Remembering The Future
Transport yourself back to the 1990s. A time of rapid technological advancements and societal shifts, where groundbreaking investment opportunities were waiting to be seized. With the dawn of the Internet Age and the telecommunications revolution just around the corner, the stage was set for a tech revolution that would unleash tremendous investment prospects. Investing in technology companies that had the potential to capitalize on the digital revolution turned out to be the opportunity of a lifetime for many investors.
Companies such as Apple Computers, Microsoft, Cisco Systems and Adobe were just beginning to make their mark and would go on to become industry giants. Some investors had the foresight to recognize the immense potential on the horizon. They had the ability to spot emerging trends ahead of the curve. Those investors were able to purchase shares in these companies at single digit prices and in some cases (Apple and Cisco Systems) for less than a dollar per share. Their future potential was being recognized by astute investors who possessed the ability to anticipate emerging trends.
Fast forward to today, thirty years later, we stand on the cusp of a new era defined by remarkable technological leaps and transformative shifts in society. While electric vehicles, artificial intelligence, blockchain, and cryptocurrencies have captured widespread attention, there are also lesser-known technological developments unfolding, harboring immense potential for profitable investment prospects. This is exactly where my focus lies, exploring unconventional avenues often overlooked by the majority. Specifically, I seek out emerging small businesses that have moved beyond the conceptual phase, showcasing concrete revenues and a minimum operational track record of five years. Although investing in such ventures carries inherent risks, I manage them by dedicating only a fraction of my portfolio to these riskier bets.
In this article, I'll share two exciting global trends that could bring big profits. And I'm happy to introduce you to a small but ambitious company that's all set to take advantage of these trends through its active business activities. As we look into these new trends, it's important to remember that we might be in a time of big change, just like the sudden and surprising changes that happened with the internet in the mid-1990s. Back then, we didn't know how fast things would happen, and the same could be true now.
Trends of the future
Off-grid, remotely managed, streetlights powered by renewable energy.
A revolution is taking place in the lighting industry
Similar to the transition of telephones from wired to wireless, the streetlight industry is also experiencing a transformative shift. A time will come when the majority of cities transition to highly efficient, off-grid street lighting systems that are remotely managed and powered by renewable energy sources. The transition is already underway in North America and various regions across the globe.
Traditional streetlight systems often come with high installation costs and dependence on wired connections to the electrical grid. In the event of a power outage, these streetlights also lose functionality. In contrast, smart streetlights that operate off-grid, powered by renewable sources such as solar and wind, offer distinct advantages. They can be remotely monitored and controlled, ensuring efficient operation. As a result, numerous municipalities, universities, and businesses have already initiated the transition towards smart lighting solutions. These off-grid streetlight systems are ideal not only for municipalities but also in remote locations such as railway switchyards, oil & gas wells and other mission critical operations.
Smart, streetlighting systems offer a game-changing strategy for lighting infrastructure. As electric vehicle use skyrockets, the need for electricity is set to hit new heights. To stay ahead of this surge, replacing traditional street lights with smart, off-grid options presents a practical fix. Embracing these advanced lighting systems allows cities to slash energy use while efficiently distributing electricity resources.
Internet and Communications for all
In a reminiscent fashion of the telecommunications boom witnessed in the 1990s, a new wave of expansion is sweeping across rural and remote areas, this time with a particular focus on the strategically significant continent of Africa. Caught in a competitive battle between the world's two superpowers, Africa stands at the forefront of this rapid telecommunication expansion. With a population of approximately one and a half billion people and over half of its territory lacking internet or cellular connectivity, the imminent transformation is poised to reshape the digital landscape of the continent. Advancements in technology have made it feasible to bring telecommunication services to even the most inaccessible corners of Africa, exemplified by the proliferation of towers that dot the continent's horizon. These towers, driven by smart, off-grid solutions powered by renewable energy sources, are revolutionizing connectivity in areas that were once deemed economically unviable for such endeavors.
The significance of this progress cannot be overstated. Through the adoption of innovative technologies, telecommunication providers are overcoming the logistical and financial barriers that previously hindered the extension of services to remote African locations. The deployment of smart, off-grid solutions ensures efficient management of these systems, while renewable energy sources provide sustainable power. This synergy of technologies is empowering previously underserved communities, as telecommunications finally become accessible in areas that were once deemed beyond reach. Tower by tower, connectivity is penetrating the most remote regions, and unlocking unprecedented opportunities.
Three decades following the previous telecommunications surge, a similar investment opportunity emerges in the companies spearheading the transformation of rural digital landscapes in regions like South America and Africa, along with remote locations such as the Marshall Islands in the Pacific Ocean.
The main question at hand is: How can we get involved in this growing sector? Should we invest in the telecommunications companies that are building the infrastructure, or should we look towards corporate giants such as Google, Meta, and Microsoft that will benefit as more people gain access to the internet and telecommunications? I believe a better approach is to find smaller companies that provide the necessary tools and services for this telecom infrastructure boom. I want to own shares in the companies that are getting paid to build the infrastructure, not the ones paying to build it.
Here is how I am investing in this incredible opportunity.
Company Overview
Clear Blue Technologies is a leading provider of sustainable energy solutions, specializing in smart off-grid technology. Their advanced energy management and control systems enable reliable and uninterrupted power supply in remote areas where traditional electricity grids are unavailable.
Clear Blue’s patented Smart Power technology operates and remotely manages solar, hybrid, and wind-powered devices and connects them to a cloud-based management system. Together with Clear Blue’s ongoing management service, this smart technology reduces the upfront costs of off-grid power systems by over 40%, and it simultaneously improves the reliability of these systems.
Clear Blue generates revenue in two ways.First, it generates revenue through salesof power and energy systems, including its Esite-Micro and Smart Nano-Grid systems, its Illumient solar-powered street lighting systems and its Smart Pico-Grid systems for satellite internet and Internet of Things devices.Second, it generates recurring revenueby providing its Energy-as-a-Service (“EaaS”) management and service offering using the Company’s industry-leading cloud-based management software and service, Illumience.
Clear Blue manages and operates all its Smart Power systems, which have been sold in 45 countries around the world to date, generating a recurring revenue stream. Each new system is sold with three years of pre-paid ongoing management and operations service. The growth and expansion of these services, both during the initial term and after this initial three-year period, is a growth area for Clear Blue. In North America, Clear Blue has customers in at least 28 U.S. states and 9 Canadian provinces. Globally, Clear Blue’s systems power and control lighting, security, and telecom applications, including sites in Europe, the Middle East, Africa, and Southeast Asia
Products
Illumient
Clear Blue's Illumient Smart Off-Grid street lighting solution offers a smart and cost-effective solar streetlight system. With no trenching or cabling required, upfront capital costs are minimized. The Illumience cloud software enables remote management, ensuring reliability and proactive maintenance. These lighting solutions can be installed anywhere, regardless of grid power availability, and are highly energy efficient thanks to the cloud management service. Clear Blue's Illumient provides a comprehensive solution for smart and sustainable street lighting needs.
Nano-Grid
To establish affordable and dependable connectivity in remote regions, a reliable power solution is essential. Clear Blue Technologies's Nano-Grid enables the provision of low-cost telecommunications services in rural areas. Nano-Grid presents an optimal answer to the challenges faced in this market. With its modular design, Nano-Grid is custom-sized to meet the specific energy system requirements of each site, minimizing upfront expenses while remaining adaptable to accommodate the growing needs of the population. Clear Blue's cloud software, Illumience, offers remote monitoring and management capabilities, reducing operational costs by minimizing the need for costly maintenance visits.
Esite-Micro
Esite-Micro power system, a hybrid smart solution designed to provide cost-effective and dependable power for large-scale telecom systems globally. With its capability to deliver reliable 24V and 48V solutions, Esite-Micro caters to both solar-only and solar-hybrid telecom sites. Powered by Smart Off-Grid technology, this system is seamlessly managed through Clear Blue's cloud control platform, Illumience, ensuring optimal uptime and minimizing total cost of ownership for large off-grid, on-grid, and challenging-grid telecom sites worldwide. The Esite-Micro power system offers a reliable and efficient solution for powering telecom infrastructure in diverse environments.
Energy-as-a-Service
Energy-as-a-Service (EaaS) is Clear Blue’s subscription-based service that provides clean, wireless power for critical systems such as off-grid streetlights, telecommunications systems, and Internet of Things (IoT) devices along with coverage for the power system’s management, maintenance and battery replacement costs.
Pico-Grid
Pico-Grid is Clear Blue’s power solution specifically tailored to the satellite internet market. Pico-Grid is a smaller solution which powers satellite Wi-Fi equipment for community-based Wi-Fi hubs. Pico-Grid’s compact nature minimizes upfront costs, which is a significant advantage in an extremely cost-sensitive market. Also, Pico-Grid includes Clear Blue’s leading edge cloud management software, Illumience. Through Illumience, Clear Blue manages power to deliver high reliability and maximum uptime for this critical service while keeping maintenance and operating costs low.
Financial Information
The year 2022 presented significant challenges and setbacks. These setbacks were primarily attributed to delays in customer rollouts and deployments, influenced by the global macro-economic environment. However, it is important to note that the majority of these projects were delayed rather than canceled, and customers still anticipate their deployment in the future. With the arrival of the new year, many of these projects have been rescheduled and are expected to proceed in the second half of 2023. Furthermore, it's worth noting that one of Clear Blue's partners is currently in anticipation of a substantial loan from the European Infrastructure Bank. Should this partner successfully secure the loan, I anticipate a significant upswing in Clear Blue's sales orders for the year 2024 and beyond.
Before the challenges encountered in 2022, Clear Blue's sales were on an encouraging path of rapid expansion. While sales during the first half of 2023 have dipped in comparison to the same period in 2022, it appears that 2023 is shaping up to be a considerably stronger year for the company. Clear Blue Technologies seems to be on a promising trajectory for the remainder of 2023 and into 2024, as they report bookings of $4,654,286 in Q2, with an expected revenue of $3,920,006 to be recognized within the next 12 months. These robust bookings, coupled with a growing sales funnel, are expected to push the company's revenue trajectory into the positive, indicating a recovery from the 2022 downturn attributed to macro-economic factors. Clear Blue's strategic acquisitions and the introduction of three new products over the past year have significantly expanded their product line, offering a wider market reach.
One key highlight is the strong demand for Illumient's new CAMMI and SENTI products, which provide competitive pricing and impressive light performance. Customers are increasingly turning to off-grid solar lighting as their primary choice, rather than as a backup to grid lights. Additionally, Clear Blue's Pico-Grid, offering power from 2W to 20W for IoT and Wi-Fi applications, is gaining traction.
The company's sales funnel reflects strength across all markets and products, with expectations of contributing to revenue for the rest of 2023 and beyond. Looking ahead, Q3 2023 is anticipated to yield revenue in the range of $1.5 million to $2.2 million, with potential for Q4 to be the strongest quarter of the year, as orders continue to solidify and are scheduled. Furthermore, early 2024 appears promising with a robust set of projects in the sales funnel. Clear Blue maintains a cash-centric focus, aiming for revenue growth, net-zero cash burn, and positive EBITDA for Q3 and Q4 2023, aligning with their objectives for the year.
Revenues by year
Revenue by Geography
Next, we'll take a closer look at the company's financial performance over the past four years. But keep in mind, while historical data is insightful, it's only one piece of the puzzle.
Financial Data
| In USD$ | 2022 | 2021 | 2020 | 2019 |
|---|---|---|---|---|
| Sales | $2.6M | $8.1M | $4.0M | $3.9M |
| Gross profit | $988k | $2.3M | $1.2M | $891k |
| Gross margin | 37% | 28% | 32% | 22% |
| Net income | -$5.7M | -$3.4M | -$3.8M | -$5.1M |
| Cash | $853k | $2.1M | $3.5M | $61k |
| Total debt | $8.9M | $6.6M | $3.1M | $1.1M |
| Free cash flows | -$5.9M | -$6.8M | -$3.2M | -$4.6M |
| Working Cap | $919k | $3.4M | $4.5M | $1.2M |
| Current ratio | 1.2 | 1.8 | 2.4 | 1.3 |
Notable Developments
The following recent developments provide us with a clearer sense of what lies ahead, which is what truly matters.
At present, Clear Blue maintains a cash reserve of $746,100, but its financial outlook is bright with a consistent influx of funds from grants and interest-free loans. Furthermore, the company's gross margin has seen a notable improvement, surging from 35% in Q2 2022 to a healthier 41%. These financial indicators underscore Clear Blue's solid fiscal footing and its potential for sustained growth.
Trendpost Takeaway
When envisioning the future state of our cities in 10-15 years, I imagine a landscape filled with self-driving vehicles and a vast proliferation of internet-of-things devices. In this vision, the majority of people across the planet have seamless access to cellular and internet communications, even in the most remote areas. Additionally, I foresee a significant global demand for off-grid energy solutions. Clear Blue is a company well-positioned to reap substantial benefits if these trends materialize, given their expertise in providing innovative solutions in the off-grid energy sector.
I firmly believe this company sits at the crossroads of opportunity and perfect timing. Consequently, I'm thrilled to introduce CLEAR BLUE TECHNOLOGIES as the first addition to the portfolio. With its remarkable potential, a capable management team, and an outstanding CEO at the helm, I have very high hopes for its future success.
Remember that the content of this newsletter is neither a stock recommendation nor investment advice. This is just something to consider. You can access the watchlist and portfolio through the link below. By clicking the link below you accept all responsibility for any potential losses that might result from buying any of the stocks mentioned in this newsletter.