Ms. Miriam Tuerk reports

CLEAR BLUE TECHNOLOGIES ANNOUNCES SECOND QUARTER FISCAL 2023 FINANCIAL RESULTS

Clear Blue Technologies International Inc. has released its financial results for the quarter ended June 30, 2023 (Q2 fiscal 2023). A complete set of financial statements and management's discussion and analysis (MD&A) has been filed at SEDAR+.

Trailing four quarter (TFQ) financial highlights:

• TFQ revenue was $1,644,227, a 72-per-cent decrease from $5,886,453 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 $646,416, a 10-per-cent decrease from $718,750 in the corresponding previous period.
• TFQ gross profit decreased to $606,008 compared with $1,984,809 in the comparable period, a reduction of 69 per cent.
• Gross margin percentage increased to 37 per cent, compared with 34 per cent in the same TFQ period of 2022.
• TFQ EBITDA (earnings before interest, taxes, depreciation and amortization) was $(3,639,495) as compared with $(3,154,258) for the previous period, a reduction of 15 per cent.

Q2 fiscal 2023 financial highlights:

• Revenue was $752,325, relatively flat from $782,101 for the quarter ended June 30, 2022, but up 187 per cent from $262,137 in the prior quarter (Q1 2023).
• Recurring revenue was $139,056, a 61-per-cent decrease from $358,250 in Q2 2022. Clear Blue's recurring service revenue includes existing site expansion upgrades, which were more frequent in Q2 2022 as compared with the current quarter.
• Gross margin was 41 per cent, up from 35 per cent in Q2 2022.
• Gross profit for Q2 2023 was $309,007 compared with $277,295 for Q2 2022, an 11 per cent increase.
• EBITDA was $(664,964) versus $(989,498) in Q2 2022, a 33-per-cent improvement from Q2 2022. The improved EBITDA reflects the company's 2022 cost reduction program and government grants offset slightly by increased costs from eSite operations.
• As of June 30, 2023, bookings increased to $4,654,287, an increase of 134 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 June 30, 2023, was $746,100 versus $853,330 at Dec. 31, 2022.
• As of June 30, 2023, the company has $5.4 million of available government funding, with $3.65-million receivable in government grants, and $1.7-million receivable in the form of a 10-year interest free loan to finance its plans going forward over the next three years.

Q2 fiscal 2023 operational highlights

• May 30, 2023: Clear Blue announced its first order for its Esite-Micro product. An African telco has purchased 20 Esite-Micro systems for installation in new telecom sites in Africa. The project is expected to ship in Q3 of this year and has an initial value of approximately $375,000.

Outlook is for Q3 2023 revenue to be in the range of $1.5-million to $2.5-million

Clear Blue's focus continues to be cash centric. Revenue growth in Q3 and Q4 2023, net-zero cash burn and positive EBITDA are still the company's objectives for the rest of the year.

As a result of the eSite acquisition as well as bringing to market three new products in the last 12 months, Clear Blue now has a robust product line, which significantly expands the company's addressable market. The sales funnel shows strength in all markets, with all the company's products, and the company expects this to contribute to the company's revenue for the remainder of 2023 and for 2024.

Of the $4,654,286 in bookings as at the end of Q2, $3,920,006 is expected to be revenue recognized over the coming 12 months. As the bookings and sales funnel convert to revenue, the company's revenue trajectory should swing positive, and management believes that the 2022 downturn, caused by macroeconomic factors, is behind it.

As orders have been received and continue to be booked, the company's focus is on shipping and delivery. For Q3, the company is currently expecting revenue in the range of $1.5-million to $2.2-million, with the low end of this range occurring in the event that some suppliers slip their scheduled shipments from September to October. Gross margin, expenses and net income will generally be in line with previous quarters.

For Q4 2023, the company sees the potential for it to be its best quarter of the year and will provide updates to the market as these orders solidify and are scheduled. Similarly, the company's sales funnel has a strong set of projects expected early in 2024.

In summary, management is pleased with its progress coming out of a dismal 2022. The remainder of 2023 is expected to deliver solid results, and the company looks forward to showing strong growth into 2024.

Conference call

Clear Blue will host a conference call Aug. 29, 2023, at 11 a.m. Eastern Time, to review the company's performance and answer questions.

About Clear Blue Technologies International Inc.

Clear Blue Technologies International 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.

We seek Safe Harbor.