Vertex Resource Group Ltd. Investor Presentation January 2019 - - PowerPoint PPT Presentation

Vertex Resource Group Ltd. Investor Presentation

January 2019 www.vertex.ca | TSXV:VTX

Click to edit Master title style Disclaimer & Notice to Reader

This presentation is for discussion purposes only. The contents are not to be reproduced, summarized or distributed. These materials have been prepared for information purposes only in relation to Vertex and are not, under any circumstances, to be construed as an offering of any securities for sale directly or indirectly in any province or territory in Canada, in the United States of America or in the territories or possessions thereof or to any U.S. person. No prospectus has been or will be filed in connection with an

• ffering in Canada and the units have not been registered under the United States Securities Act of 1993, the securities law of any state

thereof or the securities of any other jurisdiction, nor is such registration contemplated, and this presentation is not and under no circumstances is to be construed as a prospectus or other offering document. No securities commission or similar regulatory authority has passed on the merits of the units reviewed these informational materials any representation to the contrary is an offence. The information presented in this document is considered to be accurate, however there is no expressed or implied representation or warranty as to the accuracy or completeness of any such information and does not constitute investment advice. This presentation may contain forward-looking statements, including forward-looking statements regarding management’s assessment of future plans and operations, business and investment strategies, exceptions of returns, cash-flow and earnings. Forward-looking statements are based on current assumptions, beliefs, internal exceptions, estimates and projections of management relating to, among

• ther things, the ability of the funds to raise capital and locate desirable investments, the performance of the funds’ underlying investments,

the funds’ ability to effectively time dispositions, prevailing commodity prices and exchange rates, applicable royalty rates and tax laws. Such forward-looking statements are based on information currently available to management. No persons should rely on these forward- looking statements because they involve known and unknown risks, uncertainties and other factors which are, in many cases, beyond the control of management and may cause the funds’ actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the forward-looking statements. The market and industry data contained in this presentation are based upon information from independent sources and other publications. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete

• certainty. Management has not independently verified any of the data from third party sources referred to in this presentation or ascertained

the underlying assumptions relied upon such sources.

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Click to edit Master title style A Leading Environmental Service Company

We assemble, integrate and develop businesses that address the environmental needs of clients, through organic growth and strategic acquisitions with the goal of capturing efficiencies and enhancing service offerings that best anticipate customer needs.

Initial Site Selection (Planning) Consultation & Regulatory Approval Development Operation & Maintenance Decommissioning & Reclamation

BEST-IN-CLASS INTEGRATED ENVIRONMENTAL SOLUTIONS

Vertex Offers Solutions at all stages of a Client Project “Cradle to Grave”

Proven Strategy

To continually evolve, expanding our knowledge base, service offerings and expertise, enabling us to serve our customers with increasingly innovative solutions.

Mission Statement

Since 1962, Vertex has been a leading North American environmental service company We proudly serve clients in the

• il & gas, oil sands, petrochemical,

renewable energy, utilities, agriculture, forestry, midstream, mining, aggregate and municipal sectors Vertex employs a staff of approximately 700 employees and lease operators

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Click to edit Master title style Corporate Profile

Market Summary

Current Stock Price $0.45 (Dec 2018) Common Shares Outstanding 93.4 Million Market Capitalization: Enterprise Value: $42 Million $126 Million 2019 Backlog EBITDA: 2017 (1) 2018 YTD (2) $121 Million $15.5 Million $14.7 Million CAGR (EBITDA) (3) 29.12% Insider Ownership Senior Management Board of Directors____ 34% 28% Total Insider Ownership 62%

Highlights

• Became a publicly traded entity on the TSX Venture

Exchange on Oct. 16, 2017

• 6 Complementary Acquisitions in 2017 & 3 in 2018 Including:
• An Environmental Services Company in SK & MB
• A Hydro-Vac Company Operating in Edmonton, AB
• A Fluid Hauling Company in Operating throughout AB,

SK & USA

• 1. F17 EBITDA adjustments would have included $3.5M of TTM EBITDA from acquisitions or $18.7M in total adjusted EBTIDA for FY17.
• 2. 9 months ending September 30, 2018. $25.6 TTM EBITDA ’18.
• 3. CAGR EBITDA since 2006

Locations

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Click to edit Master title style Integrated Solutions from Planning to Reclamation

Environmental Consulting & Engineering Fluid Hauling & Management Rental Equipment Insulation Blankets & Buildings

➢ Abandonment, Drilling & Completion Engineering ➢ Pre-Development, Monitoring & Remediation / Reclamation Services ➢ Land & Regulatory Services ➢ Emergency Spill Response ➢ Geotechnical & Civil Engineering ➢ Hydro-Vac, Pressure, Vacuum, Hot Oiler, Steam Truck & Stable Foam Services ➢ Utilizing Specialty Tools to Clean Tanks, Lines, Exchangers & Other Equipment ➢ Fluid Hauling Including: Crude, Emulsion, Water Chemicals, Fuel, NGL, Butane & Propane ➢ Fluid Storage (water, oil and chemicals) & Secondary Containment ➢ Fluid & Chemical Sales ➢ Specialized tanks, spill prevention, site accommodations, enviro bins and rental equipment to support development,

• perational and maintenance projects

➢ Custom Manufactured Insulation Blankets to ensure thermal efficiency and the protection of workers and equipment ➢ Manufacturing, Installation and Repair of Self- Frame, Rigid Frame and Acoustical Enclosure Metal Buildings

Visit vertex.ca for additional details on Vertex’s service offering

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Environmental Services & Industrial Cleaning

45% 46% 54% 61% 79% 55% 54% 46% 39% 21% 20,000 40,000 60,000 80,000 100,000 120,000 140,000 0% 20% 40% 60% 80% 100% 2014 2015 2016 2017 YTD 2018 Environmental Industrial Total Revenue

Revenue By Division

Click to edit Master title style Diversified Environmental Service Offering

• Vertex continues to reduce risks by capitalizing on opportunities to diversify our client base and related industry exposure.
• The pursuit of industry and client diversification has resulted in several project awards causing the expedited growth in

revenue from non oil and gas related clients in recent years. This strategy has resulted in reduced risk exposure and lessened variability in the cyclical changes of this market.

% of Revenue by Industry Growth Potential

Utilities, Telecommunication & Government: Vertex continues to provide services to these sectors and is working to grow/adapt our service offering to attract new project awards. Active on obtaining contracts associated with expanding Canadian 5G network. Operation & Maintenance Projects: Continual maintenance is required to ensure optimal production capabilities. This is a more stable and consistent stream of revenue. Coal Project Abandonment: Vertex continues to be involved in coal mine, processing, and power plant shut- downs, abandonments and reclamation projects. Potash Project Abandonment: As potash mines mature, the frequency, volume and scale of total reclamation spending is expected to increase. Vertex has been and continues to be involved in the planning stages in addition to also being actively engaged in the peat and vegetation management of these projects.

• 1. 9 months ending September 30, 2018.

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(1)

Click to edit Master title style Solutions At All Stages of a Client Project

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Vertex Provides an Integrated Service Offering That Supports Project Development Throughout the Life Cycle of our Clients’ Projects

“Cradle to Grave Service Offering”

Visit vertex.ca for additional details on Vertex’s service offering

Click to edit Master title style Provincial GDP Growth

Opportunity For Vertex

• Vertex has continued operational focus in the provinces of BC, AB, SK and MN. These provinces are expected to be

among the leaders in the nation in growth in GDP into 2020. Vertex continues to expand into Ontario and select US States.

• Augmenting Vertex’s exposure to the oil and gas industry, is the increased infrastructure spending municipally,

provincially and federally.2 Also the rise in potash mining and agricultural spending in Saskatchewan. Vertex’s diverse range of services continues to meet the needs of these growth areas

Provincial GDP Growth 1

1. Average of the Statistics from National Bank of Canada, TD Bank, Bank of Montreal, Scotia Bank and Royal Bank of Canada 2. Report by Beacon Securities Limited November 21, 2018

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0.0% 2.0% 4.0% NL NS SASK NB ONT MAN QUE PEI BC AB

2017

• 1.0%

0.0% 1.0% 2.0% 3.0% NL NB NS SASK MAN PEI ONT AB BC QUE

2018E

0.0% 1.0% 2.0% 3.0% NB NS PEI MAN SASK AB QUE ONT NL BC

2019E

0.0% 1.0% 2.0% 3.0% NL NB NS PEI QUE MAN ONT SASK AB BC

2020E

Click to edit Master title style Market Conditions

Opportunity for Vertex

• As markets stabilize and become more attractive for new

infrastructure projects, there will be an increased demand for Vertex’s service offerings and the continued maintenance of these assets

1. https://calgaryherald-com.cdn.ampproject.org/v/s/calgaryherald.com/business/energy/lng-canadas-planned-40b-kitimat-project-moving-toward- approval/amp?amp_js_v=0.1&usqp=mq331AQGCAEoATgA#origin=https%3A%2F%2Fwww.google.ca&prerenderSize=1&visibilityState=prerender&paddingTop=54&p2r=0&horizontalScrolling=0&csi=1&aoh=15355737163665&viewerUrl=https%3A%2F%2Fwww.google.ca%2Famp%2Fs%2Fcalgaryherald.com%2Fbusi ness%2Fenergy%2Flng-canadas-planned-40b-kitimat-project-moving-toward-approval%2Famp&history=1&storage=1&cid=1&cap=swipe%2CnavigateTo%2Ccid%2Cfragment%2CreplaceUrl. https://www.jwnenergy.com/article/2018/7/goose-bumps-kitimat-shell-ramps-activity-towards-lng-canada/ https://www.transmountain.com/project-overview https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-canada https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us https://www.infrastructure.gc.ca/alt-format/pdf/plan/2018-04-16-ICP-PIC-english-flat.pdf https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/telecommunications-industry-outlook.html http://www.coastalgaslink.com/transcanada-to-construct-coastal-gaslink-pipeline-project/ Invest Canada & Digital Canada 150

Industry Details 1

• Telecomm 5G Network Upgrade – the deployment of 5G will require numerous

small-cell hubs as the network utilizes frequencies with limited travelling ability. This network will need to be constructed and is estimated to cost roughly $20 billion in Canada. Overall telecom infrastructure upgrades are expected to cost approximately $100 billion. Vertex’s customers will be poised to capitalize on

• ur environmental consulting expertise.
• Line 3 Enbridge Replacement Project – a $8.2-billion project which includes fully

replacing 1,031 miles (1,660 kilometers) of Line 3 with new pipeline and associated facilities on either side of the border. Includes decommissioning old line by removing the pipeline, cleaning the pipeline, and physically disconnecting and segmenting the line. Vertex is very prominent in this area given recent acquisitions.

• Trans Mountain and Costal gas link – a $7.4-billion project, although delayed

pending legal challenges, Trans Mountain is now controlled by the Federal Government to ensure completion including approximately 980 km of new pipeline carrying heavy oils, 12 new pump stations and 19 new tanks. Vertex is has secured significant contracts once work restarts on this project. Costal gas Link is a $6.2 billion project and Vertex has secured significant contracts for 2019 and beyond.

• LNG Canada – site preparation began in July of 2018 to avoid delays in the

project’s timeline pending final investment decision which is likely to be made by the end of 2018. The project includes the construction of 670 km of pipeline and a $40-billion LNG facility. A flurry of activity has raised optimism for the project which had already previously gained support of federal and provincial governing bodies including C$6 billion in tax breaks and savings from the British Columbia government. Vertex has an long standing JV with the Haisla nation and is actively working with the aboriginal band to secure additional work. Kitimat LNG is expected to be a $23-billion project once completed

• Canada’s Infrastructure Plan – a $180 billion Infrastructure Plan over 12 years

which will continue to be a predictable source of funding for municipal and provincial infrastructure projects in which Vertex currently services.

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Budget 2017 Investments – Canada’s Infrastructure Plan LNG Canada Site / Kitimat LNG Site Trans Mountain Coastal Gas Link Line 3 Enbridge Replacement Project Vertex Canadian Project Expertise and Geographic Reach

Click to edit Master title style

500 1000 1500 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Number of Abandonments Completed by Vertex

Growing Regulatory & Environmental Requirements

• 1. The Globe and Mail: In Western Canada, surge of inactive wells a brewing ‘disaster’ November 27, 2018
• 2. AER
• 3. Orphan Well Association, http://business.financialpost.com/commodities/energy/oil-industry-to-get-235-million-government-loan-to-help-clean-up-abandoned-wells, https://www.ctvnews.ca/business/defunct-oil-firm-leaves-behind-thousands-of-orphan-wells-in-alberta-1.3834743
• 4. https://keepcanadaworking.ca/facts
• 5. The Globe and Mail: “Hustle in the oil patch: Inside a looing financial and environmental crisis” November 26, 2018
• 6. The Globe and Mail: “Alberta vows to impose oil, gas well cleanup timelines on energy companies” November 27, 2018

Estimated Inactive Wells in Western Canada 1 Opportunity For Vertex

• The market for abandonments and reclamations is

expected to continue to grow based on the increased focus by governments, loans to the

• rphan well association to expedite reclamation,

deposits required by the AER for distressed companies, industry peer monitoring and a growing number of inactive wells.

Market Details 2,3,4,5,6

• Alberta and BC has pledged to impose cleanup timelines while
• ther jurisdictions are set to impose higher security deposits to

ensure wells with major cleanup liabilities will be dealt with despite being transferred to other E&P entities.

• Costs for cleaning inactive wells by insolvent companies are

borne by industry partners. This has resulted in peer monitoring to block deals in which the environmental liability is unlikely to be properly dealt with.

• AER estimates total liability associated with the cleanup of oil

and natural gas well sites, pipelines, and facilities is approximately $30.9 billion.

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Click to edit Master title style E&P Operation & Maintenance Spending

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Oil and Gas Operations Total Expenditure (C$ millions) Oil and Gas Industry Capital Total Expenditures (C$ in millions) Operations Total Alberta British Columbia Saskatchewan Manitoba

Opportunity For Vertex

• Inactive assets, turned active require significant spend on maintenance and operating activities to restart exploration and
• production. Continual maintenance is required to ensure optimal production capabilities. This presents a more stable and

consistent stream of revenue for Vertex as the company continues to pursue maintenance, turnaround and industrial cleaning opportunities.

• Due to oil production cuts in Alberta, it is likely that firms will undertake additional maintenance activities as production

units are forced to operate at reduced capacities. This presents additional maintenance project opportunities for Vertex.

• Extensive environmental monitoring, which Vertex provides clients, will be required to ensure emission standards are met

due to new regulations being adopted and implemented by the Alberta government.

E&P CAPEX and Maintenance Spending Trends in Canada 1

1. Source: Analyst consensus, Capital IQ and Raymond James 2. https://keepcanadaworking.ca/facts

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Industry Details 1,2

• Operating expenditures by upstream and

midstream companies are a continued requirement to support production and processing volumes.

• Oil & Gas industry capital spending is expected to

increase in a recovering and less volatile commodity environment.

• Increased M&A activity is expected to result in

increased upstream activity overall as active firms have acquired assets from inactive owners restarting exploration and production.

• Alberta has committed $1.4 billion in innovation

funding for clean technologies and energy efficiency initiatives to reduce emissions and eliminate coal emissions by 2030. They plan to spend $70 million to cut oil sands emissions and this will require monitoring.

Click to edit Master title style Financials

Financial Summary

• 1. 2014 presented on ASPE accounting basis with October 31 year-end. 2015 to 2018 is presented on IFRS
• 2. Adjustments relate to items that are not ongoing, are non-recurring, are exceptions to our normal operations and do not form part of our principal business. Overall adjustments relate to non-recurring bonus interest, losses or gains on disposal of assets,

acquisition costs, impairments, onerous leases and severance costs, SBC.

• 3. F17 EBITDA adjustments would have included $3.5M of TTM EBITDA from acquisitions or $18.7M in total adjusted EBTIDA for FY17.
• 4. 9 months ending September 30, 2018. $25.6 TTM EBITDA ’18.

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Year ending December 31 (C$ 000's) 2014 (1) 2015 2016 2017 (3) YTD 2018 (4) Revenue 116,465 108,327 86,153 118,419 103,803 Cost of sales 79,381 75,685 61,869 86,116 75,340 Gross Profit 37,084 32,642 24,284 32,303 28,463 Gross profit margin 32% 30% 28% 27% 27% SG&A 15,622 16,647 14,678 16,776 13,792 Other (2) 2,363 12,807 4,027

• 140

Adjusted EBITDA (before other expenses) 21,462 15,995 9,606 15,527 14,671 Margin 18% 15% 11% 13% 14% Assets 133,701 124,404 122,371 144,156 181,528 Total Debt 86,020 64,388 57,676 62,160 85,315 Total Equity 11,302 36,756 40,834 59,773 65,211 Net Capex 2,343 (2,848) 4,239 2,401 1,931 Acquistions (net assets) 21,215 21,258 11,500 16,980 21,858

2019 $121 Million 2020 $48 Million 2021 $17 Million

Backlog

2019

Click to edit Master title style Financials

• Vertex’s strong working capital position is a

result of management’s focus on improving billing and collections time to reduce DSOs, and active inventory management.

• Vertex is in a strong financial position to

capitalize on growth opportunities including acquisitions and organic growth initiatives.

• Historical low multiple and attractive valuation

metrics below book value.

Share Capital

• Fully diluted insider ownership 62% split by:
• Senior Management Ownership: 34%
• Board of Directors Ownership: 28%

1. Includes 32 Degrees Capital ownership of 18.2%, in addition to, management and others within the company whom are subject to escrow provisions to 2020. 2. Information of Vertex Resource Group Ltd. Is based on analyst reports provided by Acumen Capital Finance Partners Limited and Beacon Securities Limited dated November 26, and November 27, 2018 respectively.

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(000's) Ticker

TSXV: VTX

Basic Common Shares Outstanding

93,413

Options @ $1.00 / share

4,875

Warrants @ $1.20 / share

2,197

Fully Diluted Shares

100,485

FD Management & Directors Ownership (1)

62.2%

12-month Target Price Acumen Capital Partners Trevor Reynolds 403.410.6842 $1.20 Beacon Securities Limited Kirk Wilson 403.910.5379 $1.05 Average Analyst Target Price $1.13

Analyst Coverage Financial Metrics

Market Data Book Value Tangible 2018E 2019E 2018E 2019E P/B Vertex Resource Group Ltd. TSXV:VTX 0.45 $ 42 $ 126 $ 22 $ 29 $ 5.9x 4.3x 0.5x Earnings Data Leverage Company Symbol Close Price Market Cap Enterprise Value EBITDA (2) Net Debt / 2018E EBITDA EV/EBITDA 2.9x

Click to edit Master title style Looking Forward 2019

• Heading into 2019, Vertex is well positioned to withstand short term economic

pains in Western Canada related to commodity pricing.

• Vertex intends to continue to integrate past acquisitions in order to reduce

costs and drive increases in utilization (people & equipment) through cross- selling initiatives.

• Vertex continues to gain momentum in pursuing its customer diversity strategy

whereby Vertex customers continue to grow and provide stable opportunities in the telecommunications industries, utilities, agriculture and municipalities.

• Vertex continues to focus on paying down debt, de-leveraging through

acquisitions, reducing its overall cost of borrowing, and managing Vertex’s 2019 planned capital expenditures of $8.5 million to match industry activity.

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Click to edit Master title style Why Own Vertex?

Strategic Objectives

• Disciplined Capital Allocation & Cost Reduction Practices
• Geographic & Service Offering Footprint Expansion into Attractive Growth Markets across

North America (including BC, ON & USA)

• Continue to Provide a Diverse Integrated Service Offering Throughout All Stages of a

Client’s Project

• Continue to Cross-Sell & Increase Utilization (people & equipment)

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Demonstrated and Experienced Leadership Team Client Focused & Tailored Solutions Increased Focused by Industry on Environmental Liabilities Long Standing Customer Relationships Integration and Acquisition Opportunities in Fragmented Market Improving Financial Results

Contact Information

161, 2055 Premier Way Sherwood Park, AB T8H 0G2 (780) 464-3295

www.vertex.ca | TSXV:VTX

Click to edit Master title style

1962 – 2003 2005 2007 2008 2011 2014 2015 2016 2017 2018 2019 +

Our Journey

Beginning in 1962 through to 2003, seven companies were founded throughout Western Canada which would each be acquired to become a part of Vertex, including:

• Three Star Trucking (1962)
• Klinger Building Systems (1976)
• Pioneer Land Services Ltd (1978)
• Am-Con Insulation Services Ltd.

(1982)

• TWT Vegetation Management Ltd.

(1991)

• Endrill Resource Consultants Inc.

(1993)

• Select Soft Covers (2003)

Vertex Founded; acquired TWT Vegetation Management Ltd. and Endrill Resource Consultants Inc. Founded Westland Energy

• Ltd. (Vertex Equipment

Rental service line). Acquired Am-Con Insulation Services Ltd., Excel Insulation, Klinger Building Systems and Select Soft Covers, which became Vertex’s Industrial Division. Acquired Pioneer Land Services Ltd. Named one of Canada’s 50 Best Managed Private Companies, gold standard, an honor the Company maintained every year from 2011 to 2017. Acquired Navus Environmental Inc. Acquired Ignite Energy Services Ltd. (Vertex Fluid Hauling service line). Acquired Red Giant Energy Services. Acquired three consulting firms,

• ne chemical and

two environmental services companies Acquired Three Star Trucking Ltd., TSL Industries and a hydrovac company

Phase I

Foundation Building

Phase II

Strong Growth

Phase III & IV

Transformational Change & Strategy Execution

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Click to edit Master title style Leadership Team

Management

Terry Stephenson – President, Chief Executive Officer and Director

• Terry founded Vertex in 2005 and, as President and CEO, he is responsible for the Company’s day-to-day operations.
• Joined Flint Energy Services Ltd. as the Director of Finance, where he was responsible for M&A transaction structure, support and execution along with

public company compliance, tax planning and treasury management.

• Former accountant at KPMG LLP; worked in audit, due diligence, valuations and taxation, advancing to Manager with a focus on construction clients.
• Terry has a Bachelor of Commerce degree from the University of Alberta, is a Chartered Accountant and Chartered Professional Accountant.

Paul Blenkhorn – Vice President, Consulting Services

• Paul is responsible for the day-to-day operation of the consulting division of Vertex.
• Joined Pioneer Land Services Ltd. in 2006, eventually leading their environmental division.
• Began his career with Hood Packaging Corporation gaining experience in process improvement, capital investment, technical sales support, product

development in a wide array of business efficiency and improving initiatives.

• Paul holds a Bachelor of Engineering Science degree from the University of Western Ontario and is a Professional Engineer (AB and SK).

Michael Zvonkovic – Chief Financial Officer

• Michael joined Vertex in 2017, previously held positions as an Executive VP and CFO of FIRMA Foreign Exchange Corporation from 2012 to 2016, and

VP Financial Reporting and Finance of The Cash Store Financial Services, a TSX and NYSE listed issuer, from 2007 to 2012.

• Michael began his career in 2002 with PwC LLP in Edmonton.
• Michael earned a Bachelor of Commerce degree with distinction in 2002 from the University of Alberta, is a Chartered Accountant since 2004 and a

Chartered Professional Accountant since 2015.

Derek Ellsworth – Vice President, Energy Services

• Derek joined the company in 2018 and is responsible for the day-to-day operations of the rental equipment division of Vertex.
• Began his career in oilfield services in 2001 as a Financial Analyst in Calgary before moving into sales and then operations. Derek worked for

TechnipFMC and its predecessor companies, Canadian Subsurface, Pure Energy and FMC Technologies, starting with Canadian Subsurface Energy Services as Vice President in 2007. He then relocated to Sherwood Park to oversee the company’s Northern Canada Operations in 2016.

• Derek holds a Bachelor of Commerce degree from the University of Alberta and a Master of Business Administration from Queen’s University

Deon Walsh – Vice President, Environmental Services

• Deon is responsible for the day-to-day operations of the industrial cleaning, safety, and environmental services operations of Vertex.
• Over 25 years of industrial maintenance and fluid services experience; previously Senior VP Oilfield Services for North America with Flint Energy

Services Ltd., a global infrastructure firm where he served since 1993.

• Deon is a graduate of the Queen’s School of Business Executive Program and the University of Alberta Corporate Executive Program

For additional information on Leadership team please visit our website, www.vertex.ca/about/leadership-team/

Senior management ownership - 34% 18

Click to edit Master title style Leadership Team

Stuart O’Connor, Director

• Currently President of Timber Ridge Capital Ltd. Previously, he has served as a Director and Chairman of Flint, Director of IROC Energy Services Corp.,

President and Chief Executive Officer at Merak Projects Ltd, and as a Partner with Bennett Jones LLP. He currently sits on the boards of a number of private construction, software services, and real estate ventures.

• Mr. O’Connor holds a Bachelor of Science in Chemical Engineering from the University of Alberta and a Bachelor of Laws from Queen’s University

Terry Freeman, Director

• Currently, Head of Investments for ATB Capital and previous Managing Director of Northern Plains Capital, Mr. Freeman spent 15 years as the Chief

Financial Officer of Flint and its predecessors. He sits on the Boards of a number of private construction, energy services, private equity and real estate ventures, as well as on the Board of Directors of McCoy Global Inc.

• Holds a B.Comm from the University of Alberta, the ICD.D designation from the Institute of Corporate Directors and is a fellow of the CPAs of Alberta.

Trent Baker, Director

• Currently, a Managing Partner of 32 Degrees Capital and has been with the private equity firm since 2007. Prior to joining 32 Degrees Capital, Mr. Baker

worked in the audit department of KPMG LLP. He currently sits on the Board of Directors of CORE Linepipe Inc., Sphere Energy Corp. and HPC Energy Services Ltd.

• Holds a B.Comm from Queens and is a member of the Chartered Professional Accountants of Alberta, as well as a CFA charter holder.

Board of Directors

Brian Butlin, Chairman of the Board of Directors

• Chairman of the Board of Directors since February 6, 2007. Formerly, Mr. Butlin was Chairman and Chief Executive Officer of Flint Energy Services Ltd.
• In addition to his experience at Flint, Mr. Butlin is currently a Director of The Crossing Company and previous Director of Edmonton’s Eskimo Football

Club, Graham Construction Ltd, Derrick Golf and Winter Club, and past Chairman of the Northern Alberta Institute of Technology.

• Mr. Butlin holds a Bachelor of Science in Business Administration from the Michigan Technological University.

Terry Stephenson, President, Chief Executive Officer and Director

• See Management Bio.

For additional information on Leadership team please visit our website, www.vertex.ca/about/leadership-team/

Board ownership – 28% 19

Click to edit Master title style Management Experience

Prior to founding the Company, Vertex’s leadership team was responsible for growing Flint Energy Services, a private oilfield services company with $60 million in revenue, to a public corporation with over 7,500 employees, 49 North American locations and $1 billion in revenues.

• The Flint Energy Services platform began in 1998 with the roll up of HMW

Constructors founded by Brian Butlin.

• It continued to grow through major acquisitions until its IPO in 2001.
• Brian retired in January 2005 while Terry departed in May 2005 after

acquiring the first businesses that are now Vertex.

• Between 1998 and their departure in 2005, Brian and Terry completed 29 acquisitions and 3 divestitures that provided the platform for

Flint’s growth to a >$1 billion dollar business which employed over 7,500 employees across 49 North American facilities.

• Brian and Terry executed on a two pronged growth plan:
• Consolidation & Integration:
• a number of strategic acquisitions enabled Flint to provide a full spectrum of services, with a focus on project execution and

transition to on-going maintenance upon project completion.

• during the acquisition period management focused on integrating or rationalizing the cost structure through integrated business

processes, reorganizing management, and consolidating multiple offices into single office locations.

• Enhancement of the Flint Brand:
• by focusing on a commitment to safety training and successful project execution, Flint developed a recurring and very loyal

customer base.

• as the number of Flint built facilities increased, the level of maintenance revenue also increased as management successfully

captured long-term maintenance contracts providing a steady, recurring revenue stream.

At Vertex, the Leadership team has made inroads on executing a similar strategy and looks to continue industry consolidation while maximizing value of the Company.

Flint Energy Services Ltd. - Financial Highlights CAD $ millions (except share price) 1998 IPO1 2001 2002 2003 2004 2005 Revenue 60 637 697 651 744 1,031 EBITDA 8 83 76 68 70 115 Total assets 12 577 556 554 630 735 Closing share price 12.00 18.75 20.50 21.00 21.50 39.00

• 1. Flint IPO was November 2001

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