improvement of $4 million, up from a loss of $1.7 million in 2024. A big contributor to this adjusted EBITDA is the $2.9 million gross margin contribution, which was received under the Technology Licensing Agreement with a local partner in Brazil. The agreement triggered a one-time minimum volume commitment. Now, if you look down to revenue, revenue was $10.8 million, which was upped by $2.3 million from Q4 2024. This increase consists mainly of $1.7 million in higher system sales and $0.6 million increase in parts and service revenue. Looking to the full year of 2025, revenue was $44.4 million. This is a decline of $7.4 million. This consists of a $16.2 million reduction in system sales, which was partially offset by a $6.3 million increase in parts and service revenue and a $2.5 million increase in royalty revenue. Now, if we go to look at gross margin before amortization, Q4 of 2025 was $4.4 million for 41% of revenue compared to $3.8 million or 45% of revenue in Q4 2024. Now, for the full year of 2025, we achieved gross margin before amortization of $19.1 million, or 43% of revenue, compared to $16.3 million, or 32% of revenue, for 2024. A change in margin contribution reflects mainly the product mix, as we have projects at varying margins at different stages of completion, and we're also seeing a growing contribution from our higher margins, parts and service business, and royalty revenue streams. I also want to highlight Q4 2025 net loss and comprehensive loss of $1.2 million versus net income and comprehensive income of $1.9 million in Q4 2024. In Q4 2025, we did see an increase in R&D expenses as we advanced our Cascade LF product line. And in the prior quarter, we saw a gain in the change in fair value of note receivable, which was fully paid in January of 2025. There was also movements in foreign exchange as we had a gain in Q4 2024 versus a loss in Q4 of 2025. We ended the year in a strong position with a sales order backlog of 33.6 million and a cash position of 17.7 million compared to 16.2 million in 2024, which was an increase of 1.5 million. This shows that GreenLane has a stable financial platform to support our backlog execution and our product development. And with that, I'll send it back to Darren.

Thank you, Stephanie. Brad, you spoke today about the Cascade LF system. And how excited are you about its opportunities? And how should investors think about timing on revenue for this product?

I'm very excited, Darren. So I think that's clear. It's going to be a great product. So in terms of timing, provided we get through the steps to complete the activities to deliver or be ready to ship for the first unit by the end of this year, as you've heard from us before, that we do our revenue on a percent of project completion basis. So as we sign contracts, we get those build slots filled up. Remember the first build slot with completion or being ready to ship by the end of this year and then thereafter. We'll start to see revenue recognition from those contracts.

So looking at R&D, is this still an important factor in a related expense when considering Greenlink?

So, yes, R&D will continue to be a focus into 2026. As we've talked about with our Cascade LF product line, we're localizing manufacturing in Brazil and aiming to have the first unit ready to ship in 2026. So it could be a similar effort in 2026 that we saw last year.

Got it. Thanks, Stephanie. And as we've all seen in the news, there's an international situation in the Middle East that may have an impact on energy security. Does there appear to be any impact on Green Lane or perhaps the energy space that we're aware of? Brad, I'll put that over to you.

Yeah, well, I think, you know, obviously the events happening in the Middle East are fresh, they're new, but they do bring us back to a clear focus on energy security you know that's that's a thing it it highlights the over concentration of energy sources in this case mainly oil but not just oil passing through a small straight of her news in the middle east and you know that reminds us of the importance of local production energy sources and rng is one of those so you know anything that does not have to flow through that straight um we have to think about again in terms of global energy security and sources of supply so rng provides that rng is local it's low carbon and it's lucrative so you know that's those are the things that we need to keep in mind uh with the rng opportunity well thanks brett now let's pull this back to the financials released today what should investors expect from green lane this year in 2026

Yeah, so 2025 was a good year. You know, we ended with a positive even in number. We have $33.6 million in our backlog, $17.7 million in cash. So we're starting the year with a really strong foundation. Our objective for 2026 is to still strive towards positive adjusted even in results. But I will say we do see fluctuations quarter on quarter. And then as Brad's talked about and I've talked about, Cascade LF, is a new exciting product for us. We're striving towards a ready-to-ship date by the end of the year, and we're excited to see the impact this new product could have for Green Lane.

Thanks, Sophie. Well, thank you for watching today's financial report, everyone, and we look forward to seeing you next quarter.