Clear Blue Technologies International Inc.

Okay, it looks like we're starting to get people to join here. So welcome everyone that is just getting connected to the webinar. We're going to give a few minutes to let everybody join and we'll probably kick things off around 1103 or so. Natalie, can you hear me?

Yes, I can hear you clearly, Miriam. Natalie, can you hear me? Yes, Miriam, I can hear you clearly. Natalie, can you hear me?

Yeah, Natalie's saying that she can hear you. Can you hear us?

It doesn't matter how many times you do Zoom. Sometimes things inevitably go awry. So we'll just fix these technical issues. Can you hear me, Natalie? Yes, I can hear you.

Yeah, I don't know. As soon as I hit share screen, I lost my audio. So just give me one second.

Can you hear me? Yes, I can hear you.

Okay. And can you see my screen? I can indeed. Okay. Just to let everybody know I'm on the business side of this company, not the technology side. My apologies. Okay.

I keep saying that we need some better music to start these meetings so that everyone's entertained for the few minutes it takes. Okay. Well, let's kick things off now. So welcome, everyone. Thank you very much for joining us today. Today we are going to be going through our Q2 2022 earnings, our financial results, and the outlook for the company. So today we have Miriam Turk, our co-founder and CEO. along with Farouk Anwar, our CFO, and they are going to be walking you through the details of our Q2 earnings today. So just as a couple of housekeeping items, if you have any technical difficulties, please put it in the chat. Please add any questions to the chat or Q&A, and I will note those down and we will answer them at the end of the call. So with that, I'm going to hand it over to Miriam.

Thanks, Natalie. Good morning and good afternoon, everyone. Welcome to our Q2 earnings call. As always, we have our forward-looking statements that provide you with information about the fact that we're giving you the best information that we can, but you should make your own judgments and decisions, and there are always some uncertainties in the marketplace that have to be taken into consideration. So today we're going to provide a quick overview of Clear Blue and its markets. We're going to have a discussion of our Q2 2022 results. And as I'm sure everyone is keenly interested, we're going to give you our perspective and guidance on the future outlook. So in the world of power and solar power, most of the systems you see in the world are called microgrids. They are large, small, medium or large solar panel systems that are on the tops of roofs and farmer's fields and mostly solar. inject energy into the electricity grid, whether it's the big massive grid or a local electricity grid. Clear Blue's technology and business is in a completely different area. And for that reason, we call our systems nanogrids and picogrids. Being the engineers that we are, you can go right to the power of 10 table to understand that a nanogrid is smaller than a microgrid and a picogrid is smaller than a nanogrid. nanogrids and picogrids take the power system and they put them right at the location of the device. And that does two key things. The first is the electricity grid infrastructure, cabling, distribution, transmission, all of that cabling, distribution, transmissions, meters and switches, et cetera, et cetera. That's 60% the cost of power. And the second is that generally you would lose approximately 20 percent of the energy by transmitting and distributing it. So when you take electricity generation, power generation, and you put it right at the cell phone tower, right at the solar streetlight, right at the Internet of Things device. You're saving 60% cost for transmission distribution, and you're saving 20% losses of electricity. The key is that it's still a mini electricity system, and you have to have an ability to manage and operate that. So when you look at smart off-grid power, there is a significant demand in the marketplace. You've got smart cities, streetlights. You need resiliency in that infrastructure. You need sensors and detectors for flooding and storms and traffic and security cameras are coming. Need for connectivity. I was out last night talking to socially and people were talking about what would have happened in COVID if we not had, you know, video conferencing, Zoom, Google Meets type technology. And so the growth and demand for telecommunications and connectivity is a UN sustainability goal and is keenly needed. And as part of that, you have to have internet access. So you need easy, low cost power. You need grid resiliency and independence. You need reliability, advanced management, and you've got to have the ability to grow. And in order to do that, you have to have smart off grid. So we provide a complete mini solar off grid power system. So it's a micro, it's a nano grid or a pico grid. And it's an entire system, just like, you know, what Ontario Hydro would provide. And so it provides off grid power. The key aspect and differentiator for Clear Blue is we operate and manage it. We are a distributed power and energy operator. Every system we sell, we manage and operate it. How do we do that in 37 countries around the world? Well, we enable it by using our smart off-grid technology, our Illumium software, our predictive analytics technology. and our cloud management and network connectivity. Every device is connected, sends data every five minutes. And through that operational infrastructure, the people, the technology and the technology at the edge, the power computing capabilities that we have in those solar off-grid systems, we're able to manage and operate mission critical devices. So what is Clearblue's core technology? Well, it has two key components. The first is we make a piece of hardware. It's the size of a Kleenex box. And it is in the middle of every single off-grid system that we sell and operate today. So it's the brains of the system. And it's important to remember that Solar panels are made from sand. It's, you know, silica. And batteries are made from lithium or lead acid chemistry. They're dumb devices. How you generate energy, how you store energy, and then how you distribute and manage to the loads is all in the electronics. And that's what we make. So our smart off-grid controller is a power generation device. energy storage and load control device, but it's also an edge computing device. It has, and there are varying degrees of this, but we're building more and more of this as we move forward, edge computing capabilities in the device and communications capabilities in the device. This device is like your smartphone. You turn it on and it connects. And it connects anywhere in the world. It connects to our cloud infrastructure, which is quite comprehensive. It's got security and infrastructure and servers and backup servers and databases, et cetera, et cetera. And it's got smart predictive analytics. So our Illumion software provides energy forecasting and weather demand, weather forecasting and energy demand and energy management services. And it provides all the troubleshooting or remediation tools that are needed to make a mini electricity grid operate reliably. So when you make things smart, you tend to move from what I would call the analog world to the digital world. And this is a visual picture of what the difference is. And both of these systems were deployed in 2021. And what you can see, first of all, is that we've moved a lot of physical complexity around. And physical devices, you see this breaker, which might be a nice Siemens breaker or someone like that, probably costs $150 or $200. All of that is gone and replaced with little digital electronic switches, called a MOSFET, inside our smart off-grid controller. So... Huge cost reduction from that perspective. The second thing that's really key is you got to put a technician in front of this box. He's got to switch things and test things and wire things and do everything. And on the right-hand side, there's none of that. So people will oftentimes ask me, well, who does the install? Do you do the install? And we eliminate the need for a technical expert to do the installation, which means our customer can use one of his technicians. Maybe he's a telecom technician. Maybe he's a lighting guy. Maybe he's a security camera guy. He just knows he's got to plug the red cable into the red port, the yellow cable into the yellow port. And then when it turns on and it connects to the cloud, our team commissions it, installs it, configures it, sets it up, runs a whole series of tests, talking to that installer and saying, yeah, everything's good, Mr. Installer, or, and this is a true story starting in Q1 of this year, Mr. Installer, you've put one solar panel on top of the second one. That's not going to work. Your customer and our customer isn't going to accept that power. So removing that need for in-person operation and making it simple and all digitally electronically controllable is a key part. So when you look at our Illumiant software, there's a couple of key things about the technology. The first is energy and weather forecasting. And you're going to see some up and coming news, I believe in September, about some independent field studies that have been done to validate the value proposition. But if you can manage energy forecasting effectively, and energy demand. And if you can manage through extreme weather events, you have the ability to reduce the size of the system by 40%, reduce the number of batteries, reduce the number of solar panels. And when you do that, you have a huge cost savings. And not only do you have a huge cost savings, but your uptime availability actually is better than than a system without the smarts. That would be bigger. You want to manage the long-term life cycle of the battery as well as a short-term life cycle of the battery. You want to be able to maintain, troubleshoot, and remediate. People think, well, how often do I need maintenance? How often do I need troubleshooting? If you're running tests and it's preventative and you're looking at what things are going, you can eliminate most maintenance events by getting ahead of the curve and dealing with it early. So doing ongoing testing, et cetera, et cetera, is key. And lastly, we have something we're very excited about called potential energy, which when customers are using our systems for technologies that grow and telecom systems grow all the time, or they're shading or it's wintertime or whatever, knowing exactly what the energy capacity of that system is, not what it's using today, but what it could handle is really a key asset to managing systems. And this is unique patented IP from a clear blue perspective. So you put all of that together. And why is Clearblue different? Well, you get the lowest total cost of ownership through modularity, parallelization, sizing, weather and energy forecasting. But the last piece is we are an operator. We operate and manage every system we sell in the field. and as a result of that we have um are very proud and privileged to have a very strong customer base you'll see in the top right corner here i've added via sat an announcement that we had in the quarter and we're very excited about that partnership i'll be talking about that a little bit more late later um but global brands tier one companies uh and mission critical infrastructure whether it's the new york state department of transportation or it's MTN, which is the largest telecom company in all of Africa. So as a result of that, we've done some great things in terms of growing our traction of systems that we operate. You can see that we finished the quarter at 9,800 units deployed. I haven't checked, but I'm pretty sure we will have crossed 10,000 units. We hit more than 10 million operating days in the quarter. And of course, last August, we had 10 billion cloud transactions. So just before I get to the financials, I do want to talk a little bit about our new product called our Smart Off-Grid PicoGrid. And the PicoGrid product is a product that will be for a huge addressable market. Think Internet of Things. Any little device and sensor or traffic camera or security camera will be powered by our PicoGrid system. But the The first wave of that partnership and initiative is the satellite internet market. And the satellite internet market is growing significantly. There are billions of dollars being spent investing in new satellite technology in the marketplace to cover the world with better communications and bring internet to the more than... I think 3 billion people today who do not have good access to the internet. So we're excited about that product. We announced it in Q1. It'll be shipping from a volume perspective in 2023. And here you can see an old system, which was what's inside this big stainless steel cabinet box, replaced by what PicoGrid can do. So the impact from a price performance, easy to install, And an ROI perspective is huge and really a game changer in the market. And we believe a game changer for us. So now we're going to turn to our Q2 2022 results and Farouk, I believe you're going to walk us through a lot of our financial information.

Yes, I am. Thank you, Miriam. Thank you so much. Thank you everyone for joining. So, uh, Trailing four quarter of 5.9 million is a result of strong revenue yielding periods for the company. We do see a decrease in the trailing four quarter when compared to 2021, but this is mainly due to one time strategic deal in the comparative quarter. So the company sold towers worth $1.5 million to a major telecom infrastructure operator in Africa within our Middle East and Africa market. So if you exclude this one-time tower deal for Q1 2021, the adjusted variance is a decrease of 6%. So revenue for the quarter also decreased, but slightly by approximately 3%. The decrease for the quarter and trailing for quarter is mainly due to a delay in few customer rollouts and deployments. The global macroeconomic environment is changing. And while no project has been canceled for us, Clearblue has seen a customer financing and Capex plans to take a pause, thereby impacting Clearblue's most recent quarter and trailing for quarters. Next slide, please. All right. So let's speak about our revenue by segment sector, right? So the company's lighting vertical is made up of one-time revenue and energy as a service deferred revenue. As the company continues to grow its energy as a service offering, we see that there's a gradual decrease in one-time lighting revenue. You can see over here that our lighting revenue has gone down by 40%. But that's mainly because this one-time revenue is reducing. And on the other side, we've got our energy as a service recurring revenue that's increasing. So the 40% decrease that we see in the lighting revenue is a result of the same shift. So with revenue to be generated over the next three years. And on the right side, if you see the table for U.S. revenue, we see that U.S. revenue has declined, but that's on the same reason, because it's the same in our U.S. sector. We are primarily selling our lightning vertical. So on the telecom vertical side, our telecom vertical has grown significantly over the past few years, with $4.8 million worth of trading for quarter ended June 30th, 2022. So while the revenue from this vertical is a solid growth metric, the negative variance is mainly due to the one-time tower deal that I mentioned in the previous slide. Excluding the impact of this initial deployment, revenues have, in fact, improved in this vertical significantly. Now, another thing I wanted to point out is in our revenue by region, you can see this other where we've increased by 732%. So included in this other's region is our company's first large shipment to Latin America. So Clearblue sees significant interest in market opportunity in the Latin American market and is excited to see that its first deployment over there taking shape. Next slide, please. Maureen, do you want to speak about our bookings?

Sure. So let's talk about our bookings backlog. We define bookings as two key things. One, all contracted Illumiance and Energy as a Service recurring revenue, as well as our committed orders and contracts, projects where we have purchase orders and deposits, and of course, which are not included in revenues. And at the end of Q2, our bookings were up 37% from the year end to a total of just over $2.1 million. And of that, 1.6 million is scheduled to be delivered in the first 12 months and the remaining will be after that.

Thank you very much. So gross profit, we can see that if you look at the graph on the right, we see that the company has been able to grow its margin over the years and now is maintaining margins around the mid 30 range with margins of 34% for the trailing full quarter and 36% for the quarter. So So this trend shows that we've been focusing on improving our margins. And recently, with higher inflation and increasing commodity prices, there has been some pressure on the company's margins. However, in most cases, the company has managed to either innovate lower cost elsewhere or to pass a portion of these increased costs of materials to its customers. Next slide, please. our operating expenses. So we can see in our operating expenses have increased, but, you know, for trading for quarter period, the company's revenue, companies, companies, So in the comparative trailing four quarter period, the company received COVID-19 related grants of around $796,000 compared to only $86,000 in the current trailing four quarter. So when normalizing the effects of the COVID related subsidies, expenses have been somewhat flat. So in 2022, the company has started amortizing a portion of its capitalized R&D projects, amortizing around $88,000 per quarter, compared to nil in the comparative quarter. So that's a small portion of the increase in our expenses. And the remaining variance is due to higher travel and marketing expenses related to expenses that are covered in 2022. Customers returned to in-person meetings and conferences and that's why our traveling and marketing related expenses have gone up. So we can see over here that adjusted EBITDA loss has increased by 19% for the quarter and 4% on a trailing four-quarter basis. But this increase can be mainly attributed to reduced margins resulting from reduced revenue. Furthermore, increased salary expenses for employees relating to increased wage pressures on the company and increase in traveling marketing expenses resulting from post-COVID return of customer meetings, conferences, and in-person investor meetings. Next slide, please.

Thanks for. So to summarize the company's Q2, our booking backlog of orders and our recurring revenue was up 37 percent in the quarter. And from a top line revenue perspective, even against strong negative macro macro economic trends, the company's Q2 revenue was relatively flat. Our focus on increasing gross margin percentages is yielding results, and our gross margins are continuing to grow, even as supply chain costs have been increasing. And I really want to make a note that this isn't just from getting customers to pay a little bit more. They're willing to pay some of it. But we've achieved significant benefits through our own ongoing innovations in our technology. And that creates offsets that has made our position actually strengthen with the customer base and being competitive in what we can offer. And at the same time, increasing the margins of what we're selling. The balance sheet and cash position is a key focus of our investors. And I'm sure you know already, but if you don't, it's a key focus of management, too. We improved our balance sheet by almost $6 million in Q2. The Canadian government's FedDev $4 million 10-year 0% interest loan, which we signed late in the quarter, is going to have a positive impact on our cash position in Q3 and going forward. We'll have an initial $1.75 million drawn down in Q3, but it's important to understand that the rest of it is going to be a monthly receipt of for the next 18 months, for the rest of this year, through all of next year, and into March of 2024. Additionally, we were thrilled, and we want to say a big thank you to our investors for showing your confidence in the company. We did a $1.6 million equity raise in the quarter. Lastly, in Q2, our partnership with Viasat was announced, and it has created much excitement inside the company over the last year. We're thrilled to be working with them to support their community internet offerings, and we look forward to the launch of their new Viasat 3 in 2023. Together with our current NanoGrid product, they want both products, the NanoGrid and our PicoGrid product, our new PicoGrid product should provide a great foundation for the global rollout of Viasat services. So let's talk about outlook and guidance. Just finishing off on Q2 and a little bit on some of the things happening with Q3. In addition to our financial results, there were a number of other achievements in Q2. The Clean Capitalism Group, Corporate Knights, named Clear Blue as one of its top 25 public cleantech companies, and they ranked us number 13. While we've had projects in Nigeria for more than three years, our growth prospects and the number of customers there is growing substantially. As a result, we've opened our second African subsidiary and established ourselves within Nigeria more strongly. Since we've announced that even to today, it's had a huge impact in customers being very happy to see our commitment to the market and our long-term commitment to supporting them. On the cash side, we're managing tightly. We have always needed to do that, and we're good at doing that. So we're managing our cash and our expenses. It's a key priority for the company. And occasionally a right sizing is prudent, both for internal operations and to respond to market pressures. We did do such a cost reduction exercise in June of this year, and most of the impact of that hits us in Q3 as well. The Latin American market is a large opportunity for Clear Blue. And in the quarter, we shipped a number of projects and systems into this region. And we have follow on orders in Q3 and beyond for that market. So we're very excited to be starting to grow in that market as well, because we see it as the next gross market after the markets were already in Africa and North America. And then lastly, the climate change bill in the U.S., which was the largest climate change bill in history, is really going to increase investments in clean tech and in the clean tech sectors. But when you marry that to the U.S. infrastructure bill, which also benefits us significantly, we kind of have the double whammy of benefiting both from the Climate Change Inflation Reduction Act, as well as the Infrastructure Act, and That means that the much needed investments in infrastructure are positive macro trend for clear blue and we believe that our forward four quarter revenue in the US market is going to increase as a result. So let's talk about the outlook for the rest of the year. What does the rest of 2022 look like? As in all previous years, the last two quarters of the year are traditionally much stronger than the first half of the year. And we do expect the same for 2022. Our sales funnel has been increasing in quality and deal probability. So we track the total funnel and then we deal with the weighted funnel. And because we have more follow on, more high probability and more strategic partner related goals for 2023, our sales funnel has really grown from a forecasting perspective. The key uncertainty is the timing of the deals for the remainder of this year. We actually have two potential deals which are very timing dependent. And as a result, we want to provide really good guidance to the marketplace. And so we're giving you a rather big range of between 5.5 and 9.5 million for fiscal 2022. We just felt this was a responsible thing to do, especially given the macro environment that we've had in our year to date results. As we noted in the MD&A, there are still some upside customer deals and upside on the two deals that we talked about, which can have us exceed our guidance range. And we'll know more as we move through the rest of this year. From a gross margin perspective, this is a really strong success story. When I talk to people who are experts in the industry, it's in some sectors of solar, it's very hard to make good, strong margins, and we have very good margins. And it's really a highlight that we have strong IP, intellectual property, and we're not just a hardware company. The continued growth of this margin, even with increasing supply chain costs, shows that our innovations and our capabilities are offsetting these pressures. We're saving more money for our customers, and we're growing our margins at the same time. And as a result of all of the above, increasing margin and reduced expenses, we've improved our break-even point where we now see a targeted break-even adjusted EBITDA of $12 to $15 million. Lastly, cash is king and the Fed dev loan signed in June starts bringing cash into the company in Q3 and thereafter on a monthly basis all the way through to 2024. So from that perspective, we see ourselves sitting in a pretty good position going into the fall and looking even beyond that. That's all we had today. Natalie, do we have any questions that we want to walk through?

Yes, we've got one live question here and we've got some that were emailed in. So again, if anyone has any questions, please feel free to put them in the Q&A and we will add those to the list as we go through. So the first one I've got here is the live one. And the question is, is it possible to give more clarity on what you are seeing in terms of your customer demand in the short to medium term? pertaining to the pauses mentioned and expectations on this going forward?

So I believe we've answered that in our guidance. So what we've shown you is that the guidance range for the short to medium term, which is Q3, Q4, could have us finishing the year anywhere from $5.5 million to $9.5 million. And it really depends. We've got a number of deals, the two customers we've talked about, but others, which it depends on the timing. If I went with everything that we have in our best guess, you know, today, we would see ourselves ending up at the high end of that range. But there's downside uncertainty, and it's just prudent when guiding the market to say, look, I've got to look at the macro tens. I've got to look at what's happening from a macro environment perspective. And so the answer to that question is our short to medium term is a guidance of 5.5 to 9.5 million for fiscal 2022, which ends December 31st.

Okay, thank you. So the next question is about cash. How should we think about the company's cash position? And what gives you confidence that there will be sufficient cash to drive the business going forward despite the repeated financing in the past couple of years?

Yeah, so I can take this. So we are expecting to receive around $1.5 million from FedDev into our bank account in the next few days. And we've already started the process to get another $250,000 in September. So that'd be around $1.75 million within this quarter, which would significantly improve our cash position. Remember that this is an interest-free loan repayable over 10 years. Plus we have strategically stocked up on our inventory. So we intend to draw down on this inventory in the next 12 months. I think this would give us a pretty good cash position. to start with. And then Mariam, do you want to add anything about driving business forward?

So Clearblue is an early stage technology company and our competitive advantage in the market comes from our intellectual property, which we invest in. So we're winning business in some great markets against some very strong incumbents as a result. And what that means is our plan is to continue to invest because this company has the potential to be a billion dollar company and the dominant player in the market. As our revenue grows, our need for financing has been diminishing and will continue diminishing. And for the next period, we're able to execute on our plans without a fundraising. But as a technology company over the long term, we believe we can be a billion dollar company. And as we make progress through the various stages of the company, we will continue to invest in that. Short term, our plan is not to have to go to the market.

Okay, thank you. So, The next question is how much runway does the 4 million FedDev financing give the company? Could FedDev increase going forward? Does Clearblue have access to other government funding since you mentioned this is a competitive advantage?

So this $4 million from FedDev provides us with two benefits. One, that it is a cash injection in the company spread over 20 months. And two, it's interest-free and non-dilutive. And therefore, we believe that it will take us a long way. This amount is going to take us a long way as we don't have to pay interest and principal payments do not start until April of 2025. And yeah, and furthermore, the second part of your question, Clearblue is a clean tech renewable energy company, right? We've been in the tech space, clean technology, and we have a history of receiving a number of grants from different government and other programs. And we continue to work with these programs to get additional grants.

Okay, great. Next question is, what are some of the factors that caused Q2 and Q1 to be seasonally slow? And was the slowness more pronounced than usual this year?

So Clear Blue's product is an integral part of mission-critical infrastructure. So it's a capital budget expense. And budget planning always gets reconfirmed at the beginning of the year and then executed. So we see a very standard phase process with our customers, budgeting, planning, procuring, and then installing. And our equipment is usually at the end of the project. So, for example, in a new road project, streetlights are the last thing to be installed. So this is what drives the seasonality of our business and has always made Q1, Q2 a smaller part of the year than Q3, Q4. In terms of this year, absolutely. The global macro events created some uncertainty and everybody kind of paused. And we did see a more pronounced slowness. Okay.

Okay.

The next question is, you've provided EBITDA break-even guidance, which seems to be a couple big orders away from the top end of 2022 guidance. Is it feasible that the company could be EBITDA positive in 2023 if the global economy somewhat normalizes?

Yes, that's our plan and target, and we're working very hard towards achieving that. Okay.

Similar to a question that we've already answered, you were previously expecting several large orders in Q1 2022. If I recall, they are still potentially possible in 2022 or 2023 from the same customers, or are the big customers referenced in your outlook a different set of customers?

So the answer to that is yes and yes. Those deals have not gone away, and there's actually active discussions on the two deals that we had thought were going to come in in Q1 2022. That's an example of what I talked about earlier. But we also have a couple of new customers coming online, which also have large deals. So we're seeing our existing customers and deals moving forward, and we see new ones coming online.

Okay. Okay. Will the IRA benefit Clear Blue's US streetlight business? Would it not increase demand for solar components, driving up prices and hurt Clear Blue's gross margin as a result?

So, yes, absolutely. And it's important to remember that the infrastructure bill will also have a huge impact on demand in the U.S. market. Commodity solar prices affect all suppliers. So somewhat it's something that can be passed on to the customer as a cost because everybody has to bid the solar component. But solar is a very low part of the system cost. So we don't see it affecting our margins at all.

Okay, great. Given the decline in the stock price since early 2021, are there any plans for insider buying in order to demonstrate value at current stock price levels?

Hmm. Well, if you wanted to take a look at my mortgage, you would see how much we've already put into the company. Clearblue Management bought shares in the last quarter through the shares for debt transaction that we announced. So everyone in the management and employees, you know, all the way down to, you know, the newest technician that we've hired have regularly participated in various financing, depending upon personal situations and what they can afford at what stage of life they're on. We're strong believers in the company and we're bullish about the stock price. We really do believe in all the math analysis say that it's just at a completely silly level right now.

A few more questions here. The growth rate is rather slow. Please explain in clear terms why. If this is a $1 billion business, why is the growth rate not more accelerated? Also, are you planning any acquisitions?

So the growth rate, remember that in the last year we doubled our revenue. So we went from 4.1 to 8.2 million revenue. And I think, you know, honestly speaking, and I try not to just blame everybody else, but we've had three huge hits hit this business in the last three years. We had COVID. We had supply chain problems. and shipping issues. And then this year we have the interest rates and the macroeconomic infrastructures. So yes, we've grown and then we've had a little bit of a flat year and then we've grown again, but it's always been up and to the left. Absolutely. some point, as you start to get to one level, you will break out to the next level. And sometimes there's a bit of a pause. But even when you look at the first two quarters that were very low, our Q1 has always been like 10% of our business. Well, Q1, if you go back three years, was 300,000. Q1 this year was 1.2 million. So it was four times what it was previously. And I believe this company's growth next year will be quite positive. And I believe, you know, we're working towards having a positive growth year this year. How we get to being a billion dollar company is we need to accelerate our investment in the company. We need to accelerate our sales. We need to accelerate our R&D, our go to market. And we're doing that in a measured way. Unfortunately, you know, or fortunately, we haven't gone out and raised a $50 or $75 million round. That's not the business model we have. We've been making slow progressive momentum. And we've been making significant ground change in markets that are new. I remember when... People had wireless phones and cell phones. And in the emerging markets, everybody went straight to cell phone. But it took quite a while for the North American market to make that shift. You know, we had a landline and we had a Bell Express view or Bell 5TV view. subscription and it you know people would say oh it's never going to go away people are going to get rid of their phones took a long time and then it fell off a cliff and we've completely radically changed to the drop in the number of home phone lines and then and the drop in the in the number of um the way we get our content via the internet instead of the tv subscriptions you know i don't believe that five to ten years from now people are going to be doing cabled It's just not going to happen in North America. And when it changes, it's going to change quickly. The question of whether that was 2022 or 2024, 2023 is really where we're looking at. But from a potential perspective, this company is going to be well positioned to take advantage of that. In the meantime, doubling our revenue last year. We finished flat or slightly higher this year. I think that's a big win. And our plan, of course, is to get back on track to a higher growth trajectory next year.

Okay, thank you. Sort of building on that a little bit, are there any other markets beyond telecom where Clearblue is looking? The mining industry is looking to go greener, and they often have remote locations in need of power for lighting, internet, and so on.

Yeah. So our PicoGrid product is very... strongly a viable product for Internet of Things devices in all industrial infrastructure, mining, construction, smart city infrastructure, you know, climate change infrastructure. So that is a product that we are going to, as we launch it into the market and really scale our sales, I see it going after two verticals, one being the current Internet Wi-Fi product, telecom market, which is a bit different than cell phone towers. But secondly, going after the internet of things and smart infrastructure. And as we execute our plans next year, and FedDev is part of helping that, our go-to-market strategy on that product will be to go after that capability. And then once we have that, we'll drag along the rest of our products into that market.

Okay, thank you. One more question here. So we've talked already about backlog of orders, but maybe we just need a little bit more detail on it. So the question is, what is the actual size of your backlog?

Let me just go back. I think we disclosed that very strongly in our numbers here. So if you go on this page, we have 1.3 million of purchase orders, and we have 800,000 of recurring revenue contracts already signed, cash in the bank. It's just they're earned over time. And of that, so that's 2.1 million. And of that, in the next 12 months, we'll revenue recognize 475,000 of the recurring revenue already contracted. Then we'll have more. And of the purchase orders, we've got 1.1 million that will ship in the next 12 months. So starting July 1.

Okay, thanks. I'm not seeing any other questions at this point, but for anyone who is on the call, if you do think of some follow-up questions that you'd like to ask, please feel free to email us and we can give those questions answered directly to you. So I think with that, if there are no more questions, I'd just like to thank everybody for attending today. We appreciate you joining us on the call and look forward to the next quarter and seeing you there at the next earnings call.