Clear Blue Technologies International Inc

XTSX:CBLU

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Nikhil Thadani]

Good morning, everyone, and thank you for joining Clear Blue's Q2 financial results call. The company filed its Q2 results on the SEDAR last night. Management will walk you through the business and financial updates on the quarter in a little bit. [Operator Instructions] With that, over to yourself, Miriam.

[Miriam Tuerk, executive]

Thanks so much, Nikhil. And of course, everyone, thank you so much for taking time out of your busy day in the last of our summer season to join us on this call today. We've been working very hard, and I think we're pretty proud of the progress that we're making as a company and showing a strong upswing as a result of the -- all the work that we've done through the downturn in 2022 and coming out of it last year.

I've got the recording on. First of all, I just want to remind you that anything that we provide to you should be taken into consideration with the forward-looking statement. We do the best that we can, but please be advised and take the time to read this information. I'm going to spend a few minutes talking about Clear Blue, what our business is and what we're currently working on. Then Farrukh's going to go through our 2020 -- our Q2 results. And at the end of it, we'll talk about what we see coming up for the rest of 2024 and into 2025.

So Clear Blue is a really unique company. We do 2 or 3 things that anybody else in the industry, you would have to go and get three different companies to do. So the first thing is that we manufacture leading-edge power electronics. We make solar chargers and AC grid conversion to DC power and inverters, which invert it back from DC power to AC power, all of the different brains of an electronic of a power system, you need power electronics inside. The reason we do that is because in order to deliver smart power management and control and all of the benefits that you want to deliver to the customer.

For example, taking all of the Africa's 270,000 towers and getting them off of diesel and operating autonomously only on solar. To achieve that objective, you need to have edge computing and indeed you need to have certain parts of the power circuit with certain capabilities. So unlike other companies who make power electronics and then a separate company who's got a cloud computing software company and then a separate company that actually operates systems in the field, we are a combination of all 3 of those things. We manufacture leading-edge power electronics. We make our power systems smart by managing them through our smart power cloud service.

We use big data, predictive analytics to provide energy and uptime performance management so that we can deliver the lowest cost system with the highest uptime availability and the best performance in the marketplace. We make them fully remote control, don't have to send the guy out to the field to do anything. We've got unparalleled remote troubleshooting and remote remediation capabilities. And in order to deliver an operational value proposition to our customer, we actually get into the boat with them.

We manage and operate all of the systems in 55 countries around the world that we sell and deploy in partnership and on behalf of our customers. So that when we talk about how we can make it more reliable or we talk about how we can eliminate OpEx for diesel or we talk about how you can run it on less solar panels and less batteries than anybody else in the marketplace, we put our money where our mouth is, and we actually deliver that. Clear Blue has a broad product line that basically supports mission-critical technical infrastructure, telecommunications, smart city, Internet of Things, satellite WiFi systems, those are the technologies, the markets that we're going after because they're mission-critical.

They've got to run and they need reliable off-grid power or hybrid off-grid and grid diesel power. Every system we sell we manage from our Illumience core cloud technology. We have lots of patents and IP around that. And by doing that, we deliver the best operational and upfront CapEx value proposition of any company in the marketplace. So we're pretty proud of the customer base that we have and the markets that we're selling into, whether it's Northern Saskatchewan in Canada, or the middle of Tanzania or Nigeria in Africa.

We have customers who depend upon us to make sure that their systems deliver revenue, security and operational efficiency. With more than 400 customers, we've deployed more than 15,000 units. Our cloud platform, which I'm going to talk about a little bit later because everybody is all excited about AI, we are also. But we started that journey from day 1 of the company by gathering all of the data and maintaining it in a common area. And so we've processed more than 1 trillion cloud transactions and have more than 15 million days of operational data in our repository to allow us to perform better than anybody else.

Over the last 2 years, Clear Blue has fundamentally changed who we are as a company. Two years ago, we had our Nano-Grid product, and we had our Illumient streetlight product. We have expanded that portfolio, both upmarket into the Micro-Grid marketplace with the acquisition of eSite early last year. So we acquired that company with really great in-class hardware power electronics. We added the smart software at the local device in addition to what they already had.

And then we connected and integrated it with our cloud software to bring a full end-to-end solution to the marketplace that was delivered in Q1 of this year. And then at the low end of the marketplace, as you will know, all of our technology that we use has become digital, and it draws a very small amount of power. But even though it draws a very small amount of power, it's mission-critical. I need my WiFi up and running in order to do this earnings call, so I better make sure that I've got power connected to it.

So we've also taken all of the smarts that we would use for a large Nano-Grid or Micro-Grid system and put it in itty bitty system called the Pico-Grid, and that product is getting a fair amount of traction both in the smart city lighting industry. You can see our Senti Light which is the light version of our Pico-Grid product as well as for satellite, IoT and other things. So from 2022 to 2024, we went from being a 2-product company to a 4-product company. And when Farrukh talks to you about our revenue breakdown by product, you're going to start to see the impact that, that has had on the company.

So couple of things that are happening in the various different areas that we're working on. First of all, just to give people an understanding, if you look at Africa alone, which is our primary telecom market, although we are spending in other markets, in North America. We've got a lot of telecommunications activity going on as well as in Southeast Asia and other markets in South America, Latin America.

But in Africa alone by 2029, there's going to be 260,000 telecommunications towers. Almost all of them run on diesel only or diesel and the grid. And now it's important to understand that in emerging markets, they only have partial grid. In other words, only so many hours a day of grid. You don't have 24 hours a day of grid availability, especially in remote areas. And so they're hybrid. And a big problem started to occur in 2021, 2022, and that diesel costs went through the roof.

And now there is a big movement to convert those diesel systems to solar operations. So for example, IHS Towers, which is the largest tower operator in Africa, one of our most favorite, tough and demanding, but favorite customers that we operate more than 420 systems for them directly and indirectly a number of other systems. They announced in 2022, their carbon reduction road map, investing hundreds of millions of dollars to reduce their emissions. Why? Because these tower sites went from being cash flow positive and profitable to cash flow negative. So not just losing money, but the diesel run operations costs were costing them more than what their monthly run rate was going forward, just ignoring the upfront capital.

And so this is a big market opportunity for us. And in order to address it, you need Clear Blue's solar, smart capabilities and really fantastic power converter units that can operate in that range and that was eSite's technology, which is a Swedish company. The satellite marketplace is also growing significantly. I was at my cottage last week and a friend of mine said, "Hey, let's look up and see if we can see the Starlink satellites or some of the other satellites."

The small satellite market is expected to expand to $7.1 billion by next year, which is a 21% CAGR. And really, what's happening is bringing to commercial, industrial and also to residential customers, satellite services to run things like retail banking, ATM, infrastructure and construction, government, health care, community centers, education, energy and utilities and agriculture. And so this deployment of getting Internet access to power all these mission-critical devices is really a big focus in the satellite industry and what a number of satellite players have learned very quickly is that the power is too unreliable.

And when power is left to local operators, for example, in Kenya or Tanzania or Nigeria, to go and figure it out they end up with an unreliable service and all of a sudden, they don't get the revenue. So one of the biggest opportunities that we are working on this fall, we're hoping to have an announcement of a strong OEM partnership with one of the global leading satellite vendors. We're currently in the detail design, testing weekly project engineering, software development phase with them, all yet to be concluded, but underway, is for every one of those satellite systems that they're going to deploy to an ATM machine all across Africa, for construction, for agriculture, energy, schools, health care, banks, government offices.

But every one of those small satellite dishes would then also have a clear blue Pico-Grid system beside it to deliver strong, reliable power that's either solar only or grid solar in the case of partial grid areas. On the lighting side, those of you who've spent any time with me, you'll know that I'm a great lover of Geoffrey Moore, I believe very much in his Crossing the Chasm, early adopter and how do you get to the early majority where everybody makes a lot of money and there's a real benefit to the marketplace.

We've been in the lighting business for quite a while. And if I were to show you the projects that we were doing 5, 6 years ago, really beautiful parks and walkways, et cetera, et cetera. which is really still a very early adopter. It's a small percentage of all of the street lights in North America. But we've now hit grid parity. And that, together with how do I avoid my power lines causing forest fires, and we want to deal with climate change. But cost, cost, cost grid parity has us now doing roads and highways. So I think you've heard me talk about Interstate Highway 80 in Nevada.

This was our first interchange. We're doing our second project in Q3. It's a nice chunk of revenue. Allentown, Pennsylvania, you can't talk a little -- any better than the American Parkway in Allentown, Pennsylvania, which previously didn't have any lights and having to retrofit the construction impact, those types of projects are the ones where you start to get to scale. And what's most interesting from my perspective is when I look at the sales funnel that we have in the company, I'm starting to see Department of Transport state; number 1, Ministry of Transport Province; number two, I'm starting to see power utilities, hydro companies as customers who are now looking at deploying solar, off-grid and hybrid systems.

And so those discussions are really expanding. We're investing a lot in our sales activity there and seeing a lot of really great success. And I believe that when we look back 2 years from now, we're going to see that this was the inflection point where we started to hit the early majority where the volumes, the revenue and the profitability go up quite a bit. So we quite like our nice Illumient business.

Now that almost every CEO of a telecom tower operator, phone company, MNO, city department is being asked about what they're doing with artificial intelligence. Artificial intelligence, of course, is all based upon the data that's fed into it and the predictive analytics. And as you know, we've been on that road map since day 1 of the company. We continue to invest and our latest releases of the product as a result of strong funding from an R&D perspective that we've gotten from the Canadian government, in both loans that sits on our balance sheet, 10-year 0% interest loans, but they still sit on the balance sheet as well as government grants.

We're quite thrilled and honored for SDTC and IRAP support. We're using all of that to get smarter and smarter. And I think, of course, it's important to remember that no other vendor in the world can deliver what we're delivering because nobody else has the number of systems and the amount of data coming into the system. When I sit in front of a new customer in Canada, and he asks me how I make it through the winner in Southern Ontario, I'm able to pull up a City of Mississauga 6-year performance history where our uptime was actually 99.9875% uptime.

And with that data, we're able to know when you will have problems, when you won't, what it takes to manage through. And so we can deliver for the customer the uptime that they need. And in cases where it's like, you know what, if it goes off a little here and there, but you can manage through without killing the system, but I've got a really tight budget, the second part of it is Clear Blue has proven that we can deliver the same amount of power and uptime energy with 40% less solar panels and 40% less batteries. And it's only because of our smart technology that we're able to do that.

So power flow management, being able to diagnose and troubleshoot what's happening and how it's evolving and where things are going and what all are all these little blips, our technicians would use this to try to understand, hey, there's something wrong here. It's not performing the way it should be, how do I figure out what happened over time. And then when you're trying to do a global dashboard to see how things are working, where there's problems, how to manage them, all of those 15,000 devices are managed by our team of 5 people globally.

And as our volumes of units that we're supporting, especially when we start talking about the tens of thousands of Pico-Grids that we expect to ramp up over the next few years, being able to scale that without having to scale the team from a resource perspective is part of what our software is continuing to do. So we're pretty able to absorb more and more and more services, more and more recurring revenue without having to increase our cost base on the operations side. So we don't have -- we have some AI, a little bit of AI built into our product today. We have a lot under development. But in order to get to machine learning and AI, you have to start on the data side, the big data side, how do I get all these networks connected? How do I make them secure? How do I make sure they're not hacked, how do I compress the data.

And how do I manage the 30, 40, 50 terabytes of data that we already have in our system. How do I start to get analytics and how do I get smart about how I'm doing. We, in the last 2 years, started to get to a point where our operations center was like I got too much data, I'm being overwhelmed. How do you make it smarter, so I know exactly where I do and don't, how do you automate different services. This is the value that we're bringing with our analytics and predictive analytics and we're overlaying on top the machine learning and AI aspect.

One of the things that I'm really excited about, I'm leaving on Tuesday for 5 weeks in Africa and in Europe, and have been asked, Clear Blue has been asked to lead the AI predictive analytics panel at a leading conference. We'll be announcing more details about that next week. But to have us be invited to sit at the table and talk about what we're doing with the largest leading players in the marketplace is an honor and a thrill and it's really just a reflection.

I had a customer say to me last week, off the record, of course. I think if I ask him for a quote, he probably wouldn't give it to me. But just anecdotally, we were asking him for a new project, and he said, we'd be happy to work on developing that project plan because Clear Blue provides the best service of any company we have as our vendor and you have the best network management software in the world. That was just a great thing off-the-cuff to be told and to motivate the team.

So now I'm going to turn it over to Farrukh, who's going to talk about our Q2 results. Farrukh, are you there?

[Farrukh Anwar, executive]

Yes, I am. Thank you, Miriam. Welcome, everyone. So let's start with our Q2 revenues. So revenue for our Q2 2024 were $1.01 million, which yielded the trailing 4 quarter result of $6.2 million which is a very strong trailing 4 quarter increase of around 278%. Q2's revenue were the strongest since 2021. You can see on the graph on the top, our revenues in Q2 were significantly high compared to in the past. The comparative TFQ was negatively impacted by the economic downturn triggered by the macroeconomic events of 2022. The current TFQ has showed a return of strong revenues, margins and growth.

Next up, Miriam. Okay. So if we dive down further into our segments, so the 2024 vertical results really began to show the impact of Clear Blue's new expanded full product offering. The lighting vertical is seeing strong growth as a result of our new CAMMI and Senti product offerings, together with 2 products, significantly increased performance at a much lower price point, making solar off-grid lighting very cost competitive with traditional grid connect lighting. On the telecom vertical, the integration of the eSite hardware product, together with the Clear Blue's smart power management platform is yielding strong sales growth. This, together with the recovery from the 2022 downturn is what underlines the 278% TFQ top line increase in our revenue. Next up, Miriam, please.

Okay. So now when we look at our revenue by product, so we're looking at our 4 products. One can see growth across the entire portfolio. We saw 48% increase in Illumient solar lighting revenue due to the increased market adoption, better price performance and solar grid parity in Canada and the U.S. Nano-Grid revenues were up by 208%, it is experiencing growth as a number of key long-term Clear Blue partners ramped up their expansion and growth of systems. Also new customers who previously only knew about eSite are now choosing Nano-Grid for certain applications. eSite now integrated fully with our smart power management platform is now gaining strong traction in the market.

And we also see further cross sales in many Clear Blue Nano-Grid customers who are choosing eSite for larger systems and retrofit projects. And for Pico-Senti while still small revenues, it's the beginning of its adoption curve. So we can see that the adoption curve across solar lighting, IoT and satellite telecom markets, it's on the increase. If we talk about Illumience and EaaS recurring revenues, so first, we have to see what our recurring revenue is. Our recurring revenue is the revenue that the company earns from its Energy-as-a-Service and Illumience ongoing management services and cloud software. Every single system, a Clear Blue has ever sold includes an ongoing service component. Clear Blue manages and operates the power systems on an ongoing basis and provide support to our customers. This is at the heart of our business and value proposition.

As telecom customers increase wireless telecommunication bandwidth to support their ever growing customer base, so too do our power needs of those sites. This ongoing growth of telecom systems and ongoing operations and maintenance of the power needs to keep the systems functioning is what drives the growth of our recurring revenue. As you can see, adoption of our telecom customer rollouts over the years is having a nice impact upon the growth of our recurring revenue.

Trailing fourth quarter revenue was $779,000, a 21% increase from $646,000 in the corresponding previous period. We are seeing strong growth in the telecom site power consumption for our customers in Africa. For example, for one of our customers in Cameroon, we have seen a 43% growth in power consumption of those sites. This strong -- this drives strong revenue growth for our customers and also system expansion and upgrades for our power systems for Clear Blue. The recurring revenue comprised of $169,000 of quarter's revenue compared to $139,000 in Q2 2023, which is a 22% increase.

Miriam, do you want to talk about bookings further?

[Miriam Tuerk, executive]

Yes, as soon as the computer shows me the new pattern. So building ongoing recurring revenue is something that is a big focus of the company. It delivers a strong relationship with the customer. It allows us to develop the IP and the expertise that we have, both in our software, in our operations team and also in our power electronics hardware. So every single system we sell includes an upfront onetime component as well as an ongoing 3-year contract from a managed service perspective. It's important to understand, as an example, that, that then results in a larger amount of cash in and the upfront sale than what we would revenue recognize as revenue.

So as an example here, you can see that our total bookings at the end of June was $3.2 million, we'll receive $3.2 million of cash imminently as those orders ship. But the revenue will show on our P&L for the first 12 months will only be $2.7 million, so about $500,000 of extra revenue -- of extra cash there. And that's the year 2 and beyond services. So Bookings consist of 2 things: one, the ongoing recurring revenue, which is growing nicely as we deploy more and more systems as well as the upfront orders that we are expecting to imminently ship.

For Q2, as of June 30, that had increased 30% from the end of December. One thing I will comment, and I haven't figured out how to do this. If we get an order in the quarter, and then we ship it in the quarter, it doesn't show up in the quarter end bookings number from an order perspective because it's already done. So ins and outs and our ability to deliver quickly will not show necessarily what the -- in the bookings number. I know, for example, in Q3, I've got a lot of orders that are coming in and also going to ship in September. And so that won't show up in the Q3 numbers. We'll have to figure out a way to better share that with the marketplace in the future.

I'm going to give it back to Farrukh now.

[Farrukh Anwar, executive]

Thank you so much, Miriam. So let's talk about gross profit. So if you look at the graph on the right, we can see that the company has been able to grow its margin over the years. And now it's maintaining margins of around 40% range. With higher inflation and increase in commodity prices, there has been a pressure on the company's margin. However in most cases, the company has managed to either innovate lower costs elsewhere or to pass the portion of these increased cost of materials to its customers. which is made possible due to our value proposition, our software and service.

Gross margin in Q2 2024 was 24% of sales, down from gross margin of 41% in Q2 2023. This is largely as a result of an unexpected onetime solar panel anti-dumping charge that was charged on us of around $93,643, which the company has appealed and believes that will be rescinded. Excluding this onetime anti-dumping duty, the adjusted gross margin for the quarter was 33%, which is according to our expectations, as we've indicated in the past that our expectation is in the mid-30s and it's pretty consistent with our expectation. Miriam, next step, please?

So if you talk about the operating expenses, we've done a lot of work on our operating expenses. In this environment of high inflation and resulting higher costs, company's management is focused on reducing operating expenses where possible. When compared to the prior periods, operating expenses are pretty much consistent despite the increase in revenue. So if we keep -- in view of the increase in revenue, we can still see that for the 3 months ended June 30, 2024, the overall margin -- overall operating expenses has only increased by 5% compared to the same period of 2023.

And for the trailing 4 quarters ended June 30, 2024, the operating expense increased by 5% compared to the same period in 2023. If you look at the 6 months, which we show in our financial statements, operating expenses increased by -- decreased actually by 1% compared to the same period in 2023.

Miriam, next slide, please. So with the increase in revenue and consistent costs, we can see that our EBITDA has increased by 54% from a negative [ $1.622 ] million to a negative $750,583. So it's still a bit negative compared to where we want to be, but still, it's a great improvement of 54% compared to the -- comparative Q3 -- Q2 of 2023. Improvement is mainly due to higher revenues. And as a result, as Clear Blue's revenue is expected to grow nicely over the remaining year, we expect our non-IFRS adjusted EBITDA to continue to improve. Miriam?

[Miriam Tuerk, executive]

Thanks, Farrukh. I know one of the questions was about when Clear Blue will hit positive EBITDA. And I've been working on getting to that point for quite a while. Had not anticipated the things that we can't even make up, all the things that have happened to us in the world over the last few years.

But even during the downturn, we've been very focused on getting to that point. If you just look at -- I think let me go back. If you just look at these numbers, what you can see is that a $6 million revenue, our EBITDA has dropped quite nicely. And by the time we get to about $10 million to $12 million in revenue, which is in our sights. That's $2.5 million to $3 million revenue per quarter, we start to show positive EBITDA. One thing I would like to comment to everyone is that in 2023, about 80% of our revenue was in Q3, Q4.

And I believe we're going to have about the same thing this year. So with that in mind, we should be reporting the next 2 quarters with a really good EBITDA number as long as those numbers repeat, which is the plan that we currently have in place from a management perspective. So on the outlook, so the short answer is management's best guess is that within the next 12 months, we will be EBITDA positive. But doing everything we can to make sure we have that happen and continuing to approve along that trajectory, if it takes extra 1 or 2 quarters, I think that would be the range.

So let me just revise that. Within the next 12 to 18 months, management believes we will be positive EBITDA, certainly by the end of 2025. And because we're now a 4-product company, that growth trajectory is a diversified base of revenue, diversified markets, interest rates are coming down, people are investing more, and we've really been ruthlessly focused on making sure that we keep our margins up. We continue to expect that they'll be in the high -- mid- to high 30s as the product mix evolves with newer products versus the older products that have a higher gross margin, we feel confident that we're going to get there.

One of the things you will see in the press release and in the MD&A is that the founders and the management team of the company in the last 18 months has put CAD 2.5 million into the company. During the market downturn, we've had support from investors, but we've had to double down and kind of get in the boat ourselves to the best of our ability. And that just tells you how committed and how serious we are about getting to positive EBITDA and positive cash flow. So where are we going? What is the outlook? Well, Q2 is very busy. We've got a fair number of deals closing in the near term to give us a strong half 2. We've got them all specified contracts, draft contracts, final purchase orders, deposits in place. And so we do see that half 2 of this year, Q3, Q4 is going to be the majority of this year's revenue.

Production execution, we had our Board meeting yesterday, and one of the questions coming up is, can you execute on all the shipments you have scheduled for Q2. As an example, we've got 7 to 10 lighting projects for North America, Illumient and Senti shipping. They tend to be in the $100,000 to $400,000 apiece. We've got 2 to 6 eSite orders that are closing for Q4 -- Q3 and Q4 2024.

And, of course, that's a new production ramp-up that we have from our product with new software. So we've got our eye on the ball. Our Nano-Grid product is doing very well, and we do anticipate because a number of customers and partners of ours have closed their funding and are moving forward with deployments. So that's a key focus. Sales, production execution, we have 2 strategic partnerships under development, which we hope to announce in Q4. They are both sales and distribution and both by Tier 1 leading global companies.

One is in the telecom space and one is in the lighting space and those 2 partnerships together bodes very well for large jumps in revenue growth and sales distribution for next year. So we're building well to make sure we finish well for the end of this year, but also to try and make sure that we start strong for 2025. And lastly, as I've already mentioned, there are new entrants in the marketplace who are trying to go after the artificial intelligence and providing all of that thinking and thought process and software and capability.

It's a topic of discussion with every customer that I talk to with every CEO. And we are garnering strong interest in those discussions and those joint development and integration of our product with other telecommunications products as an example, to deliver really smart systems and so that's a key focus of the company over the next 6 months as well. That's about everything that I have other than any questions. Nikhil, have we got a list of questions that we've got brought in. And if we don't certainly you always challenge me with good questions that the market should think about. So please feel free to throw your own zingers at me.

[Nikhil Thadani]

There's a few questions that came in. I think the first one was asking about EBITDA that you've alluded to in your previous statement pretty well. There's a few more that have come in. So let me just start taking them from the top. The first question is asking about the stock price and the value of the company. Why doesn't the stock price reflect the true value of the company, what you tell investors?

[Miriam Tuerk, executive]

So I had one of our advisers in Europe, say to me that the small cap market is in a nuclear winter. I would advise all investors to be like Warren Buffett and buy during the downturn. I honestly 100% believe that the only reason that the stock is down is because the sector is down. We kept our heads down. We've made lemonade out of lemons. We've gone from 2 to 4 products. Management is all in and committed. We've got revenues and margin and growth in references.

The stock will follow, the stock will follow. I don't believe that there is any reason to believe anything else. And I don't look at it every day because it's -- when it went up like crazy, it doesn't mean we've doubled our value. We have to build the business momentum by momentum, brick by brick, and that's what we're doing. And at some point, the downward pressure will come off and the stock will pop. For now it's a great opportunity to buy stock in the company.

[Nikhil Thadani]

The next question is asking about revenue. Do you believe Clear Blue will hit CAD 8 million in revenue in 2024?

[Miriam Tuerk, executive]

Maybe. I don't think it's necessarily 100%. I think the -- I have low to high range of the mark of the range of the focus that we're working on. And the low number is below that, not a lot below that, but it is below that. I think the one thing that has been a big issue and I don't think anyone understands how difficult it has been. In January of this year, we expected payments from a couple of customers who had deliveries on the East Coast of Africa, and our SDTC grant money that we have a 3-year.

If I think it was a 4-year, $5 million grant, $1.54 million this year, which is a big chunk of our operating expense. We expected that money in January. We got the SDTC money in May. And we got the payment from the payments that were large amounts. I think it was almost $1 million at the end of July. The amount of time and energy this company had to invest in order to make it through that period, management put in money. We didn't take paychecks. We're working with all of our suppliers, calling people, working with some of our investors who had convertible debenture interest due, and we didn't pay it on time.

But we've now gotten ourselves caught up, and we're continuing to get caught up. But that took a lot of time and energy, and that has impacted us. So we're a couple of million short from where I would have like to be. I wanted us to be over $10 million this year. Right now, I'm guiding below $8 million, but close to $8 million. And -- but it's possible. We have a number of large deals and it's possible. But our revenue last year was $5.4 million. We're going to arrive on a very strong growth number over that. And if you just continue that trajectory, we cross over the $10 million mark next year with positive EBITDA, and that's a game changer for all of us.

[Nikhil Thadani]

There is another question that's come in about NuRAN in Africa. NuRAN has recently started receiving funding. Have you started seeing orders from NuRAN restarting in Africa as a result of this funding?

[Miriam Tuerk, executive]

So I have a great belief and support in NuRAN. We have received payments for orders and some orders that are in process for them. We have not yet received the new orders that are expected to be shipping in September, October, but they're imminent on a daily basis.

One of the reasons that, that has not yet arrived is that the exact configs are not yet -- I got to correct that, sorry. We have received a purchase order from NuRAN. We've received payments from NuRAN, but we don't have the final release for the next phase of shipments because they have an increase in the size of the systems, more larger size systems because they're getting larger revenue from those sites. And as a result of that, they haven't finalized the exact configs.

But I'm expecting that actually this week in my conversations with Francis and Jim. And we do anticipate very strong shipments in the fall. So when I talked about a number of our long-term partners who have received their financing and who are moving forward and we expect to ship large orders this fall. We have 3 that are moving forward, NuRAN is one of them.

[Nikhil Thadani]

The next question is asking about the balance sheet. How is the company doing cash wise? Will you need to raise new funds or do you have enough cash for the next 12 months?

[Miriam Tuerk, executive]

So when you look at the balance sheet and you look at the debt, it's not the best picture. Part of the reason for that is that a lot of the Canadian government funding now for R&D development is now done as loans, not as grants. So the older programs like IRAP and SDTC that were established many years ago, they do grants, but they don't get more money every year. But for example, the new AI program that they've announced of large funding that's all going to be done as loans.

So we have on our balance sheet, a fairly big chunk of the debt that is there is #1 government 0% interest-free 10-year loans. There's a $4 million loan there. Number two, given that the markets have not been friendly over the last few years, and everybody who's in the microcap market knows, it's been a long time since the market has been strong. Customers, our shareholders have preferred to do convertible debentures, loans that converted to a higher price. And so we haven't done an equity raise that's pure shares since I believe 2020.

And as a result, most of the equity raises we've done have been as convertible debentures. But that's pseudo-equity where people are working with us, they're helping us to do converts and renewing them going forward. We're very happy to pay them interest and then when the share price rebounds, they'll have the convert. I think a lot of them are at $0.10 a share now, which I think is a fairly reasonable number. In terms of cash, cash is very tight. We spend all of our time managing -- not all of our time but first 30 minutes of the Board meeting talking about cash.

We've made it through and that's the best reference I can give you for our intention to move -- to continue to make it through. Management and the founders and our families have supported the company and put it in money when we needed to. That's one of the reasons why we were able to manage through without the SDTC and Red Sea delayed payments in the first half of this year.

So cash is tight. When the market is receptive, we will likely try to convert some of that convertible debentures and other shares and warrants into equity. But if the market isn't responsive at this point, we know that will come in the future, and we will work on finding other ways to develop funding. As an example, in July, we had some investors who had done a previous debenture that had expired. They renewed in a new debenture.

Then we had the federal government give us a 10-year loan for $500,000. And we went to BDC, and they deferred a lot of principal payments to the tune of $350,000 of impact on cash flow over the next 12 months. So it'd be a lot easier to go to the market and just say, let's do a $3 million raise. Instead of that, it was 20 pieces of paper, but we're doing what we need to do and everyone from our suppliers to our investors, to our employees to our customers is helping us with that and because they see the value in the company. So I focus on it so that I don't have to worry about it.

[Nikhil Thadani]

Thank you, Miriam. I don't see any more questions in the queue. I'll hand it back to you for any closing remarks you may have.

[Miriam Tuerk, executive]

Okay. So closing remarks, I leave next week for 5 weeks of customer meetings and investor meetings. I'll be back in October. Happy to talk to any investors who'd like to meet or talk. We continue to support the business ourselves, and so we think you should support the business as well, support us when -- by investing and buying the shares in the marketplace. It's a great opportunity.

And I think that I know that there's a lot of people saying, when will there be news. We do have a number of trade shows and customer events happening. So you will see news over the next few weeks and throughout the fall. That's the last that I have to say. Please don't hesitate to reach out to me anytime or through Nick. And Farrukh is also always available to chat with investors. We greatly appreciate your support and your time. Have a great Labor Day weekend.