CHAR Technologies (YES) investor relations material

Technology and market approach

• Focuses on high-temperature pyrolysis to convert woody biomass into renewable natural gas and biocarbon products, with initial production at the Thorold facility in Ontario.

• Biocarbon serves as a drop-in replacement for metallurgical coal, targeting green steel markets, while renewable natural gas is sold under long-term, inflation-indexed contracts to utilities.

• Strategic partnerships with ArcelorMittal, BMI Group, and Lake Nipigon Forest Management provide offtake agreements, project investment, and feedstock supply.

• Project development is modular, scaling with biomass availability, with current and planned sites in Ontario, Quebec, and British Columbia.

• Project financing leverages non-dilutive government grants, project equity, and nonrecourse debt, minimizing the need for large corporate-level fundraising.

Project pipeline and financials

• Thorold facility targets $4.5M in initial project revenue and $1.25M free cash flow to equity partners, with phase two aiming for $28M in annual revenue by 2026.

• Lake Nipigon project benefits from abundant biomass, with modular plant design and a capital expenditure of approximately $55M, supported by grants and a 70/30 debt-to-equity structure.

• Revenue ramps up as additional kilns and renewable natural gas systems are added, with EBITDA and free cash flow growing alongside production capacity.

• Feedstock costs are the largest expense, followed by labor, and are factored into financial models.

• Project-level investments total $28M, primarily from government grants and strategic partners.

Biosolids and PFAS destruction initiative

• Partnership with Synagro in Baltimore focuses on high-temperature pyrolysis to destroy PFAS in biosolids, converting waste into biochar and addressing regulatory challenges.

• Six-month demonstration project concludes in December, with third-party validation of PFAS destruction scheduled for November 15.

• Licensing and engineering fees provide recurring revenue, with equipment costs for biosolids projects around $10M per site.

• Gas produced from biosolids can offset natural gas use in burners, offering additional value streams.

• Urgency is driven by regulatory and social pressures, including lawsuits and disposal costs for PFAS-contaminated biosolids.