Drone Delivery Canada Annual Financial Statement Review (FLT.V)(TAKOF)
If you get any value out of this video, please remember to click that like and subscribe button and lets jump right in okay. So, first of all, the goal with this video is to just kind of share my perspective with the results of the 2021 financial statements and the management discussion and analysis im just trying to share with you what i think about them. What goes through my head and how i feel about the company after what has happened over the last 40 year and a half now drone delivery, canada, if youre not aware they trade in canada under the ticker symbol, flt, they trade in the u.s under t a K, o f company is headquartered in toronto, and the price is 67 cents, canadian, as i filmed this video, giving them a market cap of about 150 million dollars. That is a very important number, and that is something youre going to want to keep in mind. As we go through this video, keep asking yourself: is this company worth 150 million dollars? If i was just gon na, buy everything out so something to keep in mind there? Uh logo is down beneath here, and the website is dronedeliverycanada.com. Now i have made a bunch of different videos about this company before i basically review all of their different financials ive also interviewed the former ceo twice on this channel. So if you want to see any of those videos or how i felt about them in the past, everything is available for you there on my channel, but in this video i want to talk about what theyve done so far and then the results of these financials And so far this year, theyve made a variety of different changes.
So the first major change and probably the biggest change so far, has been the new ceo. His name is steve midgirius and it looks like he has a lot of experience and a lot of knowledge that he could bring to the table. So this could be very exciting. I have reached out to drone delivery canada to try and set up an interview with steve, so steve if youre watching this, please respond. Let me know if you want to come on the channel. We would love to get to know you and ask you a couple of questions join delivery. Canada has also started doing uh delivery of dangerous goods with dsv, so that was a recent press release that just went out and theyre still testing and trying to develop the new canary drone, and they also do not have a firm timeline on the condor drone. I went through kind of all the notes i could find and it doesnt seem like. We have a solid update on that, or at least a solid timeline on that it looks like its still kind of going through the process so thats, where we at so far. This year now the financials uh got posted on friday after the close. Now i dont know if anybody else has figured this out, but i have no way to figure out when these financials are coming out, feels like the company. Doesnt really tell anybody and they dont really give a whole lot of heads up.
So if you have figured that out, please leave it in the comments down below otherwise im just kind of waiting until somebody else shares it, but they are available publicly theyre available on cdar.com heres the link to them. If you want to find them for yourself, i will put this in the description down below, but this is where im going to be pulling all of the information from in the next little, while so all of its publicly available and my goal with this video is Im, an investor im, a retail investor, just like you and all i want to do here – is just kind of share my opinion of what i think as i go through these financials uh. If you have a different opinion or you think, im doing something wrong, please leave it in the comments down below id love. To just hear your opinion, what you guys think and if im wrong, thats good, because it means im learning something so thats. What im? Looking for and uh, the first thing we are going to do here is start with the balance sheet. Now i always like to look at the balance sheet first, and the reason is because the balance sheet helps us understand how a company got to where they are. Today so, for instance, if you have a company that does a million dollars in revenue, but they have 20 million dollars in debt, that is a very, very different story than a company that does a million dollars in revenue and zero dollars in debt.
And so the balance sheet helps us get a much much better perspective when we switch over and we go to the income statement. The balance sheet basically shows us what is in the company? What does the company owe and how did they get to where they are, and then the income statement shows us how well theyve operated over the last three months or one year time period and so thats? How i kind of think about things and when we go through the balance sheet for drone delivery, canada, its really nice, because they actually have 28 million dollars in current assets, of which 27.6 is made up of cash and cash equivalents. So that is beautiful, especially when we compare it to their total liabilities of only 2.19 million dollars, so they have well over 10x the amount of cash as they have total liabilities, which is an extremely healthy measure of a balance sheet. So thats very nice to see. However, they do have a 76 million dollar deficit, meaning that theyve gone through 76 million dollars just to get to where theyre at today and they have ‘6 000 of deferred revenue. Now this line item actually wasnt on the previous balance sheets. Theyve changed how theyre, displaying and formatting their balance sheet to include this line item here and i think its because a lot of people missed it on the last balance sheet. But this is really important and its kind of an important number so right now um at december 31st.
2021. This number was ‘6, however, at september 30th, 2021. So, three months before that the deferred revenue was part of trade and other payables, so it was kind of clumped into that category on the balance sheet and it was 443 000 at that time. Three months earlier and so deferred revenue is payment for customers, payment from customers for future goods or services and unfortunately deferred revenue over the next over. The last three months has actually declined by about forty thousand dollars, which is not great and uh. They have changed how this is presented so that they can show this on the balance sheet, probably or presumably to show people that they have uh signed contracts and how much those contracts are worth. Unfortunately, that number has decreased over the last three months, so i definitely like the change that theyve made, but i definitely also want to see this number increase fairly dramatically actually over the next few years. Now, when it comes to their income statement, now that we know how this company got to, where they are, they spent 75 million dollars to get to this point, theyve got 28 million dollars of cash in the bank or whatever it is, and now we can look At the income statement with all of that, in the back of our mind and when we look at this income statement, its really interesting, because revenue went up by a pretty significant amount from 265 to 335, so it went up by about seventy thousand dollars here.
So a nice little margin, you could call that maybe thirty percent right here – thirty percent revenue growth, roughly im just doing quick math in my head here, so a nice kind of revenue, growth number here. Unfortunately, 335 000 of revenue for 150 million dollar company isnt. Very much and i would actually expect this revenue to increase much much more dramatically and so uh in my head theyre a little bit behind on revenue, and then we have all of their operating expenses im going to dive into this in just one minute here, but Their total operating expenses was 15.2 million dollars to bring in 335 000 and that gave them an operating loss of 14.9 for a net loss of again, 14, basically 0.7. And so that is how much money theyre losing on an annual basis just to operate. And if we compare that to the balance sheet, they have about 27.6 million dollars of cash in the bank. So if they just maintained this pace and they werent able to increase revenue, they would have roughly two years of runway, so thats sort of how i look at this company is they have about two years before they need to either really start to dramatically increase this Revenue and start to turn some real money here or theyre gon na need to raise some more money and possibly dilute shareholders. So those are the two kind of paths that are coming down: uh coming down in the next sort of one to two years, at least from my anticipation, based on what i see in the balance sheet compared to the income statement.
Now, when we shift this over and we go to the expenses – basically not shift it over, but we dive in and we do a little bit more detailed research on these expenses here um. I have a couple of questions because i think some of these numbers are a little bit high, maybe im just not kind of fully understanding it. Maybe we just need steve to come on and give us a little bit of context to some of these expenses, but the ones that specifically raised some flags for me are the advertising promotion at 1.67 million dollars if youre spending 1.6 million dollars to bring in 335 000 worth of revenue and about the same amount worth of deferred revenue. Those arent very good ratios, especially considering that shareholder information, is considered its own line item for 270, 000, so youre, not even advertising or promoting to investors and shareholders. I have no idea who theyre spending 1.6 million dollars advertising to, because in my mind, this should be one or two internal sales, reps that are picking up the phone and trying to stir up some business, so this is kind of cool. This is a question in my head, the other questions that i have are around some of the expenses with regards to personnel, so they have consulting here for two million dollars. They have personnel expenses here for 4.8 million dollars and then they have share based compensation here. For 1.35 – and so i mean when you add this up here – its well over seven million dollars that theyre paying to employees or consultants or executives or whatever, you want to call it uh, but its seven million dollars for 300 000 in revenue and its just the Expenses seem fairly high for the amount of production that were seeing out of this company, especially because it also doesnt feel, like weve, seen a whole lot of substantial news releases or progress over the last, at least in my mind, over the last six months, so thats.
What goes through my head here? Some of these expenses seem a little bit high and like seven to eight million dollars worth of um money that is going into people to run. The business uh seems very, very high to me as well. Now, when it comes down to quarterly revenue, like i said it was nice to see the the number increase, we did. 115 000 in the last quarter, uh the quarter before that was only 6 000 and then 18 000 and the first quarter of the year was actually the best quarter of the year at 194, 000, and so, unfortunately, the revenue is down from q1 of 2021 and Total assets is also kind of just slowly falling down here, so eventually they will have to either ramp up revenue significantly or raise more money. So, in my mind, its kind of mixed results when we look at this chart theres nothing real great about this chart. Here, though, and when we look at the budget, its also kind of mixed results, so i reviewed the 2020 and the 2020 actual um in one of my previous videos, and now we have the 2021 budgeted versus the 2021 actual and it was fairly close, like their Total expenditures were fairly close to what they actually spent uh. The scaling of management and sales team was slightly down here, probably because they didnt have the product to sell, which is probably why they spent more on commercial testing.
So like these numbers kind of make sense in my head here, but still it just feels like it just feels like the revenue number is a little bit low for the uh for what whats going on in this company. Now, when we look at the stock chart its very, very interesting chalk stock chart, it feels actually uh kind of crazy here. So we can see all the way back to 2018. Stock ran up to a high of two dollars and 27 cents came all the way back down to around 60 cents ran up to a brand new high of 2.55 cents and just wasnt able to stay in this sort of area. So we saw rejection, and now the stock has fallen. All the way back down to the exact same level of support here from 2020 were currently trading at 67 cents. Right now you can see in the top left here, and i think my original position in this stock well over a year ago was at like 66 cents. So its been a uh a very, very interesting year and a half holding the stock and seeing this company and following this company and uh and and it just feels like a little bit of a roller coaster now here are my final thoughts. After going through those financial statements and looking at that stock chart number one, i think this company has huge potential. I absolutely love the business model. I think everything that they are doing strategically is in the right direction.
I just dont think that they have executed it very well. I think theyve been slow. I dont think they. They have secured the deals that they should have done. I dont think that they have progressed as quickly as everybody has hoped that they would progress and it feels like they havent done um, maybe maybe thats, not even the right term. For it. It just feels like the grand vision is so great, and it feels like we havent made as much progress as we would have liked, at least as an investor sitting on the outside, where the only updates i really get are these are these press releases that come Out of the company and uh its tough to really stay on top of the progress thats happening because its also tough to see it so thats what goes through my head. I also think that some of the expenses seem extremely high to me, like i said its like six or seven million dollars worth of expenses that are going to people to run the business. That seems just outrageous for the amount of revenue theyre bringing in, and i would also love to see an update, or at least an anticipated timeline or an expected timeline, or even just a goal of when the condor is going to be ready. And once when. Some of the other developments are going to be ready, michael zara, the last time i spoke with him. He said that the condor was not held up by regulations or approvals.
It was held up by the company itself and so id really like to see an update. A good update with some timelines on that to uh to hold them accountable. So those are my final thoughts thats. What i think about the company, if you disagree with me, i totally understand i completely get it. I i i know i get it leave it in the comments down below. I will do my best to respond to you. I would love to have some feedback from you and, if youre interested or you like how i reviewed this stock, where you like how i look at these companies, i put all of my knowledge and all of my information into a course that is completely free. Its literally completely free its on skillshare, you sign up with the link down below you, create an account you get a free trial. My course is 10 hours long. It has over 10 000 students in it 380 reviews for you to read through and if you cancel that subscription before the trial is over, you get my course you can take any other course on the platform of skillshare as well completely free cancel the subscription. You wont pay a single penny and uh. I promise you itll be well worth your time, so definitely check that out and hopefully steve if youre watching this. I want you to come on the channel. I want to set up an interview for you.