Okay. Perhaps we'll just start, so welcome, everyone, to the RE Royalties Third Quarter.
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I am your host for today's call, Bernard Tan, CEO. Joining me as well on this call are Management Team Peter Leighton, COO, and Luqman Khan, CFO. All company executives will participate in the Q&A session after management's formal remarks. As usual, before we get into opening remarks, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information. This information, by its nature, is subject to risks and uncertainties that may cause the stated outcome to differ materially from the actual outcome. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our MD&A and also the related news release, as well as the risk factors particular to our company. The financial information presented on today's call will be in Canadian dollars unless otherwise indicated.
I would also like to point out that we will use various non-GAAP measures during this call. You can find explanations and reconciliations regarding these measures in the related news release. Following opening remarks, we will address some previously submitted investor questions. If we do not get to your questions today, please email investor@reroyalties.com. That's investor@reroyalties.com, and we would be happy to follow up with an answer. To begin, from the end of August, second, just make sure everyone is adequately muted. Thank you. From the end of August up until this week, we completed our Series 4 Green Bonds and raised a total gross proceeds of approximately CAD 7 million. Along with our cash on hand, we have a very healthy cash balance of approximately CAD 20 million to work with in deploying into a number of opportunities.
As you likely saw from the various news releases from the past few weeks, we were able to complete three different transactions with existing and returning clients. These include: one, a secured loan and royalty to Abraxas Power for up to CAD 10 million for the construction of a portfolio of solar projects in the Maldives. Two, a CAD 3 million construction facility and royalty acquisition to SolarBank Corporation for the construction of three separate 5-megawatt battery and energy storage systems in Ontario, Canada. And three, a CAD 6.3 million secured loan and royalty to support a letter of credit for Alpensolar to meet their security requirements with the Alberta Electricity System Operator for a 200-megawatt project outside of Edmonton, Alberta. Peter will discuss in further detail each of these investments that we have made.
From a financial perspective, while our Q3 financial metrics were slightly lower during the quarter compared to the prior year due to the early repayment of loans from our clients, the recent investments we have made will push back on a growth trajectory as we expect to see continued growth in our revenues and income, EBITDA, and cash flows in the future quarters to come. As of today, we currently have about CAD 9.5 million in cash on our balance sheet, and our team is further evaluating additional new opportunities with current and prospective clients. I will now pass it over to Peter to discuss some of these opportunities and performance on our portfolio.
Thank you, Bernard, and thanks to everyone for joining us today. Since the last quarter, the company has completed four transactions that have previously been announced. The first, in November of 2024, the company entered into an agreement with Abraxas Power Maldives Investment Limited, a wholly-owned subsidiary of Abraxas Power Corp and Ontario-based energy transition developer. This transaction was to provide up to CAD 10 million secured loan to support the construction of solar projects in the Maldives. The first tranche of CAD 1.4 million was advanced in mid-November for the construction of two rooftop solar projects with a combined generation capacity of 0.77 megawatts DC. The projects are located at a hospital in Malé, the capital of the Maldives, and on an island resort approximately 50 kilometers north of Malé. They will generate revenue from power purchase agreements for a term of up to 15 years.
This loan with Abraxas will have an 18-month term and an interest rate of 13% per annum on advanced funds compounded monthly. The company will receive a gross revenue royalty of 2% on the project's revenues for the term of the power purchase agreements. In November, the company also entered into an agreement with a wholly-owned subsidiary of SolarBank Corporation, an independent renewable energy project developer and owner focusing on distributed community solar projects in Canada and the United States. This transaction supports the construction of three 4.99 MW battery energy storage system projects to be located in Ontario. These battery energy storage system projects have long-term contracts with the Independent Electricity System Operator under the E-LT1 program. The company provided a secured loan of CAD 3 million with a 12-month term at an interest rate of 11% per annum.
The company will also receive a 0.4% royalty on the gross revenues generated for the life of the storage projects, estimated at 20 years. The royalty rate will be reduced to 0.25% if the loan is repaid within the first six months. In November, the company also announced that they had settled the outstanding loans with Switch Power Battery Operating Company and with Switch Power Solar Operating Company. Under the terms of the settlement, the company will retain the shares of these two companies in full and final satisfaction of the outstanding debt, and these two companies, Switch Power Battery Operating Company and Switch Power Solar Operating Company, are now wholly-owned subsidiaries of the company. The company currently owns and operates nine operating battery storage projects totaling 5.3 megawatts or 12.3 MW hours and a single operating 428-kW DC rooftop solar project, all in Ontario, Canada.
Finally, in December of 2024, the company entered into an agreement with Alpensolar SA, a German-Romanian renewable energy company focused on the development, construction, and operation of solar power plants globally. The company provided a secured loan to support a CAD 6.3 million letter of credit on behalf of Alpens to meet their security requirements with the Alberta Electricity System Operator for the 200-megawatt Solar Aurora project located in Sturgeon County, Alberta, Canada. The Alpens loan carries an annual interest rate of 13% with an initial term of 12 months. The company will also receive a gross revenue royalty of CAD 0.25 per megawatt hour of energy production from the Solar Aurora project for the life of the project.
As of the end of September 2024, the company has 114 royalties under contract covering projects that generate solar and wind energy, projects that convert waste to energy, storage projects, and energy efficiency projects. Cumulatively, these represent approximately 428 megawatts of clean energy capacity and generate approximately 1 million megawatt hours of clean energy every year. This is enough clean energy to power approximately 136,000 homes, offsetting approximately 429,000 tons of CO2 annually. We continue to see a substantial number of new high-quality investment opportunities from both existing and new clients add to our project pipeline and backlog. Our team is currently undertaking detailed due diligence on several of these opportunities in order to determine the best allocation of our current cash on hand.
We have a number of transactions that we are evaluating that are still subject to completion of due diligence, definitive documentation, conditions precedent for each transaction, and approval by the company's board of directors. There is no assurance that any of the opportunities under evaluation will result in a completed transaction. I'll now pass it over to Luqman Khan, who will discuss the financial results for the quarter.
Thanks, Peter. During the third quarter of 2024, the company recorded CAD 1.7 million in revenue and income, a decrease of 12% over the similar quarter in the prior year. The decrease was due to lower finance income as a result of early repayments from clients during the current year. During the nine months ended September 30, 2024, the company recorded CAD 6.2 million in revenue and income, a decrease of 14% over the similar period in the prior year. The decrease was as a result of one-time royalty buyout of CAD 1.6 million in the prior year, which was not applicable in the current period. For the third quarter of 2024, the company reported CAD 1.6 million in gross profit, including changes in fair value of financial assets, a decrease of 12% over the similar quarter in the prior year.
For the nine months ended September 30, 2024, the company recorded CAD 5.8 million in gross profit, including changes in fair value of financial assets, a decrease of CAD 1.1 million, or 16%, over the similar period in the prior year. EBITDA for Q3 2024 was CAD 1 million, an increase of CAD 2.6 million over the similar quarter in the prior year. This increase was the result of a CAD 3.1 million provision for expected credit loss in the prior year quarter, which was not applicable during the current quarter. EBITDA for the nine months ended September 30, 2024, was CAD 3.3 million, an increase of CAD 1.5 million, or 77%, over the similar period in the prior year. Loss after income tax of CAD 195,000 was recorded for Q3 2024, compared to CAD 2.8 million in the similar quarter in the prior year.
A net loss after income tax of CAD 193,000 was reported for the nine months ended September 30, 2024, compared to a year-to-date net loss after income tax of CAD 1.1 million in the similar period. At September 30, 2024, the company had cash and cash equivalents of CAD 18.4 million, including restricted cash. With that, I will pass it back to Bernard.
Thanks a lot, Luqman and Peter. With that, I would like to thank everyone for taking the time to join us on this Friday afternoon for the call. Q3 was really a transformative quarter for us as we raised additional capital from the Series 4 Green Bonds and really built up our cash reserves. After the end of the quarter, we were able to deploy a portion of this cash reserve into the three transactions discussed earlier. These investments will provide cash flow, revenues, and income for the upcoming quarters. We are also evaluating a number of very good opportunities and conducting due diligence on them. With the existing cash on hand, we feel that the company will be poised to build on the success in subsequent quarters to come.
This concludes the formal part of the conference call, and we will now turn it over to submitting questions. I believe we have three questions that were submitted prior to the call. I will perhaps go over the first one. What impact does the Trump presidency have on your assets and green bonds in the U.S.? I'll maybe pass this one to Peter.
Sure. Thanks, Bernard. We do not expect that the Trump presidency will have a material impact on our business or on the assets underpinning our green bonds. We've had material early repayments on our investments in the U.S., and our exposure to the U.S. market is much lower, about 25% of our portfolio today, compared to where we were a year ago when it was closer to 50%. Additionally, the royalties that we have are mostly on assets that are already operational, so the impact of any policy changes will be minimal. There is a possibility that a Trump administration could potentially affect our deal flow going forward. During the last Trump administration, we saw an increase in opportunities as larger pools of capital either pulled out of the U.S. or delayed their investment decisions. This actually created more opportunity for us.
We currently have several opportunities under due diligence in the U.S., and we remain focused on ensuring that we adequately protect capital and generate a suitable return for shareholders and bondholders. While the Trump administration may overhaul existing Biden administration policies, like the Inflation Reduction Act, it will likely keep a lot of the benefits and may simply rebrand the act as a Trump policy. Again, during the last Trump administration, investment tax credits for the renewable energy industry that had been introduced by the Obama administration were maintained and, in some cases, enhanced by the Trump administration, and interestingly, the largest markets for renewable energy project development and construction in the U.S. right now are Republican states, so we don't foresee new policies that would take away these benefits from the Trump base.
We also saw the use of tariffs last time as an economic weapon and leverage against China, and now Mexico and Canada are being threatened as well. What we're seeing is a lot of manufacturers in the renewable energy space are repositioning their manufacturing facilities to Southeast Asia and South Asia in an attempt to avoid these incoming tariffs. Back to you, Bernard.
All right. Thanks, Peter. Just moving on to the second of the three questions. What will the Switch assets that we now own generate in terms of revenues and cash flow? I can probably answer that one. Of the nine operating battery sites that we now own, those assets will generate roughly between CAD 1.4 million-CAD 2 million in revenues, and approximately out of that, roughly about CAD 1.1 million-CAD 1.4 million in net cash flow. The reason for this range is because of how the Global Adjustment market works in Ontario, and it comes down to the cost savings that these batteries are able to generate for the underlying host client. There's also typically a timing lag between when these batteries deliver those savings and also when the revenues are ultimately recognized.
As far as the solar site, which is also in Ontario, this asset will generate approximately CAD 200,000 in revenues and about CAD 160,000 in net cash flows. This asset does have a feed-in tariff agreement with the Ontario electricity operator and does extend to approximately 2035. Moving on to the final question, and this one I will perhaps hand it over to Luqman to explain as it's more of an accounting-related one. Can you explain why the income statement shows CAD 2.77 million in interest expense for the nine months, but yet your cash flow statement says that you only paid CAD 2.19 million in interest on the green bonds? Were there additional debt that you paid interest on? So can you explain?
Yeah. Thanks, Bernard. So basically, we do capitalize certain expenditure when we close the financing, and that includes commission and fair value of warrants, legal costs, and those expenses get amortized over the term of the bond. They are not actually. They do not carry ongoing cash impact on our quarter-to-quarter cash flows, but our cash flow presents only the cash interest payment during the quarter, and the difference is essentially between the actual cash interest and the amortization of warrants and other capitalized costs.
Thanks a lot, Luqman. Again, those were the three submitted questions. I would like to thank everyone again for your time today. Should you have any follow-up questions that you would like to ask management, again, please feel free to submit those questions to investor@rero yalties.com. That's investor@rero yalties.com. Thank you, everyone, and we hope you have a wonderful holiday season, and we look forward to speaking with you in the new year. Thank you.
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