Investor Presentation - June 2020 TSXV: GRN / FSE: 52G
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Investor Presentation
June 2020
TSXV: GRN / FSE: 52G
1
Important Disclosures
Not an Offer to Purchase or Sell Securities Forward-Looking Statements (Safe Harbor & Financial Outlook Statement) actual results or events may differ materially from the results or events
predicted. Any such forward-looking information is expressly qualified in its
This overview is for informational purposes and is not an offer to sell or a The information set forth in this presentation may contain “forward-looking entirety by this cautionary statement. Moreover, the Company does not
solicitation of an offer to buy any securities in Greenlane Renewables Inc. (the statements”, as such term is defined in applicable Canadian securities assume responsibility for the accuracy or completeness of such forward-
“Company”) and may not be relied upon in connection with the purchase or legislation, that are not historical fact and are subject to certain risks and looking information. The forward-looking information included in this
sale of any security. uncertainties. Certain statements contained in this presentation constitute presentation is made as of the date of this presentation and the Company
"forward-looking information" as such term is defined in applicable Canadian undertakes no obligation to publicly update or revise any forward- looking
General Disclaimer securities legislation. The words "may", "would", "could", "should", "potential", information, other than as required by applicable law. This presentation
This presentation is Copyright 2019 Greenlane Renewables Inc., which reserves "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and includes financial outlook about Greenlane’s prospective revenue, which is
all rights in and to this presentation. Greenlane Renewables Inc. (the similar expressions as they relate to the Company, are intended to identify subject to the same assumptions, risk factors, limitations, and qualifications as
“Company”) is a public company which is traded on the TSX Venture Exchange forward-looking information. All statements other than statements of set forth in the above paragraphs. Revenue estimates contained in this
(TSX-V: GRN), with a principal office in Burnaby, British Columbia, Canada. The historical fact may be forward-looking information. Such statements reflect document were made by Greenlane management as of the date of this
statements contained in this presentation which are historical in nature are the Company's current views and intentions with respect to future events, and presentation and are provided for the purpose of describing anticipated
accurate to the best of our knowledge. However, the Company makes no current information available to the Company, and are subject to certain risks, changes in revenue, and are not an estimate of profitability or any other
assurances and does not guarantee that the statements included herein are uncertainties and assumptions. Many factors could cause the actual results, measure of financial performance. Readers are cautioned that the financial
accurate. No representation or warranty, express or implied, is made or given performance or achievements that may be expressed or implied by such outlook contained in this document should not be used for purposes other
by or on behalf of the Company or any of its affiliates, directors, officers or forward-looking information to vary from those described herein should one than for which it is disclosed herein.
employees as to the accuracy, completeness or fairness of the information or or more of these risks or uncertainties materialize. Certain of the “risk factors”
opinions contained in this presentation and no responsibility or liability is that could cause actually results to differ materially from the Company’s Cautionary Note to U.S. Investors
accepted by any person for such information or opinions. The Company does forward-looking statements include, without limitation: the inability for
Greenlane’s biogas cleaning systems to meet performance expectations; This presentation does not constitute an offer to sell or the solicitation of an
not undertake or agree to update this presentation or to correct any offer to buy, nor shall there be any sale of the securities of the Company in any
inaccuracies in, or omissions from, this Presentation that may become unexpected disruptions affecting project developments and operations; the
availability of the Company to enter into definitive joint venture agreements jurisdiction in which such offer, solicitation or sale would be unlawful prior to
apparent. No person has been authorized to give any information or make any registration or qualification under the securities laws of such jurisdiction. The
representations other than those contained in this presentation and, if given with SWEN Capital Partners; reliance on licences and authorizations and delays
in receiving such licences and authorizations; demand for renewable natural securities of the Company have not been and will not be registered under the
and/or made, such information or representations must not be relied upon as United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or
having been so authorized. The contents of this presentation are not to be gas; managing and developing relationships with customers; product liability;
environmental risks; regulatory risks, including changes to national and local any state securities laws and may not be offered or sold within the United
construed as legal, financial or tax advice. Recipients of this presentation who States, unless an exemption from such registration is available, information
are considering acquiring securities of the Company are referred to the entire legislation or taxation in any jurisdiction in which Greenlane operates;
managing growth; retention and acquisition of skilled personnel; legal concerning the assets and operations of the Company included in this
body of publicly disclosed information regarding the Company. The presentation has been prepared in accordance with Canadian standards and is
information is subject to material updating, revision and further amendment, proceedings; global economy risks; economic and political developments
surrounding the United Kingdom leaving the European Union; liability, not comparable in all respects to similar information for United States
and is qualified entirely by reference to the Company’s publicly disclosed companies.
information. For additional information relating to the Company, please see enforcement, complaints, etc. ; foreign sales and fluctuations in the exchange
the Company’s Base Shelf Prospectus dated July 2, 2019 and the Company’s rate between various currencies including the British pound sterling, the Euro,
Filing Statement dated May 13, 2019, copies of which are available under the the U.S. dollar, and the Canadian dollar; capital requirements associated with
Company’s SEDAR profile at www.sedar.com. expanded operations; estimates or judgments relating to critical accounting
policies; tax risks; the market for the Company’s common shares; no history of
payment of cash dividends; tax issues; and the completion of the acquisition of
Greenlane by the Company being subject to certain conditions precedent.
Should any factor affect the Company in an unexpected manner, or should 2
assumptions underlying the forward-looking information prove incorrect, the
Highlights
• Market leader in upgrading • Only company offering all three main
low-grade biogas to high-value biogas upgrade technologies
renewable natural gas (RNG) to • Pure play in the RNG space
decarbonize the natural gas grid and – 2019 revenue of $11.2M
commercial transportation
• Expanding to recurring revenue and
• Trusted global technology provider profits
with 30+ years
industry experience • BUILD » OWN » OPERATE
• Largest global supplied capacity • Attractive valuation: current price to
>100 installations in 18 countries sales multiple of 1.5x vs.
peer group average of 3.0x*
* Based on 2020 consensus estimates and an analyst-defined peer group 3
Our Focus Decarbonizing Natural Gas
for Two Major Markets
UTILITY / PIPELINE TRANSPORTATION
4
Why Now? Demand Acceleration
• RNG rapidly shifting from • TRANSPORTATION RNG demand is
niche to mainstream drop-in driven by market pricing, NOT
substitute for natural gas subsidies*
• Consumer demand for energy with • GAS UTILITY demand driven by
reduced carbon intensity competition with shift to renewable
• RNG posed to follow the wind/solar electricity
rapid growth curve • residential, commercial, and industrial
customers threatening to go electric if
• Multi-nationals, gas utilities and no green gas option
governments announce increasingly
frequent contracts to achieve
10–20% RNG by 2030
* e.g. Renewable Fuel Standard (RFS/RINs), Low Carbon Fuel Standard (LCFS) in the U.S. and Renewable Energy Directive (RED) in Europe 5
Significant Opportunity
Biogas Upgrading Equipment Greenlane
$18 Sales 5% Sales Pipeline Growth
NA Distribution Network
North American
Billions of US Dollars
US$18 B(1)
RNG Content in
Natural Gas Network $14 4%
~$700M(2)
$10 3%
Current RNG
Penetration $6 2%
~0.3%
$2 1%
BUILD OWN OPERATE
model targeting recurring revenue and
Launched new
increased gross margin.
(1) Source: Internal estimates based on various market statistics and industry publications.
(2) Sales pipeline is defined as qualified prospective projects that could convert into orders within approximately 24 months. Not all of these potential projects will proceed
or proceed within the expected timeframe and not all of the projects that do proceed will be awarded to Greenlane. Nevertheless, over time, this number gives a 7
reasonable metric of changes in market activity and anticipated growth of the industry.
RNG Resilient During COVID-19
• Greenlane has benefitted from an asset- • Private equity partners not immediately
light business model, allowing: impacted by public market distractions
• operational flexibility • Feedstock doesn’t stop!
• outsourced supply chains with built-in
redundancy • Dairy and swine farm, landfill and waste water still
creating feedstock
• Recently completed oversubscribed
$11.5M private placement, strengthening • Energy companies still need RNG for
balance sheet home/industrial use
• Increased sales activity with business
partners and customers alike working from
home, with increased focus on our new
and existing proposals
8
Key Industry Developments
“UPS
announced "Climate change has
plans to “The demand for RNG become a defining factor in "Amazon founder Jeff
purchase more is significant. This companies’ long-term Bezos on Monday “SoCalGas has
than 6,000 natural gas- sustainable energy prospects. Companies, announced the launch announced its vision to
powered trucks from 2020 source blends investors, and governments of a new Earth Fund be the cleanest natural
through 2022. The CNG seamlessly with must prepare for a that the e-commerce gas utility in North
fleet expansion provides conventional natural significant reallocation of chief plans to use to America, delivering
additional capacity for gas in our distribution capital. Because capital combat climate affordable and
expanding the use of system, lowering the markets pull future risk change. He said that increasingly renewable
renewable natural gas, overall carbon intensity forward, we will see those he’s pledging $10 energy to its
which UPS has committed of the natural gas being reallocations of capital billion to start the customers. As part of
to purchasing 230 million delivered to homes and sooner than most fund, which will be that vision, SoCalGas
gallon equivalents of over businesses. Our target anticipate, and more called the Bezos Earth has committed to
the next seven years, is having 15 per cent of quickly than we see Fund and issue grants replace 20% of its
making it the largest our gas supply be changes to the climate to climate-oriented traditional natural gas
consumer of RNG in the renewable by 2030.” itself.” scientists and supply with renewable
transportation industry.” —FortisBC news —BlackRock CEO Larry activists.” natural gas by 2030.”
—UPS News Release, release, Fink’s letter to CEOs, —CNBC Article, —SoCal News Release,
Oct 9, 2019 June 13, 2019 Jan 14, 2020 Feb 17, 2020 April 25, 2019
9
Greenlane & Biogas
RNG Advantages
What is Biogas? • Drop-in substitute for natural gas
50–65% Produced from decomposing 35–50%
CH4 CO2 • 100% renewable—no new carbon
organic material without
• Upcycles low-grade organic waste
presence of oxygen
into high-value, low-carbon
energy source
Trace
impurities (H2S,
VOCs, etc.)
RNG provides solution
for 2 enormous and
What is Biogas Upgrading? difficult to-decarbonize
sectors of global
Meet pipeline
Cleanse Separate CO2
or vehicle energy system
impurities from CH4
specifications
10
Greenlane Upgrading Technologies
Only company to offer three main (Price per unit ranges from ~$2–$8M,
biogas upgrading technologies depending on size and scope of supply)
Membrane
Water Separation
Wash
Pressure Swing
Adsorption (PSA)
11Right Solution for Every Project
Digester Gas Landfill Gas Tough Pipeline Spec
(Low N2 & O2) (High N2 & O2) (High Heating Value, Low O2)
Water Water Water
Wash Wash Wash
HIGH PSA PSA
FLOW
Membrane
LOW Separation
PSA PSA
FLOW PSA
12Senior Management: Strong Track Record
Brad Douville Lynda Freeman Brent Jaklin
President, CEO & Director CFO Sr VP, Sales & Service
Joined as President in 2017 after a Joined as CFO in 2019 with 22 Joined in 2009 to start up the
25-year career in the natural gas years of financial experience and North American office, bringing
commercial vehicle industry as a was previously CFO of TSX-listed 20+ years experience in the alt
founding member of Westport Alterra Power, a global renewable energy, natural gas and RNG
Innovations (1995) and Cummins energy company. Lynda holds a BA sectors. Previously, Brent held
Westport (2001). Brad holds an of Accountancy and Law at Oxford roles with PSA provider QuestAir
MSE from UBC and Executive Brookes University and is a UK Technologies and gas utility
Program certificate from the qualified CA. FortisBC. Brent holds a BME from
Stanford School of Business. Lakehead University.
13Trusted for the Biggest Jobs
Greenlane
supplied systems
for the largest
RNG production
facilities in North
America and
Europe
14Trusted for the Toughest Jobs
*Rule 30 is a stringent
guideline created by
SoCalGas specifying the
pipeline gas quality RNG
producers must meet in
order for RNG to be received
and distributed. Greenlane
supplied systems to the Perris
California site, the first
commercial scale project to
inject RNG directly into
SoCalGas’ network.
15Global Expertise / Strong IP
• Fully Outsourced, Asset-light Business • 14 Patents and 28 Device Titles
Model for Scalability and Global Reach
• Deep Engineering Expertise
• process design, mechanical & electrical,
system-level integrity and integration
• Field Service, 24/7 Remote Monitoring
• Widest Range of Applications
• landfills, WWTPs, digester gas facilities
• CO2 recovery, liquefied bio-methane
• Certifications
• ISO 9001, ISO 14001, OHSAS 18001
16Competitive Landscape
Installed Capacity
120,000
100,000
Biogas Flow Rate
80,000
[Nm3/Hr]*
Water Wash
60,000 Membrane
PSA
40,000 Chemical Scrubbing
20,000
0
Greenlane Malmberg Air Liquide Carbotech Puregas Xebec
*Source: Public filings, press releases, news articles and industry publications. 17Growth Potential Through
Build, Own, Operate
• Expand beyond equipment sales with • Market opportunity of US$27B in annual
lucrative long-term contracts RNG sales to reach 5% RNG in NA gas
• Gain exposure to more profitable distribution network(1)
off-take contracts with customers • Build, Own, Operate deal announced with
requiring/desiring a strategic partner
for RNG production SWEN Capital Partners for Europe
• Generate recurring revenue and stronger margins • Greenlane in negotiations with project
finance partners for North America
Average RNG project is similar to average initial production rate of
conventional natural gas wells in Western Canada
(~280,000 GJ/year) and largest RNG projects are ~10x of the average(2)
1. Source: Various news articles and press releases 2. Source: Government of Canada Canadian Energy Regulator 18Build, Own, Operate in Europe Launched
• January 28th, Greenlane announces
Agreement in Principle with 5B Euro
AUM—SWEN Capital Partners
• SWEN setting its sights on RNG
market in Europe with a dedicated
fund and a joint venture with
Greenlane JV
• Joint venture will: CO
• combine Greenlane’s market presence,
technical expertise, customer contacts
and industry experience with SWEN’s
financial backing
• provide innovative turnkey solutions,
OPERATE
removing burden of ownership on
OWN
Greenlane’s clients by replacing initial BUILD
capital outlays with a monthly fee
…with 3rd Parties
19Financials
First Quarter Ended Recent Updates
March 31, 2020 • Completed an oversubscribed
Revenue Generated $2.9M $11.5M private placement on
Gross Margin $1.3M or 44% February 19, 2020
Net Loss $1.1M • New contract wins for $8.5M
Adjusted EBITDA Loss $0.7M announced to date in 2020
Cash $6.7M
Sales Order Backlog $22.6M
Sales Pipeline ~$700M
(1) Sales order backlog refers to the balance of unrecognized revenue from contracted projects, where such revenue is recognized over time as completion of the projects progress.
(2) Sales pipeline is defined as qualified prospective projects that could convert into orders within approximately 24 months. Not all of these potential projects will proceed or proceed within the expected timeframe and not 20
all of the projects that do proceed will be awarded to Greenlane. Nevertheless, over time, this number gives a reasonable metric of changes in market activity and anticipated growth of the industry.Capital Structure
Shares Outstanding 91.7M (141.2M fd)(1) Trading Start June 10, 2019
Warrants Outstanding 41.7M total: Exchange TSX-V
(expiry date) 30.2M @ $0.26 (Jun/Oct 2021 as GRN.WT)
Symbol GRN
11.5M @ $0.70 (Feb 2021)
Options Outstanding 991k @ $0.10 (6 yrs)
(average remaining life) 5.5M @ $0.20 (2.9 yrs)
1.4M @ $0.50 (0.9 yrs)
Market Capitalization ~$36M (@ $0.39 per share)
Long-Term Debt(2) ~C$7.6M 4yr promissory note
(7% per year accrued interest payable at maturity)
Insider Ownership ~28%
Institutional Ownership ~5–10%
(based on financing announced Feb. 19, 2020)
1. Outstanding share data as at March 31 2020 21
2. The promissory note is denominated 50% in Canadian dollars and 50% in British pounds sterling with a maturity of June 2023.Highlights
• Market leader in upgrading • Only company offering all three main
low-grade biogas to high-value biogas upgrade technologies
renewable natural gas (RNG) to • Pure play in the RNG space
decarbonize the natural gas grid and – 2019 revenue of $11.2M
commercial transportation • Expanding to recurring revenue and
• Trusted global technology provider profits
with 30+ years • BUILD » OWN » OPERATE
industry experience • Attractive valuation: current price to
• Largest global supplied capacity sales multiple of 1.5x vs.
>100 installations in 18 countries peer group average of 3.0x*
* Based on 2020 consensus estimates and an analyst-defined peer group 22Analyst Coverage
Analyst Firm Recommendation
Ahmad Shaath Beacon Securities BUY
Darrell Bishop Haywood Securities BUY
Jason Tucker Paradigm Capital BUY
23For more information:
Incite Capital Markets
Eric Negraeff/Darren Seed
604.493.2004
IR@greenlanerenewables.com
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