CBLU.V - Update.


Clear Blue Technologies Intl Inc. (CBLU.V) delivers clean, managed, “wireless power” to meet the need for reliable, low-cost, solar and hybrid power for lighting, telecom, security, IoT devices, and other mission-critical systems.


The company offers a number of innovative products: Solar Controller, Solar and Wind Controller, Telecom Power Pack, Illuminence Cloud Control, Nano-Grid Power Pack, and IOT solutions.


Previous coverage was issued on May 2019 and February 2020.


News releases


Feb. 18 - Announces Appointment of Jane Kearns to its Board of Directors.


Mar. 24 - Provides Update on Covid-19 Mitigation Strategy - Production at the Corporation’s Toronto assembly facility has been suspended and temporary layoff notices have been issued to most employees. During this period, our service team continues to provide our Energy as a Service management services ensuring continued operation.


Additional Updates

As stated on our quarterly calls the Corporation’s work in the telecom market has progressed positively with a number of initiatives maturing nicely in Q4 2019. We remain confident that this pipeline of business remains intact and will continue to roll out once pandemic-related restrictions are reduced sufficiently to allow a return to full production.


Apr. 16 - Closes Large Scale Telecom Rollout Contract & Debt Financing with BDC - The contract with a Telecom operator in Africa is planned for a phased roll out over the next 3 to 5 years. This initial contract is for the year one volumes of 500 systems for an estimated $3.5 million CAD, the majority of which we anticipate will be booked this year.


Received $2 million from BDC as a first tranche of a $5 million loan facility on April 9, 2020. CBLU.V intends to use the proceeds from the BDC loan facility for growth capital and R&D.


In connection with the BDC loan facility, the Company issued 72,100 common share purchase warrants to certain existing debenture holders of the Company as compensation to enter into postponement agreements in favour of BDC. Each Warrant will be exercisable for one common share for a period of 18 months at an exercise price of $0.50 cents.


Apr. 23 - To Report Fiscal 2019 Annual Results and Host Conference Call on Tuesday, April 28, 2020.


Apr. 27 - Correction: To Report Fiscal 2019 Annual Results Wednesday April 29, 2020.


Apr. 29 - Announces 2019 Financial Results: Record quarterly revenues of $2,392,839 in Q4, a 114% increase over Q4 2018 The Company exceeded its previous guidance on telecom pilots by selling 12 Proof of Concepts and 5 First Installs.


Adoption & Recurring Revenue: In 2019, Clear Blue deployed 1,478 units for a total of 5,018 units to date.


May 20 - to Report Fiscal 2020 First Quarter Financial Results and Host Conference Call on Thursday, May 28, 2020.


May 27 - Announces Q1 2020 Financial Results: Quarterly Revenue flat, but 35% improvement in Adjusted EBITDA

Offices were closed in March 2020 as a result of COVID-19, impacting our ability to ship and recognize revenue for Q1.


May 29 - Announces Shares for Debt Transaction and Annual Incentive Compensation Awards. To settle aggregate indebtedness of $340,225 in exchange for the issuance of an aggregate of 2,013,161 common shares of the Company at a price per share of $0.169, being the volume weighted average price of the Company's common shares 20 trading-day period ended May 29, 2020, thereby allowing the Company to preserve cash and improve its balance sheet.


As a further cash savings measure, the Company has granted an aggregate of 365,880 restricted stock units ("RSUs") to certain members of the Company's senior management team in lieu of variable cash incentive payments.

Each such RSU bears a grant date of May 29, 2020 and will vest in full on February 1, 2021.


Also granted an aggregate of 951,000 RSUs and 190,001 options to acquire shares to certain directors, officers, consultants and senior executives. Each such RSU bears a grant date of May 29, 2020 and will vest on May 29, 2021.


Lastly, Clear Blue has re-engaged German Research GmbH ("German Research") as its investor relations consultant in Germany under an extension to the agreement originally signed with German Research in November, 2018.


Aug. 19 - To Report Fiscal 2020 Second Quarter Financial Results; Host Conference Call on Thursday, August 27, 2020.


Aug. 27 - Announces Q2 2020 Financial Results:



Summary


In the past seven months, CBLU.V has traded between $0.09 and $0.195 cents. Overall, the company has not reported the same level of activity mostly due to the impact of Covid-19. This is also reflected in the earnings reported for the period.

Revenues continued the rising trend in Q4 2019 and FY2019 while the net loss were considerably less. However, Covid-19 negatively impacted revenue in Q1 and Q2 2020. Silver lining is that Net Loss continued to trend downwards which shows that the company was successful in containing expenses. Cash reported in Q2 2020 was healthy at $1.23M.


Historically, Q3 and Q4 Earnings tend to be stronger than Q1 and Q2, which may bode well for the next earning report.

Financing

In April, CBLU.V disclosed having received received $2 million from BDC as a first tranche of a $5 million loan facility. As part of this deal, 72,100 warrants at $0.50 cents were issued to specific debenture holders as compensation.


In May, Clear Blue issued 2.1M shares (at $0.169 cents) for a debt of $340,225 as a mean to conserve cash. The company also granted 365,880 Restricted Stock Unit (RSU) to management instead of cash incentive payments. And finally, 951,000 RSUs and 190,001 options to acquire shares to certain directors, officers, consultants and senior executives.


In total, CBLU.V granted 2.1M shares, 1.3M RSU, 0.2M options and 72,100 in warrants.


Partnerships

None were disclosed in this period.


Distribution

None were announced in this period.


Product

None were reported in this period.


Projects

In April, CBLU.V revealed a contract a Telecom operator in Africa. The effort is anticipated to roll out over 3 to 5 years. The initial contract is estimated at $3.5M CAD, the majority of which Clear Blue anticipates will be booked this year.


In Short

Covid-19 really impacted CBLU.V. While revenues in Q1 and Q2 2020 suffered the company was able to limit its impact on the bottom line by reducing its Net loss respectively by 25% and 67%. Hence, CBLU.V was efficient at managing expenses. It also finally evolved to being able to record booking for its recurring revenue at $2.0M TFQ in Q2 2020.

The $5M loan facility from BDC was instrumental providing access to cash for the African Telecom Operator. CBLU.V also successfully implemented a number of measures (shares for debt, warrants, RSU, options) for cash conservation.


Otherwise, specific updates on previous project were not reported on the period. For instance, The Raeanna (POC 2G,3G),9mobile network expansion roll-out in Nigeria, as well as, the Vodafone Ghana were not discussed. In addition to Covid-19, the lack of visibility of the company's backlog and sales pipeline does not help valuation.


Nonetheless, CBLU.V deserve credit for execution to date. Depending on the timing on the delivery for the African Telecom contract, Clear Blue may well be positioned to match FY 2019 revenue performance and perhaps exceed it.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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