FLY.V - Not so much.


Flyht Aerospace Solution Ltd. (FLY.V) provides airlines with Actionable Intelligence to transform operational insight into immediate, quantifiable action, delivering industry leading solutions to improve aviation safety, efficiency, and profitability. This unique capability is driven by FLYHT’s patented aircraft certified hardware products including AFIRS™, a satcom aircraft interface device which enables real-time streaming of flight information, cockpit voice and black box data streaming and TAMDAR™, which aggregates and streams airborne weather data in real-time.


Previous coverage was issued on February 2017, September 2017, November 2017, March 2018, May 2018, October 2018, June 2019. March 2020 and October 2020. Listed below are the releases issued since the last update.


News Releases


Nov. 5 - Reports Third Quarter 2020 Results.


Nov. 12 - To Participate in the Fall Investor Summit


Nov. 17 - Integrated Procurement Technologies Places Hardware Order: Integrated Procurement Technologies (“IPT”) of Goleta CA announced today that IPT has made an additional order for AFIRS technologies. The total contract is for US$0.282M with delivery of the units in Q4 2020. FLYHT also received a PO for US$0.128M from an international aircraft manufacturer for AFIRS to provide software improvements, ensuring continued licensing revenue.


Nov. 24 - To Present at the Diamond Equity Research Emerging Growth Invitational.


Dec. 2 - Announces Leadership Changes to Accelerate SaaS Growth: Derek Graham, current Chief Technology Officer, will become VP of Business Development to focus on nurturing strategic partnerships with other suppliers of specialty products and services to the aviation industry. Darrel Deane, a key member contributing to the Company’s success since 2012 as an architect of its innovative technology, has been promoted to VP Solutions. In his expanded role, Deane will sharpen the Company’s focus of resources on its SaaS offerings and transform the legacy applications to Actionable Intelligence. Matieu Plamondon, Chief Operating Officer, is leaving to start a new chapter of his career.


Dec. 3 - Announces Upcoming Investor Conferences


Dec. 21 - Announces Ravn Alaska’s Return to Service and Provides Business Update: Corvus Airlines (dba Ravn Alaska), a regional airline that specializes in servicing the small communities in Alaska, has signed an agreement with FLYHT to reactivate its fleet of nine DHC-8 aircraft with full AFIRS™ services.


The contract with Ravn is expected to generate revenue of approximately $300,000 to FLYHT, provided that all services are delivered over the 5-year term of the agreement.


Other developments include confirmed customer deliveries of up to 35 AFIRS shipsets to be delivered in the fourth quarter, and a one-year extension of our agreement with Environment Canada for the provision of weather data. FLYHT expects to deliver services valued at approximately $0.130M to Environment Canada over the extension term.


Jan. 8 - To Participate In MoneyShow January Virtual Expo.


Jan. 15 - To Present at NobleCon17 on January 19.


Feb. 2 - To Participate in the Cowen Aerospace/Defense & Industrials Conference.


Apr. 6 - To Participate in Global Chinese Financial Forum on April 15.


Apr. 7 -Reports Fourth Quarter and Full Year 2020 Results: 1) Strong Cost Control Contributes to Increase in Cash Balance, 2) SaaS Represented 54% of 2020 Revenue, Driving Gross Margin Expansion to 68%, 3) Company Expects Launch Partners to Deploy Actionable Intelligence Software in Q2


Apr. 26 - Announces Resolution of Claim: Executed a settlement agreement and mutual release in respect of the litigation between Thomas R. Schmutz (former CEO of FLYHT) and the Company, as first announced on June 30, 2020.


The parties have agreed upon a final settlement whereby FLYHT will pay Mr. Schmutz $225,000 CAD and 250,000 common shares in FLYHT. All of the common shares issued are subject to a 4-month hold period.


Apr. 29 - To Present Q1 2021 Results at 2021 Annual and Special Meeting on May 6


May 4 - Signs Waltzing Matilda Aviation’s New Brand, Connect Airlines: Announced a multi-year contract with U.S. charter operator Waltzing Matilda Aviation for its new scheduled air carrier branded, Connect Airlines.


Under the terms of the five-year agreement, FLYHT will install AFIRS and Actionable Intelligence (“AI”) services on Connect Airlines’ entire fleet of DHC-8-Q400 turboprop aircraft.


The contract is expected to generate revenue of approximately USD $1.0 million to FLYHT, provided that all services are delivered over the 5-year term of the agreement.


Connect Airlines, a new airline commencing operations in October 2021, will offer convenient service ideal for the day-tripping US business traveler direct into Toronto’s downtown Billy Bishop airport.


May 5 - Reports First Quarter 2021 Results


May 10 - Announces Issuance of Incentive Stock Options: The stock options are exercisable at a price of $0.57 per share. The options will vest 1/3 on each of May 6, 2022, 2023 and 2024 and will expire on May 6, 2025.


May 11 -Names Nina Jonsson as Chairman of Board of Directors: Ms. Jonsson has held leadership roles at major operators in the U.S. and Europe, including most recently at Air France-KLM, United Airlines, US Airways and global industrial aviation services provider Bristow Group. She is currently active as a consultant to the global airline industry’s C-suite as Senior Advisor with Plane View Partners, and serves on the board of directors at Icelandair and the advisory boards of Waltzing Matilda Aviation and Genesis Park Acquisition Corporation.


May 12 - To Participate in the Q2 Investor Summit.


May 14 - Announces Amendment to Grant of Incentive Stock Options: Correct the number of shares previously announced on May 10, 2021 from an aggregate 248,355 common shares to 434,555, subject to regulatory approval, to employees, officers and directors under the stock option plan approved at the Annual and Special Meeting.


June 3 - Willie Cecil Joins FLYHT as Company Launches Industry Leading AFIRS Edge with World’s First 5G wQAR: Willie Cecil has been hired by FLYHT as Sales Director, effective May 3, 2021.


Additionally, FLYHT announced today that it will launch sales of AFIRS Edge, an industry leading LTE/5G wireless Quick Access Recorder (wQAR), Aircraft Interface Device (AID) product and edge computing platform, with the first installs planned for late 2021. AFIRS Edge will be key to the global shift in replacing all 2G/3G technology. A future option for Iridium Certus is also included in the design and will be released in 2022.


Summary

Overall, in the last eight months FLY.V's valuation ranged from $0.46 cents to $0.92 cents.


Appointments

A number of appointments were announced in December 2020. Derek Graham went from Chief Technology Officer to VP of Business Development. Darrel Deane was promoted to VP Solutions to focus on SaaS offerings and transform the legacy applications to Actionable Intelligence. Matieu Plamondon, Chief Operating Officer, left the company.


Recently, Nina Jonsson was appointed to Chair of the Board of Director and Willie Cecil was hired as Sales Director.


Settlements

An agreement and mutual release in respect of the litigation between Thomas R. Schmutz (former CEO) and the Company was reached. The initial claim was from Mr. Schmutz was for $0.52M. The final settlement is such that FLY.V will pay Mr. Schmutz $225,000 CAD and 250,000 common shares in FLYHT.


Milestones

Roughly a third of the news release issued were related to executives attendance at investor/industry conferences.

Otherwise, three releases regarding contractual engagements were reported.


November 2020, Integrated Procurement Technologies (AFIRS) for $0.282M with a Q4 2020 delivery as well as, another for an international aircraft manufacturer (AFIRS).


December 2020, Corvus Airlines (dba Ravn Alaska) for $0.3M over five years for Full AFIRS services. Also included in the release 35 AFIRS shipsets were set to be delivered Q4 2020, along with a one year extension of an agreement with Environment Canada ($0.13M).


May 2020, a contract with Waltzing Matilda newest brand; Connect airlines were reported. For $1M over 5 years FLY will install AFIRS and Actionable Intelligence (“AI”) services on Connect Airlines’ entire fleet.


Earnings

FY 2020 was not kind to the aviation industry and FLY.V was no exception. However, FLY.V managed to end FY 2020 with $13.6M down 36% from FY 2019 ($21.1M) with a net loss of $3.23M compared to $0.74M in FY 2019.


















Both Q2 and Q3 2020 exhibited sharp declines in revenue coinciding with the peak of the Covid-19 Crisis. In Q4 2020, revenue bounced back but did not exceed Q4 2019. As depicted, Q1 2021 revenues were soft and mostly attributed to a sluggish return in activity though BackLog as of Q1 2020 stands to $27M; a $2M reduction from Q4 2020.


Stock Options and Warrants

Recently, 434,555 Stock options ($0.57 per share) were granted.


In short

In the Q1 2021 MD&A, FLY.V CEO referred to three factors guiding optimism 1) New products/services within the Actionable Intelligence suite and the AFIRS family of products. 2) Expected recovery of the airline sector, 3) Strong cargo and specialty carrier customers as well as the belief that short haul mid-sized companies will recover first.


Overall, FLY.V revenue decline in FY 2020 (36%) is much lower than passenger traffic (60%). This shows the resilience of the existing business model for which cargo and specialty carriers probably contributed to a higher revenue mix.


FLYTH launched Actionable Intelligence (a SaaS software initiative) in FY2020. As per MD&A: Actionable Intelligence is a sophisticated toolset allowing us to deliver an incredibly valuable entrance into the world of artificial intelligence. FLYHT’s Actionable Intelligence provides insight into our customers’ total operations to identify areas for improvement. That insight triggers actions based upon rules or previous observations to direct corrective action in near real time.


By using this service, FLYHT estimates that an operator of a 100 aircraft fleet could save more than $120m over 3 years.


In their last note, KCR Insight reduced their previous target of $3.30 to $1.80 (on a FY 2021 revenue estimate of $19M) citing Covid-19 challenges on the industry. KCR Insight also provided a detailed Actionable Intelligence (AI) roll-out.

Thus far, Phase 1 has been complete but there has been no update on a timeline for phase 2 completion.


Again per MD&A: The Company will continue to expand its earnings and cash flow potential through its focused marketing efforts, particularly the presentation of Actionable Intelligence tools to our customer and prospects, which are expected to result in additional contracts for delivery of hardware units and related services.


To date, FLY.V reported that China Express, Swoop Airlines and Connect Airlines are engaged. Though its still early days, it remains unclear how much incremental revenue Actionable Intelligence will bring to the overall business.


Swoop's has 10 aircraft, China Express has 50, and Connect Airlines is set to launch in October 2021. For Actionable Intelligence to have a wider impact, FLY.V will need to convert many more prospects and existing customers.


The value proposition for Actionable Intelligence is clear for airlines. For the FLY.V shareholders, not so much.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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