Clear Blue Technologies International Inc. (CBLU) Earnings Call Transcript & Summary

Okay, everyone. Good afternoon, good morning. My name is Miriam Tuerk. I have the honor of being Co-Founder and CEO of Clear Blue Technologies. I'm joined today by our wonderful CFO, Farrukh Anwar, and our lead in marketing Jonathan van der Veen. Today, we're going to be going over the earnings for Q2 and also talk about Clear Blue 2.0, which is the transition we've made from the last few years and is really building up strength and momentum for us to have a very strong growth path going forward. We're going to be recording this presentation, so that people can download it and listen to it afterwards. And I would please encourage you to ask all questions that you would like to talk about today, Farrukh and I are at your disposal to answer any of those questions. As always, please be aware of forward-looking statements with any public company. We do the best to give you the information we can. But as we all know, markets can change in via third-party external factors can change at any time. So please take that under advisement when you're considering the information. So I just want to talk a little bit about where the company is and where we're going from an investor perspective and from a company perspective. And I thought I would start off a little bit on what the company is all about. So the market we're going after is the energy industry. And energy has become something that is now a very big channel -- challenge across the world. The world needs smart off-grid because the grid is becoming more challenging in terms of its reliability, and it's not able to handle the capacity that we all need, whether we're in emerging markets like Africa or whether you're anywhere across North America, a reliable grid able to handle the capacity of the needs is very difficult. So the solution requires cost-effective alternatives and integration with renewables. As a company, we have a grand vision and that's to become the world's largest virtual renewable power utility. Every single system we sell and deploy all over the world, and we have many of them deployed and lots of them all line and connected. We manage and control and operate on behalf of our customers. And so we are today already the world leader in delivering clean, managed wireless power to meet the global need for reliable, low-cost energy for mission-critical infrastructure. There's lots of people who have deployed technology and systems, but remotely managing, controlling them, operating them and integrated with renewable energy as a reliable component of the business is key capability that Clear Blue has. So we've entered the phase of Clear Blue 2.0. And in order to do that, we've done a number of things over the last few years. We had a challenging few years, starting with COVID and through all of the iterations since then where the company became heavily burdened with debt because of challenges in our market from a sales perspective and in the investor -- investment market for small-cap companies. As a result of that and additional third-party factors, we were hit a point where we needed to recapitalize and recalibrate the company. We have now completed that, and we have emerged as a much more cost efficient -- cost structure. At the same time, we were making lemonade out of lemons and making sure that we invested in growing our products and growing our channels. And that has resulted in new partnerships to drive growth. There are 3 key market pillars that we are focused on. The first is in the emerging markets, specifically Africa, taking cellular telecom infrastructure and moving it towards a renewable energy-driven infrastructure that's basically consuming 0 diesel. Today, it's almost 100% diesel, and we are on the road to 0 diesel with our customers in getting off of that high cost unprofitable and difficult energy source. At the same time, high-speed satellite Internet is now very quickly becoming an -- a strong and key reliable alternative to cellular. It provides a large amounts of data and gets people connected. And enabling satellite Internet across Africa is a key area of our focus with the new products and partnerships we have built. And lastly, our smart solar lighting business in North America, which generates a significant amount of recurring revenue and has a marquee customer list is starting to go mainstream through the interest of power utilities and departments of transportation. So the transition from Clear Blue 1.0 to 2.0 in is quite significant. Having a smaller product range, which was basically 2 products over the last few years, part of the investment that we did was to focus very heavily from an R&D perspective, and also, we did a small acquisition in Sweden to expand our product range, so that we have full coverage to cover the 3 distinct market opportunities that we're focusing on. Significantly because of that R&D investment that was needed and other higher cost structures. We had a higher cost structure related to the margins and the revenue that we were at, and we have now been able to pair that down significantly in order to position us at a point where we can get to positive cash flow, positive EBITDA for sustainable growth going forward. A big part of that was adjusting our debt, it was putting too much pressure on our ability to execute. And so we have now converted a lot of that debt to equity, and are sitting at about a reduced debt of approximately $6.0 million on the balance sheet. Of that $6 million, $3.4 million is interest-bearing, the rest is noninterest-bearing. I wouldn't use low quality. I'm going to edit that. We had smaller customers and early adopters in our book of business. And we have now transitioned to newer, larger, better capitalized and more mature customers and partners. And that is also having an impact on the size of orders, the amount of orders, the ongoing rollout that we're seeing. And in the same way as our customers have gone that way, so have our distribution partners. So as an example, we are very thrilled with the fact that we are now dealing with a number of power utilities throughout the market. So I've talked about the 3 markets, the telecom, road to 0 diesel, enabling satellite Internet and solar mainstream, how does that translate into investor KPIs? Well, the 3 KPIs that we are tracking and then I would think you would want to track it as well. Our commercial contracts, positive adjusted EBITDA and positive cash flow generation. Those are the things that we're keeping our eyes focused on. From a commercial contract perspective, I think we're at over 120 orders this year. Many of them are smaller and still valuable growing, but we have some larger commercial contracts that we have in the funnel. And as they become online, we will be announcing them. And as you're going to see today and going forward, strong momentum towards positive adjusted EBITDA and positive cash flow generation. So this is quite an important slide because it's important to understand that whether you're 0 to 20 watts and you're an Internet small device powering a Starlink or Eutelsat or an Intelsat or whatever type of application in communities, in schools, in health care or just for commercial uses. You might need the Pico product, then your Nano, which is our core bread and butter project, the product that we've had for a while, are Illumient, which also needed to have expanded capability to cover all use cases. And then last, but certainly not least, our Micro product, which now gets us into the very large power and gets us with an ability to tackle the diesel challenge. So to have a product range that goes from 0 watts to 30 kilowatts and is usable in all of those ranges. Important to understand that Nano, for example, wouldn't work at 10 to 20 watts in an economical way. And Micro, it doesn't really work below -- I would say, 1-kilowatt to 3-kilowatt your kind of in a crossover. And in the Illumient business needing to be able to have products that generate across the entire market. So having this comprehensive portfolio and all of the money and time and energy invested by the company to deliver that creates a very strong asset, both from an IP perspective as well as from a sales and marketing perspective to go after projects and market share. So from a business model perspective, we have created and built smart power systems. We've learned that in order to be smart, you've got to integrate and embed right into the power electronics, certain smart capabilities, edge computing and connectivity and communications capability with the cloud. We take that, we connect it to the cloud, and we provide aftermarket service in terms of operating and manage, not just warranty, but running and operating and managing these systems in partnership with our customer, and delivering Energy as a Service in a variety of different contractual and service capabilities. At this point, I'm going to ask Farrukh to step in and talk about the highlights of our financials.

Yes, for sure. Thank you, Miriam. Hello, everyone. So as we can say based on the new product offerings that we have. So what we have done is we are building a foundation for growth with all of these 4 distinct products -- sizes that we have. In Q2, revenue grew 12% to $1.13 million, bringing year-to-date revenue to $2.2 million. To put that in perspective, last year's full year revenue was $2.76 million, and we were already near that level with 2 quarters still to go, which will have historically been our strongest -- like our next 2 quarters have historically Q3, Q4, have historically been our strongest quarters. Recurring revenue also grew by 6% in the quarter to $180,000, while year-to-date, it's slightly lower due to timing of renewals. The service base remains solid and expanding with over 15,000 units deployed worldwide, generating recurring services and data insights. We are trying to build a strong foundation to scale profitability and deliver long-term value. Miriam, do you want to take the next slide?

So we talked about satellite Internet. We've talked about cellular telecom. And as I've also mentioned, we're seeing a lot of activity in the power utilities, in transportation, in municipalities. And starting this fall, we are going to be privileged to do -- we actually got 2 agriculture projects now, one in North America and one in Africa. These markets are expanding significantly. Connectivity, the Internet of Things and having the telecommunications industry, which is really powering everything is a significant growth for us across all of our markets. We have some very strong advantages -- sorry, apologies for the dog. We have some very strong advantages going into those markets. We drive higher performance and better economics than anyone else in the marketplace. We do that by delivering the smart power equipment on site by having analytics-driven remote monitoring, remote cloud troubleshooting and repair fixing things, whether it's power system, things that need to be managed and operated, or even the telecom systems themselves need to be rebooted, we can do all of that remotely. And when you were dealing with multiple power sources and sources that are dependent upon solar or wind, they're not there 100% of the time. So whether an energy forecasting for which we have some nice patents is a key foundation of what we're doing. Through that, we've got more than 15,000 systems that we've shipped in 55 countries. We make our systems more and more power -- smart on an ongoing basis. We're using big data and predictive analytics, we can troubleshoot and remote -- remediate better than anyone else in the market, and we're managing and operating for our customers alongside our customers. Strategic partners are very important, obviously, to us. And I thought I would just spend a few minutes talking about at Eutelsat. Eutelsat is -- you'll be familiar with low earth orbit like Starlink and higher earth orbit satellite services. Both of them are getting much faster with much higher capacity, and Eutelsat has become a strategic asset for France, for the U.K. and for all of the EU ferments, security, resiliency infrastructure perspective. They recognize the importance of power alongside the connectivity, and we have signed an MOU with them for our partnership. We've been working heavily with them the last 8 or 9 months. Throughout all of this year, there's been some changes on their side. They have received $1.6 billion of investment from the French government and the U.K. government and other reference shareholders. So they are making significant investments in rolling out their services across the EU and across Africa. And along with that, we are expected to provide the -- a power infrastructure. This represents a multimillion-dollar opportunity over the next multiple years for Clear Blue. From a customer base, we have a marquee list of customers. We have the top telecommunications infrastructure customers across Africa, MTN being the largest telecom organization, IHS Towers being the largest tower operator in Africa. Satellite vendors, Eutelsat, ViaSat, Intelsat, Avanti, iSAT and the entire service infrastructure. Across North America, cities, municipalities, states transportation, Pennsylvania Turnpike, Interstate 80 and commercial retail customers are our base of customers. And many of these customers have been using our services for 4, 5, 6, 7, 8, 9, 10 years now. Just a bit of a refresh on our Board. There's a lot of them that have gray hair or no hair. I don't have gray here at all. That's why my hair is nice and brown, but those of you who've seen me lately know that there's a bit more gray there. We've been working really hard, and we are a very determined team. We have a disparate set of assets and capabilities. The 3 founders, myself, John and Mark couldn't be more different people, but between the 3 of us, I think we make one hopeful super person with individual skills. And we are very focused as a company, making sure everybody plays their position well. As a result of the -- the end of Clear Blue 1.0 and the restructuring, we have -- it's time to refresh our Board. We were thrilled to announce in the quarter that Greg Ross has joined our Board as an independent director, this quarter. He has a significant amount of industry and investment knowledge in the Canadian markets and global markets and is already providing us with Sage Advice and we expect to expand our portfolio of independent directors from a go-forward perspective. Farrukh, would you like to talk a little bit about the trend lines and the work we've been doing?

Yes, for sure. So as we indicated earlier in the presentation, we've been working really hard on our debt restructuring and bringing debt to a level that is manageable and you've been successful. So over quite a bit. So over the last year, we have taken action to strengthen our balance sheet. As you can see from the graph, the net debt is down from $14.7 million in Q3 last year to $5.7 million in Q2, a 61% reduction in less than a year. This was made possible through stakeholder support as we converted convertible debentures, shareholder loans and into equity. We restructured our debt to extend the terms and converted the short-term loan into a mix of royalty, equity and smaller debt balance payments. So the result is lower leverage, reduced near-term cash needs and alignment of our stakeholders with Clear Blue's long-term success. Most importantly, this structure gives us the breathing room to execute our growth strategy without an overhang of excessive debt, right? The next slide, please. So you can see, if you look at our revenues, they've been improving and the gross margin is being supported by -- and giving us better profitability. So in Q2, revenue grew 12% year-over-year to $1.13 million with gross margin improving to 44% from 24% last year. The improvement in gross margin was driven by product mix, more skewed forward -- more skewed towards our more mature products and higher-margin services. On a year-to-date basis, revenue is up 20%, and gross profit has nearly doubled, with margins expanding to 48% versus 32% in 2024. While restructuring activities temporarily impacted revenue in late 2024, we are now seeing a recovery with stronger profitability. These results validate our push towards improving cost control and higher margin business. Next slide, please, Miriam. So the key levers and revenue recovery leading to an inflection point. We believe that we are at an inflection point in the business, having a couple of challenging years, our adjusted EBITDA has improved 69% in Q2 and 57% year-to-date, driven by higher revenues, stronger margin and reduced operating expenses. In fact, operating expenses were down 14% year-over-year in Q2 and down 20% year-to-date. Thanks to workforce automation, lower overhead and tighter G&A management. Our R&D and business development remain tightly focused on revenue generation with the shift from heavy R&D to commercialization, past sales investments are starting to yield orders from higher quality customers, as Miriam mentioned, and we believe that we are on path towards positive adjusted EBITDA and improved cash generation. Miriam, next slide, do you want to take it over from here?

Sure. So lots of changes to the cap table, but we think we fixed it in terms of cleaning it up nicely now. We did a share consolidation in Q2 as well. And so we're now sitting with 78 million outstanding shares, a number of warrants for all the people who participated last year in helping us make the transition. And where we sit as a result is we're very honored that BDC Capital, who is our largest lender is also now a very large shareholder. And I think as you can see, there is a significant management focus and board focus and commitment to the company. And as a result of investments that we've made, we're sitting at about 22%. The shares are still sitting at a level that are quite flat. And I think that our thoughts are that we need to show the trend line in a stronger way over more quarters. So we've got a good start. When you look at where our EBITDA numbers are going and how our gross margin and revenue has been improving. But I think the market will want to see how we do for the rest of this year to make sure it wasn't just a spot quarter and that the trend line is going forward in a strong way. And once that happens, we think that there's significant potential for upside from where we are today. In terms of comparables, presenting a little bit of a basket of selected comparables, a range of small cap and micro-cap solar, power, electronics and energy management peers. We've provided a context here for valuation metrics relative to companies that are a similar stage of scale and market position. We're planning on bucking the trend, and we aim for an EBITDA-positive company. We think we're ready. We're at the point where we need to be. We've got the technology developed. And once we've achieved that on a consistent go-forward basis, this is a rarity seen amongst clean tech companies, and we think there's significant opportunity for upside. So just to summarize where we're at. We have 3 core markets that provide a foundation for strong revenue growth and improved profitability. We're in the commercialization phase with our new products, and that has allowed us to significantly reduce our operating expense -- our R&D expenses and some automation that you need to develop the product to automate it to get things going. And so that's helped on the OpEx side as well. That doesn't mean we're not doing R&D. It just means we've gotten a big chunk of it behind us. The 2024, 2025 debt restructuring has really helped to stabilize the business and provide a breathing room for us to execute in our growth strategy. We've reduced our operating expenses, and we have a pathway to positive adjusted EBITDA and improved cash generation. And we've got new partnerships that are being formalized that are moving forward, such as Eutelsat and Growth Energy, and they are going to support larger scale deployments and revenue growth. So that's the presentation for today. I'm going to stop sharing, and I wonder whether there are any questions that we want to take at this point in time.

Yes. We got a couple of the chat all to you and Farrukh. Okay. So the first one is, what are you expecting in terms of the revenues for the second half of 2025?

So the second half of our fiscal year is typically when we see the highest revenue quarters. Last year was an exception because we were constrained by the restructuring activities. But we have a number of key projects that we are going to be and planning on delivering on and we need to deliver those in order to ensure that we have the 2 strong quarters in the back half of the year, sorry. And our team's focus is to make sure that happens and deliver on our goal of hitting a positive adjusted EBITDA this year.

Awesome. Okay. Next one is, so what is driving the visibility for that stronger second half of 2025 then?

So this year is going to be particularly strong for our Micro and Nano products, which are mainly for telecom applications. The success in the second half will be predicated on making these deliveries on time along with winning further contracts to solidify the bookings for 2026.

Got it. Okay. Now in terms of OpEx, are there any other costs that you can cut to reduce that?

I can take that question. So we've already made a significant amount of reduction in our overall operating expenses. With this quarter -- our quarter is down 16% year-over-year. There's also -- this is the balance that we want to hit between revenue growth and cost structure. And going on forward, we're not trying to compromise our revenue growth. So I would say that our OpEx would remain flat. Where are there -- there are opportunities, we are going to work on it. But like we've already made significant strides towards reducing our OpEx. And I think it's a good position right now.

Okay. Next one is, how are you managing the debt on the balance sheet?

So with the restructuring, the reduced -- we've reduced our debt by approximately 61% from its peak. Most of the remaining debt is with BDC or FedDev Ontario. FedDev is industry and does not require any significant payments within the next couple of years. It's pretty small payments over the next couple of years. And with BDC, we did our restructuring recently. And we've got manageable payments going on forward. So our goal is to improve our profitability and therefore, our ability to service the debt will go hand in hand with higher revenues. Once we get to that point, we have more flexibility and options on how to fund ourselves. But right now, I think we're managing our debt amicably after the restructuring that we've done.

Awesome. Okay. Now is the company thinking that it's going to need to do another equity raise is the next question?

I can take that one. So we want to keep all of our options on the table as we've entered this new phase of growth. And there may be situations and opportunities where more capital could help us to accelerate that growth. Historically, we funded ourselves with grants, with debt, with equity raises, and the management team and Board are assessing those options on a go-forward basis to decide if and when we want to approach that when we put the pedal to the metal, et cetera, et cetera, and taking all of those things into consideration.

Perfect. Okay. What is happening with the Eutelsat partnership is the next one?

Okay. So the Eutelsat partnership is a huge ship. It's not a little sea due. It's a huge ship. This opportunity in front of us is for tens and tens of thousands of systems being deployed across, as I said, all of the Europe and Africa. Right now, we're focused mostly on Africa, but EU is entering the conversation as well. You may have noticed there was outage in Spain of power, and that has triggered some concerns about the reliability of the grid in Europe, which is not unsurprising. So we are actively engaged with Eutelsat. Most people in the company at Clear Blue touch many different people in Eutelsat multiple types a week. And we're working towards formalizing the commercial terms of our rollout with them. They've had some significant developments on their side, raising EUR 1.6 billion from the French government, the U.K. government to fund their growth, and they have very accelerated plans. So we'll update the market as things develop and become finalized. But as it stands right now, things are going all in the right direction with them.

Awesome. Okay. I think this one might be for you, Farrukh. So with recurring revenue, do we book the entire so the annual amount, the month it was received, hence, the timing issue on prepaid renewals or treat it as prepaid revenue and kind of phase that in over the payment period as it's earned.

So with the recurring revenue, what we do is we don't take it all at once. The way that it works is, like if it's a 3-year contract, we take it over the 3-year period. And then when there is a renewal, it's generally an early annual renewal, and then we amortize it into income over the next 12 months. The -- when we mentioned that the timing issue on prepaid renewals, it's basically the time lag between getting the renewal done. And so unless and until we get the money in, it's not deferred revenue. So just a time lag on -- between when the 3 year ends, and the fresh renewal is going to come in. There's lots of processes that need to go in and work on. And sometimes there's a delay on that. Because the end customer changes and whatnot, right? So that's just why there was a delay in the long-term prepaid renewals, but like it's amortized accordingly, and you can see the monthly renewal over there as well.

So you might have a telco or a city that is fully intending to renew their ongoing recurring revenue, but we don't have the signed contract or the payment for 2 or 3 months into the new terms, so then the numbers go down in that quarter, but they come up the next quarter because it's retroactive, that kind of thing. So it's just those types of items.

Awesome. We have a couple of folks that are interested in more information about the agriculture contract. So like if we're powering irrigation pumps or kind of what those projects are about?

Yes. So in -- I don't actually know exactly what we're powering in Africa. I just know we're doing an agricultural project in Tanzania. But the interesting thing about agriculture is it tends to be outside the city. So power utilities are looking at. I've got this large, distributed power infrastructure. I've got to provide mission-critical power to them. It's going through forest fire territories. And as a result, I would like to look at providing green energy as an alternative. So I think we have some pilots coming up that we'll be announcing, hopefully in the fall related to that type of an agriculture project.

Awesome. Okay.

And just one more thing. Like our Pico plus product, like our smart streetlights, all-in-one light, those are also like easily transportable and whatnot. So those are also a pretty good fit for agricultural areas as well.

Awesome. Perfect. Okay. So now we have another question. So of the $3.5 million in bookings that will be recognized in 12 months, how much of that are we expecting to be invoiced in the 12 months? And how would we -- how much would we estimate that to be invoiced in fiscal year-end 2025?

So we would expect 100% of it to be invoiced in 12 months. In terms of the number for 2025, we're not going to give exact guidance at this point because things can still move a month here or a month there, and it's all related to execution and timing, et cetera, et cetera. What I can say is, historically, the last 2 quarters of the year have been significantly bigger than the first 2 quarters of the year. And that is what we have seen most of the time is the trend that we have, and that is the plan that we're working on for the end of 2025. One of the other things that we're focused on. So our definition of success at the end of December is good, strong Q3 and Q4, and a nice bookings backlog to show that we're going into a good, strong Q1 for next year. That's our plan.

Awesome. Perfect.

The only thing I'd like to add in there as well, like is that there's also recurring revenue inside the $3.5 million. So that would go more than -- if it's a 3-year contract. So that revenue is going to come in over more than 12 months. But the rest of that, the cash we are expecting to be received in the next 12 months for this year.

Correct. So if you look at the bookings table, it shows a year 1 number and it shows a beyond year 1 number. We -- when we show a booking, its cash received from the customer. So we generally get the first 3 years of the ongoing service contract prepaid in the first year of the contract. So our cash receipts are higher than our revenue.

Perfect. Okay. We have another question here. So is the Energy as a Service and recurring revenue at or above the corporate profit margin levels?

Recurring revenue is a higher margin than onetime hardware sales, yes. That is, in fact, the case.

Perfect. Okay. Another good one here. So is management still committed to a long-term, or if a company comes along with, for instance, $50 million a takeover offer. Will the company gets sold? I'm asking as a diluted retail investor.

So as we've said with raising equity in the future and will we need to do another raise. Management and Board will always look at those things and figure out what's the best opportunity. From management's perspective, we're not looking to get out of this anytime soon. We're keeping our head down and building the business. And I don't -- and sorry, I'm just trying to think through all the scenarios. We don't see anything happening in the short term. One never knows though. But the key focus is to grow the business, and have a long-term road map and to make sure that the shareholders get the maximum return on their investment. Certainly, at the numbers we're sitting at right now, we consider that not to be the value of the company at all. And our intention most strongly is to deliver significant return on investment to our shareholders. We would not have gone through all of this pain if we were just going to take a few pennies on the dollar. This company has a significant amount of IP assets in both customers, in revenue, in product, technology and know-how. And we're here to make sure that, that value is realized.

Awesome. Thanks, Miriam. Okay. So we got another good question here. So what percentage of like a big installation does the power component make up for a total project CapEx?

It depends by product, but let's take a typical telecom installation. If you're establishing a new tower installation, I would say that the power is probably 50% to 60% of the CapEx. If it's a retrofit, it's probably 75% of it. In the street light business, it depends if we're supplying the entire system or not, but of course, those percentages would be high. So I would generally say most of the time, it's 50% of the CapEx of the project.

Awesome. Okay. I think another one here. So understanding we can't give guidance, but do we expect to see revenue growth in the second half over last year in the last 2 quarters year-over-year. To clarify, you say it will be -- we're aiming to be EBITDA positive by the end of the year. Is that the goal for Q4?

So our last 2 quarters are expect -- we are targeting and working hard to deliver strong Q3 and Q4. Strong Q3 and Q4 would be nowhere near what we did last year. Last year's 2 quarters -- last 2 quarters were significantly impacted by our -- the restrictions due to the restructuring and that's not what we're targeting. Those are very low quarters. We're more looking back towards previous years and what we have traditionally been able to show in terms of growth on Q3, Q4 versus Q1, Q2. In terms of adjusted EBITDA, you could see on the chart that there was a very strong growth -- trajectory towards getting to positive adjusted EBITDA, and we are planning on continuing quarter-after-quarter to get better and better at that.

Awesome. I'm kind of piggybacking off of that one. Someone is interested in like what the sales level is required to be to become cash flow breakeven. I don't know if we're able to -- yes, share that?

So Farrukh, do you want to answer that question?

Yes, for sure. So we've got -- so right now, our -- for-- so to be EBITDA positive, so we looked at to be EBITDA positive right now. We have -- in Q2, we had $1.1 million in revenue, and our adjusted EBITDA was $222,000 negative, right? At 40% margin, you can see that, that -- at that level. So if we get around -- around $2 million or $2.2 million a quarter, I think we would be EBITDA positive. And again, with the cash flow, our working -- we've got -- we've reduced our debt significantly. So if you look at our margins at 40%, so if we -- on a quarterly basis, if we do $2 million in a quarter and at 40% margins, so -- and then looking at our expenses. So I think at $2 million or $2.2 million, we would be cash positive as well.

Awesome. Okay. Next question, so what is the payback time for a customer on replacing diesel in the telecom industry? And what is the IRR on this?

So the payback period is months, not years. The key challenge is what we're seeing in the industry is everyone is moving towards adding solar, but the operators who have historically run the site as diesel and a generator have not got the tools and the expertise to actually deliver the solar energy to the system. So we see a lot of customers who maybe have rolled out solar with other companies, and they're not getting the benefit from that. So step one is to get the infrastructure built out, but step 2 is then to harvest the solar energy, and that requires significant configuration, management, analysis of the sites to make sure you're setting up the parameters, adjusting the parameters to doing that. So that's why we talk about the road to 0 diesel because we've seen sites where we started off with a system and okay, it's going to deliver 40% solar. And with us doing the management of it, we can get it 90%, 95% plus solar operated on a way to getting it to 0 diesel. So the payback is in months. But one of the key criteria is there are many, many installations we're seeing where they do the work, they do the upgrade, but don't actually get the benefit without the operational experience. That's why we believe so strongly in our model of having the field operational expertise and skill sets, having the analytics and the data and the management team to do that. And then even to the next level, changing the technology and the hardware to respond to what's going on in the field. I call it the red dot problem. It's not about how to make this stuff work in the lab. It's about how to make this stuff work in the field, whether it's in Northern Saskatchewan at minus 40 and plus 40, sometimes within the same week almost or it's in Africa with dust dirt's, no local maintenance people and 40 degrees, 50 degrees Celsius.

Awesome. Thank you. Okay. This may be a Farrukh question. But do we have the tax loss carryforward dollar amount?

Yes, for sure. So we can break that up into 2. So we've got -- at the end of the year, last year, we had noncapital losses available for future periods of around $26 million, $26.6 million. And we had research and development tax credits that we had carried forward of around $8.6 million, $8.7 million.

Awesome. Thank you. Okay. And this is the last one that we've got in the queue is, going forward, can we expect more frequent news release updates?

Certainly, we expect to have more visibility in the market. I think the answer to that is yes. But I just wanted to emphasize that we've been keeping our heads down and making sure that we could deliver on a long-term trend, not just a blip. We've now got 2 quarters behind us that have shown the new trend, and we've got more coming. So we believe that the market is getting ready to see the results and see the progress. I do want to emphasize, as I said, we've got over 120 projects that we've done so far this year that we've got orders for. And some of these are strategic nice projects. I've got projects that are a couple of thousand dollars, but they lead to very significant follow-on strategic projects. So we don't announce everything. But yes, I would think that there's going to be more visibility, more news coming forward now that we've kind of come out from dealing with all of the restructuring and are focused on sales. We're also seeing a lot of deals happening. So the activity is much higher as well given that the revenue is growing.

Awesome. We have one more come through. So turning back to the power components of those large projects. So if we got 5% of Eutelsat, $1.6 billion, it would be $80 million of revenue to you over time. Is that in that kind of 5% ballpark?

Well, the money that they're putting in is CapEx, not OpEx. So I'd have to take a look at that. But I think in looking at what the potential value of that contract is, we see the contract being potentially worth more than $20 million over the next 2 to 3 years. I'd say more than $20 million over the next 3 years is the potential that we see for that contract. And that is just for the Africa portion, how Europe starts to come into play might be very interesting. Those are still early days, discussions when it comes to Europe.

Perfect. All right. We give 30 more seconds if anybody has any last-minute questions, but that is all of them in the queue that have come in.

Okay. Thank you very much, everyone. We really appreciate it. This webinar presentation and this PowerPoint presentation will be put on to the website for other people to listen to if they want. I do just want to give a shout out. Many of you have been part of the team in terms of doing the transition. We want to thank all of our stakeholders for the support that we got through this financial transition. We would not be here without you. And it is something we think about and hold ourselves accountable to every day. So a very big thank you for all of the supporters we have had. And every person in this company is working hard to deliver on that investment for you.

Perfect. Yes. No more questions. I think that's good.

Thank you. Have a great weekend.

Yes. Bye.