Clear Blue Technologies International Inc

XTSX:CBLU

Earnings Call Transcript 2022-Q4

[Miriam Tuerk, executive]

So I guess I'll kick it off. Good morning. My name is Miriam Turk. I'm Co-Founder and CEO... This meeting is being recorded. Just to let everyone know we will be recording this presentation webinar and not loading it on to our website and distributing it to interested investors. So it will be recorded. I'm joined this morning by Farrukh Anwar, our CFO; as well as Ryan Fremantle, our wonderful IR team member from Sofit Capital. This morning, we're going to go through an overview of the company from a go-forward perspective as well as our fiscal 2022 results. Soon as I get the computer page, I will. Here we go. As always, as a publicly traded company, please read the forward-looking statements that gives cautionary advice on we're giving the best knowledge that we can, but things can happen as we all know, and you should take that under consideration when making any investment decisions. So what we're going to do is give you an update on the company, its products, what we're seeing in the marketplace, and there's been quite a bit of change. So I think it will be an interesting conversation for you this morning. We're then going to be going over the fiscal 2022 results. And after that, we'll talk about the outlook for 2023, which at this point in time, we are faces optimistic that things are in good stead for a good year in 2023.So let's start, first of all, with 2022, and there is really no other word than abysmal when you look at the revenue results for the year. They were contrary to not only our 2021 results, but our 2020 results, our 2019 results and our 2018 results. And so it is in management's opinion, an anomaly that is not something that is typical for the company. It is such a big delta compared to even 4 years of previous history. And we've spent a lot of time analyzing and thinking about what that could cause could have been. And really, the macroeconomic challenges were the key driver of what happened in 2022.As a result of that, we had other challenges as a company. We had working capital challenges, as you can imagine. We are a company that believes because of our R&D technology. We are leaders in innovation in power and what we do, and that requires R&D investment. And so when the revenue dropped, we needed to figure that out. And I think we took some good actions to do that. And then it wasn't just us that went through hell back last year. A lot of our customers -- most of our customers had significant impacts as well. They hang-up their capital investments projects had to be reallocated. And that, of course, they would reach out to us for help and assistance on all of those things. So all in all, it has been a tough year. But as we all know, many companies do well when they work through the tough periods. That is when real value and real gems come through. And our job as a company has been to make sure that we take advantage of both the positive and the negative. And so we worked very hard last year to put in place the things we needed to have to make it a launch pad for large and resilient future growth. Albert Einstein in the middle of every difficulty lies opportunity, and that is clearly what we did. So let's talk about what that looks like. And so I think the key thing that everyone needs to understand is that we are today a very different company than we were 15 months ago. On the one hand, we've raised more than $10 million of non-dilutive capital. And of that $6 million is pure R&D grants. That is funding that doesn't come in as a onetime lump sum. It comes in on a monthly and quarterly basis and provides us capital to continue to invest in R&D and maintain our market leadership over the next 3 years. We acquired e-Power Systems. We signed the deal in December and closed it in January, and that's a real game changer for us. I'm going to spend a bit of time talking about eSite Power Systems, but it is a huge -- has a huge change in terms of our product line as well as how we are perceived and positioned within the marketplace as a company.We have broadened our product offering quite significantly. January 1, 2022, we basically had 2 products. We had our Nano-Grid product for telecom, and we had our Illumient Streetlight product. As of today, and July 1, we start -- we've been -- we started shipping 2 of the products commercially, we are a 5 product company. And so that's a big change in the products we have, which expands our addressable market and extreme our use cases and our opportunity for revenue growth. Because of the eSite Power acquisition, we've expanded our customer base and we added 35 large strategic new telecom customers as a result of that acquisition in 25 countries. And these are our key companies. We're talking about American Tower, Airtel, MTN, Vodacom, Safaricom, Avance. And although IHS Towers is a great customer of Clear Blues, they are also a good customer for eSite Power for the larger systems and retrofits, and that's a strategic value to us going forward. And then I think the last thing I'd like to say is that as a result of all of the above, we're really moving into the core network and core infrastructure. So on the core network side, larger power, AC-driven power, hybrid systems and getting -- working with customers to add solar and get off of diesel from a retrofit perspective, is now a big part of our conversation. And I think when I say that the acquisition of eSight really changes how the market use Clear Blue. It's clear to the marketplace now that we are a leading sophisticated player in telecom power. Prior to eSite we were in that business, we were in that market, but with new and innovative technology and applications and not really part of the core. Now we are part of the core. And I've seen in a lot of meetings I've had with customers, there's a bit of a different view, a different conversation happening and renewed interest in our other products. So if we have eSite and we're doing it in the core, then that same underlying technology is in Nano-Grid, so it's telecom-grade equipment. On the Illumient business, and you're going to see us start to talk a lot more about Illumient and our North American business than we have in the past. And the reason for that is there's been a market change in the sales, in orders, in demand and in the market. This is highly generated by the Clean Air and infrastructure acts in the U.S. and the budgets in Canada that have been announced. And I think the key thing is that the market seems to have been ready. So there's been other incentives in the past, but now we're seeing a major infrastructure projects as a result. And so to be able to talk about the fact that for O'Hare Airport in Chicago, we're part of an airport runway extension project. And in the American Midwest, we're doing an interstate highway interchange. These are different projects than what we have traditionally done, and they're larger, they're more mission-critical infrastructure. They're bigger spending and our expanded product base is helping us to win those businesses. So when we look at our product line, you will see that it has expanded significantly. First of all, through the acquisition of ESI Power Systems, a Swedish company, we have now taken that technology, and we are blending it with clear blues IP from Illumient's cloud management service perspective. Our business model, our unique IP is being added to that product. And so we now call it eSite Micro. And as you can see, that expands our use cases from the Nano-Grid business, which really took you up to about 3 kilowatts up to well over 30 kilowatts of power from an eSite micro perspective. So whereas no projects or revenue for those types of systems were in our numbers for 2022, even starting in Q1, we have revenue for eSite Micro in our results. Additionally, you know that we've announced the Pico Grid product.It's been a big focus of our R&D investment as a company, and it starts to ship commercially in Q2. So you start to see the impact of Pico-Grid revenue and volume sales in our numbers in the back half of this year. I will caution everyone, it will be small numbers this year, but we expect the volume to scale quite significantly. And our plan and our hope is that it will have a material line item in our revenue for 2024. On the Illumient side, we've also worked on new product introduction. And our traditional product prior to January 1 of last year was our Strata series. We launched the Camy series, which is really a lithium version of our Strata series. I think in Q2 of last year, and one of our large booking orders for that Interstate highway is the Camy product. So we started to see results already in the orders. As you would know, there's easily a 9- to 12-month lead time on order. So we launched in Q2 at an order already in hand in Q1 of this year. And we are launching our new SENTI product, which I'll speak more about in a minute. And I just want to make a comment that SENTI builds off of Pico-Grid. So it's the same power, smart power electronics inside, but 2 different versions of product from a go-to-market perspective. And so when you look at the 2 product lines, you can see that we've added eSite micro. We've added Pico-Grid. We added Camy last year, and we are now -- and so the portfolio of products the company has is quite expanded. Let me just spend a few minutes on Pico-Grid and on SENTI -- and it's really a definition and an example of the innovation Clear Blue brings to the marketplace.So when you're looking at Internet of Things devices, a lot of those systems are very small power devices. We're talking about security cameras that drop 3 watts. But they're still very mission-critical. And the market needed a very small and low cost simple system in order to provide reliable power. And so our Pico-Grid product is an all-in-one product. It's got energy storage inside of it as well as the power electronics. So instead of someone having to go out and buy the batteries and buy a charger and then buy some DC/DC conversion and have 5 or 6 little pieces put together and have quite a bit of a mass. We have designed and built a single all-in-one simple system, very low cost, very targeted for a specific use case, quite a lot of sophistication in terms of the control and management of the loads, which is very much needed for this use case. As well as an ability to support a myriad of different devices from a power perspective. And so you have a company that's got 5 or 6 little things that they have to put together, and it might cost about $2,000 to get rid of all of that. And in 1 12-inch box, you get Pico-Grid and it's replacing that. On the SENTI side, if you drive a rent, you have probably seen a fair number of all-in-one solar street lights. And basically, what they are, it's a light on the bottom and a solar panel on the top clock together, so it's kind of an all in one. There were a lot of challenges, unless you're right underneath the equator, those all in one street lights were sub performance for a number of reasons. And so one of the reasons Clear Blue had not come out with an all-in-one solar street was because the technology performance was not there. They were basically garden lights, and you've heard you talk a lot about garden likes. We don't do garden lights. We came to a point where because of the performance of Pico-Grid. Pico-Grid is inside of SENTI because of the performance of Pico-Grid, because of the advancements in LED lighting, and we now have our own LED light engineer on board and because of the innovative patent around this turret, we now have an ability to deliver an all-in-one streetlight that it is probably 3 to 4x the performance of other products in the marketplace. And it will work in Toronto, and it will work in South America. It doesn't just have to be under the equator. So it can be slanted to face the sun. You can put the light any direction you want. You don't have to try to line it up. And it sells for manufacturers suggest real to price around USD 1,200. And there's no wiring no separate batteries. Again, everything is built inside. So these products began shipping in late Q2, and we do expect both of them, our plan and our target is that these will scale to thousands and thousands of systems that will ship. Now I want to talk a little bit about eSite. So as you know, eSite is a Swedish company, and I'm very proud to talk about Swedish hardware engineering and quality and software that's sitting on that hardware. It is a strong industry brand recognition and a strong respect in the industry that they've been around since, I think, 2008 with their products in the marketplace, a marquee customer list of customers that they have. And it's interesting to understand that it's quite unique if you are a power person, you're not used to seeing this outside compartment. And the reason it is there is that it is specifically engineered for harsh non-air-conditioned environments. So if you are a telecom company and you are spending thousands of dollars a month on diesel gas because the grid is not there or not reliable. Getting off of diesel and reducing that is both a green initiative as well as a huge cost problem. In the last year, in Nigeria, for example, people will talk about the cost of diesel going from 200 to 670. So we're talking about over 3x the price increase. The only way to get off of diesel and go green is to be non-air conditioned to have passive cooling. And the only way to do that is what eSite micro has. So there was a very specific reason why we were interested in the company and their technology and engineering of what they have built in this product is leading in the industry just from a hardware perspective. When you take that and you merge it with our smart power management platform, which we've are adding and integrating with eSite, every eSite system we sell and ship today, shifts with our recurring revenue Illuminient's management platform and our service solution. That implementation integration is ongoing. But every customer from day 1 that we closed the business has asked for that. And we have an imminent order that we're hoping to get in short order where the customer is buying some new eSite systems. We've now included our Illumient and they've come to us and said, "Can we take all of our 100 systems we previously purchased from eSite and add the aluminum's platform and service to that." We've also added the fact that we are now selling full system solutions to the marketplace. So we don't just sell the power electronics. We engineer the energy and the power of the system for our customers, and we provide an industry-leading service model. So customers don't just get the hardware and then they have to figure it out. They get our ongoing support and there is strong demand and acceptance for that. So when you put two things together, when I sit down and I have a conversation with the senior executive of large telcos and tower [indiscernible], really where we are is we're on the road to 0 diesel. And customers are thinks, well, how can you go to 0 diesel. We're never going to get rid of all of the diesel generators. These are small footprint, existing sites, there's shading of the tower on solar panels. And it's a very interesting story. So let me just go back to what our core technology is and what it is that we do. So Clear Blue's core technology is our smart offering management capability. That is embedded in our hardware out in the field. So Clear Blue's Nano-Grid, Pico-Grid, Illumient, SENTI all has smart power electronics with edge computing in it. And the wonderful thing about East Sight is their hardware has that edge computing capacity as well. And so the ability to add Illumient into the eSight system is a perfect synergistic opportunity. Every single system in the field communicates wirelessly with our platform. And through our cloud platform, we deliver unparalleled maximum uptime, long system life and we handle all the installation maintenance nightmares, and they are quite challenging in the field. How do we do that? Well, we do energy forecasting and management. So we have the weather. We look at the energy profile of the site. We look at what's happening to the site. We get warning -- early warning indicators and predictors to help us manage the energy of the site and keep it up even through extreme situations or maintenance events. One of the things that a lot of people don't realize is that when a site goes down and there's a problem, it can take days to repair a maintenance situation. And we have a unique ability to deliver service through a maintenance event unlike any other company in the marketplace. We also have a fantastic troubleshooting and remediation tools, the ability to look for problems that are coming or starting to have an issue long before the site has to go into emergency mode and the [indiscernible] have to get out there and make sure everything is working perfectly in an emergency way. So customers benefit from our intelligent management. We managed through the rated period. We managed through storms. We managed through degraded sites, someone broke a solar panel or something wasn't connected properly. And we also deliver to our customers more energy than they are actually have acquired or paid for. So we have one customer, as an example, who is consuming 50% more power than the site was actually engineered for. And most of the time, that's okay, and that's as a result of our energy and weather forecasting. So we're able to over exceed our performance capacity for a very big chunk of the year even though the site was not engineered for it. Battery life cycle management, energy storage, how much you have, how much you have on an ongoing basis, how you charge and discharge those batteries and make sure that they're healthy is the key to every business case and business model. There are really two big issues when you're looking at deploying power infrastructure. One is, what is the upfront CapEx? And we have a better capability to deliver 40% lower upfront CapEx than anybody else in the marketplace. But also making sure that the batteries in the energy system will last a long time these last 5 years, these last 10 years and how to make sure that happens. So I was listening to CNBC last night, and they were talking about the Pixie Dust of the word AI. And different companies are using more AI and so people are getting a stock tick forward or not. So I'm a little bit cautious but I was talking about this. And so it's a big word. And I want to be very clear, Clear Blue does not today have any AI. But if you look at this Gartner graph, when you are on the move towards artificial intelligence and that, you start down a path where, first, you've got to have the data. You got to know what happens and how things happen and you have to have descriptive analytics. You have lots of data. We are the only company that has thousands of systems in tens -- and tens of countries that are sending data to an integrated cloud and data platform in the marketplace. There is no other company in the world that is doing that for power systems for telecom and smart city and hybrid offered systems. We have already done the data and the big data. Analytics is something we've been doing for many years. And over the last few years, we've been moving into predictive analytics. So we can now predict certain issues and problems and see when they're going to get a problem in the future.The next step on that path is to start to automate at scale and then they use that data to teach the system to get the machine to learn to then start to have their own insights. And Clear Blues $5 million grant from SPTC the Canadian government that we won and started drawing money down in December of last year is about our plan to add a checkmark to the fifth item here. And it's going to take us a few years to do that, but we are already very far down the path. And other companies, unless you're a Microsoft or a Google where you have all that data, but if you're a power infrastructure company in our market, you got to start at the beginning. You got to start with data, then you got to get to big data, then you got to go to analytics, predictive analytics. So we're on a journey. We don't do AI technically, but we've got a lot of the building blocks, and we're going there.So what does that look like for our customers? The conversation we're having with our customer is that what we're doing with R&D, and we're not there today, and we can't guarantee everything, but here's where we're going and what we're trying to do. First of all, we want to lower your CapEx. That we've proven into the marketplace. And it's been independently validated by Meta, Facebook and Telefonica telco in South America, who did a field study in 2021, produced their own independent report. Yes, Clear Blue smart off-grade power requires 40% lower upfront CapEx than other customer -- but other competitive systems. So with checkmark on that one. The next step is how do we get to 0 diesel? How do we eliminate massive quantities of diesel? And we're not going to do it on every site. Yes, we'll add solar and every site will require less diesel. But if we can get to a point where using predictive analytics and machine learning and optimization, we can increase the performance of solar. We can optimize for shading. We can use machine learning dynamics to say, "Hey, this grid over here with this power consumption of that site in this location in that solar, you know what, 20% to 50% of your sites, you can actually turn the diesel generator off." Reducing maintenance windows by 50%, knowing ahead of time when there's a problem, improving uptime availability. And at the end of the day, what we want to do is we want to walk into a Towercos and say our technology adds 5% to 10% margin to the bottom line. You take our acquisition of eSite to take us into that retrofit business where all of a sudden, diesel is a blend. Remember that where Blue's technology did not support a hybrid diesel site. With the addition of e Site, we now have a much stronger AC support for hybrid diesel systems. And you put all of that together, and we are at a point where we have momentum to move forward and deliver for our customers some significant value with a wide range of products in the marketplace. So hopefully, that was informative. If you have any questions, please don't hesitate to reach out. I could dive in for hours on it, but I wanted to kind of give you a high-level overview of that. Now we're going to go into our 2022 results. So there's only one word for it. I'm going to be very blunt. Our 2022 revenue top line result was abysmal. It was way lower than we could ever have anticipated. And we hit the year quite strong. We expected that our trend in growth would continue from our previous years. We had orders and customers and bookings and everything and momentum to move forward. And then the war and the interest rates and China still being closed and still shortages on parts. People remember now there's no shortages in parts now less than there was, but it definitely impacted. And so at the end of the day, really starting in Q2, project cancellation, project deferral, project delay. And when CapEx spending gets delayed, our projects are part of that and that things got kicked forward. So our results for the year were impacted. We were down 68% from the previous year. And our Q4 was particularly low. I will say, and if I could have had Tom, I would have done it, we did have to reverse out 2 transactions of 2 customers who are very good relationship of ours because they didn't get their financing and things we're unable to move forward. It was originally thought they would move forward pretty well. But by the time we got into early Q1 of this year, they had to be reversed out. So that's why December is so low. At this point, I'm going to turn it over to Farrukh to give you some updates on our financials in detail. Farrukh do you want to take it from here?

[Farrukh Anwar, executive]

Yes, for sure. Thank you so much, Mariam. Hello, everyone. So as [indiscernible] pointed out, our overall revenue has been down compared to prior year. However, we see some interesting trends shaping up. Clear Blues lighting vertical is made up of onetime revenue and Energy as a Service deferred revenue. As the company continues to grow its Energy as a Service offerings, we have seen a gradual decrease in onetime lighting revenue and corresponding increase in the Energy as a Service recovering revenue. The 37% decrease in lighting revenue is impacted by the same shift with the revenues to be generated over the next 3 years. Decrease in U.S. revenues is also likely impacted by the companies. It's basically likely impacted by the shift and also by project delays waiting on infrastructure and cleaner ads, which are now in place, resulting in a big change in future outlook for our lighting business. On the telecom side, our business has been growing consistently over the past few years. However, for the first time, we can see that there's a decline in this vertical during the current year. As Mariam pointed out, and rightfully so, the decrease is mainly attributable to the global supply chain issues, which we can see that's affecting our -- that's affecting the telecom rollout of different customers of ours, and that and projects have been delayed to 2023, resulting in a decrease in revenue for the quarter and trailing for a quarter of 2022. Customers also delayed their CapEx expenditure in 2022, which caused project deferrals. So we can see a decrease in our EMEA Middle East and Africa segment, which can be mainly attributed to this. However, we still continue to have a good relationship with these customers and are working with them to accommodate them to -- so that we can work on their device rollout schedule with them. Next slide, Mariam. Okay. So as we said in the previous slides, in our recurring revenue is the revenue that the company earns from its Energy as a Service, Illumient's ongoing management service and cloud service. So there are 3 main areas where we get our Energia service that's Illumient's ongoing management services, the cloud services and Energy as a service. So every single system that Clear Blue has ever sold includes an ongoing service component. Clear Blue manages and operates the power systems on an ongoing basis for our customers. And this is at the heart of our business and our value proposition. As telecom customers increased wireless communication bandwidth to support their ever-growing customer base, so to do the -- their power needs of those sites also increase, and that's why it helps us in our recurring revenue.This ongoing growth of telecom systems and the ongoing operations and maintenance of power needed to keep these systems functioning as what drives the growth in our recurring revenue. As you can see, addition of our telecom customer rollouts over the years have a nice impact upon the growth of our recurring revenue. For the trailing 4 quarters, recurring revenue grew 83% to 819,000 -- for Q4, revenue was 116,689, which is around 112% from the same period last year. Mariam, do you want to speak about bookings?

[Miriam Tuerk, executive]

Yes. So bookings were actually up compared to the previous year, just under $2 million in bookings. And just as a reminder, our bookings include 2 components. One is customers prepay their Illumient's deferred revenue services. And as a result of that, we have that as a deferred revenue line item, and it's prepaid. So it's bookings that we will realize the revenue in the future. The second is when we have orders that we have received but have not yet shipped. And when the portions of the orders that are deferred revenue only convert from purchase order to deferred revenue once it has shipped. So as a result of that, at the end of last year, we were just under $2 million, which is up from the previous year. And we do expect that this is going to grow nicely when we are able to announce our Q1 results. One of the great news is that bookings jumped quite nicely in Q1.

[Farrukh Anwar, executive]

Thank you, Mariam. So if you look at the graph on the right, we see the company has been able to grow its margin over the years. And now it's maintaining margins at a mid-30 range with high inflation and increasing commodity prices, there has been pressure on the company's margin.However, in most cases, we've been -- we've managed to either innovate lower costs elsewhere or pass a portion of these incurred costs of materials to its customers. So trailing fourth quarter margin increased to 37%, up from a margin of 28% in 2021. I will include in trailing four quarter 2022 was a one time -- I mean, trailing quarter trailing fourth quarter 2021. So that competitive was a onetime low-margin deal of -- for our customer. And if you exclude that impact of that onetime deal, so our margin comparison is 37% compared to 29.7% year-to-date for 2021. So I'm pretty happy about the margins that we've been able to generate on our products. However, given that we acquired ESI this year, and the company does expect a little bit lower gross margin in 2023, while we undertake work to improve the margins for the business. However, it is still expected to be around 30 range -- around that range.So for our operating expenses. In this environment of high inflation and resulting higher costs, Clear Blue's management is focused on reducing operating expenses where possible. We can see that in Q4 operating expenses decreased by 4% compared to the same period in 2021. However, the company continues to invest heavily in R&D projects. And as Mariam pointed earlier, our product offering has grown over the last year. And now we have a wide range of products to meet varying customer needs. Some of these projects have been put into use this year. And therefore, the company has started amortizing intangibles related to completed R&D projects, and this amount to around $355,000.The company also continues to spend on non-project related R&D. And during the year, mainly cloud and software costs were up by approximately $175,000. The remaining variance in operating expenses for the year is due to some allowance for [indiscernible] debts that we had to make of around $343,000. So we did have our travel-related expenses increase, but by around $280,000 due to the company's participation in various customer meetings, meetings with other customers as well and investor-related events whereas travel was restricted in the comparative periods 2021.The increase was offset, however, by lower share-based compensation of $343,000 compared to the comparative period of 2021, and the management team provided the company's salary relief of around $323,000 in 2022 by agreeing to forgo a portion of the remuneration owed as of December 31 as well as reducing their salaries.So all in all, adjusted EBITDA, if you look at our adjusted EBITDA, loss has increased by nearly 3% for the quarter and 47% on a trailing 4-quarter basis. The increase can be attributable to reduced margins resulted from reduced revenue. Thank you so much. Mariam, do you want to take it from you?

[Miriam Tuerk, executive]

So 2022 is now behind us. We had, as I said before, abysmal revenue results. I do want to comment, we really looked very hard inwardly around whether or not we could, in fact, confirm that it was impacted by the macro environment. We don't just say that [indiscernible]. As many of you will know, management put in a fair amount of money and took a fair amount of salary reductions, et cetera, et cetera, off of the table. And the main reason for that was because of a ruthless analysis to say, does the dog hunt? Is the business good? And why is this happening? And the roundabout conclusion, both in consulting with external and getting our independent Board members the kind of make sure we're not seeing through rose color class is that we really do believe it was by the macro environment. A couple of things that need to happen once the numbers start to come back up as you've got to still make money in contribution margin and the fact that we've been able to grow our margins is a good positive. I talked for many years about growing our recurring revenue, and it wasn't moving. It is now moving, and we're very happy about that. Making sure that we can go after a wider breadth of the product, getting share of wallet from the customer by having a wide range of products is key. And so growing our product portfolio from 2 products to 5 was a strong aspect. The acquisition of eSite micro, both from a product perspective and on a customer perspective is a huge game changer for us. And getting access to $10 million of non-diluted funding, of which $6 million is a grant. The other $4 million is a 0% interest tenure loan. That injects cash to us over the next 3 years to allow us to maintain our leadership from an R&D perspective.Okay. Let's talk about going forward as the last time I have to talk about 2022. Sales is -- okay, the whole company hugely busy right now, scaling, scaling, scaling and very, very active. In terms of our key sales activity in 2023, our Illumient North America business is seeing strong sales momentum and making sure that -- that continues that we capitalize on that, that we monetize that is a key focus and area of activity. Our eSite micro is powering the greening of existing retrofit and large telecom systems. So there are a number of large strategic customers who have already announced, like IHS did $140 million spending program to convert every one of their existing large telecom sites to solar hybrid. And eSight Micro, together with Clear Blue is working hard to be positioned to get a very large chunk of that business. That's heavy activity this year. We have Nano-Grid rollouts continuing and expanding. We are expecting a number of follow-on orders, and we've got new projects. We announced our e-learning Avanti partnership last year. I think we're going to start to see some revenue from that initiative land in this year, hopefully, and grow beyond that. The launch of SENTI in North America is going to require some focus, and we are moving quickly to make sure we capitalize that. And then for Pico-Grid, Pico-Grid is going to be -- could be thousands of systems, right? We're talking about a device that for those of you who have a new Starlink modem for every one of those Starlink modem, you have a peak of grid shipping with that. And so we're talking about the follow-on being thousands and thousands of systems. The way that's going to happen is small rollout projects will happen as companies steal that. And so we expect to see small rollout projects this year ready and for the larger volume deployments in 2024. Those are the key areas of activity and focus from a sales and business development that the company is working on right now. So when you look for catalysts, what's going to validate that we are on that new traction. I think as you'll see on the next slide, if I look at the year-to-date results of where we are from a performance perspective, we're on track to doing what we want to do this year, showing that 2022 was an anomaly and that we're going to grow from 2021's numbers. Still early in the year. So we have to prove that out. How are we going to know? Well, we've got to see that North American sales growth driven by all 3 new products. eSite Micro sales in the retrofit market, winning those deals is key, converting the rest of our $350 million pipeline to revenue, demonstrated cash flow breakeven. We're very focused on cash and positive EBITDA, and we get there around $2-plus million in quarterly revenue. So as soon as we can show that for a few quarters now, you start to see they're on track to positive EBITDA, 0 cash burn for this year. And of course, we want to show that 50% plus growth rate. Beyond that, we're going to continue to do strong organic growth of our top line. There are additional M&A opportunities. 2023 will prove out the success of our model of acquisition helping to help with organic growth through eSite micro, and we'll then look at some others. And put all of that together, we want to have a demonstrated established track record of consistent EBITDA growth for the company. So in closing out our formal presentation, we're just about to open it up to questions. Our 2023 target plan, everything this company is working towards is focused on achieving positive EBITDA and net zero cash burn. As you know, Q1 is always soft. It's soft because it really -- and I think that ships in Q1 is Q4 purchase orders. So you had to be looking at last November and saying, how was the market to really see what we were going to do in Q1 from a revenue perspective. So it's traditionally always been low revenue, and it's going to be for Q1. But -- and this is the piece that helps us to reconfirm that it was a normal year, our sales activity has started off quite strong across multiple businesses. So we have more than $3.5 million in orders at the end of Q1, and we expect of that $3.2 million to ship in the middle of this year. And the good news is it's equally split 1/3, 1/3, 1/3 across Illumient, Nano-Grid and eSite micro. So it's not just like a one big deal from this customer or that. It's multiple orders, all last big orders, good margin, et cetera, et cetera, growing nicely. And so our year-to-date performance is indicative that we can meet our target. We just need to make sure that, that momentum continues more than just year-to-date April in order to demonstrate the results for the year. And as it sits right now, -- as I said at the beginning of this presentation, management of Clear Blue is cautiously optimistic. So I thank you for your time and your support in this presentation. Ryan, do you want to throw some questions at us that people have sent in?

[Ryan Fremantle, analyst]

Yes. Thank you, Miriam. As mentioned at the beginning of the call, my name is Ryan Fremantle and I work for Sotin Capital. We held both Clear Blue with their Investor Relations. I'm going to be your moderator for the Q&A session. So with that, let's begin. We've collected questions via e-mail beforehand. And for those of you that are on the call today, and just a quick reminder that you may continue to ask questions via the chat function or feel free to send an e-mail with questions to either investors @clearbluetechnologies.com or myself, [e-mail] Okay. Mariam, let's start off with a few product-related questions. So the micro product. What percentage of integration will occur this year for CBL use IP into micro? And when do you expect full integration?

[Miriam Tuerk, executive]

So there's 3 phases to the integration. The -- okay, so there's 4 phases to the integration. Integration #1 was day 1, we began providing the service management function. So eSite previously was just shipping hardware and the customer was on their own. They want to closing the deal, our service team became the support resource for customers. So rollout of systems, installation of systems, troubleshooting of systems and working with customers on optimization from a service we started day 1. There are 2 active accounts, one of which is one of the biggest ones who were a little bit vibrating. They were struggling and of our team and our people on the ground in Africa, we started at day 1. So that's done and is already happening. Step 2 is what I will call the simple integration into Clear Blue Illumient's platform. I don't have fine time lines. We're still learning, and it's also dependent upon customer need, et cetera, that our expected time line for that is in Q3. If I needed to accelerate it, I could probably do it in a couple of months. There's already work ongoing, but it will be juggled according to other revenue-driven demands and needs of the marketplace. But sometime in Q3, that's step 2.Step 3 is full integration with Illumient's' current functionality. I'd say that's another 3 to 6 months. So it could be there in Q4 or in Q1, again, based upon customer demand and what they need. And then the last piece which will be an ongoing thing in our AI program and everything else is now that you've added diesel to the mix and you're dealing with much more hybrid systems rather than solar only, There will be new and innovative IP. So adding that new level of functionality that we don't have today that's specific to those use cases will be something that will be an ongoing road map for the company. As I said to some of the senior executives of some of the customers, we're on the road to 0 diesel. And how we get there through machine learning, it has a material impact for them. And there's a lot of learning from the machine to do that. But that will start next year. So our program around machine learning and AI is going to heavily include that, and that is just starting from a planning perspective. But I would think that, that is something that we will file a number of patents and really grow our leadership in the market on.

[Ryan Fremantle, analyst]

Again, the eSite micro product. Is there an application for construction companies? For example, ATCO, who manufactures prefabricated structures, which does include temporary facilities that often are and harsh deployments with no access or comparatively no access to expensive power.

[Miriam Tuerk, executive]

So this starts to get into anybody who wants to watch some of the Tesla wars, et cetera, et cetera. Power is made of the AC world and the DC world. Our products are primarily focused on the DC world. So DC curtain some of the AC current you have in your house, DC is what powers anything electronic. So if it's an LED light or a computer or it's got any sort of processor of any brains, any processor, those circuits in your computer are DC powered. Clear Blue's products are mostly focused on DC. We can support AC, but most of focus. So the answer is yes, but not every use case. If somebody wants -- they have a construction, I can remember when I worked on a construction site for one of my work terms. I was one of those mobile trailers and we walked in and you had an office and a coffee machine, and that's where the foreman worked. And if you need a generator or start a system to power that AC trailer, that's probably not us. But if you're talking about mining and construction and oil and gas and monitoring and those kinds of things, there's a lot of use cases for that. By the way, we have contracts and projects with ATCO, and Alberta is a bit of investing in green. The energy industry is greeting itself, and so we already have them as a customer and are thrilled to support them.

[Ryan Fremantle, analyst]

Pitching to the SENTI product -- can you elaborate in priority, the markets you identified for this product?

[Miriam Tuerk, executive]

So the SENTI product is -- so if you look at a traditional street light that we had been selling previously, it was big, it was heavy. It required a crane and concrete foundation, et cetera, et cetera. And if you think of yourself like if you've been to spoke and you drive to the nice Muskoka Hotel there and you're driving up the roadway and they've got kind of nice little accent lighting for roadways and Parkway, et cetera, et cetera. Those kind of smaller lights never made any delta so parks, roadways, landscape areas, private property, non-roadway applications, the bigger lights didn't make sense. So SENTI because LEDs have gone from 80 lumens per watt to 170 lumens per watt because of Pico-Grids Clear Blue.I understand that we're using lithium cells. We're not using a battery. We've got the cells, and we've made the electronics with the functionality. We've optimized it for high performance, high efficiency. And because solar panels are efficient, you can get a reasonably small [indiscernible]. You put that all together and a SENTI white is really applicable. Think of it as anything where you would walk through a streetlight or a pathway light that's 15 to 20 foot pole. And the beauty is this thing is going to ship in a box. And when you get it and you take it out, there's actually no wires, no connections. It's just a mechanical amount you could buy one of these things, screw it to the wall of your cottage. And it's not a cottage application, but I'm just trying to say that a non-technical, easy-to-install, just take it out of the box, you plug it, you screw it, you mount it somewhere in a way you go. We anticipate that we are going to have significant volumes across the Southern U.S. and the Western U.S. as well as in the Northeast, mostly because it's easy to ship. Our current products are having to ship. We're talking about truckloads of poles. And so it's not very often that our agent partners are going to make a poll in Burlington and ship it to L.A. But with SENTI we've got a wider addressable market.North America is our primary focus, and we had thought to launch only in North America, but we've actually seen a significant demand in Africa. For private, not public for infrastructure, but gated communities, mining, construction, industrial complexes, significant demand from some of our partners. So for now, we're in focus in North America, and we'll start again in Africa because we have distribution channels.SENTI is a lithium product. You're not going to put it in Fort McMurray... It's too cold.

[Ryan Fremantle, analyst]

How does send this cost of $1,200 per light compared to traditional non-LED wire street lights. And how much does it face with streamline costs?

[Miriam Tuerk, executive]

So a traditional -- so first of all, street lights are like dining room chandeliers. You can spend $20 or you can spend $10,000. So you just have to know that, that's a whole thing. So you can't just compare. But you can buy a street-like like that, probably for $300, then you have to add a termination breaker, like a termination box with a plug and a termination point. You have got fuses, you've got to wire it down the pool. You got to have a termination point. You've got to send it through the ground over to a breaker panel and a distribution panel, then you've got to have a meter connecting it to the grid. And the general rule of thumb is $200 per meter cost of cable and instruction.So if you're putting these things 30 feet apart and it's a new construction build, it is way cheaper to go solar off-grade. And what I think is interesting is in Q4 when we were doing a bit of a roadshow with the lighting agents. 5 years ago, all anybody wanted to talk about was the conversion of regular street lights to LED light. There was a massive redeployment of LED lights across America where everybody retrofitted all their old high-pressure sodium street lights with LED streetlights. What the agents told us is the #1 question when they walk into the room now is, what have you got for solar products. So it's starting to be solar first. And that's why I talked about a hair airport runway extension program, a run rate extension project and their solar so lights -- interstate highway in the American West and the interchange on-ramp source lights. And we're starting to see that more and more. We're seeing towns and municipalities doing entire infrastructures solar only. There's an understanding that it's reliable and it works. The technology is there. There is an understanding that it's more resilient. They don't have to deal with all the climate change issues that destroy infrastructure. If you have a core fire across the highway, it burns the whole cable and you've just lost the whole street late line. But I think lastly, anybody who goes out and buys a streetlight or outdoor lighting, not just street light, but roadway park landscaping, parking lock industrial compact that, but anybody who buys that, it gets taken turnover and the power utility manages those systems. And so when I'm the city of Hamilton and I decided to do a new subdivision and I put streetlights in, at the end of the construction project, I turn those lights over to the Hamilton Hydro. I am not in the power management business. If I decide to go with solar street lights, I'm not deciding to get into the streetlight power management business, I'm deciding to go with Solar Streetlights. So one of Clear Blue's key differentiators is we're that power management utility. So when we talk to the customer, we say, wow, if you go with the bread, you're going to turn it over to Hamilton Hydro. And if you go with a solar system, Clear Blue is going to manage it for you. And that is a key thing because, I mean, I don't know how many of you have ever looked at doing power systems in your house. But you just -- I'd love to be able to call Toronto Hydro and say, okay, I need you to connect my house to the -- I need power, checkmark here neck to the grid or silver upgrade or hybrid. And that's not what happens. What happens is Toroto hydro provides the grid and then the rest have to manage myself. And that's the big piece that Clear Blue is solving.

[Ryan Fremantle, analyst]

Let's change gears here. Can you give us a bit more color on how 2020 played out from a revenue perspective?

[Miriam Tuerk, executive]

Well, there was none. Sorry, I do a little bit more color. So what happened was we have customer partners who have ongoing product rollout programs. And they are planning on moving out CapEx and doing rollouts, et cetera, et cetera. And if I looked at the beginning of the year compared to what actually happened, 2 things happened, that rollout for 1,000 systems suddenly became a rollout of 50 or 100. We're just going to slow down a little bit. Do show what's happening in the market. It's a little bit uncertain here. We're just going to buy it in smaller chunks. That's the first thing that happened. And then the second thing that happened was we actually had reversals. And we have non-cancelable purchase orders. So there isn't like people can return the equipment. But if you have a really big and strategic partner who's got a multiyear program with you and they pick up the phone and say, "Hey, I need a favor." You have to work with them and you want to keep them doing well. You want them to succeed going forward. And if you can redeploy the technology, you kind of got to do that. And so we actually had to reverse out a couple of deals last year and had 1 order, which was $2 million -- no, 2 orders, which was $2.1 million, where we actually sent the pro forma invoice. We had done a shipping quote. We had just done the 25 steps that you needed to do just before you got the purchase order and the deposit and with phone call and said, companies just doing a big downsizing, we want to defer all of our CapEx, we're covering budgets.We're pushing it out a year. That's what happened to our revenue last year. Some of those have now come in now, and we're seeing them coming in now and rolling out. And some people want to catch up. I mean they still have their 5-year plans or 10-year plans that they've announced to the marketplace or that are their internal commitments to their own funders. And so there's a keen desire to catch up.

[Ryan Fremantle, analyst]

Okay. With $10 million in undiluted capital, $6 million of that for R&D, what is the release schedule in terms, if any, on the remaining $4 million?

[Miriam Tuerk, executive]

So we have about $7 million left. The -- it breaks into 3 components. The Fed dev, there's around $2 million left at the beginning of this year, and that drawdown is expected to happen between the January 1, 2023 and the end of March of 2024, so over 15 months. We successfully closed an IWAP grant in Q1 of this year of $750,000. That was new funding that we got at the after at the end of last year. We are always continuing to look for assistance and support in our R&D investments. And so the Canadian government granted us a 750 from IR. And that one runs to the end of March of next year. So the bulk of it will be -- we drew down some in Q1, and the bulk of it will be the next 3, 4 quarters, so Q2, Q3, Q4 and Q1. And then the STDC $5 million grant comes over 3 years. We expect $1.2 million in May. We've already gotten 550,000 in December, $1.2 million in May, and then there'll be an additional drawdown starting January of next year going forward. So it's in chunks over a 3-year plan.

[Ryan Fremantle, analyst]

Can you comment on the low stock price, given management's positive outlook?

[Miriam Tuerk, executive]

I think the -- I mean, my personal opinion, so I'm not an expert when it comes to the stock market. But when I've looked at our history, we hit a low point at around, I can't remember, this was $0.08 or $0.09. And then when the market moved and we were doing positive on our results, the stock went up to, I believe, $0.65, $0.68. I think the market is still fairly negative. Investors are still sitting on the side, still very conservative. I'm hopeful have people telling me that they think that bearishness is now going to start to translate to people coming back into the market later this year in the fall. And I think it definitely reflects the fact that last year was a bad year. As we start to announce our Q1 results, which will be soft on the revenue side, but we'll -- I think -- I know will show strong bookings numbers. Q2 results, Q3 results, we start to show that we're back up at the numbers that we used to be at and on a trajectory to growing that were positive EBITDA and that we don't need to do a raise, which is a huge focus of us this year as a company. Then I think that, together with the market response, it should come back up nicely and could come up very strongly in the fall. So when we went from $0.08 to $0.65 in a period of 2 months, that is the way the market moves as a small cap company, and it will do so again. As our revenue grows and our profitability grows and you go out a year or 2, I don't know -- I'm not giving you a forecast, but we will grow out of that ultra-small micro-cap into kind of a small medium microcap. We'll get to consistent positive cash flow, generating real meaningful cash. We'll get to good top line growth, we'll do M&A. And I think that we'll grow ourselves into a next category, ultimately moving from the TSXV to the TSX. And then the up and down bakery will be much less than what it is right now. It's a huge buying opportunity for the company, investors and for our employees. -- and very happy for people to buy in now and have a very positive result, either to average down for those who've already invested or to just come in.

[Ryan Fremantle, analyst]

The next set of questions is going to look towards Q1 and the remainder of 2023. So even though Clear Blue is not giving forward guidance at the moment, how should we think about Q1?

[Miriam Tuerk, executive]

So just to iterate, we had started to give guidance when the company was expected to be north of $10 million in revenue, and we had good consistent flow and forecast. Obviously, there was a material change in the marketplace last year, and therefore, we're not comfortable we shouldn't even if everything was 100% from a Clear Blue perspective, just the macro environment says caution is better to be conservative when giving guidance. Our Q1 revenue has traditionally, if you go back and look at our charts, it's always very small because it's that Q4 order that ships in Q1 before people's budgets still left over from the previous year or the budgets don't come in until really we see purchasing for this year against this year's budget starting in February, March with purchase orders. So revenue will be soft. Our bookings number is quite strong, up quite significantly from last year. I don't have the final numbers in because I've got to include the Illumient pieces in that. But I believe we're up more than 50%, and that momentum has continued in April. So where we're at is to -- we're working very hard to have a Q2, Q3 that delivers that $2 million plus revenue and delivers the positive EBITDA results that we want to demonstrate positive cash flow. And at this point, as I said, cautiously optimistic that, that's what's going to come to fruition.

[Ryan Fremantle, analyst]

How should we think about Clear Blue's balance sheet? I know you mentioned you will not need to raise capital in 2023.

[Miriam Tuerk, executive]

Yes. So Clear Blue's balance sheet, when you just look at it from a -- you think, wow, there's a little bit of debt there -- and there is. But when you look at the growth trajectory plans of the company and understand that, that debt is what I'll call friendly in debt. So Canadian government, BDC, BC's actually a tough taskmaster, so they can be demanding and strict, which is good, makes us a better company. But they are also keenly interested in helping innovate technology of small companies. And so they're quite supportive of us and had no Silicon Valley venture debt on our books [indiscernible]. And so our debt is something that is reasonably good. So our debt balance sheet, for example, is growing because of the Fed dev $4 million loan, but it is 0% interest. It is 10 years. And when COVID hit, we had 2 existing loans with the Canadian government and the relationship with BDC, where all of them -- 2 of them voluntarily just send us an e-mail that we're stopping to draw money. Like we're not going to take any payments, we'll just defer. And so we have friendly debt and supportive debt on our balance sheet. We are looking at our balance sheet all the time. Were very focused on cash and improving our working capital ratios. So we have, as a company moved from revenue driven to cash and EBITDA driven. There is one impact of that, and that revenue does not realize as quickly when we get an order. So we used to kind of pre spend when we saw the order coming, and that's not the world we're in today.And as a result, when we get a purchase order, it's more difficult to turn it around. So there's been times where I've gotten a purchase order in November 28 than it was December revenue, that's not happening anymore because of our focus on cash.

[Farrukh Anwar, executive]

Can I just add a couple of things in there? Yes. So you also have to notice over here that there's lots of items that are not in the balance sheet, for example, the 7 million Gorman grants that we have like out of that Fed dev is receivable, but it's down in the balance sheet.But as we continue to get our milestones in during the year, we would get that money in our bank. Furthermore, we've also got inventory. We've got $3 million worth of inventory that we have. That inventory will -- is being used on orders that we have. So there's less cash outflow right now on those orders because we continue to use the inventory that we already have built up. And then so combined with our cost structure, What we've done is we've reduced our costs. You've seen our margins go up. And then that's why you can see that that with our reduced cost structure, expected pipeline conversion, we believe that our cash flow is going to be pretty much neutral with money coming in from, as Miriam said, the friendly debt from [indiscernible], which is interest free, which won't have -- we won't have to start paying until 2000, I think it's 2007 or 2006, something around 2026 or $27, something around that time.So yes, I think apparently, the balance sheet looks off, as Mariam said about this debt. But like overall, there's these items on the balance sheet that are not in our outlook that are not on the balance sheet as well.

[Miriam Tuerk, executive]

Thanks so much for jumping in there. Sometimes I get so focused on thinking about the answer. I just keep talking. That was really good.

[Ryan Fremantle, analyst]

I know we're running a little long here, but I just want to say thanks for everyone for staying on. We appreciate your patience and engagement, and we've got 4 more questions here. So this next question kind of has a few parts to it, Maria. What led to the strong order intake in Q1? And what gives you confidence that a large portion of those orders will convert into revenue? And have any of these new orders began to ship?

[Miriam Tuerk, executive]

A crap load of work and effort by everyone in the company to bring the orders in and maintaining relationships with some change in the investment community in the market. So in North America, it's just -- we need more time to prove, but a big change in the order traction in revenue. We believe that part of that was because we needed to invest in our product line, and we've responded to market demand by innovating in our product line with the Camy and now SENTI [indiscernible]. Part of that was bringing on a lighting engineer who's got some great skill sets to help us, but the market demand is there. So that's really on that side. On the Nano-Grid side, we do have some new businesses coming in, but the -- the big part there is follow-on orders from existing customers. And then on eSite, these are some follow-on orders to existing customers of eSight as well as a large order from a clear blue customer for the eSite product. So this is a cross-sell upsell synergies. The orders is really a timing on shipping. We have begun to deploy them and get them starting to move, nothing has shipped as of yet, but procurement has begun. Things are on trucks and boats in intermediary, points, et cetera, et cetera. So things can always happen. But as I said, it would be surprised to see a big change because it's a diversified set of orders. And we have more orders that we've received. We have an internal thing called wing-the bell and we had another order yesterday that came into North America. So we're seeing more stuff coming in on top of what we've already announced.

[Ryan Fremantle, analyst]

Can you comment on your recurring revenue growth? What are your expectations of that are for 2023?

[Miriam Tuerk, executive]

I can't give you a forecast for what it could be. What I think is interesting is, as we introduced our Energy as a Service model in North America, which started around 2 to 3 years ago, that it increased the annual fees that customers pay quite significantly because we took on some of the expenses they would normally have had to pay in other ways. So we evergreen the batteries, et cetera, et cetera. And so the first 3 years was upfront. Now we have the renewals. We're seeing those renewals come in. and I'm quite pleased by that. We've also, as I said, had customers reach out and say, "Well, can I add my other eSite Micro systems on." So it's very interesting because we used to be a bit concerned that customers didn't look at Illumient. And they -- to some extent, they're not supposed to because we're running it for them. So they have access to it, but they can see things, they get updates and reports. But they don't need to log in every day because that's what we do. We manage it for them. But connectivity access to the site has become a Tier 1 mission critical. So we get level 1 alerts from our customer standpoint, Wait a second. The whole site is working, the telecom is all working, everything is great, but Illumient isn't getting its data level 1 problem. So the amount of demand of our customers to get access to what we're doing in Illumient, the value it's delivering is evident and starting to put more pressure on the company. And that intuitively then also means, well, if it's so mission-critical, you're going to be willing to pay for it. So that's what we think is driving the growth. The other thing that's driving the growth is numbers multiply over time. And so that's been helpful as well. We have been increasing the pricing, adding value-added services. So the revenue per customer for Linus has also gone up and will continue to go up with ESA.

[Ryan Fremantle, analyst]

These next 2 questions, we're going to take a step back and kind of look at the macro environment. How is management navigate the current environment? And kept those gross margin steady despite all of the global challenges?

[Miriam Tuerk, executive]

I think what happened in 2022 was we had. So in the fall of 2021, there was the, "Oh my God, there's no parts available. We're not going to have any parts, et cetera, et cetera." And we went out and bought enough parts to make us match through. And then when revenue drop, we have inventory. So part of it was that we didn't see the big bump in prices in some of the things that we were dealing with. And in those areas where we were seeing the bump in prices, they were with long-standing partners who knew that they just couldn't 100% pass it on. So because they were existing supply chains, not everything was passed on. In other areas, we've talked about adding innovation -- we have some very compelling cost components that we have been able to deliver huge value on because we've innovated. So lithium batteries are a good example. We've got a lot of smarts in our technology, which reduces the amount of smart you need in the battery and makes that battery more reliable and easier to manage. And because of that, we -- for our Nano-Grid product, we have a very cost-competitive lithium battery. A lot of those commodity prices have come back down again. So in many cases, what I've seen suppliers do is we had the 2021 price list. The 2022 price list just went through the roof. It was ridiculously stupid. And now people are coming back and saying, "Oh, yes, here's our new price list, and it's the same as 2021." So I think we've weathered through the store.

[Farrukh Anwar, executive]

Yes. And some of our suppliers, what they did was they just added in a surcharge like inflation surcharge or like high cost on charge and whatnot. And now this year, we are seeing that they've removed that because the prices have gone down now.

[Ryan Fremantle, analyst]

Obviously, everyone's seen the inflation Reduction Act in the United States and Canada just came out with the own [indiscernible], can match that. How does Clear Blue benefit from those various government incentives?

[Miriam Tuerk, executive]

We -- so historically, Clear Blue's business was not tied like Mini solar to the feed-in tariff program of Ontario Hydro, et cetera, et cetera. But these tax bases are across, like I think of them like a shred or an R&D tax credit, they are across the entire industry. They are refundable tax credits and they are available to both tax-paying entities and nontaxpaying entities.And when you put all of that together, it's just adding that extra little bit of incentive that allows customers to really look at us as an option, look at clean tech options as an option. And then when you put that together with a certain amount of acceptance that yes, this works, it's not a problem. And it's the cost benefit, it's having a big impact. Where we're seeing it is in the Illumient business in North America, and we expect to also see it in Pico-Grid in North America.

[Ryan Fremantle, analyst]

Okay, we have one final question here regarding the Eastside acquisition. Can you give us an example of revenue synergies with eSite since that acquisition closed?

[Miriam Tuerk, executive]

So to revenue synergies. One is existing Eight customer has requested Clear Blue's aluminum service and on their existing historical systems. And on new orders, we had 2 or 3 customers where when we acquired the company, the customer was saying that the price was too high, you've got to drop your price, you've got to go cheaper. And when we repackaged it with the Clear Blue value proposition and services it reduced other costs for the customer. And by taking those other costs of off the table, we increased our margins on the product and still had a lower cost for the customer. So the customer is like, well, I'm going to spend 10 builders with you and I got to spend another $5 and we're going, no, no, no, you're going to spend $12 with us and you don't need to spend that $5. So the customer went from 15% down to 12, then we went from 10% to 12% with the value add. On the Clear Blue side, we have one partner customer who has a very wide-ranging diverse set of power needs. And we have a new project that's deploying that is at the higher end of power, and it was kind of pushing the envelope of Clear Blue. They're committed to us. They like us. They want our service. And so when we did the eSight acquisition, they said, yes, we want that. So I don't know that the project was at risk, but it was under stressed because it was pushing the envelope with the Clear Blue system and with eSight they're just really happy. And so we have a large book-to-order that will deploy with ESA.

[Ryan Fremantle, analyst]

Thank you, Maria. This concludes the question-and-answer portion of the call. Once again, if anything arises after the fact, we're free to send an e-mail with that question to either [e-mail] or myself, Brian softwacapital.com. So I'll pass the mic back to you, Maria, for closing remarks.

[Miriam Tuerk, executive]

Thank you so much, Ryan. I just want to say a very big thank you to all of our shareholders, investors and supporters and to our employees, our customers and our supplier community. It's been a tough 1.5 years. We're through it. We're positive and optimistic and busy as all heck from a sales perspective and a shipping production delivery perspective. And we would not have gotten there without everybody being very supportive of the company. And I think it will pay off for everybody going forward. Everything I do every day is all about making sure that we deliver for our investors we serve at the pleasure of the shareholders. Thank you very much. If there's any questions, please don't hesitate to reach out to us. And I do want to give a big shout out to Faruk, if you just think about everything we just talked about in this presentation, he has just done a fantastic job helping this company to navigate and deliver what it needed to deliver, and we would be nowhere without them. Thank you so much.

[Farrukh Anwar, executive]

Thank you...

[Ryan Fremantle, analyst]

Thank you so much.