Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8) (“Draganfly” or the “Company”), an award-winning, industry-leading drone solution developer and operator, is pleased to announce its third quarter financial results.
Key Financial and Operational Highlights for Q3 2021:
Revenue for the third quarter increased 30.5% to $1,896,992 up from $1,453,905 in the third quarter of 2020. Third quarter revenue was made up of $1,351,517 from product sales while $411,756 was from drone services with the balance coming from engineering services.
Gross profit increased by $212,586 or 37.9% for the third quarter over the same period last year. Gross margin percentage for Q3 2021 was 40.8% compared to 38.5% in Q3 2020. This was attributed to a larger contribution of engineering services this quarter versus the same period last year, as these services tend to have higher gross margins than the other categories.
Total comprehensive income for Q3 2021 was $24.0 million compared to a loss of $2.5 million in Q3 2020. The large increase is from the accounting treatment of a $30.6 million non-cash liability from USD warrants that were issued during the Company’s Reg A offering. The year over year comprehensive income increased as Q3 2020 did not have the treatment of the USD warrants from the Company’s Reg A offering. The increase year over year was somewhat offset by an increase in office and miscellaneous expenses and professional expenses.
Cash balance on September 30, 2021 of $28.0 million compared to $2.0 million on December 31, 2020.
Draganfly signed a minimum $9 million manufacturing agreement with Digital Dream Labs, Inc. (“DDL”) to design and develop an AI consumer companion robot drone (the “Drone”). As per the terms of the announced agreement, Draganfly will be the exclusive manufacturer and assembler. DDL will order at least 50,000 units annually with delivery starting in 2022. The Drone will be integrated into DDL’s existing product family, including support, sales, and distribution channels used for their other consumer robots. Draganfly has also been granted a right of first refusal to become the exclusive manufacturer and assembler of subsequent drone or UAV-based robots to be added to DDL’s product portfolio. The parties have entered into a binding letter agreement reflecting the above terms and will use commercially reasonable efforts to enter into a definitive agreement. The binding letter agreement will govern the relationship between DDL and Draganfly and there can be no assurance that a definitive agreement will be completed or entered into amongst the parties.
Draganfly entered into an exclusive manufacturing agreement with Valqari LLC (“Valqari”) to produce its Drone Delivery Stations. The Valqari Delivery Station is a patented universal drone receptacle for package delivery and pick-up. It will allow Valqari to revolutionize drone deliveries for industries including pharmaceuticals, meal delivery, grocery services, governments, and residential e-commerce. As per the manufacturing agreement, Draganfly will be the exclusive manufacturer of Valqari’s Drone Delivery Stations. Valqari will be ordering at least $400,000 of manufacturing services during the initial phase of the agreement.
Draganfly successfully completed over 300 daytime drone delivery test flights with EMS personnel in Texas. 100 of the successful flights were completed with the Company’s innovative temperature managed payload box, which can transport up to 15 pounds of medical supplies including vaccines and testing kits. The payload box is uniquely top mounted to make deliveries safer and more accessible. Initial night flight training and testing is being scheduled to commence. The data collected from Draganfly’s daytime and night flight tests will be submitted to the Federal Aviation Administration (FAA) for approval to enter Phase 2 of its five-phase agreement with Coldchain Technology Services, LLC. Feedback from EMS personnel is also being used to improve Draganfly’s training module and develop industry standards.
The Drone Racing League (“DRL”) announced a multi-year partnership with Draganfly. The companies will launch DRL Labs, an innovation hub, to research and develop next generation drone technology that will advance the sport of drone racing and other industries undergoing significant transformations through drones, including humanitarian aid and mobility. DRL will incorporate Draganfly’s groundbreaking AI Vital Intelligence platform into its 2021-22 DRL World Championship Season, which will be used to monitor pilots’ in-race heart and respiratory-rates. DRL will also release a “Why I Fly” Series Presented by Draganfly, spotlighting pilots’ personal journeys into drone flying during the 2021-22 Season.
Draganfly’s Drone Pilot Training program is now being offered at Alabama State University (“ASU”) in Montgomery, Alabama. The nine-week course includes an FAA Part 107 drone preparation course. To fly drones under the FAA’s Small Unmanned Aircraft Systems (UAS) Rule (Part 107), a Remote Pilot Certificate must be obtained. The certificate demonstrates that pilots understand the regulations, operating requirements, and procedures for safely flying drones. It is also inclusive of specific skills for sensors, software, and missions as it relates to varied specific high demand drone operations like emergency response, delivery, and security. Following the end of the pilot project in the winter, ASU is expected to add the course to its continuing education program. Draganfly’s Drone Pilot Training program will also be commercialized next year.
Draganfly’s Vital Intelligence Smart Vital system has been integrated into Fobi AI Inc.’s (“Fobi”) (TSXV: FOBI) Venue Management System for Conferences & Events. The venue management platform will now consist of Draganfly’s Smart Vital assessment system, Fobi’s Passcreator mobile Wallet passes, proprietary Smart Tap Devices, Smart Scan Pass Validation App, and Insight Portal for event analytics.
Draganfly launched its Draganflyer Commander2 drone system. Exclusively designed, developed and manufactured in Canada, the system fully complies with “Built-in-North America” requirements. It takes maximum advantage of federal regulatory requirements concerning the origin and security of drone systems and devices. The Draganflyer Commander2 is a small Unmanned Aerial System (sUAS) and replaces the highly respected Commander platform that launched in 2015. The new model improves operational capabilities and payload options, as well as offering new North American built and sourced flight controllers, sensors, communications, and utilises Mav-Link based mission planning software. Draganfly’s latest class leading drone is ready to answer the needs of the commercial, farming, geological, military, and emergency services sectors.