Thank you operator and good afternoon. Welcome to the Greenlane Renewables second quarter 2021 conference call.

I am joined today by Brad Douville, Greenlane's President and Chief Executive Officer and Lynda Freeman, Greenlane's Chief Financial Officer. Before beginning our formal remarks, we would 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. Greenlane Renewables doesn't undertake to update any forward-looking statements, except as maybe 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. Lastly, while this conference call is open to the public and for the sake of brevity, questions will be prioritized for analysts.

Now, I will turn the call over to Brad.

Good afternoon and thank you everyone for participating on today's call. I would like to start off with a few financial highlights from the second quarter before I turn the call over to Lynda for a more detailed review of the numbers.

I would also like to highlight some of the industry developments in the quarter that demonstrate the ongoing momentum in the renewable natural gas space and the increasing recognition of the essential role that RNG place, specifically in the difficult to decarbonize sectors of commercial transportation and the natural gas grid. First off, Greenlane delivered a fourth consecutive record quarter with growth of 200% over the same period last year.

We have had a disciplined and energetic approach to executing our business plan and are seeing rapid expansion of our core biogas upgrading system sales business. Greenlane is unique with our relentless focus on the global RNG market.

Instead of selling one technology into multiple markets at which RNG might be won, it is exactly the opposite. We brought multiple technologies to one market.

Greenlane is all-in on RNG. Objective is to be the go-to industry partner for upgrading any biogas anywhere for any project size or type.

Our strategy has been particularly effective as the number and caliber of RNG project developers and owners has increased, many of whom are seeking to build large portfolios of RNG projects. Every biogas project is different requiring a tailored solution.

Greenlane is uniquely positioned to be a strategic partner to help our project developer and project owner customer scale up as the demand for low carbon and carbon negative energy solutions continues to build. Our contract wins in the quarter covered multiple geographies from the first commercial scale biogas upgrading system to be deployed in Colombia to another system supplied in to Spain to a large landfill gas-to-RNG project located in the Midwest, U.S.

Subsequent to June 30, the company announced new biogas upgrading systems supply contracts for three more projects in the U.S.. I will reiterate that Greenlane is the only biogas upgrading system supplier to offer all three of the primary upgrading technologies, namely waterwash, pressure swing adsorption and membrane separation.

This is the unique position in the RNG space and one that we believe continues to offer a distinctive competitive advantage. These recent orders involved all three of the upgrading technologies that we offer.

Helping drive our success is our talented and fast growing team of subject matter experts and professionals who have been enablers of the rapid scale up in operation to meet the demand as well as to uncover and progress new opportunities. We exited the quarter in a strong financial position, having no debt and with cash on hand to pursue and invest in strategic growth initiatives.

Although we will not lose our focus on a rapidly growing core system supply business, we additionally will pursue opportunities to deploy development capital to help accelerate project using even more Greenlane systems and also explore acquisition opportunities that can broaden our market reach and expand our IP portfolio. From a macro perspective, we continue to see RNG gain traction and show strong growth through industry developments and announcements, notably in commercial transportation and the natural gas grid.

In April, industry trade groups, NGVAmerica and the RNG Coalition, jointly announced that for the first time ever, more than half of all on-road fuel that use the natural gas vehicles in the U.S. was RNG.

In calendar 2020, RNG made up 53% of the total, after RNG volumes grew at 29% CAGR from 2015 through 2020. Also, for the first time ever, vehicles in California running on RNG removed carbon dioxide from the atmosphere than they emitted.

Admitted according to the California Air Resources Board, the average carbon intensity of RNG used in transportation in the state of California in 2020 dropped below zero, the only fuel of all options available including electricity and hydrogen to be carbon-negative on average. Natural gas utilities also continue to move forward with RNG initiatives and announcements in order to offer their residential, commercial and industrial customers, a green alternative to fossil natural gas.

Most recently Chesapeake Utilities, a diversified energy company serving customers in the Eastern U.S., announced that RNG was one of its five key strategic initiatives that will be undertaken through 2025 as it seeks to decarbonize its business. Additionally, UGI Corporation, a natural gas transportation and distribution company with operations in the U.S.

and Europe, announced that it expects to spend more than $1 billion on renewable gas investments over the next five years, building a diversified portfolio of projects. On the regulatory front, bipartisan legislation in the U.S.

has recently been introduced to encourage investment in building anaerobic digesters and nutrient recovery systems by farmers by providing a 30% tax credit. In the province of British Columbia, the government has recently amended its Greenhouse Gas Reduction Regulation to increase the amount of renewable gas utilities can acquire and make available to their customers from 5% to now 15% of the total annual supply of natural gas in their respective gas distribution networks.

This is in support of the province's plan to reach 15% renewable gas in the gas distribution network by 2030. With all this, it's clear that RNG is an exciting space to be in right now, as evidenced by the high growth of our core biogas upgrading system sales business and the continued pace of new industry developments every quarter.

Biogas upgrading is not easy with a variety of challenges and complexities, but we believe that our success in steadily and reliably executing on our business plan is because of our laser-like focus solely on the RNG market and our commitment to making our customer successful. I remain just as excited about the future growth of Greenlane and the industry more generally as RNG becomes increasingly recognized as an essential and necessary tool to combat climate change by decarbonizing the immense energy systems that we all rely upon.

I will now pass it over to Lynda.

Thanks Brad and good afternoon everyone. As a reminder, all figures are in Canadian dollars, unless otherwise stated.

And all comparisons are the second quarter of 2021 against the second quarter of 2020. As Brad mentioned, Greenlane posted another record quarter.

Our revenue in the second quarter was CAD12.6 million, which represented 200% growth over the comparative period of 2020. As a reminder, system sales revenue, which accounted for 94% of total revenue, is recognized in accordance with the stage of completion of projects.

During the quarter, the company secured new upgrader contracts with an aggregate value of CAD16 million and began recognizing revenue from these contracts immediately. Subsequent to June 30, Greenlane secured three additional systems supply contracts totaling CAD12.8 million.

We will commence recognition of revenue on these contracts in the third quarter. We delivered a gross margin in Q2 of 26% or CAD3.2 million, compared to CAD1.1 million or 26% in the second quarter of 2020.

Going forward, we continue to expect gross margins in the range of 25% to 30% on an annual basis. Adjusted EBITDA in the second quarter was a profit of CAD0.1 million versus the CAD0.7 million loss for the second quarter of 2020, which primarily reflects the strong increase in revenue compared to the same period last year, offset to some extent by higher operating expenses including new employee hires necessary to support our expanding business.

From a profitability standpoint, over the last 18 months our quarterly revenue growth rate has been 3.4 times greater than the quarterly growth rate in operating expenses, generating positive adjusted EBITDA, starting in Q4 of 2020. This leverage reflects the strength of asset-light business model which we see continuing as the topline grows.

We reported a net loss in Q2 2021 of CAD1.1 million compared to CAD0.9 million lost in the comparative quarter of 2020. This is reflective of operations in the quarter and an unrealized foreign exchange loss.

As at June 30, 2021, the company sales order backlog was CAD41.9 million. This does not include the three new contracts announced this week for CAD12.8 million.

As a reminder, the sales order backlog is a snapshot in time which varies from quarter-end to quarter-end. The sales order backlog increases by the value of new system sales contracts and is drawn down over time as projects progress towards completion with amounts recognized in revenue.

As announced the sales pipeline of prospective projects grew to over CAD800 million as at June 30. We continually update our pipeline of active system sales opportunities, based on quote activity which represents visibility to a significant number of opportunities that funnel down through our sales process.

And those opportunities successfully converted into contact wins then move into our sales order backlog. Looking at the balance sheet.

We remain in a very strong financial position as we exited the second quarter of 2021 with a cash balance of CAD36.5 million and no debt, which positions Greenlane well to continue to invest in and grow our core RNG business as well as pursue other strategic initiatives. We look forward to keeping shareholders apprised of our progress.

And with that, I will open the call to questions.

Thanks. Good afternoon everyone and congrats on a great quarter.

Thanks David. Good to hear from you.

Thanks. My first question here.

Just noticing the sales pipeline is up fairly materially quarter-over-quarter. Brad, wondering if there's any color you could provide on what drove that?

And if nothing specific, then maybe just commentary on the kind of momentum you have seen in the industry so far this quarter?

Sure. Yes.

Well, I think when you look at the sales pipeline, of course just as a reminder for everybody that that is a reflection of the active opportunities that we are pursuing. It is somewhat reflective of the general market activity in the RNG space.

We are quite rigorous in our approach to the pipeline. Not everyone uses the same methodology and of course it's not a GAAP-based standard but it's more activity.

I think it's also a consequence of some of the new entrants that we are seeing in the place. There is amount of money that are flowing in from funds, from energy producers, from gas utilities.

And that takes, we have been talking about this for some time, it comes in waves at times, but we certainly saw an increase in activity in the quarter. The other thing also is when we sign these contracts like the CAD12.8 million we announced this week, that comes out of the backlog or sorry out of the pipeline and goes into the backlog.

So we continually have to replenish what's going on. And again, I think we do have to recognize when these amounts come out and they are starting to be larger and larger amounts that more sales activities is growing plus growing pipeline more generally.

So hopefully, that provides a little bit of color.

Yes. That's great color.

Thank you. And then maybe just moving on to kind of a broader industry question.

I see that the comments or the potential for a tax credit in the U.S. I am wondering what you think would happen if there was a material uptick in demand, driven by tax credit?

And how you see kind of the supply demand situation for upgrading systems in North America? Could we see a situation where we see demand even a much higher from where it is today and maybe tightness in supply as a result of that?

Well, I think all of these regulatory moves and support by the government, it's all very helpful and they build on each other. I don't know if we can pick out one particular program while other than, of course, the base programs that are in place in the U.S.

right now, the RFS at the federal level and LCFS at the state level, both targeted very much towards the transportation industry. Some additional support, it's all good.

Every bit helps. And I think we may see some additional uptick as a consequence of that.

Time, of course, will tell. I don't get the sense that people are waiting around for these sorts of things.

So really, perhaps what it does is accelerates and projects that maybe could use a little bit of extra to get it over the line, but there's a considerable amount of quality projects out there that are advancing without these supports.

That's helpful. Thanks Brad.

Maybe just one last one for me, if I could. Last quarter, you talked a little bit about providing support for some of the developers in your sales pipeline.

I am just curious if there have been any developments on that front over the last quarter here?

Yes. Well, I think it's important to firstly say that the reason that we have been doing that is to accelerate projects so they are ready for construction phase, selfishly, of course, speaking that we want to sell more equipment.

We are selling a lot of equipment. So that's all very positive.

So these other things that we are doing are meant to support that aim. With our deployment of development capital, the concept is to be able to help those developers who perhaps don't have access to capital, we can help them accelerate, but also from a Greenlane perspective that gets us some recurring revenue and profits associated with a small participation of the projects.

We are sitting in front of an estimated CAD90 billion biogas upgrading equipment sales over the next couple of decades, two to three decades, according to third-party data. And so we see that these other things that we can be doing to be helpful, then we will keep doing them.

So in terms of specific deployment of capital, we are having a number of conversations going. We will be specific when we have specific deals.

But right now, there does seem to be ample money out there. There are still opportunities for sure for us to deploy that.

But the ultimate goal for us is to keep selling increasing amounts of equipment. And so far, we are on that trajectory.

Excellent. Thanks very much for that.

Good afternoon guys. Just my question on the cash balance and also deployment of capital.

I think you guys touched on it previously in your remarks that you are looking to expand potentially your IP portfolio. Any developments on the front?

And if so, maybe if you can give us a little bit of color on potential pipeline of M&A opportunities, multiples and what are you guys thinking on that part of the strategy?

Good to hear from you, Ahmad. So, yes, good question.

So this is back to the raise that we did earlier this year, CAD26 million gross proceeds. And so we said that a portion of that would go towards our develop-own-operate model which is the deployment of development capital.

The other part, of course, is M&A. So we have been looking at a number of opportunities.

We have been saying that this space is fragmented and consolidation in our market at this stage that we are at in the RNG industry is bound to happen. I think it's fair to say, we have got a couple of opportunities.

I can't say much at this point in time. It's been interesting.

Of course, we know that some of the companies that might be targets are part of larger companies and just simply aren't for sale and aren't up for the business combination. But we do have a couple that we think are compelling.

And for us, what M&A strategy means is two basic pockets. One would be buying competitors to win a larger market share.

And then the other would be expanding our IT portfolio. Right now, I think it's fair to say, we are more focused on the expansion of the IT portfolio because we think that there is some interesting opportunities there to bring additional value to our customer set and also perhaps a decent margin improvement and just make sure that we are continually building out all aspects of our product portfolio as what we prefer to as parts to plant.

So that's not just the core upgrading technologies, but the ancillary parts related to treatment of the impurities that are associated with every biogas project as well as the that the post-treatment depending on whether it's going to be liquefied or whatever form it might take thereafter.

Great. That's very helpful.

Thanks Brad. And then one more follow-up for me.

I am not sure, on the gross margin front, there's a nice uptick in the revenue quarter-over-quarter, but the margin kind of it's still in your target range. But any takeaways there?

Why is it on the lower end of that range? And are you seeing any inflation?

Or that's just normal course of business and part of the project pipeline you are working on?

Yes. I think the way to think about our gross margins is, we don't give guidance but that is the one piece of guidance that we do give.

And we have been consistent for quite some time that we expect to see 25% to 30% on an annual basis. So I think fluctuations quarter-to-quarter are bound to happen.

We are still within the zone. Although we will wait for another two quarters to see how we do for the balance of the year.

I don't think we can read too much into a lower quarter. Sometimes it's a bit of a mix where we are in the project timelines.

Sometimes that impacts things. But I think overall, we are pretty happy with where we ended up and it will just bounce around a little bit from quarter-to-quarter.

That's very good. It was really helpful.

Thank you Brad. I will jump back in the queue.

Hi Brad. Hi Lynda.

Looking at your systems sales revenue here in Europe, it looks like you guys had a pretty nice contribution during the quarter. Maybe you just provide a little of color this uptick in sales?

Like was there any changes in the sales force in this region during the period?

There was no change in sales force of the region. So we have sales staff in France that handles the southern part of Europe and in the U.K.

that handles the U.K. and the northern part.

So that's been consistent for quite some time. We have this pipeline of opportunities currently at CAD800 million.

These things, they happen when they happen. It's very much up to the developers.

I think timing came into this. So this particular order went into Spain.

It's an account that we have been working for some time. They had, like we often see, a bit of a pause period but it's come back and we are happy to get the order.

So that's what I can say on that one.

Okay. Yes.

No, that helpful in. and then just a bit of macro picture here on you guys sales pipeline.

Are you able to comment at all on the mix between, I guess, pure-play biogas companies versus more diversified energy producers? And have those mix changed over the past year with any new entrants?

Yes. I think that's exactly what's happening, Devin.

We are seeing a bit of a change in mix. We saw the more aggressive entrance of the global majors into the RNG space.

I think what we are hearing is that the core business of the global energy companies is that they provide liquid fuel to the transportation space. We have heard a few comments, one in particular by the CEO of Chevron saying, well.

I know I recognize our peers are looking at wind and solar, but what value that we add in that space. RNG is quite different, right.

Because RNG is going at the heart of what these companies do for the core business. It also factors large into the two programs, the RSF, the renewable fuel standard at the federal level and the LCFS at the state level to do require these so-called obligated parties, which are the oil companies to have to have these growing amounts of renewable fuel in their mix.

So those are kind of the underlying principles that we are seeing trend to action in terms of the mix of more of the international energy companies that are behind some of the activity in our sales pipeline.

Okay. Great.

That's very helpful. And I will jump back in the queue.

Thanks guys.

Thanks Devin.

Hi guys. Thanks a lot for taking my questions.

It looks like a solid quarter. So congrats on that.

A lot of ground has been covered already. But just on the EBITDA.

The Q-over-Q decline looks like it's mostly driven by FX. You had similar revenue to Q1, a little bit higher.

I am just wondering if you are considering or changing your hedging strategy to help kind of protect from those kind of debits?

Want to take that one, Lynda?

Yes. Also I will be happy to take that one.

The FX is really, it's just purely for financial reporting. It's the FX on our U.

S. Dollar bank account.

Yes, we have to manage FX. A large level of our contracts are in FX but so a large number of our supplier contracts.

So the impact of FX on the actual like, true impacts, on profitability and margins et cetera is only really exposed to predominantly the gross margin side of things. Otherwise, that's really just an accounting of FX, rather than actually a true FX difference.

Does that help, Colin?

Yes. That's very helpful.

I didn't have time to dig into the financials too much so far. But I just wanted to check in on that.

And as far as the pipeline goes, Brad, maybe you could, is it possible to elaborate kind of on the geographic mix of the pipeline? I know you talked about some other kind of granulation of it.

But I was just wondering where it's heavily focused?

Yes. I think if you look back at some of our announcements, it has been broad-based geographically, but when you sum the numbers, at least for us, it's been quite weighted to North America, particularly the U.

S. Much of that is driven by what I have already talked about today, the transportation-based programs, the RFS, which has been in place since 2005, the LCFS programs.

So that continues to be driving considerable activity. The 30% investment tax credit, that may further that along even more.

So I think our pipeline we are seeing awful lot from the U. S.

market. That's probably the majority of it.

But certainly, we are seeing quite a mix geographically, including Latin America and Western Europe which is really our two other kind of key focus areas. That said, we are starting to see some activity in places like India.

It's early stage compared to other markets. But of course, massive country with a lot of biomass that needs to be dealt with.

So we will be monitoring some of these new upstart markets, of course, that are big opportunities to come.

Yes. That's great color.

Thanks for that. That's kind of what I was after is kind of where you are seeing that kind of new opportunities and the change in the smaller parts of the pipeline And I don't know if you can answer this.

But on the backlog, is it safe to assume kind of based on what you have added? I mean you basically gave the formula for in the press release.

But are we thinking around $50 million right now based on kind of Q3 business levels thus far and the additions?

Well, trick questions, hold on. So we report the backlog just once a quarter, right.

We try and do that because otherwise it would get hard to handle. And as every day that we go beyond the end of the quarter then some amount leaves the backlog and goes into the revenue line.

So it's not quite as simple as saying that the CAD12.8 million that we announced, you add that on top of the CAD41 million because some of that has already moved into the revenue line, which is course, we won't report until three months from now. So it's being able to come up with the number you kind of make an approximation.

We are halfway through the quarter. So what's Q3 revenue look like and subtract that and then add back the revenue from the contract value that we just announced.

Yes.

That was math enough, if that wasn't confusing. Lynda, you want to try and simplify that?

I don't know. I kind of just slipped down the rabbit hole.

Yes. I agree with what Brad's saying.

I think the key is that you have got to consider both sides of it. So yes, we have added CAD12.8 million in contracts, but then we have also had revenue that we have recognized in the period from July 1 to date, which we obviously haven't disclosed.

Yes. For sure, that's the number I was trying to get color on.

Yes. I can't give you color on that, I am afraid.

Okay. Well, thanks a lot guys.

I appreciate it.

Hi. Good afternoon.

Thank for taking the question. First on the pipeline, the incremental amounts.

I am wondering if you can give any color on the size of those opportunities? Are you seeing anything in terms of number of deals?

Like, are they similar size, similar magnitude of what you r been announce lately? Or are we starting to see some deals creep up into the bigger mega $20 million you did before [indiscernible]?

Nick, good to talk. I think we are still seeing they are pretty much in line with the kind of size that we have been seeing.

I think it's also fair to say, if you look back in time at our press releases, yes, we had a very large one mid-last year of $20 million. But more recently, we are getting more consistency around the, call it, the $10 million-plus or $10 million range.

So I think over time, we are seeing bigger projects but to get to project, a single project that's over $20 million, that's not so easy to do. So I think partly I would say, we are focused to where the market is focused is to try and gain scale.

It's really hard to gain scale if you are doing a bunch of really small projects which require just as much project management effort, the cost to do the pipeline. Interconnect is just as much for 100 SCFM system than is for a 6,000 SCFM system.

So obviously I think that the project developers, they recognize that to try and find a he sweet spot when they running their financials and that means to aggregate the feedstock to the best that they can. So, kind of long-winded way to say I think we are continuing to see projects that are creeping up in size, but $5 million, 10 million.

I don't think we are going a ton of $20 million ones but undoubtedly there will be a few more of those overtime.

Okay. Good.

Thanks. And then last was on the develop-build-and-operate model.

I am wondering if you can provide any color on what's happening in Europe with SWEN? And if you are seeing any uptake of that in North America?

Yes. Well, SWEN is a great partner base.

They are very creative. We met them and said, hey, let's look try and think differently about the market and put this upgrade to the service model together because no one was really doing it.

I think what we have done is, we have learned a lot in the process and we have really determined that the key for the market is to provide the financial solution for the entire project, which isn't necessarily what upgrading to the service is doing. SWEN is also making great progress in deploying the funds that they raised in that first fund, which was €175 million.

They have reserved an amount for us still. And what we are looking at doing is to say, okay, well, we tried this.

We haven't had quite the uptake that we anticipated but both parties are quite motivated from where we both fit in the industry to get more creative and look for ways that we can add value to project developers out there. So we haven't made a ton of progress on that joint venture to- date, But both parties are very motivated to see what else we can do together.

Okay. Thanks.

And then is there in North America, is it a similar dynamic you are seeing?

North America, sorry missed that part your question. In North America, we are really focused on the deployment of development capital to developers to accelerate the project to ready for construction.

That's applicable when the project developer may not have access to financing because as you can imagine before you have a project, it's not bankable. And often financial players out there may not be in the position to understand the risks or to themselves derisk project.

And that's where we settled on this strategy is because we are a key part of any project. We can understand the risk areas.

And we can fundamentally derisk it by participating. So that's really where we are focused there.

In the event that we put these deals together, the concept is that we would end up getting a partial consideration back by an equity or a profits interest in the resulting project. And our vision here is not to own a large percentage of a small number of projects, but the other way around.

We would rather own a small part of a large number of projects into which we sold our equipment. And that's with the plan that at the front end of a massive infrastructure build out to $90 billion estimated biogas equipment sales over time within the next 20 to 30 years.

So if we can be the go-to partner for most of that equipment, as well as have a small profits or equity share in the resulting projects, then I think that's what success looks like to us.

Sounds good. Thanks for the color.

Hi guys. Thank you for taking my questions.

On the competitive environment, do you see any sort of increase in competitors pursuing similar opportunities or your pipeline sort of getting a little bit more competitive in terms of new entrants coming into to the market?

Hi Amit. That's a good question.

I think what we are seeing is, doing this biogas upgrading is tough. It's a tough slog.

It's a tough business. It's difficult to do.

I think we are seeing some of our competitors either experienced some very significant lead times, which is helpful to Greenlane because we are quite liking the lead times. I think we have seen some other competitors reduce their focus to kind of shrink the risk areas.

For us, all we do is RNG, all we do is biogas upgrading. And I think that's helpful for our business because that's all we do, we better be good at it and make sure that we have the core competencies within the business to execute and minimize the risks and make sure that we are delivering.

So if anything, I think what we are seeing is people trying to orient the business in ways that they can deliver. And for us, it's perhaps cleared a few pathways, to be honest.

That said, it is a competitive environment. I would say there's some higher degree of competitive pressure in Europe that we see than we see in North America.

But it's a global environment that we participate in and we are seeing companies look across different jurisdictions and look for ways that they can enter. So right now, we are seeing great success in the Americas particularly.

And we are trying to make sure that our customers see us as the guys that can deliver. And we want to make sure that we maintain what we see as a leadership position in the industry and keep building on our recent successes.

Understood. Thank you for that.

And then, Brad, maybe in terms of the time to deliver on this backlog, has there been any change to that? Or should we expect any chance to that?

Demand is strong. It looks like everybody wants to get this done.

Is that speeding up the delivery timelines or no really change on that side?

Well, I think you are right. Everyone wants to get it done.

It hasn't really changed much over time. We are seeing obviously some dynamics in global shipping that have become challenging.

That is something that we are keeping a close watch on and having to manage. It's definitely fair to say that we have experienced a few situations of, we had goods ready to ship and the ship said, well, it's going on the next one.

Well, what do you mean? So there is some unprecedented dynamics.

Some costs have increase on the global shipping. But coming back to the lead times and when we see our order backlog translate revenue, it's still roughly that same nine to 18 months that we typically advise.

I wouldn't say it's accelerating just because you can only move so quickly when we are building the equipment. We have had a couple of situations where we have been able to, we have had the opportunity for some inventory or some inventory that we could get quickly that sped up a program.

But typically, the equipment has to be specified and then built specifically for that project. So I think the guidance is still roughly the same for that nine to 18 month period.

Okay Thank you. That all I have.

Thank you so much.

Okay.

Hi Brad. A couple of follow-ups from me.

On the last point that you just touched on in terms of some delays on logistics. You guys have done a good job historically structurally to get contracts.

So when we are bidding right now or in your current contracts, like do you have protection against some potential delays in terms of cost creep ups? Did you guys structure it that way?

Yes. Well, firstly, you have to look cost increases.

There's two different things going on. I mean there's a lot of talk around inflation.

But to be honest, I don't think we are necessarily seeing that for us right now and we haven't really experienced. That hasn't been a drag on the business.

What we are seeing is that several of our supply chain partners, they used to give longer price validity periods. But because of concerns, these are concerns and necessarily a reality, but concerns around inflation, we are getting shorter price validity periods.

So we are managing through that. But that so far is manageable.

So it's not really causing us any grief. So right now, I would say we are definitely keeping a sharp eye on inflationary pressures, which again, we are not really seeing that quite happen.

The other thing of course, is the way that that we manage within our asset-light model is when we get a customer contract, we do then quickly make sure that we have got the same orders put out to our supply chain partners. So we minimize any sort of time period that we are experiencing risk that the prices could go up.

So that's kind of a core principle as to how we execute our projects to minimize inflationary risk.

That's great color, Brad. And another on the pipeline and maybe taking a step back focusing one North America.

We know that the EPA hasn't really set the RVO and yet we see this nice uptick in the pipeline. So plenty of discussions on the field like what are you seeing in terms of whether it's the super majors or any other market participants?

How are they thinking about EPA and RVO and all that in the background, especially since it hasn't been set? It doesn't seem to be a concern for them.

And if that decision from the Biden administration comes in more favorable than the previous administration, should we expect another nice uptick in the pipeline do you think to maybe $1 billion and staying there for a while?

Yes. Well, I mean you have been around this for a long, long time, Ahmad.

So yes, these are sophisticated questions. So I think every little bit helps, right, of course.

And we know that when we look at projects into the transportation space, we have got the contribution from the RFS through the RINs being a lesser amount than the LCFS. So we know that many project developers they do tend to look more at the value that's coming from the LCFS and also don't think I said it yet today, but it should be quite clear certainly from our press releases that we are seeing a lot of activity in the dairy space.

In the dairy space, the ratio of the value coming from the LCFS is much, much greater sort of the ratio of the LCFS versus the RFS. It's much greater for a carbon-negative project like dairy versus something like a landfill project.

So the LCFS is really overarching, which doesn't rely on the RVO. The other dynamic that we are seeing, of course, is as more and more gas utilities are coming into the space, that's a whole another market in the U.

S. I have often said that there's kind of two markets in the world right now.

There's the U. S.

market, which has been led by transportation, the combination of the RFS and the LCFS programs. But everywhere else, it's more of the gas utility-led space.

That whole gas utility space now in the U. S.

is really starting to pick up. And we are getting the gas utilities now looking for their own offtake.

So that provides a whole another demand channel for project developers who can just, they can just skip the transportation. They don't like the RVO, they don't like the RIN prices, then they can go do a deal with one of the gas utilities.

And it's also important to know in the same way that you don't have to be, your project doesn't have to be in the state where the LCFS is. The same applies for the gas utility space.

So in other words, just to use an example, Northwest Natural in Oregon, your project could be in Louisiana. It's the market allows for the mass balancing and the notional deliveries.,

That's great color, Brad. Very much appreciate is.

I will jump back in the queue.

Thanks everyone and thank you for participating on today's call. We appreciate your questions as well as your ongoing interest and support and look forward to seeing you on the next conference call.