Thank you, operator, and good afternoon, everyone. Welcome to the Greenlane Renewables fourth quarter and fiscal year 2021 conference call.

I'm 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'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. 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 and MD&A, which have 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'll turn the call over to Brad.

Good afternoon and thank you everyone for participating on today's call. I'll make a few high level remarks on the quarter before I turn it over to Lynda for a more detailed discussion on the financials.

2021 was another outstanding year for Greenlane Renewables. We made significant progress in advancing our business strategy that is focused on helping to clean up two of the largest and most difficult to decarbonize sectors of the global energy system; natural gas grid and commercial transportation.

We saw record uptake of our biogas upgrading systems that produce clean, low carbon and carbon negative renewable natural gas also referred to as RNG or biomethane from organic waste sources such as landfills, wastewater treatment plants, dairy farms and food waste streams. The year was highlighted by the strongest revenue generation in the company's history at over CAD 55 million.

We also generated adjusted EBITDA of over $1 million for the fiscal year, a first for the company. In addition to delivering 2.5 times year-over-year revenue growth we treat -- we achieved several important milestones through the course of the year, including graduating to the TSX from the TSX Venture Exchange, eliminating our outstanding debt, signing our first acquisition, and finalizing new system sales contracts exceeding CAD 57 million Our acquisition adds compelling hydrogen sulfide removal technology that strengthens our IP and product portfolio.

In the fourth quarter alone, the company delivered revenue of over CAD 17 million, an increase of 94% over the fourth quarter of 2022. This is our sixth consecutive record revenue quarter and our sixth consecutive quarter of positive adjusted EBITDA.

Adding to the company sales order backlog we finalized in the quarter system sales contracts totaling CAD 19.2 million, RNG projects in Canada, United States and Brazil. As you can see in today's news release, we see a bright future and are well-positioned to execute on our strategic plan having as at December 31, 2021 a record sales order backlog of over CAD 50 million.

Sales pipeline of opportunities valued at over $850 million, solid cash position at over $30 million, no debt. Despite the uncertain global economic and political environment, we're all watching play out right now in real time.

The backdrop for continued growth and momentum in the global RNG and biomethane markets remains robust, specifically within the two sectors that Greenlane is working hard to decarbonize the natural gas distribution networks and commercial transportation sector. For instance, according to BloombergNEF’s most recent data from its 2022 Sustainable Energy Factbook, the RNG sector continues to attract investment capital at a high growth rate, as total investment dollars earmarked for RNG increased 88% year-over-year to US$3 billion in 2021.

In addition, the regulatory framework continues to be supportive for natural gas utilities incorporating RNG into their distribution networks, as 33 states in the US are now taking action to promote the use of RNG for delivery to residential, commercial and industrial customers, up from 2016 and 2021. Echoing rapid growth in RNG as a transportation fuel in North America, which saw RNG becoming 2020, the majority fuel used in natural gas vehicles, according to data provided last spring from NGVAmerica and the RNG coalition, Europe is now experiencing similar growth in the use of biomethane as a transportation fuel.

According to new data from NGVAmerica. NGVA Europe, more than a quarter of the gas used in road transportation in 2020 was biomethane.

In Europe, the Renewable Energy Directive or RED2 adopted at the end of 2018 came into force on July 1, 2021. The European Commission estimates that renewable gas will represent approximately 40% of the entire road fleet fuel consumption in 2030.

Taking a significant bio diesel fuels market share. Well, retail distribution giant Amazon continues to move -- continues the movement towards decarbonization of its delivery infrastructure, is it followed up on its purchase of 1000 natural gas fueled trucks in North America last year, with a commitment in Europe to have over 1000 natural gas powered trucks by the end of this year.

Strong momentum continues with the natural gas utility sector as local distribution companies, who are direct or indirect customers of Greenlane, increased RNG supply with their respective gas distribution networks. California's Pacific Gas and Electric announced that pipeline-spec dairy RNG began flowing into its gas transmission system in late December, and the largest natural gas utility in the US by volume, SoCalGas announced a 17% increase in RNG volumes, distributed through its pipeline network in 2021, and remains on track to deliver its targeted 20% RNG and its network by 2030.

FortisBC is the first natural gas utility in North America to offer RNG to its customers over a decade ago, tripled its RNG supply to its customers in 2021 and expects a minimum -- at a minimum to triple supply again this year. FortisBC has said that it is currently on pace to exceed its target of having 15% of its gas supply being renewable by 2030 and is working towards 75% of its supply being renewable by 2050.

Oregon Gas Utility Northwest Natural said that it believes there are a significant and long-term need for RNG and a recent announcement -- and recently announced an expansion of its role in the growing RNG market through the formation of a subsidiary focused on supplying renewable fuels to utilities, and commercial, industrial and transportation sector customers across the US. In Europe, the terrible events and falling with Russia's invasion of Ukraine have threatened the security of the supply of energy causing extreme volatility in the price of fossil fuels.

Policymakers are reacting to this vulnerability to their domestic economies. Just this week, the European Commission proposed an outline of a plan to make Europe independent from Russian fossil fuels well before 2030 starting with gas and the EU imports 90% of its gas consumption with Russia providing around 45% of those imports.

Commission President, Ursula von der Leyen said, "We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter, and accelerate the clean energy transition." This re-power EU plan, calls for a number of measures including large -- larger volumes in biomethane production and imports.

With the actions taken in Europe, we see an urgency to solve the climate crisis simultaneously with the energy crisis -- energy security crisis, where biomethane has a significant role to play. As we monitor ongoing events, we will continue to watch for any potential impacts on our business.

With this in mind, I want to take this opportunity to thank our team for their extreme dedication and hard work for the outstanding year we had in 2021. Thank our customers for putting their trust in Greenlane, and we look forward to keeping the public informed of our progress as we continue to navigate the opportunities and challenges ahead in 2022.

I'll 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 fourth quarter and fiscal year of 2021 against the respective periods of 2020.

As Brad mentioned, Greenlane posted our sixth consecutive quarter of record revenue. Our revenue in the fourth quarter was CAD17.1 million, which represented 94% growth over the comparative period of 2020.

For the fiscal year, 2021 revenue of CAD55.4 million increase to 146% over 2020 revenue of CAD22.5 million. System sales revenue accounted for 94% of total 2021 revenue, which is recognized in accordance with the stage of completion of projects.

Our gross margin, excluding amortization, in the fourth quarter of 2021 was 25% or CAD4.3 million, compared to CAD2.4 million or 27% in the fourth quarter of 2020. For the full year, we delivered a gross margin, excluding amortization of 26% or CAD14.1 million compared to 29% or CAD6.4 million in 2020.

As a reminder, we do not give financial guidance. One exception in the last few years was the annual guidance on gross margin.

We did this as a newly listed public company to provide a starting point. But now that we have had 10 quarters under our belt and to be consistent with our policy, we will now also stop giving guidance on gross margin.

Naturally, we will continue to report gross margin on a quarterly basis. Adjusted EBITDA in the fourth quarter was a profit of CAD0.3 million versus a CAD0.2 million profit in the fourth quarter of 2020, which represents our fifth consecutive quarter of positive adjusted EBITDA.

For the full year, adjusted EBITDA was CAD1.1 million versus a CAD1.7 million loss in 2020. This was the first year of positive EBITDA generation for the company.

We reported a net loss in Q4 2021 of CAD1.3 million compared to a net loss of CAD1.2 million in the comparative quarter of 2020, with a full year net loss of CAD2.5 million in 2021 versus a net loss of CAD2.5 million in 2020. As at December 31st, the company's sales order backlog was CAD50.1 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 in 2021 to over CAD815 million as at December 31, 2021, an 18% year-over-year increase. We continually update our pipeline of active sales -- 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 contract wins then move into our sales order backlog.

A sales pipeline at December 31, 2021 is consistent with the sales pipeline at the third quarter of 2021. However, the balance reflects both a net increase of approximately CAD20 million in new opportunities and the movement of CAD19.2 million in signed contracts into the sales order backlog in the quarter.

Our balance sheet remained very healthy as we finished 2021 with a cash balance of CAD31.5 million and no debt, providing ample flexibility for Greenlane to invest in and grow our core R&D business, as well as pursue as to other strategic initiatives. We look forward to keeping shareholders apprised of our progress.

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

Afternoon all. Thanks for taking my questions.

Maybe I'll start with an obvious one. System sales revenues were pretty strong this quarter and a bit of an outlier if you look at it as a percentage of opening backlog.

So, I guess, I'm wondering if there was anything unique in the quarter that resulted in the strong revenues or if we should just expect to see you start chewing through the backlog a bit faster than you were previously?

I’ll tackle this one.

Yes, go ahead.

Yes, no, I was just going to say, I mean, it was a strong quarter for us. Part of that, we had those units that we had previously sold to RNG player that we disclose, all three of those units went forward this quarter.

So that was a big contributing factor, and I'd also say that because they were serviced partly from used equipment that we had had in inventory, it meant we were able to recognize a higher portion of revenue on those than we would perhaps normally and we disclose in the MD&A that those ones are recognized over a shorter period than our typical nine to 18 months will be safe for other contracts. So that that would be the one outlier, I would say.

Okay, great. We also saw pretty decent uptick in the aftercare services revenue.

I also noticed Q4 of last year, it was a little stronger relative to the other quarters around it. So I guess I'm wondering, is there a seasonal impact or was there anything unusual in the quarter?

Or is that a good run rate going forward given the higher sales?

Yes, I mean, it's not seasonal. You're right, Q4 2020 and 2021 both have had higher periods.

It's just a function of the team getting sort of jobs completed, et cetera. I think it was a strong quarter and a good indication for the future, but not really seasonal impact, I would say.

Okay. And then last one for me, just on the gross margin and understanding you're not giving guidance, but was there anything unusual in the quarter one way or the other that would have impacted and could you quantify the magnitude of if there was?

Yes, I mean, we disclose in the MD&A that we had projects, some higher returning gross margin projects, like the unit components that we talked about with regards to revenue that brings in a higher gross margin. We did suffer some slightly lower gross margins as a result of some of the delays, some of the transportation issues that have been experienced globally.

So, those are some of the things that sort of have impacted gross margin, but that's not why we stopped doing guidance. We really are just not given guidance, because it's not something we do and we just want to stick to our policy of no guidance in the future.

Understood. And thanks, I'll turn it over.

Appreciate it.

Hi guys. Thanks for taking the question.

Just following up on that gross margin question. Are you guys seeing or do you foresee any kind of inflationary pressures given the current environment?

You mentioned transportation that could affect gross margin near term? I'm just wondering, kind of what strategies you have identified to move up in the range.

Well, I guess, there's no more range, but maybe just talk about the things that can be done to move the gross margin upward and if you're seeing any pressure, or if you're forcing any pressure on margins coming up?

Yes, I mean -- do you want to take this one, Brad.

Sure. Hey Colin.

Remember that the business model of the ABS is, we've got supply base, we have a customer base, and we do our best not to get stuck in the middle. So, to answer your first question, yes, of course, we're experiencing inflationary pressures, everybody is, but we're able to mitigate that to a degree with our pricing.

So, we don't often find ourselves in a situation where we've signed a contract with a customer and then have to suffer through increased pricing because we've done our best to plan for that ahead of time. So, that that kind of protects the gross margins.

That's not really an impact there. So in terms of the kind of typical impacts that we would see on gross margins, which we have a long track record now, referring our gross margins, but those would be things like project delays, or some costs that were unpredicted that didn't come through in the initial planning.

But again, I think we've got a pretty solid track record of showing how we do under those kind of more typical non inflationary kind of downward pressure on gross margins. So, hopefully that gives a bit more color.

Yes, a little bit. On the strategy to improve, is it acquisitions like Airdep that bring certain capabilities in house that could help capture some more margin?

Yes, absolutely. That's part of the M&A strategy.

The Airdep acquisition does a couple things for us, it strengthens our IP and product portfolio, but also does exactly that. That gives us better price performance in the market, which will allow us to strengthen margins.

Now, bear in mind that the -- of an overall system sale, the H2S or the hydrogen sulfide component from the products from Airdep would be, call it, less than 20% of the overall contract value. So, there'll be some modest uplift, but that's the sort of thing that's consistent with our strategy to -- over the long haul, improve gross margins.

Perfect. Thanks.

That's what I was getting at. I'll step back in the queue.

Thanks, guys.

Good afternoon guys. Okay, you guys, just in terms of supply chains, you know, being constrained in certain areas.

Do you think that that has an impact on your backlog burn rate going forward into 2022? I know there is a couple of items that you highlighted that that gave you the high revenues and burn rate through Q4 But just in general, do you think that this slows down a bit just given constraints are you guys in pretty good shape to continue on with a good backlog burn rate?

I mean, obviously, same as with inflation, everyone's experiencing supply chain delays. We're not finding ourselves in the crisis that the automakers have done, for example, with chip scarcity, that it's not quite that degree with so.

So, some of the delays they're not material delays in terms of turning the backlog into revenue. So, we're not going to see, for example, contracts that would have otherwise contributed significant amounts this year falling and next year that's not what the supply chain delays are going to cause.

So, there's a few we're able to mitigate that. We have, like many of our other participants in the industry quoted longer lead-times because that's just the reality that we're faced with.

So in many respects, we've already baked that in to all the projections and our contracts with our customers.

Great. Thank you.

Hi, everyone. Thanks for taking my call.

This is Theo Genzebu calling in for Dave. Just on the -- my first question, just on Airdep acquisition, I know it hasn't been long since closing, but when do you expect to see the cost benefits of having the deep authorization technology in house and any updated thoughts on potential for cross-selling?

Hey Theo, glad to have you. So, I mean, we're going to start to see some benefits right away.

Remember that at Airdep is selling independently. I think your question specifically, when would we see that in system sales?

That'll grow over time. We expect that as we get more traction and remember that the rationale is first step, do the acquisition, bring it in house and that positions us differently in the marketplace where that becomes part of our offer.

The sales cycle has a bit of time associated with it. It's anywhere from six to 24 months.

So, we'll start to see that happen all the time. But in the meantime, we've got the -- both revenue and margin generation from the system sales of those units into customers that aren't buying a complete bug as operating system from Greenlane.

So that's kind of the trajectory that we would expect there.

Okay. Thank you for that.

And just another question on, gas prices are clearly elevated in Europe right now, just because of the geo political issues going down, but does this higher costs and desire for energy independence make RNG more competitive and have you seen like any increase, I guess, inbound interest?

Yes. Well, that's exactly what's happening.

So for example, this repower EU proposal that's been tabled to move away from Russian gas well before 2030. So that's an example.

I think without even having that in place, you're right, the commodity cause for gas in Europe has just gone completely off the charts. And so that has increased the inbound, the interest level.

But again, things don't turn on a matter of days or weeks with our sales orders. That's good news.

That it's providing increased interest and increased inbound calls. But that's going to have to work its way through and we think that, that just goes -- it's another foundational driving force in addition to the climate crisis, now we have this new energy security crisis, we've always had it, but now it's flared up again.

That's just another strong driver for the business. So we think -- we view that as positive in terms of continuing to build the demand for RNG which is already strong, but it'll strengthen that further.

Okay. Great.

Thanks for that. I'll get back in the queue.

Thanks. On the Airdep acquisition guys, can you expand a little bit on whether or not the Italian market will be able to service all of Western Europe.

I can't recall that's going to be a beachhead or if you're going to enter more markets?

Hi, Nick. Do you mean from a footprint for system sales?

Or do you mean selling the Airdep systems throughout Europe?

I mean, more of like a relationship management tool. Just I recall that part of the issue with Western Europe and your existing operations there with the UK office doesn't necessarily have the sales capabilities in say France, Germany or Belgium, would be Italian Airdep office be capable of interacting both of those different markets or do you think you'd have to really expand regionally in order to fulfill all of Western Europe with hydrogen sulfide systems?

Yes. So thanks for the extra color on the question.

So the rationale, obviously, firstly, with the Airdep acquisition was to strengthen our IP and products portfolio, but also it does a couple other things for us is that part of Italy, I mean, Italy, in general, has a really compelling supply chain. And we wanted to have a footprint there to access that not only for the hydrogen sulfide and removal and the authorization systems, but that gives us a local presence to be able to really exercise the local supply chain for many of the other things that we do, so that's attractive for the rest of our systems.

But like most things in Europe, unless you have a presence in that country, you're not really deemed to be attractive to the local clientele. So because Italy is such a dynamic market, we wanted to make sure we had that in so far as supplying other parts of Europe.

That's the other strength of this relationship or why the rationale for the business combination was we have existing presence in places like the UK, France, Germany, that Airdepwasn't able to reach, so we can use that presence to sell deodorization systems. So the manufacturing footprint or the final semi footprint that we now have in Italy, will certainly be able to serve that from assembly and product delivery perspective.

And then combine that with our sales presence and service presence in those other markets. And that's the -- that's what we're trying to take to the next level Airdepto date has been about 90% of its sales in Italy.

So we're looking to change those ratios. So obviously keep growing quickly in Italy, but then started to grow exponentially in the markets outside of Italy.

Great. Thanks.

And then coming back to the home markets, I’m wondering if you can comment on the size of projects you're seeing right now. And previously, you're starting to see some larger things from landfills, wastewater treatment facilities.

Is that still the case or are more farm and kind of smaller dairy based systems starting to pop up?

Still very much a mix. I would say, we're seeing certainly project sizes across the spectrum and contract value.

I think it is fair to say that we are seeing some -- I don't know what to label them as you know, mega projects. Maybe it's a bit aggressive of wording but certainly larger size.

And that's mainly coming out of the landfill US space, was just particularly large landfills, there seems to be for whatever reason, right now in our pipeline, quite a number of landfill developers and interest in that space. So that's a bit of a trend but I think -- for announcements for us, continue to expect to see quite a range.

I think in the last year or so. It's been common for us to look at contracts as small as a couple million Canadian, up to our largest was CAD 20 million, which was a collection of dairy farms and then some single site ones would be large -- on the larger size would be about CAD 10 million.

So that's -- we might see a little bit larger on an individual basis going forward, but I don't -- I'm always leery to talk about trends because they're, you know, things come and go but as long as the overall revenues climbing that's really what we've got our eyes focused on

I mean that’s perfect. I'm not going to cry too hard on this, but the word mega, how high do you think that could actually be?

Could you give any kind of context around what those projects would look like and whether or not the existing team has all the resources it needs to fulfill something like that?

Yes, sure. It's -- we talk about it often and one of our reference sites in Montreal, so it's a landfill.

That one's probably about seven years ago now, when that one was commissioned. At the time it was the world's largest.

And just to put some numbers behind it. It's around 10,000 SCFM.

Sadly, we just got dethroned in December. So there was a new project and I think it was Pennsylvania with our [indiscernible] they dethroned us, the world's largest project.

But we've got a couple that are in that order of magnitude in the pipeline. So there's people that obviously, they see the value in this and if they're going to, you know, go in and spend the effort and time developing R&D projects.

Some people are absolutely convinced that size matters and that's a true statement. But, you know, though, there's a limited number of those very large point sources, and so we'll see continued deal flow on the smaller size contracts, but there's a few of these big ones that are there, and to answer your question around resources, we've been growing like crazy.

There's no hiding that. And our number one issue has been building the business, getting the resources and training people up.

We've been able to do that. We're continuing to do that.

None of it's easy. But that's what we're intending to do.

And we're trying to prepare as best we can for continued growth in the business and when we get these larger projects, we'll manage our way through it.

Okay. Great.

Thanks for the color, guys. That’s it for me.

Hey, guys, thanks for taking my question. I guess, Brad, maybe an update on your ability kind of your quarterly ability to book revenue, given with the resources you have right now.

I'm not sure it came up on the call. You've parsed out a couple of systems that kind of help the bump in revenue for Q4.

But I'm just wondering, also Airdep acquisition kind of helped you to with additional resources on engineering, design, performance, because I know you do a lot of that stuff remotely as well. Just trying to rub my head around maybe upside potential to your quarterly booking on the revenue side?

Hi, Ahmad. So firstly, I guess I’ll answer your last question first.

We don't expect Airdep, what I mean Airdep doesn't have excess engineering right now that we can use for other sources. They're growing extremely quickly as well.

That was part of the rationale. So we'll be on the question of resources.

We've got business building through resource additions and Airdep as well as the rest of our business. I'm not quite sure how to answer your question around quarterly revenue recognition as a function of resources other than to say, we've been adding resources.

We've had success, adding resources, that's probably our number one focus area for continuing to be able to grow the business. I think we're getting pretty good at building and adding new resources and staff and getting them involved quickly into the business.

Again, you know, it's not -- none of its easy, but that's a key area of focus for us and key competency. So we haven't really seen a fundamental constraint to date in terms of saying, well, we just can't hire enough people to get the revenue and whether that that turns into a constraint.

If we look backwards to project forwards, I think we'll continue to find ways to keep adding the staff that we need.

That's great. And thanks for answering that.

Appreciate it. I'll jump back in the queue.

Thanks, Ahmad.

Thank you, everyone 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.