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Independent Reviews for Venture Investors

LTE.V - On record.


Lite Access Technologies Inc. (LTE.V) uses innovative and proven trenching technologies, alternate methods of deployment and specialist products reducing the cost the network deployment for telecommunications operators.


LTE.V provides clients with integrated solutions, for the design and implementation of fibre optic networks. Lite Access' product have been deployed in multiple high-profile communication networks such as olympic, military, government, and educational institutions, as well as, communities throughout the UK, the USA, and Canada.


In addition, global telecommunications companies that have adopted Lite Access as the "solution of choice" for the least invasive, most cost effective and future-proof fibre optic connectivity available.


Coverage was initiated on October 2020 with an update on July 2021.


News Releases


Aug. 30 - Reports Q3 2021 Financial Results; Revenues up 57% Over Q3 2020:


Brooks, Alberta: August 2020, the City of Brooks issued an RFP and accepted proposals to provide broadband. January 2021, Brooks City council accepted the proposal to construct a city-wide broadband network. The initial value was $14.4M and increased $21M which is pending a successful negotiation of a contract which is in progress.


Clearwater County, Alberta: Further to the May 28, 2020 release, Lite Access has substantially completed the majority of the design/build fibre project. The project has a total contract value worth approximately $1.2 million. Additionally, in February 2021, the Company announced the receipt of a purchase order from Clearwater County, Alberta totaling $1,183,000 for the supply of microduct and fibre optic components, which was fulfilled in March 2021.


West Vancouver, British Columbia: Lite Access was awarded a fibre build contract valued at over $400,000 from a major Canadian carrier. Lite Access provided civils and construction services to install fibre using its advanced deployment and excavation methods. The project commenced in December 2020 and was completed in May 2021.


Southeastern, British Columbia: Fall 2020, an RFP for the provision of construction services, utilizing both aerial and underground fibre construction methodologies, to deploy fibre optic cable. LTE.V's was successful in the RFP process with its proposal of approximately $0.8M for the services, the terms of which have been finalized in a signed contract. Construction for the project has started in August and expected to be completed by the end of fiscal 2021.


Prince George, British Columbia: Lite Access was awarded a project to supply and install fiber optic cable. The three-phase project has a total contract value of approximately $1.5 million. During the first three quarters, the Company completed phase 1 and phase 2 of the project ($1.4 million). Phase 3 is expected to finish fiscal 2022.


Vancouver Island, British Columbia:In April 2021, the Company signed a contract with a city on Vancouver Island as the sole source for fiber optic construction and installation work for a period of 5 years.


Sep. 15 - Awarded Two New Fibre Projects:


Clearwater County, Alberta: Selected as a preferred candidate to provide construction services, as part of the County's Backbone Broadband Internet Plan, for Phase 2 Rocky Mountain House to Olds. The contract is valued at approximately $0.75M. Lite Access completed Phase 1 (see releases dated May 28, 2020, January 20, 2021 and February 11, 2021) and has been invited to bid on additional phases of the project that are to be awarded over the next few years.

The Ktunaxa Nation Council, Cranbrook, British Columbia: Awarded the first phase of a Fibre-to-the-Home (FTTH) construction project worth approximately $135,000. This award is Phase 1 of a much larger project is expected to begin this month. Over the next year, additional phases of the project are expected to be awarded to contractors.


Oct. 27 - Signs Early Start Agreement with City of Brooks for Fibre Backbone Build: Advancing its city-wide FTTH broadband network project with the fibre backbone build in partnership with Community Network Partners Ltd.


This Agreement provides services and deliverables to construct the feeder network (backbone) for Brooks with a Master Services Agreement ("MSA") to follow for the entire project.


Dec. 9 - Provides Corporate Update on Current and Ongoing Operations:


UK Liquidation: Received $525,000 from UK Administrator; with respect to the wind-up of Lite Access Technologies (UK) Limited ("LAT UK") - expect a another distribution of similar size in coming months.


Clearwater County Alberta: continues to proceed in a positive manner. Selected as the preferred candidate to provide construction services connecting Sundrie to Olds, Alberta, greater than 90% of the network has been deployed to-date with construction continuing until weather permits. Originally valued at approximately $750,000, the scope of the build increased by an additional $405,000 resulting in a total value now estimated to be $1,150,000.


Jan. 28 - Reports 2021 Q4 And Year End Financial Results; Revenues Up 204% Over Fiscal 2020


Feb. 22 - Signs Fibre Installation Contract With City Of Brooks Valued At Approximately $13.6M: Partnered with best-in-class organizations, IBI Group, O-Net and Community Network Partners Inc., Lite Access will be responsible for the installation of a reliable, cost-effective, and future proof broadband telecommunications network.


Phase 1 to commence in April 2022 and focus on the construction of the backbone network. Phase 2 to immediately follow to provide individual connections to constitutents. Construction expected to be completed by December 2023.


LTE.V will be invited to bid on additional phases of the project that are to be awarded over the next couple of years.


Mar. 2 - Report Q1 2022 Financial Results.


Mar. 3 - Announce Private Placement for $1M: 10M units at $0.10 per Unit (warrant $0.15 cents). Proceeds from the Offering will be used to fund growth initiatives and for working capital purposes


Mar. 14 - Provide an Update on Canadian Operations:


British Columbia: Will commence construction today on the first phase of a fibre project in Comox on the eastern coast of Vancouver Island, BC, valued at approximately $23,000. The second phase of the project which is expected to be awarded is valued at approximately $237,000, will commence immediately thereafter.


In addition to civil work, the Company's team of splicers and fibre experts are currently engaged in a 300km network upgrade for a large service provider within the BC Interior. Furthermore, with spring around the corner, final construction including fibre installation and splicing can resume in Clearwater County, valued at approximately $200,000, as well as the third phase of the Prince George project valued at approximately $200,000.


Brooks, Alberta: Actively engaged with suppliers to provide the necessary products and equipment for the project. Through extensive pre-planning efforts successfully procured the necessary products required.


AMEC: LTE.V's Cutting & Coring Division, projects that were put on hold during the pandemic are now back on track.


Summary


UK Liquidation

More than a year ago, FRP Advisory Trading Limited was appointed as administrators. December 2021, $0.52M was received in connection with the wind up of LAT UK. Another distribution is expected to be forthcoming.


Projects

Brooks, Alberta: Last year (January 2021) City Council accepted a proposal for a city-wide broadband network for an initial value of $14M (increased to $21M; August 2021). February 2022, a $13.6M contract was awarded. LTE.V will be working with IBI Group, O-Net and Community Network Partners Inc.


Phase 1 to begin April 2022 will focus on the construction of the backbone network. Phase 2 will immediately follow to provide individual connections to constitutents. Expected construction completion date is December 2023. March 2022, Lite Access indicated that the equipment for the project has been supplied.

Clearwater County, Alberta: Lite Access has substantially completed the majority of the design/build fibre project ($1.2M). February 2021, a PO was received for ($1.1M) for the supply of microduct and fibre optic components which was fufilled March 2021. September 2021, Lite Access was selected to provide construction services, as part of Clearwater County's Backbone Broadband Internet Plan, for Phase 2 Rocky Mountain House to Olds ($0.75M).


December 2021, an update was provided. The scope of the project was expanded by an additional $0.4M for a total value of $1.1M. March 2022, an update was provided which indicates the resumption of activity shortly.


West Vancouver, British Columbia: Awarded a fibre build contract ($0.4M) for which it provided civil and construction services. Project started in December 2020 and completed May 2021.


Southeastern British Columbia: A contract of $0.8M was secured for the provision of construction services, utilizing both aerial and underground fibre construction methodologies, to deploy fibre optic cable. Construction was initiated in August 2021 and expected to be complete in December 2021.


Prince George, British Columbia: Awarded a project to supply and install fiber optic cable in three phase totaling $1.5M. Phase 1 and 2 were completed (1.4M). March 2022, an updated stated that Phase three ($0.2M) will resume shortly.


Comox, British Columbia: April 2021, signed a contract with a city on Vancouver Island as the sole source for fiber optic construction and installation work for a period of 5 years. March 2022, initiated a fibre project valued at $0.02M. The second phase of the project ($0.23M) will begin immediately thereafter.


The Ktunaxa Nation Council, Cranbrook, British Columbia: September 2021, LTE.V was awarded the first phase of a Fibre-to-the-Home (FTTH) project ($0.13M). As of December 2021, the project was on time and budget.


AMEC: LTE.V's Cutting & Coring Division, projects that were put on hold during the pandemic are now back on track.


Earnings

Due to the termination of the UK operations earnings have been re-stated to reflect continuing operations activity.


On January 26, 2021, the UK business officially appointed FRP Advisory Trading Limited as administrators. Accordingly, the Company no longer has control over the UK business as of the date of the appointment of the administrators. As a result, LAT UK financial results have been classified as a discontinued operation as at March 31, 2021. Certain prior year comparative figures have been reclassified to compare with the current year presentation.


Given the exit of UK Market, Lite Access has delivered steady earnings in the past five quarters. However, Q1 2022 has not showed revenue growth compared to Q1 2021. Moreover, Net Losses have not improved from Q1 2021.


However, the AMEC acquisition had an impact on Lite Access revenue: After the acquisition, the total revenue of $1,833,102 from AMEC was reported, representing 38% of the revenue growth of fiscal 2021.


Financing

March 2022, a $1M financing at $0.10 cents (Warrant $0.15 cents) was initiated. As of now, it is still ongoing.


In short

In the past nine months, Lite Access has increased its communications. LTE.V has provided three detailed project based updates (August 2021, December 2021 and March 2022). Transparency is better but questions persist!


The total addressable market in Western Canada for the company is unknown. In addition, no backlog numbers and revenue projections are provided. Also, an investor presentation continues to be not readily available. As such, there has been progress but more work needs to be done to define the opportunity for investors at large.


Federal and Provincial Government Funding ($2.75B Universal Broadband Fund; $830M British Columbia and $39M in Alberta) should be catalysts for the company going forward but the extent of it remains unclears.


While LTE.V's business model does not include recurring revenues, Lite Access has demonstrated the ability to retain existing customers and generate incremental revenues; For instance, Clearwater County, after completing an initial contract ($1.2M), additional awards of ($1.1M) and ($0.75M) have been received for subsequential phases.


However, the economy of scale from the AMEC acquisition have yet to be materialized; LTE.V is still incuring net losses. Note, the year end results MD&A indicated that: After the acquisition, the total revenue of $1,833,102 from AMEC was reported, representing 38% of the revenue growth of fiscal 2021.


Also, For the three months ended September 30, 2021, a total revenue of $1,540,618 was reported, 102% higher than the fourth quarter of fiscal 2020, primarily driven by the revenue from AMEC after the acquisition.


The current financing points to "fund growth initiatives". Going forward, is LTE.V planning to aquire more synergistic entities? Perhaps it may not neccessirily be of immediate benefit to them on a single large project. For instance, for Brooks, Alberta the initial contract value ($14M) was raised to $21M (August 2021) then brought back down back to $14M (February 2022). Did the City of Brooks decided not to award such a large contract to one company? Or will the difference be assigned in a later phase? The release states: Lite Access will be invited to bid on additional phases of the project that are to be awarded over the next couple of years. Still, $14M is the largest contract in Canada to date.


"This is the largest Canadian award in our Company's history and validates our strategic decision to focus on North America and its significant market potential. We are off to a strong start in 2022 and our expanding sales pipeline has us remaining optimistic for the rest of the year and beyond." - Greg Smith, Chairman and Interim CEO of Lite Access


Within this context, the terms of the current financing ($0.10 cents; warrant $0.15 cents) being below the 52 week low is considered extremely discounted. Especially given that LTE.V is projecting entering into a new growth phase.


However, the most recent MD&A states: As at December 31, 2021 and the date of this MD&A, 3,430,000 options were outstanding. On February 25, 2022, 5,290,000 warrants were expired and as at the date of this MD&A, no warrant was outstanding. In essence, the warrants from this current financing will be the only ones on record.


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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