Global UAV Technologies Ltd (CSE: UAV) is arguably a leader in the small unmanned aerial vehicle (UAV) sector that exists within Canada. While this emerging industry works on coming to fruition, Global UAV has managed to compile a portfolio of diversified subsidiaries in the field. These strategic acquisitions, all of which occurred in the last year, have enabled the company to get a lead on many of its competitors.
Recently, it appears that the market has slowly taken notice of this fact. After consolidating in the single digits for months on end, Global UAV’s share price finally woke up at the start of this year. If investor sentiment is any indication, the consolidation that followed will be nearing an end shortly as well with the filing of the latest company financials.
High hopes rest on these financials, as investors have been without details since September 21 when the last data was filed. Although positive, numerous developments have occurred in the time since this information was released. Lets take a look at a handful of the positive indicators Global UAV currently has on the go.
Global UAV Technologies: Three Positive Developments
Gobal UAV’s Latest Quarterly Results
By and large, one of the most positive indicators for the future of Global UAV is their performance for the third quarter of 2017. For the quarter ended July 31, 2017 Global UAV Technologies managed to post a profitable quarter. On the Canadian Securities Exchange, this occurrence is few and far between.
Although positive on the quarter, they did still post a deficit for the nine month period which does need to be acknowledged. It should also be noted that salaries and wages seem absurdly low for a company with four separate subsidiaries. During the three month period they managed to spend more funds on investor relations than that of paying their employees. Nor is share-based compensation overly high, which leaves us with a few questions.
In addition to posting a positive income statement for the three month period, the company also managed to post a positive cash flow. This was due in part to warrants that had been exercised in the period to the tune of $242,750. Overall, on the quarter the company registered a cash gain of $97,013. Not a large number, but positive nonetheless and an excellent sign of what may be to come in the latest filings.
Global UAV’s Three Cornered Approach
The second item on our list for positive indicators, is the three cornered approach that Global UAV Technologies has taken to the sector. Rather than focus on one niche of the industry, they’ve taken a more vertically integrated approach. This is displayed through the three divisions in which their four subsidiaries currently reside. Here’s a quick run down.
The vertical integration of Global UAV starts at the bottom – the regulatory aspect of the industry. Sensing the potential this emerging industry has, the company acquired UAV Regulatory Services Inc.
Through this subsidiary, they assist users with obtaining special flight operation certificates (SFOC). What is a SFOC? Its the certificate that allows you to legally fly a UAV within Canada. UAV Regulatory Services is focused on assisting users throughout the application process to obtain such a license, whether it be for recreational or commercial use.
- Manufacturing and Engineering
Once a user has obtained a special flight operation certificate, Global UAV is able to assist the user with the next step – purchasing a drone. Although it’s not entirely certain if the company uses this vertical integration to its full advantage, it is certainly an option.
Global UAV handles its manufacturing through NOVAerial Robotics, a subsidiary that currently manufacturers the drones themselves in addition to the accompanying specialized sensors and equipment. It currently offers users one model, however it is believed that two more models are currently being prototyped. These units are of a high enough commercial quality that the company’s other subsidiaries actually utilize them in their specialized operations.
- Manufacturing and Engineering
The last division of the company is comprised of specialized services it provides to the global market. To serve its global customers, Global UAV utilizes two separate subsidiaries.
The first of which, is High Eye Aerial Imaging. Originally focused on providing imaging and surveying services to its customers in Ontario, High Eye has since evolved to focus on providing LiDAR and thermal imaging surveys to its clientele. Through this highly niche market, High Eye can focus on servicing large government agencies and industrial partners.
Pioneer Aerial Surveys, the fourth and final subsidiary owned by Global UAV is also what we view as the most promising. Pioneer Aerial is currently engaged with several clients around the world – from Africa to South America. The subsidiaries primary focus is that of utilizing its proprietary software known as UAV-MAG. This technology is utilized primarily in the resource sector as a means of mineral exploration. However, it has recently crossed over into the unexploded ordinance field where it has proven successful as well. This specialized technology has been in demand in several regions around the globe, from both government and private agencies.
This three cornered approach by Global UAV was implemented shortly after the most recent financials. This is thanks in part to the acquisition of NOVAerial Robotics on August 9, a few days after the end of the third quarter. Information issued by the company has been viewed positively since the time of this acquisition, however the numbers will tell the whole story in the next financial filing.
The final overly positive indicator for Global UAV Technologies is the strategic relationships it has managed to form in a short time frame. Of particular importance, is the government agencies and NGO’s the company has chosen to align itself with.
Of particular note, is the relationship the company has formed with the Canadian Trade Commissioner Service. Through this government agency, the company has been opened up to a range of governmental contacts around the world. This includes contacts in Africa that are assisting the company with gaining access to the region, in particular with national companies. In addition to this the Service recently was able to secure a spot for Global UAV at WEST 2018, a conference for military, government, and industry leaders. Of particular note, is a number of private meetings that were secured with the US Department of National Defense and other large stakeholders.
In addition to the US Department of Defense, Global UAV has had discussions with it’s Canadian counterparts as well. In this regard, they have performed demonstrations for members of the National Research Council of Canada as well as the Department of National Defense, which occurred back in November 2017. This could be a potential key contact should the Department elect to utilize the NOVAerial units that were being demonstrated.
Finally, is the non governmental agencies that Global UAV has performed its services for. Specifically, this comprises of the Fallen American Veterans Foundation, an NGO committed to bringing home missing in action American soldiers. The contract is for operations worldwide, however the first mission is located in that of Greenland. Here, Global UAV will aid in searching for a US Coast Guard ship lost in November 1942 that is now hidden beneath layers of ice. The work conducted through this NGO will then potentially lead to further contacts for the company.
At this point in time, we view Global UAV Technologies in a quite favourable light. However with that being said, we are eager to review the latest financials due out by the end of the month. Many developments have occurred in the time since the last company filing, and the potential effects on company financials are quite large.
Unfortunately, the latest financials won’t give us an entirely clear picture of the latest success of the company. With these financials being for the period ending October 31, much of the most notable items have since taken place for Global UAV and therefore will not be included in the figures provided. Our only hope is that the company can continue to display strong financials through its period of rapid growth.
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Information for this analysis was found via The CSE, SEDAR, High Eye Aerial imaging, Pioneer Aerial Surveys, UAV Regulatory Services, NOVAerial Robotics, and Global UAV Technologies Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.