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Independent Reviews for Venture Investors

NUR.CN - Near term.


NuRAN Wireless Inc. (NUR.CN) is a supplier of mobile and broadband wireless infrastructure solutions. Its innovative radio access network (RAN), core network, and backhaul products dramatically drop the total cost of ownership, thereby creating new opportunities for established, as well as emerging mobile network operator.


Coverage was initiated January 2020 with notes on August 2020, September 2020, May 2021 and January 2022.


New Releases


Jan. 27 - Engages Octagon Media for Investor Relations Campaign: to assist in a digital media advertising campaign coupled with an investor marketing program over a term of six months.


Feb. 14 - Gathers Momentum on Deployment and Revenue: Cameroon: Total sites deployed - 41; Pop covered 197,254 inhabitants; 49.4% penetration rate including on average 88,000 users have connected to the NuRAN network (projections were 24% penetration rate); Average revenue currently generated per sites $2,144 CAD ($1,681 USD);


NuRAN has now issued its second invoice to Orange Cameroon for sites deployed through January 2022. Democratic Republic of Congo (DRC) 12 sites deployed; Pop 61,673 inhabitants.


Feb. 22 - Signs MOU For 150 Sites With MTN In Namibia For Rural 4G AND 2G: i) Minimum of 150 Sites within 24 months ii) Sites to be deployed are 2G, 4G and/or 2G/4G Combination sites iii) Second MOU with MTN in 6 months for the deployment of rural and suburban sites under the network-as-a-service model (“NAAS”) in Namibia.


Mar. 16 - Announces Entry into Term Sheets with Lenders for Convertible Debenture Facility: with two groups of lenders for a convertible debenture financing of up to $17M. The purpose of the proposed Bridge Financing is to cover working capital expenses and, subject to closing any future equity financing of the Company's African subsidiary.


The Company intends to close the total funding in two tranches, with the first tranche consisting of secured convertible debentures of $2,000,000 (of which $1,300,000 has been advanced to date),: ii) the debentures will be convertible into common shares at a fixed price of $1.35 at the option of the debenture holder with purchase warrant (0.9, $2.00). NuRan Wireless intends to close a second tranche consisting of an unsecured convertible debenture for up to $15,000,000 subject to specific terms and conditions.


Mar. 18 - Signs Final Aggreement with Afriland First Bank, Close First Bridge Financing and Corporate Update:


The Company has completed the final step in unwinding the bankruptcy of its wholly owned subsidiary, Nutaq Innovation Inc. NuRAN's proposal to creditors was accepted by the bankruptcy court on March 17, 2022 and a final payment of settlement made. The unwinding allows the Company to recover certain research and development tax credits totaling CAD$182,000 and past tax losses estimated to be over CAD$30 Million.


Signed the final agreement with Afriland First Bank in Cameroon (“Afriland”) for the CAD$2.87 Million loan facility announced previously on November 29, 2021 with proceeds to be used for infrastructure investment in Cameroon.


The Company closed the first tranche of the previously announced secured convertible debenture financing (each, a “Debenture”) in the principal amount of approximately $2,000,000 (subject to an original issuance discount of 10%).


NuRAN is also pleased to announce that there are currently 73 sites live with 45 in Cameroon and 28 in the Democratic Republic of the Congo (DRC). NuRAN is committed to having over 500 sites live by the end of fiscal 2022.


Apr. 14 - Signs $60M USD 4G LTE Contract With MTN Namibia: i) Minimum of 150 Sites within 24 months in Namibia ii) Over $60M USD Agreement (10 years Network As A Service (NaaS) , iii) 100% 4G coverage for Rural and Suburban.


NuRAN now has 2,692 sites under contract in pursuit of its objective of 10,000 sites under contract.


Apr. 28 - NuRAN Selected by a Tier 1 Mobile Operator For RFP For Mobile Sites in the Middle East and Africa:

i) Potential for thousands of sites ii) Over 15 countries iii) Over 50 Million population coverage


Following its successful selection by the operator pursuant to the RFP, the Company is working with the operator to finalize a general framework agreement which is intended to set the global terms for the Group. The Company intends to provide a further update once the general framework agreement is entered into.


There is no assurance that the Company will enter into a definitive general framework agreement as planned or at all.


May 10 - NuRAN Selected for an Additional 500 Sites and Provides Corporate Update: Selected by another Tier-1 Mobile Network Operator (“MNO”) for an additional 500 telecom sites in sub–Saharan Africa.


The proposal is subject to the entry into definitive agreements by the parties. Following the recently announced agreement with MTN Namibia as well as NuRAN’s successful rural RFP selection by a Tier-1 MNO,


Corporate Update

Development Finance Institutions (DFI) Loan Facilities: NuRAN has amended the terms with one of the DFI lenders to increase its overall loan amount from US$15M to US$18M on the same terms as previous disclose to help accelerate its funding plans. The additional loan amount is subject to the Company meeting certain financial covenants.


The total amount for each varies between US$15 and US$20 million commitment and is for investment in its newly African subsidiary officially called NuRAN Wireless Africa Holding in Mauritius. The total amount is expected to allow the company to close the US$30 million DFI package and meet the conditions of drawdown.


Financial Highlights from Year End 2021: NuRAN released its 2021 Consolidated Audited Financial Statements on Monday May 2nd and reported its first significant Network As A Service (NaaS) revenues (CAD $0.8M) in 2021.


Cameroon: i) 53 sites deployed to date ii) Total population covered of approximately 266,121 inhabitants iii) An average 47% penetration rate including on average 121,000 users have connected. NuRAN and Orange plan is to complete the rollout of the first 122 sites in July and subject to a DFI drawdown, an additional 120 sites are expected to begin deployment in 2022. Orange expect expanding beyond the 242 sites.


Democratic Republic of the Congo: 29 total sites deployed to date, population covered about 217,964 inhabitants. .

NuRAN expects to resume deployment in May 2022 and complete the roll out of the first lot of 118 sites in July 2022.


South Sudan: i) Site Surveys and Site Acquisition have commenced with the assistance of a local partner. ii) Network Element Integration is expected to be performed in May 2022 iii) 20 sites are planned to be delivered by mid-July.


Operational and Business Highlights: i) NuRAN expects to deploy approximately 500 sites by the end of the year at a pace of over 50 sites per month ii) NuRAN currently has 2,642 Network as a Service (“NaaS“) sites under contract with Orange Cameroon, Orange Democratic Republic of the Congo (DRC), MTN South Sudan and MTN Namibia.


May 20 - Cease Trade Order (CTO)


June 15 - Announces New Board Member Hassan Kabban

CTO: The Company also announces that NuRAN and its auditors will be submitting a revised audit report to the British Columbia Securities Commission (the "BCSC") intended to address all deficiencies outlined in the previously announced cease trade order (CTO). NuRAN anticipates that upon receipt of final BCSC approval of the revised materials the revocation of the CTO and the resumption of trading of the Company's common shares will follow.


Due to the CTO, the Company has extended the exercise period of all unexercised 450,000 common share purchase warrants issued pursuant to a private placement which closed on December 15, 2020. The Warrants had an initial expiry date of June 15, 2022 which has been extended to July 8, 2022 due to the current CTO.


June 27 - Announces Update on Revocation of Cease Trade Order: filed amended audited financial statements for the year ended December 31, 2021 (the "Financial Period") together with an amended management's discussion and analysis ("MD&A") for the year ended December 31, 2021 (together the "Amended Financial Reports").


As at December 31, 2021, the Company held inventories in its African subsidiaries in various locations including in transit, on-site generating revenues or in inventory waiting to be deployed. Since the auditor had not been able to audit the inventory count as at December 31, 2021 and due to the absence of sufficient and appropriate audit evidence, the auditor issued a modified opinion on the Company's previously filed auditor's report dated May 2, 2022.


NuRAN has since carried out the necessary reconciliations in order to identify the categories in which inventories should be recognized and to identify their location. Also, the Company was able to do a physical count as at May 23, 2022. Following the filing of the Amended Financial Reports it is expected that the British Columbia Securities Commission, the Company's principal regulator, will revoke the cease trade order previously issued on May 19, 2022


July 12 - Announces Closing of Convertible Debenture Offering and Financial Update: Closing of a non-brokered private placement of convertible debentures with a strategic investor for aggregate gross proceeds of $2,000,000. The Convertible Debenture has an original issuance discount of 10% and the principal of $2,222,222 is convertible into common shares of the Company at a fixed price of $1.35 (warrants at $2.00).


The Company intends to use the net proceeds from the Offering for working capital purposes,to fund its purchases under the sales agreement and for capital expenditures under the Company's NaaS agreements.


Financing Update: NuRAN is also pleased to report significant progress in its various financing initiatives. In connection with the previously announced loan facilities with development finance institutions (DFIs) in the amount of up to US$27,000,000, the Company has been formally advised by one of the DFIs that, after a detailed appraisal of the operations of the Company, all internal approvals have been received.


The Company also wishes to announce that it has determined not to proceed with the second tranche of the previously announced bridge financing consisting of an unsecured convertible debenture facility in the principal amount of up to $15,000,000 announced on March 16, 2022.


July 21 - Signs Group Framework Agreement With MTN GROUP For Mlddle East and African Rural Deployment: NuRAN participated in MTN's rural RFP process for up to 19,000 thousand network sites in over 15 countries in Middle East and Africa as previously announced on April 28, 2022. Following completion of the RFP process the Company is pleased to have selected by MTN to enter into the GFA, which represents a significant milestone for the Company.


July 26 - Signs US $125 Million NaaS Contract With MTN Sudan: The 10-year agreement is estimated to represent up to approximately US $125 Million in revenues over the course of the contract assuming 500 sites are completed.


The estimated revenues are subject to associated project expenses including expenses associated with satellite bandwidth, site lease, network operations center expenses, curative and preventative maintenance fees, project management and monitoring fees, and insurance.


The project will support 2G and 3G with variety of site categories to cover different population densities and coverage areas. NuRAN expects to retain the ownership of the infrastructure after completion of the contract.


NuRAN now has 3,192 sites in 5 countries throughout Africa under contract with an overall objective of 10,000 sites.


Aug. 11 - Resumes Site Deployments in Africa: The new schedule for site deployments includes the completion of the initial 122 sites in Cameroon in partnership with Orange Cameroon initially announced in a press release dated October 29, 2020 by the end of October 2022. NuRAN will additionally resume site deployments in the DRC in partnership with Orange DRC with the expected completion of 118 sites in the DRC which was initially announced on February 8, 2021. Lastly, NuRAN will launch live sites in South Sudan with a total of 10 sites to be deployed.


NuRAN has currently deployed 82 live sites in Cameroon (53) and DRC (29). With this new batch of sites to be deployed, NuRAN expects to have a total of 250 sites live by the end of October 2022.

NuRAN is pleased to announce the appointment of Christian Marcoux as Managing Director of corporate operations. NuRAN is also pleased to announce the appointment of George Benson as Director of Operations for Africa.


Due to short term delays with respect to the release of debt financing, management reports that it now targeting the completion of 400 sites by the end of December 2022, a decrease of 100 sites from its initial target of 500 sites.


Aug. 22 - Announces Restructuring of Convertible Debt: Restructured the terms of the secured convertible debenture financing closed on March 18, 2022 in the principal amount of $2,222,222. Lenders from the offering agreed to restructure the existing secured debt, extend the maturity date to August 19, 2023 and advance an additional $900,000 in principal to NuRAN. The restructuring gives the Company the flexibility to either convert or repay the obligations and thereby manage the financial impact in this critical period leading to closing of the non-dilutive Loan Facilities.


(i) secured convertible debentures (the "New Debentures") in the aggregate principal amount of $3,517,512 (inclusive of all advances, accrued interest and default fees) with a blended conversion price of approximately $0.905 representing a 25% premium to the 5 day volume weighted average price of NuRAN's common shares with $1,951,804 of the principal amount convertible at $0.95 at the option of the debenture holder and the remaining principal amount convertible at a price of $0.85, provided that if at any time while the debentures remain outstanding, the volume weighted average price of the common shares does not exceed $0.85 for a period of 50 consecutive trading days, the Conversion Price will be reduced to $0.73. $1,398,278 of the principal amount of the debentures bears interest at a rate of 12% until maturity and the remaining principal amount does not bear interest until maturity; (ii) 2,694,667 share purchase warrants (the "New Warrants"), with each warrant exercisable to acquire one common share of the Company at an exercise price of $1.10 until August 19, 2025; and (iii) 153,954 bonus common shares of the Company.


NuRAN has received $500,000 of the proceeds advanced prior to closing and intends to use remaining net proceeds from the Offering to fund the continuation of rollout of its NaaS networks in Cameroon, the DRC and South Sudan as previously announced on August 11, 2022, including the incorporation of new subsidiaries in South Sudan, Sudan and Namibia and set up costs associated with its recent agreements with MTN Group and for working capital purposes.


Sep. 13 - Deploys New Sites in Cameroon and Reaches Milestone of 500,000 people connected in Africa: Five new sites have been deployed in Cameroon. NuRAN now has a total of 58 live sites in Cameroon and 87 live sites in total across five countries in Africa covering a total population of approximately 530,000.


The Company is also pleased to provide the following update on scheduled site deployments previously announced (August 11, 2022,) the new schedule includes the completion of 122 sites in Cameroon by the end of October 2022.


NuRAN also intends to resume site deployments in the DRC in partnership with Orange DRC with the expected completion of 118 sites in the DRC which was initially announced on February 8, 2021.


NuRAN is expected to launch live sites in South Sudan with a total of 10 sites to be deployed.


To date, NuRAN has had to finance all site deployments from equity at the corporate level. Our plan has always been to finance site deployments predominately through debt at the African level. As we await the completion of the proposed $27M USD of African debt financing, we are pleased to continue the process of deploying sites.


Sep. 23 - European Investment Bank (EIB) Public Announcement on NuRAN Financing: Further to our prior announcement of a mandate letter from EIB for $15M USD in January 2022, which has since been increased to $18M USD, the Company has been advised by EIB that it is approaching the final stage for approval. The financing has now been published on the EIB website as the bank is a public entity.


The $36M USD project is a combination of $18M USD from EIB, 8M EUR from another DFI which has already been approved and the remainder from NuRAN of which more than $6M USD has already been invested and is sufficient to initiate the first drawdown. Subject to completion of the financing, all loan proceeds are expected to be advanced to NuRAN Wireless (Africa) Holding, which is 100% owned by NuRAN Wireless Inc.


Oct. 6 - European Investment Bank Approves US$18M Financing of Nuran: Formally approved its previously announced senior credit facility of NuRAN for a total of US$18M on October 5th. The approval is also expected to trigger the release of an additional EUR 8,000,000 senior secured credit facility with a second development finance institution (DFI) for which final approval has already been granted as previously announced on July 12, 2022. On closing the combined funding is expected to provide NuRAN with approximately US$26M in total debt facilities.


The combined proceeds of approximately US$26,000,000 are expected to be used for project expenditures relating to the installation of network infrastructure by NuRAN and roll out of up to 242 rural sites in Cameroon and 850 sites in Democratic Republic of Congo ("DRC"). This financing also confirms the bankability of our NAAS contracts.


Oct. 11 - Signs a US $75M NaaS Agreement With MTN Ivory Coast: Announce an agreement for up to 1,000 sites with MTN Ivory Coast (JSE: MTN) for the deployment of rural sites under the Network-as-a-Service ("NaaS") business model in Ivory Coast. i) US $75 Million Contract ii) 1,000 Sites iii) Renewable 5-year NaaS Agreement iv) Fourth Contract with MTN Within 1 year v) 11 New Live Sites Added for a Total of 101 Live Sites.


The 5-year agreement with MTN Ivory Coast is expected to be the Company's second largest contract in terms of number of sites with the potential to generate over US $75 million in gross revenue over the course of five years.


The estimated gross revenues are subject to among other things, associated project expenses including expenses associated with satellite bandwidth, site lease, network operations center expenses, curative and preventative maintenance fees, project management and monitoring fees, financing for the build out of the sites and insurance.


Fees for the NaaS services provided by NuRAN under the agreement are paid on a revenue sharing basis. The project is expected to support 2G and 3G with variety of site categories to cover different population.


Similar to the previously announced MTN Sudan and MTN Namibia agreements, NuRAN expects to retain the ownership of the infrastructure after the completion of the contract.


New Live Sites: NuRAN is also pleased to report that an additional 11 sites including its first site in South Sudan and 10 in Cameroon have been added bringing the new total of live sites to 101 under NaaS business model. The Company continues to push forward in achieving its goal or 400 live sites by year end.



Summary


Financing

March 2022, a Term Sheet with Lender of Convertible Debentures was announced with two groups up to $17M (Bridge Financing). The intention was to close in two tranches with a first of $2M of which $1.3M was advanced at a $1.35 conversion price (Warrant, $2.00). Also in March 2022, NuRan closed a $2.87M loan facility with Afriland First Bank to be used for Cameroon sites. Subsequently, an updated Development Finance Institutions (DFI) Loan Facilities was provided in May 2022: The terms were amended from US$15 to $18M for NuRan's subsidiary; NuRAN Wireless Africa Holding in Mauritius. In July 2022, a Convertible Debenture of $2M with a strategic investor was closed.


August 2022, the re-structuring of Convertible Debt was completed. The conversion price was lowered from $1.35 to $0.73 cents along with the 2.6M purchase warrant which also were reduced from $2.00 to $1.10.


October 2022, the European Investment Bank (EIB) formally approved its previously announced senior credit facility of NuRAN for a total of US$18,000,000. At the time, the approval was expected to trigger the release of an additional EUR 8,000,000 senior secured credit facility with a second development finance institution (DFI).


The combined proceeds of both DFI of roughly US$26M are for project expenditures relating to the installation of network infrastructure by NuRAN and roll out of up to 242 rural sites in Cameroon and 850 sites in the DRC.


Engagements

A number of new engagements were announced this period. February 2022, an MOU MTN Namibia (rural 2G and 4G) for a minimum 150 sites in 24 months was released. In April 2022, a $60M USD contract (10 years) was signed.


Also in April 2022, NuRAN announced that it was selected by a Tier 1 Mobile Operator for Mobile Sites in the Middle East and Africa with a potential for thousands of sites in over 15 countries for a 50 Million plus population coverage.


In May 2022, NuRAN also reported being selected by another Tier-1 Mobile Network Operator (“MNO”) for an additional 500 telecom sites in sub–Saharan Africa. July 2022, a Framework Agreement With MTN GROUP For Rural Deployment for up to 19,000 thousand network sites in over 15 countries in Middle East and Africa Also in July 2022, a US $125 Million (10 Years, 500 sites) NaaS Contract With MTN Sudan was penned for 2G and 3G with variety of site categories. In October 2022, a a US $75M NaaS Agreement (1,000 sites) With MTN Ivory Coast was also confirmed.


Earnings

NuRAN is off to a good start in FY 2022. YTD Revenue already exceeded FY 2021 and the possibility for eclipsing FY 2018 revenues is likely. However, Net Losses continue to be large which is expected at this stage. However, investors will keep an eye on these. As site deployment ramp up, the expectations will be that Net Losses decline over time.

Note that until very recently, most of the deployment effort were funded by NuRAN. However, with new funders on boards, it will be vital that Net Losses be monitored even to a greater degree than before.


Deployments

In July 2022, deployment resumed and NuRAN lowered its target to 400 sites (from 500) by end of FY 2022.









Since then, two updates were provided. Looking at NuRAN's website today, total live sites equals 136.


Appointments

Hassan Kabban was appointed as a Board Member (June 2022). Otherwise, Christian Marcoux as Managing Director of Corporate Operations and George Benson as Director of Operations for Africa (August 2022).


CTO

A Cease Trade Order was issued in May 2022. An update was provided in June 2022. The held inventories in multiple areas (and count) were at issue, As a result, the auditors were not been able to audit the inventory count and issued a modified opinion.The necessary reconciliations were made and the CTO was lifted.


In short

In the last nine months, NuRAN has achieved a number of very significant milestones.


It has secured a over $25M in funding from the European Investment Bank (EIB) for the Cameroon and the Democratic Republic of Congo (DRC) deployments. In addition, it has converted two engagements into agreements valued at $200M for deployment in Sudan ($125M, 500 sites) and Ivory Coast ($75M, 1,000 sites).


Despite these transformational achievements, NuRAN is still an early revenue venture which continues to post significant Net Losses. More importantly, It is lagging in meeting its self-imposed target of 400 sites by year end.


Currently at 136 sites, NuRAN would have to deploy as many sites as it completed year to date in two consecutive months (400-136 =264, 264/2 = 132). While its possible it is likely to come short given what is achieved to date.


NuRAN closed today at $0.72 cents, below the amended conversion price of the Convertible Debt ($0.73 cents), which explains resistance at this level. Similarly, the same is likely to occur at $1.10 where 2.9M warrants from the same funding are likely to be exercised given the current market conditions.


Going forward, investors will be monitoring deployment metrics closely. At issue, is how quickly can NuRAN scale. There is no doubt that the NAAS model is bankable. Now the question is whether it is highly scalable in the near term.



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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