Great points about DDC not to forgetDon't forget that DDC is carrying a surprisingly good Balance Sheet for a start-up that we seem not to talk about much. DDC has no debt or bank loans. The share-based compensation that accounts for 20% of Operating Expenses is now in a proper context. So, from the 9 months of $10.9M Operating Expenses, with $2.1M in share-based compensation, $1.9M in R&D, $1.5M in Consulting Fees, $612k Depreciation, we can expect that longer term expenses will come down as the company matures. The remaining 9 month Operating Exepenses of $4.8M is about 50% Personnel. I am not certain as to why only $170k of $2.6M budget was actually spent for 2020. Perhaps they didn't need to spend the llocated amounts but it could be possible that these were delayed due to the pandemic.
Also keep in mind that the many, many planned routes will not show in the revenues until they are past their start up phases. They only include routes that are set up and in operation, running as regular routes. For example:
On March 23, 2020, the Company announced that the first route for DSV was commercially operational and began providing drone delivery services. As such, DDC had begun recognizing revenue in March 2020 related to this contract and in conjunction with the application of IFRS 15. As per the terms of the agreement, DSV pays DDC a monthly fee. All operations are conducted in accordance with the Canadian Aviation Regulations and Transport Canada flight authorizations. Flights are remotely monitored by DDC from its new commercial operations centre located in Vaughan, Ontario. The initial term of the agreement is fifteen months with additional successive one-year terms to follow unless the Agreement is formally terminated.
The Company completed deployment and setup of site infrastructure in September 2020 and began commercial operations from BFN mainland to BFN Christian Island. Revenue from this contract was included on a pro rata basis for the three months ended September 30, 2020 and consistent with the Company’s revenue recognition policies.
Others are not set up beyond testing phase.
On July 30, 2020, the Company announced it had entered into a commercial agreement with the Georgina Island First Nation ("GIFN") to deploy DDC's patented drone delivery solution to provide service to the GIFN community in Ontario.
Pursuant to the terms of the Agreement, DDC will enable a defined two-way delivery flight route from/to GIFN mainland to/from Georgina Island utilizing the Sparrow drone and its DroneSpot takeoff and landing zones as well as additional drone flight infrastructure as required. All operations will be conducted in accordance with the Canadian Aviation regulations and Transport Canada flight authorizations. Flights will be remotely monitored by DDC from its Operations Control Centre located in Vaughan, Ontario.
The Company has started the process to apply for an aircraft Type Design Approval for the Sparrow drone, with subsequent aircraft in DDC's fleet to follow. Potential US-based partners would use the DDC delivery system to conduct for-hire drone delivery operations in the US under 14 CFR Part 135 rules. The aircraft Type Certification effort is an essential first step for enabling FAA approval of routine beyond visual line-of-sight delivery operations, which in-turn will provide significant opportunities for expansion. The Company is currently permitted to conduct limited delivery operations in the US using visual line of sight regulations under 14 CFR Part 107 rules.
Also, DDC has grown in value through its patents. ($762k as of Sept 2020)
On April 21, 2020, the United States Patent Office granted DDC Patent 10,625,879 which covers aspects of DDC's drone delivery technology and processes relating to controlled access zones for UAV landing and takeoff.
The patent is directed to aspects of DDC's proprietary FLYTE management, which is a core component of DDC's drone delivery platform. Additionally, the patent is also directed to aspects of DDC's 'RAILWAY IN THE SKY' concept that is intended to simplify routing and control of delivery drones particularly in crowded urban areas.
On July 16, 2019, the United States Patent Office granted DDC Patent #: 10,351,239 which covers DDC's proprietary FLYTE management software system along with its drone delivery technology and processes.
The patent is directed to aspects of DDC's proprietary FLYTE management which is a core component of DDC's drone delivery platform.
Additionally, the patent is also directed to DDC's 'RAILWAY IN THE SKY' concept that is intended to simplify routing and control of delivery drones particularly in crowded urban areas. The system provides a database for a flight route network that includes a number of route sections that can be selected to provide a desired routing.
The Company continues to work on additional patents pending and potential new applications.
DDC has no debt, maintains value from its patents, is investing in R&D and growing revenues, many routes which have yet to show their revenues but are underway. These points are net positive, in my mind, but easily overlooked.