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. Listed below is an update.
New Releases
Feb. 10 - Provides a Corporate Update. Booked CAD $6.0M in new business from September 2019. Based on the current rate and its near-term pipeline, NUR expects revenues for fiscal year 2020 will be the Company’s highest in its history.
The $6,000,000 in new business does not include any contracts related to MTN’s announcement of November, which stated the selection of NuRAN technology for its rural expansion plan which consists of more than 5,000 potential sites
The Company is also progressing on opportunities which fall under its Mobile Network Enabler (MNE) business model.
Feb. 26 - Reaches Agreement for extension of Senior Debentures. The company offered to grant holders a decrease of the debenture conversion price from $0.10 cents to $0.05 cents, as well as a share purchase warrant entitling the holder to purchase one common share of the company at an exercise price of $0.05 cents for a term of three years for each 50 cents of principal amount owing to the holder under the debenture for an aggregate total of 6.18 million warrants.
Feb. 28 - Reports Audited 2019 Annual Financial Results. Revenue $2.12M vs. $4.16M YOY; Net Loss $3.54M vs. $3.49M.
“2019 results have been severely impacted by contracts taking longer than expected to materialize". -NUR's CEO.
Mar. 2 - Reports EBITDA-positive First Quarter 2020 Financial Results. Revenue: $2,045,212, Net Loss: $193,361. "We view this first quarter as a turning point... and are expecting the materialization of further significant business to come sustain the growth trend”, states Maxime Dumas, President & CEO of NuRAN Wireless.
Apr. 7 - Provides Update on Operations in Context of COVID-19 Pandemic. NuRAN has experienced supply chain challenges due to merchandise import and export measures taken by governments in reaction to the pandemic.
The pandemic has altered the plan in the following way: of these three connection projects, one is still ongoing, one had started but had to be interrupted as NuRAN’s employee working on-site needed to return to Canada while it was still possible (the remaining of the connection will be achieved remotely), and one has been postponed to a later date. While delays have been incurred in their completion, none of the projects are currently at risk of being canceled.
Apr. 14 - Signs Preliminary Agreement for Expansion of Tier-One Operator Network. Towards the deployment of rural sites under a network-as-a-service model, also referred to by NuRAN as “Mobile Network Enabler”, or “MNE”.
While deployments under the MNE model require the Company to make upfront investments, they generate significant value whereby NuRAN benefits from long-term recurring revenues with compelling returns.
The signed preliminary agreement confirms the intent of NuRAN and the tier-one mobile operator to engage into a network expansion project and lays out the commercial parameters under which the parties plan to enter into.
Apr. 27 - Preliminary Agreement for Expansion of Another Tier-One Operator Network. The signed preliminary agreement confirms the intent of NuRAN and the tier-one mobile operator to engage into a network expansion project and lays out the commercial parameters under which the parties plan to enter into.
June 30 -Reports Second Quarter 2020 Financial Results:
-Three months: Revenue $1,432,841, Net Loss $1,089,155
-Six months: Revenue of $3,478,053, Net loss of $1,282,517
As per Apr. 14 and 27th release NuRAN expects to have definitive agreements for both of the recently announced deployment projects under network-as-a-service model signed shortly and will make announcements in due time.
Aug. 13 - 9369-5864 Québec Inc. Announces Sale of Common Shares of Nuran Wireless Inc.
In accordance with applicable securities laws, 9369-5864 may, from time to time and at any time, acquire additional Common Shares and/or other equity, debt or other securities or instruments of Nuran (collectively, "Securities") in the open market or otherwise, and it reserves the right to dispose of any or all of its Securities in the open market or otherwise at any time and from time to time, and to engage in similar transactions with respect to the Securities, the whole depending on market conditions, the business and prospects of Nuran and other relevant factors.
Aug. 18 - Announces Sale of Common Shares of Nuran Wireless Inc.
Immediately prior to the disposition of the Common Shares described above, 9369-5864 held 29,584,790 Common Shares of Nuran, representing approximately 17.10% of the issued and outstanding Common Shares of Nuran. As a result of the disposition, 9369-5864 now holds 26,076,790 Common Shares, which represents approximately 15.08% of the issued and outstanding Common Shares of Nuran.
Summary
The last eight months have been eventful with NuRAN (NUR). Valuation has ranged between $0.025 and $0.06 cents.
Debentures
In February, NUR lowered its convertible debentures and share purchase warrant from $0.10 to $0.05 cents (6.18M).
Earnings
NuRAN reported three earnings reports during this period. FY 2019, Q1 2020, and Q2 2020.
FY 2019 were negative compared to FY 2018. Roughly half the revenue with a similar loss. In contrast, Q1 2020 results were noticeable especially on a Year over Year (YoY) comparison. In fact, NUR's CEO claimed that it was a "turning point". This was confirmed by the Q2 2020 revenues which also exceeded YoY earnings. Also on a Year to Date (YTD) basis, combined Q1+Q2 2020 results exceeded the performance of FY 2019 overall and may possibly outperform FY 2018.
A few days after Q2 2020 release, NUR jumped to $0.06 cents from an opening of $0.035 cents with almost 6M in volume.
Tier-One Operator Network
In April 2020, NUR.CN signed two preliminary agreements for the deployment of rural site under its network as a service model (MNE). The purpose of these agreements are to lay out the "commercial parameters under which the party plan to enter into". While preliminary in nature those are promising for the company.
Per release these agreements: "require the company to make upfront investments...". However, NUR is expected to recoup in these investment in long run through a recurring revenues business model.
This along with this section in the last MD&A resonated.
Future Financing
Management closely monitors the Company’s current cash position and the short-term and long-term cash
requirements and recognizes the need for improved cash flow and liquidity for future operations and growth.
Notwithstanding its cash position at April 30, 2020, the Company will look for additional financing for costs
related to operations and its growth strategy (including the purchase of new equipment, continuous
development of next generation wireless solutions such as the multi-Standard 2G, 3G, 4G platform, as well as
the deployment of mobile infrastructure under network-as-a-service model).
Although the Company’s operations currently generate positive cash flow, these are not sufficient to cover its
administrative costs and finance its sales growth and the Company will continue to depend on its ability to
convert its sales opportunities into purchase orders as well as on future equity issuances or other means of
financing to finance its operations
Insider Activities
The number of insider transactions conducted in the last period are questionable. This does not reflect well for a company that's in early growth stage, unless the sales proceeds are to be re-invested in the company.
No matter what the rationale, insider selling at near a multi-year 52 weeks low is not the norm.
In Short
NUR is definitely on the path to a strong FY 2020. Top and bottom line numbers YTD 2020 are strong and likely to exceed FY 2018. These results combined with the two Tier-One Preliminary Agreement provide a positive outlook.
However, the potential need for future financing and sensitive cash position can be headwinds for valuation. So are convertible debentures and warrants at $0.05 cents (6.18M). Moreover, the timing of the insider sales are puzzling.
Be as it may, NuRAN Wireless has definitely made significant progress in the past eight month. However, it still remain uncertain how the company will fund its growth to the next phase.
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