Deveron UAS Corp. (DVR.CN) is agriculture technology company focused on providing data acquisition services and data analytics to the farming sector in North America. Coverage was initiated in June 2017 with notes on December 2017, April 2018, September 2018 and March 2019. Below is an update.
Mar. 29 - Issues Stock Options. - A total of 2.57M at $0.30 cents with a three and five years expiry date from March 25, 2019.
Apr. 11 - Deveron Reports Significant Increase in Q4 and Year End Revenue. FY 2018 Revenue up to $0.5M vs. $0.2M in 2017. Operating Income up to $0.1M vs 0.06M in 2017. Q4 2018 Revenue up to $0.2M vs. $0.03M in 2017. Total current assets in 2018 increased to $3.4M from $1.5M in 2017.
“2018 was truly a transformational year for Deveron. Our focus has been to turn Deveron into an integrated agriculture technology company that focuses on two products: data acquisition and data analytics” - David MacMillan, President and CEO.
May 7 - Offers Drone Based Data Solutions for Cereal and Canola Crops. Partnership and distribution agreement with Airinov to provide North American growers with a solution for managing in-season crop nutrient applications. The offering will use high-resolution in-season imagery collected by UAV (“Drone”) to drive nitrogen placement decisions in crops such as wheat, barley, oats and canola.
May 16 - Partner with World Class Extraction to Deliver Advanced Data Insights to Hemp Farmers in the United States and Canada. World Class Extractions (CSE: PUMP) to provide its network of hemp growers and affiliates with best in class data insights in the United States and Canada.
New Frontier Data, a leading technology-driven analytics company specializing in the cannabis industry, projects global hemp sales to hit a record $5.7 billion by 2020. Given the strong increasing demand for hemp-derived CBD products, both companies believe they can drive improved production of hemp at the farm level, ultimately improving quality and yield.
June 11 - Secures Drone Phenotyping Research Work in Western Canada and US Midwest. The work will use imagery collected by UAV (“Drone”) to enable new efficiencies in high-throughput phenotyping and crop protection research for the advancement of various crop technologies.
The projects will cover a wide range of growing environments, including Missouri, North Dakota, Ohio, and Saskatchewan. Through Plot-level data, measurements of crop traits such as seedling vigour, disease resistance, and flowering progression will be undertaken.
July 2 - Corporate Update - SOAR is positioning Deveron to be a leading agriculture technology company that derives improved outcomes on the farm by turning data into actionable information - The linkage of data analytics and data acquisition services is a cornerstone for the future.
All of our arrangements are continuing to grow our data services businesses in both analytics and collection and set us up for further success throughout the 2019 grow season. Also granted 0.66M options from $0.30 - $0.375 to employees and advisors of DVR.CN with a May, July 2020 expiry.
Aug. 13 - Acquisition of US AgTech Market Company. Acquires Kansas City, Missouri based digital agriculture provider Atlas Team (“Atlas”). Atlas currently serves farmers and agriculture industry leaders across 13 states in the US.
"The purchase price for the acquisition of Atlas comprises 0.25M shares of the Company, issued to the shareholders of Atlas, at $0.30. " Under the terms of the agreement, the shares will be released from escrow in 3 tranches on an annual basis, commencing on the first anniversary of the closing date.
Aug. 27 - Reports Q2 Revenue Growth of 472% - Announce revenue growth of $0.72M in Q2 2019 (472%), from $127,199 in Q2 2018. Hence, DVR.CN surpassed 2018 total fiscal year revenue of $0.50M in one operating quarter (Q2 2019).
"Typically, Q3 and Q4 are periods of relatively high activity around soil optimization and future planning for the next crop season. This should continue to add to our success of already surpassing 2018 revenue in one single quarter.” - David MacMillan, President and CEO.
Sept. 9 - Technology Leader to Advisory Board. Mr. Deen has 25 years of experience in software development. Most recently, he was the Chief Technology Officer of UXP Systems Inc., which was acquired by Amdocs Inc., for $102 Million.
In addition, Deveron is also pleased to announce that further to its press release of August 13, 2019, the Company has acquired all of the issued and outstanding membership interests of Atlas Team, LLC (“Atlas”), pursuant to the terms of the purchase agreement.
DVR.CN continues to make headway in the last seven months. Its evolution from a drone network to an integrated entity also focused on data analysis and value added services has yielded results; It doubled revenue in 2018 YoY. In addition, a number of net new initiatives were announced including 1) partnership with World Class Extraction (CSE: PUMP) for servicing Hemp farmers in both Canada and the US., 2) Initiation of phenotyping and crop protection research in Canada and US with A&L Laboratories, and 3) The acquisition of digital architecture provider Atlas Team (“Atlas”). Hence, a new partnership in a new vertical (Hemp), the implementation of usage of drones for research (five months after the agreement), and a new acquisition representing the second in the past year (i.e. Veritas being the other).
However, one of the announcement (May 7 ) is not likely to materialize as Airinov ceased operations in June 2019.
Unfortunately, it is yet another testament that the diversification strategy taken by DVR.CN is sound.
Furthermore, the backing from Green Castle Resources has been consistent with insider purchase of $58,000 YTD of which $22,400 (38%) occurred in the past seven months. As per Q2 MD&A filing, DVR.CN reported having cash and cash equivalents of $2,05M and claimed: "Based on the rate of expenditure above, the Company will have sufficient cash to fund its operations for the twelve months ended June 30, 2020." DVR.CN also indicated that upcoming Q3 and Q4 are relatively active for the company so it will be interesting to see if the trend in revenue growth continues to materialize.
However, the downward movement since the beginning of September is evident but also associated with the CSE Index. Given that recent options were granted at $0.30 - $0.375 cents, the trend of the current valuation toward R1 is definitely notable.
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