Welcome to the EverGen Infrastructure Q2 2025 earnings results presentation. During the presentation, all participants will be in listen-only mode. Participants can submit questions via the Q&A box at the bottom of the screen, which will be answered following the presentation. As a reminder, this call is being recorded. Before we begin, I would like to direct all participants to our website at www.evergeninfra.com, where you will find a copy of the Q2 2025 earnings presentation. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may vary materially from results projected by those forward-looking statements. Additional information is contained in the Q2 2025 management discussion and analysis. I will now turn the call over to Chase Edgelow, EverGen Infrastructure's Chief Executive Officer, to begin.
Great. Thank you, Laura. Good morning, everybody. Thanks for joining us on this call. I am excited to be back at the helm of EverGen and to be talking with our supportive shareholders once again. After spending the last couple of years on the sidelines as a shareholder myself, it's energizing to rejoin this business. Just 10 days ago, we closed our transformative transaction, which included a CAD 5 million equity investment from a large family office, which we'll talk about on the call here. It marked the beginning of a new chapter with both myself and Ron Green, who you'll meet joining the leadership team. We'll start the call today with a brief review of our Q1 results and then spend some time on an introduction or reintroduction of the team and outline our plans for the business moving forward.
I'd like to take a moment to sincerely thank Misha and Jamie for their dedication to EverGen over the years and their support during this transition. I'm especially pleased that Misha, who co-founded this business with me in 2020, will continue to contribute on the team as a board director. I'd also like to extend our thanks to the departing board members for their service and to send out a warm welcome to our incoming directors in Blake Allmond and Burin Anand. We'll start with the Q1 results on slide one. Overall, Q1, looking back, was a challenging quarter for the company. Largely, this reflects the financial strain the business was under prior to this transaction. With limited capital, the business was unable to address key operational bottlenecks or invest in preventative maintenance. That's largely what you see reflected in these year-over-year results.
Much of the impact that you see from a balance sheet perspective was to reflect transactions that occurred at year-end and were discussed as part of the year-end financial results. Looking at revenue, the revenue was impacted by volume curtailments at both composting facilities, primarily a result of bottlenecks that had built up over time. That said, this was offset by higher tip fees, which is a positive indicator overall for the composting and organics market in Southwest BC. We continue to see positive upward momentum, I think a sign of municipalities recognizing the costs involved in processing organics properly and best-in-class operators. On an encouraging note, the R&G volumes continued to rise in Q1. I think this has been discussed previously, but really exemplified by record production in March and April, where the facility was producing at near nameplate capacity and continues to be on that same trajectory.
Overall, this momentum gives us a lot of optimism for the rest of the year that we'll continue to break records with Fraser Valley Biogas and continue to have strong operational results from our R&G business. Importantly, subsequent to the quarter-end, we completed the CAD 5 million investment transaction and management transition, which repositions EverGen with a strengthened foundation to drive long-term value for our shareholders. As you can see, from the end of Q1 to today, the impact of the transaction was truly transformative for EverGen. It brings in a long-term aligned capital partner and significantly strengthens our financial position. The injection of CAD 5 million of equity capital improves our working capital position materially, providing us with the flexibility to execute on our near-term plans, which we'll discuss.
Perhaps most significantly, what we have now is a very strong alignment between management, board, and our shareholders, with insiders and the shareholders represented on the board now owning 42% of the company. We are all fully committed and highly motivated to realize EverGen's full potential. For those new to EverGen or joining the call for the first time, I think I just want to spend a bit of time introducing our team. I was one of the original founders of EverGen and I'm someone who's deeply passionate about what we do here. After spending the last few years advising and investing in similar businesses with a focus on organics and working with some large capital providers that provide capital into the sector, I've come back with a very strong conviction that EverGen stands out in this space. We have top quality assets.
We've got a very strong team, and this positions us uniquely in what is still an early-stage market to take advantage of opportunities ahead. A consistent theme in looking at other platforms in this space is the ones that are successful are able to integrate assets, build world-class operations, and execute efficiently. That is what we intend to do. I guess with that, I'll turn it over and welcome Ron Green as our incoming Chief Operating Officer. I've known Ron for over a decade. He comes with 30 years of experience in energy and infrastructure assets and building out teams. In particular, he is very strong in terms of operational excellence and aligning incentives. Ron has led multiple turnarounds and is known for optimizing operations and driving performance and results. His leadership will be instrumental as we elevate EverGen to the next level.
Maybe Ron, spend a bit of time acquainting our shareholders with yourself.
Thank you, Chase. Good morning, all. My background is in largely oilfield service. I have focused on founding companies, growing companies, and in a few cases, turning around companies. I'm an operator, and I focus on best processes and best procedures in ensuring that we identify the right way to do things and that we stay focused on doing the right things. I like to provide clear direction to my team and collaborate with all on projects. I am a leader, not a manager, and I think it's really important to motivate and then hold people accountable. I firmly believe that it's not work if you enjoy what you do. What excites me about joining the company is the challenges. If this was an operation mode that did not need a lot of help, I would not have joined Chase.
Because there are challenges, that's what excites me. I love getting up and focusing on those challenges and aligning everyone on the team to focus on challenges that they directly control. I believe the company will do well by doing good, and I think this space is doing good for the environment. To be very specific, I love making money.
Thanks, Ron. I'll jump into the next slide and maybe let you talk to some of our thinking on what builds a strong business in this space.
When Chase and I were talking about coming in and how we would approach things, I feel that there's four pillars in this company that require focus. As I mentioned about leading the people, I like to create a strong culture that is focused on best processes, repeatable processes. When we start to grow the company again, the way to do things will be very clear. I will make sure that there are SOPs, standard operating procedures, identified and implemented throughout the company. I have a firm belief that preventative maintenance is cheaper than repair maintenance, so there will be strong focus in that area. Safety is led by the operations group, which I will be 100% responsible for. I'm going to jump over to the sponsorship group or the partners, rather. I already talked about team.
I believe in focusing with intake and offtake partners as well as key vendors because we cannot do things without strong partners. We have some challenges that we need to clean up, which we will do. I will also leverage my contacts in oilfield service, and we will, again, implement best processes, which will equal best output. Just a couple of points on profitability. I've already led one focus group on how we are going to make improvements to our PCR location. We see significant opportunities for increased profitability. Late last week and early this week, I have conducted a couple more meetings, which will do the same for one of our other facilities, which is Growtec. We see significant opportunities to focus on cost savings and revenue increase. I believe profitability is the foundation to look after everything else that's on this slide. Thanks, Chase.
Great. Thank you, Ron. We'll go to slide nine, I believe. The rest of the presentation, I think, will be familiar to those that have followed the business and happy to spend more time on should anybody want to reach out and discuss individual assets of the business. Happy to take those calls. In terms of path forward, I think Ron outlined the four pillars of what we think is going to make EverGen successful long-term. Immediately, phase one for us is focusing on achieving nameplate capacity at both Fraser Valley and Growtec. I think the business has trended in the right direction here and really needs some focus to ensure that these targets are met.
I think with the capital that we now have in the business, things like preventative maintenance, things like critical spares that have caused downtime in the past are part of the budget go forward and will ensure that we can meet those targets. With respect to the bottlenecks at the organics businesses, I think really we touched on this, but these were really the challenges that those facilities faced without having capital to de-bottleneck and caused part of the operational disturbances along with the fire that was mentioned in Q4. I think, again, capital, a focused plan helps ensure that these disturbances do not occur again in the future. I think ultimately we have a view that we can operate at nameplate capacity across all of our facilities. Phase two, build. Again, we have touched on growth projects.
We have phase two under review at Growtec and believe that there are a number of different capital projects that can be pursued at Growtec. We're going to be reviewing those over the next 60-90 days and deciding which projects have the highest return on investment potential with a focus on cash flow generation and a short payback period. Same thing across essentially all of the other facilities. We continue to advance larger projects in our pipeline. PCR, R&G expansion as an example, as well as Project Radius.
Phase three is really with a stable base, with that stable foundation, returning to the growth potential that we see in the unique position that EverGen has in the market to both pursue existing brownfield acquisitions with expansion potential, the template being Fraser Valley Biogas for that, larger scale greenfield projects, the template for that, Project Radius, and look-alike projects in new jurisdictions. I think what EverGen is doing is unique in the sense that we are tackling small projects with a mixed waste approach, understanding the organics market and the places we operate, and ultimately building long-term contracted cash flow infrastructure. I think that applies in lots of other jurisdictions that are maybe at an earlier stage of providing offtake agreements or an earlier stage of organics management.
I guess one of the unique tailwinds that we've had in the last three months and kind of occurred simultaneous with the transaction that we were working on was the election of Mark Carney as Prime Minister. I think overall, while that may not be positive for other businesses or others that were looking for maybe a cleaner or a clearer pathway for energy export, I think for us in the clean energy sector, it's certainly a positive. We've seen additional allocation to the Clean Fuels Fund, and we believe that we'll see CFR price certainty continue to return to normalized levels here in the coming months. Some significant tailwinds from the regulatory environment that we operate in, and we're excited to see the results of that. The Canadian Biogas Association has spent the week in Ottawa, and hopefully we'll see some results of that in the coming months.
Finally, I think we have been focused on the transaction. We've been focused on initially the first 10 days here transitioning the business and setting up for success. We've closed the first CAD 5 million. We now have a new shareholder in Ask America, represented by Varun on our board. This family office has a long-term perspective, believes in the business, and we expect to be a supportive shareholder for many years to come. As part of this transaction, we wanted to provide an opportunity for all existing shareholders who have been supportive throughout the years, many of whom have invested at a higher cost base, to have the opportunity to invest alongside Ask America. We've got an additional tranche of up to CAD 2 million.
We will be reaching out to existing shareholders as well as speaking to new potential investors over the coming weeks, and we'll have an update on the timeline there. I think we've certainly got a much more stable platform going forward. We're excited about the business, and we want to make sure that everybody has the same opportunity here. Ultimately, the opportunity that we saw and the reason that we're back to prosecute the opportunity and create shareholder value here is there are very few companies like EverGen out there. We've got a dedicated team that operates four assets across Canada. These are best-in-class assets in terms of the longevity, their approach to the products that they bring in. They stand out above the rest.
The business has a diversified cash flow stream that's contracted, long-term offtake agreements on the RNG side, as well as contracted tipping fees, and then upside from soil sales and carbon credits. We think there's quite a bit that can be done with those two markets in the coming years. There is another layer of upside that comes from tailwinds in the sector that we talked about with respect to Canadian policy, as well as material growth potential from our project pipeline. We have a template for success. We have a team that's excited to grow this business across Canada, and we see opportunities every day that allow us to, I guess, pick and choose in this environment, in this market, those projects that we want to move forward with at the right time.
Overall, I think the why now for those thinking about putting additional capital into EverGen is we now have very strong alignment from a strategic shareholder that owns a significant portion of our company. We have a view that these assets are undervalued, and there is a quick path to a re-rater and a lower cost of capital for the business. We are hard at work. We appreciate any input, any feedback that our shareholders might have, and look forward to speaking to all of you in the coming months. Thank you. We will now turn it over to Jeremy and Laura to go through questions that we have had come in.
Thanks very much, Chase. Just on that last note, I guess we'll jump into the first question here. Are you able to provide an update on the second tranche of the private placement of up to CAD 2 million?
Yeah. With that, as I mentioned, we're spending the next couple of weeks getting in front of shareholders and want to ensure that we give our shareholders time to participate, time to contemplate this. We'll be setting a deadline shortly on that private placement, and we'll be in touch with our shareholders on that.
Thanks, Chase. Just continuing on the note of financing, are you able to provide an update on the debt refinancing?
Yeah. I think mentioned at year-end and in Q1 is we have been working on refinancing of the corporate loan. This is something that we've got a letter of intent on and continue to progress a loan agreement. Expect to have good news in the coming months on that. Hopefully sooner. I think we are excited to be able to share that as soon as we can.
Thanks, Chase. Moving to questions on the assets. Start with Fraser Valley Biogas. Are you able to comment on just the ramp-up of Fraser Valley Biogas's RNG production?
Yeah. I think as we mentioned, looking back, March and April were strong months, and we've got those results fully in. May has continued a similar trend. We'll share results on a more regular basis going forward. I think we're seeing the potential there to continue to operate in nameplate capacity, barring seasonal challenges that we may see in terms of pipeline capacity or something of that nature. I think we can certainly be optimistic that we're going to be much closer to nameplate capacity this year than we were last year. In 2026, with a full year of planning and capital available to tackle preventative maintenance, there's no reason we can't run this facility in nameplate capacity or slightly above.
Thanks, Chase. We touched earlier on some of the expansion or greenfield opportunities. Perhaps you can just provide an update on the PCR R&G project as well as Project Radius.
Absolutely. I think at PCR, as mentioned on the previous update called by Misha, the project continues to move through regulatory approvals. This is an R&G expansion on top of the existing organics processing facility. This has been bottlenecked from a regulatory perspective for a long period of time, and we've seen that bottleneck unlock with the gate that we moved through earlier this year. We expect to have an update in Q3 once it's gone through a couple of additional regulatory gates that we have to go through to get approval. With that, we've got an engineering and design team ready to go pending regulatory approval so that we can move quickly towards FID on the PCR R&G expansion. I guess touching on projects in our development pipeline, the other one to touch on is Project Radius in Ontario.
I would just say for now that post-election, a large number of the uncertainties have been removed with respect to the CFR program and the Clean Fuels Fund. Our team is working closely with financial sponsors to progress the project to a shovel-ready project as quickly as possible.
Cool. Thanks very much, Chase. That concludes the questions for this call and the call itself. Thanks very much for everyone who tuned in. If you'd like to discuss any of the individual projects, as Chase mentioned, please reach out. Chase and I would be happy to do so.
Thank you.