Ms. Miriam Tuerk reports

CLEAR BLUE TECHNOLOGIES ANNOUNCES FIRST QUARTER FISCAL 2023 FINANCIAL RESULTS

Clear Blue Technologies International Inc. has released its financial results for the quarter ended March 31, 2023. A complete set of financial statements and management's discussion and analysis (MD&A) has been filed on SEDAR. All dollar amounts are denominated in Canadian dollars.

On a trailing four-quarter (TFQ) basis:

• TFQ revenue was $1,674,003, a 72-per-cent decrease from $5,914,758 in the corresponding previous period. The current period was impacted by the economic downturn triggered by the macroeconomic events of early 2022.
• TFQ recurring revenue was $865,610, a 75-per-cent increase from $495,404 in the corresponding previous period.
• TFQ gross profit decreased to $574,296 compared with $2,011,797 in the comparable period, a reduction of 71 per cent.
• Gross margin percentage remained consistent at 34 per cent with the comparative TFQ period of 2022.
• TFQ EBITDA (earnings before interest, taxes, depreciation and amortization) was $(2,825,118) as compared with $(3,232,312) for the previous period, a 13-per-cent improvement.

For Q1 fiscal 2023:

• Revenue was $262,137, a 79-per-cent decrease from $1,225,106 for the quarter ended March 31, 2022.
• Recurring revenue was $212,004, a 40-per-cent increase from $150,975 in Q1 2022.
• Gross profit for Q1 2023 was $93,272 compared with $507,500 for Q1 2022, an 82-per-cent decrease resulting from lower revenue for the quarter.
• Gross margin percentage for Q1 2023 was 36 per cent, down from 41 per cent in Q1 2022.
• EBITDA was $25,180 versus $(919,958) in Q1 2022, a 102-per-cent improvement from Q1 2022. The improved EBITDA reflects the company's 2022 cost reduction program, increased costs from eSite operations as well as government grants.
• As of March 31, 2023, bookings increased to $3,516,857, an increase of 77 per cent when compared with $1,991,275 as of Dec. 31, 2022, with delivery anticipated over the next three years in the case of Illumience/EaaS and typically in the next four to six months in the case of production orders.
• Cash at March 31, 2023, was $682,945 versus $853,330 at Dec. 31, 2022. During the current quarter, the company received approval for a grant of $750,000 from the National Research Council of Canada Industrial Research Assistance Program. As at March 31, 2023, the company has received $247,285 in connection with the grant. Subsequent to the quarter-end, the company received an additional $1,175,862 in grant payments.
• As of May 29, 2023, the company has $5.6-million of available government funding, with $3.8-million receivable in government grants, and $1.8-million receivable in the form of a 10-year interest-free loan to fund its plans going forward over the next three years.

Notable developments during Q1 fiscal 2023:

• Jan. 27, 2023: Clear Blue Technologies closes final tranche of oversubscribed $2.5-million private placement;
• Jan. 23, 2023: Clear Blue Technologies acquires eSite Power Systems.

Subsequent highlights:

• May 18, 2023: Clear Blue announced an order for a roadway expansion project. The project is expected to ship in Q3 2023 and has an estimated lifetime contract value of $425,000.
• In May, 2023, Clear Blue received its next tranche of Sustainable Development Technology Canada research and development government grant financing in the amount of $1.1-million.

Outlook

Clear Blue's focus continues to be cash-centric -- driving a cash-neutral plan for 2023. While this includes benefits from already approved government grants, cash neutrality would be a first in the company's history. As Clear Blue moves into the later quarters of the year, EBITDA should improve as bookings convert into strong revenue growth, combined with already implemented cost containment measures.

The company is on track for fiscal 2023 to be more in line with the company's historic revenue profile and its 2021 results. Although the eSite acquisition did increase the company's cost base slightly, Clear Blue's revenue threshold for cash flow and EBITDA break-even is approximately $9-million, owing to the company's cost containment measures and considering the integration of the eSite acquisition.

Clear Blue believes fiscal 2023 will ultimately look more like 2021 than 2022 based on the customer interest and confirmed bookings to date. The company sees a much-improved customer macro environment with confirmed bookings and orders in the pipeline for Q2 to Q4 sufficient to generate an annual revenue outcome more in line with 2021 than 2022.

Conference call

Clear Blue will host a conference call today at 1 a.m. Eastern Time to review the company's performance and answer questions. Those interested can register.

About Clear Blue Technologies International Inc.

Clear Blue Technologies International, the smart off-grid company, was founded on a vision of delivering clean, managed, wireless power to meet the global need for reliable, low-cost, solar and hybrid power for lighting, telecom, security, Internet of Things devices and other mission-critical systems. Today, Clear Blue has thousands of systems under management across 37 countries, including the United States and Canada.

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