BDC Cleantech Practice provides $5M loan to Clear Blue Technologies

CPE News (4/16/2020) – Clear Blue Technologies International Inc. (TSX-V: CBLU) has announced it has signed a contract with a Telecom operator in Africa to deploy 2G and 3G cellular networks in rural areas of Africa. This initial contract is for the year to roll out an initial 500 sites for an estimated $3.5 million

Clear Blue Technologies also announced a $5 million loan facility with BDC Cleantech Practice with an initial $2 million tranche delivered April 9th, 2020. Clear Blue intends to use the proceeds from the BDC loan facility for growth capital and R&D.

Toronto based Clear Blue delivers clean, managed, wireless power – anywhere and anytime. The company uses patented Smart Off-Grid technology, delivered through its Energy-as-a-Service business model, to manage lighting, telecom, Internet of Things devices, and other critical systems around the world. Clear Blue has thousands of systems under management across 37 countries, including the U.S. and Canada.

BDC Cleantech Practice is a $700 million five-year commitment announced in 2018 to help high-potential Canadian cleantech firms with market-ready technology or products meet the capital-intensive needs of scaling and achieving timely growth. It generally invests in companies by way of equity and semi-equity (convertible debenture).

Both BDC Capital Growth & Transition Capital and EDC have been providing loan financing to Canadian companies for growth capital and export support needs.

photo credit: Clear Blue

News Release

Clear Blue Closes Large Scale Telecom Rollout Contract & Debt Financing with BDC
Telecom Contract is part of Large Scale Rural Cellular Roll Out by Major Telcos in Africa

TORONTO, April 16, 2020 (GLOBE NEWSWIRE) — Clear Blue Technologies International Inc. delivers clean, managed, wireless power – anywhere and anytime. “Clear Blue” or the “Company” (TSXV: CBLU) today announced that it has signed two key contracts:

a contract with a Telecom operator in Africa to roll out an initial 500 sites this year. The entire program is planned for a phased roll out over the next 3 to 5 years. This initial contract is for the year one volumes of 500 systems for an estimated $3.5 million CAD, the majority of which we anticipate will be booked this year. The Company received the purchase order for the first 50 systems with the signing of the contract.
a $5 million loan facility with BDC, Canada’s bank for entrepreneurs which includes an initial $2 million tranche delivered April 9th, 2020. The Company intends to use the proceeds from the BDC loan facility for growth capital and R&D.

Telecom Project

“The telecom project will deploy 2G and 3G cellular networks in rural areas of Africa, providing low-cost mobile internet coverage through commercially sustainable models that can be scaled and replicated,” said Miriam Tuerk, CEO and Co-founder, Clear Blue. “It is exciting to see the largest telecom firms in Africa lead the way with innovative technologies and business models to bring much-needed communications and connectivity to the more than one billion underserved people in the world’s emerging markets.”

Bringing rural mobile internet coverage, with critical data services, to rural areas can be twice as expensive as in urban areas when using traditional technologies. Next generation open cellular-based radio technologies, coupled with satellite services and Clear Blue’s Smart Off-Grid highly reliable low cost power services brings a technology solution that makes this next wave of cellular network coverage possible.

Clear Blue’s Smart Off-Grid technology delivers clean, managed, wireless power, anywhere and anytime. Clear Blue’s service team uses its Illumience platform to manage, control and operate all power systems remotely, ensuring the high availability and service levels needed for telecom services. Illumience is the industry’s most advanced off-grid management service, providing real-time, 7×24, remote control, monitoring, and management of systems using Smart Off-Grid power.

BDC Loan Facility

Additionally, Clear Blue has received $2 million from BDC as a first tranche of a $5 million loan facility. The loan has a 5-year term and consists of an initial period of interest only payments through August 15, 2022, and a subsequent period commencing on September 15, 2022, of principal and interest payments, culminating in a balloon payment at the end of the term. Subject to meeting certain financial milestones, the Company has the option to draw down an additional $3 million in $1 million tranches. The loan is secured against the assets of Clear Blue and each of Clear Blue’s subsidiaries and carries a variable base interest rate per annum of 7.5%. In addition to the cash interest a non-compounding payment in kind (“PIK”) interest of up to 9.5% per annum will accrue, depending upon various factors.

This transaction was led by Cheri Corbett, Director Cleantech Practice for BDC. “Clear Blue has an innovative and unique technology and business model. Their presence in 37 countries and their adoption in lighting and telecom verticals at this early stage of their growth, is quite impressive. We are pleased to support them as they continue to scale and grow.”

In connection with the BDC loan facility, the Company agreed to issue an aggregate of 72,100 common share purchase warrants (“Warrants”) of the Company to certain existing debenture holders of the Company as compensation to enter into postponement agreements in favour of BDC. Each Warrant will be exercisable for one common share of the Company for a period of 18 months following the date of issuance at an exercise price of $0.50 per common share. All Warrants proposed to be issued by the Company will be subject to a statutory four month hold period in accordance with applicable securities legislation. The issuance of the Warrants is subject to approval from the TSX Venture Exchange.

Certain directors, officers and other insiders of the Company will acquire direction and control over a total of 18,200 Warrants in connection with the Warrant issuance to existing debentureholders of the Company. The issuance of securities to those persons constitutes a related party transaction as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance of securities to the related parties is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101 and exempt from the minority shareholder approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101. The Company did not file a material change report 21 days prior to this announcement as the details of the participation of insiders of the Company had not been confirmed at that time.

Covid-19 Update

With respect to the ongoing Covid-19 pandemic, the Company’s distributed, remote management business model and geographically diverse customer base in 37 countries provides significant mitigation to the ongoing business risks related to this virus. With installations provided by our local partners, travel risk to Company personnel is limited and we have taken steps to significantly reduce ancillary travel. However, significant risks remain related to global economic activity as a result of the virus that could have material impacts on the Company in general and the two contracts reported herein.

About Clear Blue Technologies International Inc.

Clear Blue delivers clean, managed, wireless power – anywhere and anytime. We use our patented Smart Off-Grid technology, delivered through our Energy-as-a-Service business model, to manage lighting, telecom, Internet of Things devices, and other critical systems around the world. Clear Blue has thousands of systems under management across 37 countries, including the U.S. and Canada. Clear Blue is publicly traded on the Toronto Venture Exchange under the symbol CBLU and on the Frankfurt Stock Exchange (FRANKFURT: 0YA). Learn more at www.clearbluetechnologies.com.

About BDC

BDC is the only bank devoted exclusively to entrepreneurs. It provides access to financing, both online and in-person, as well as advisory services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of risk capital solutions. For 75 years and counting, BDC’s purpose has been to support entrepreneurs in all industries and all stages of growth. For more information and to consult more than 1,000 free tools, articles and entrepreneurs’ stories, visit bdc.ca.

Legal Disclaimers

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Media Contact:
Becky Nye
Director
Montieth & Company
155 E 44th St., New York, NY 10017
bnye@montiethco.com
+1 646.864.3517

Investor Relations:
Miriam Tuerk
Co-Founder and CEO
+1 (855) 733-0119 x200
investors@clearbluetechnologies.com
http://www.clearbluetechnologies.com/en/investors