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 issued on February 2017, September 2017, November 2017, March 2018, May 2018, October 2018, June 2019. March 2020 , October 2020. and June 2021,
News Releases
June 30 - Major Chinese Cargo Operator Contract for Additional Installations of AFIRS: Agreement with an existing customer to equip up to an additional 15 aircraft per year over the next five years with the AFIRS™ solution.
The agreement is expected to generate revenue of approximately USD $3.6 million to FLYHT, provided all deliverables are shipped over the five-year term of the agreement. In tandem with the agreement signing, FLYHT received a purchase order from this cargo operator for the first four aircraft under this agreement.
July 6 - Receives Follow-On Order from a Long-Time OEM Partner: a US$338 thousand purchase order for Iridium modems and license fees from a long-time OEM customer. This order builds upon the relationship previously discussed in press releases dated July 15, 2014, August 1, 2019 and February 18, 2020.
The OEM will be licensing FLYHT’s technology and delivering the automated flight information reporting system (AFIRS 228S) to their European airframer customer for three certified aircraft platform types. FLYHT anticipates shipping all product, and therefore recognizing revenues, from this order during the third quarter of 2021.
July 7 - Announces $6.6 Million Non-Brokered Private Placement: Up to 8,800,000 common shares at $0.75 cents. The proceeds will be to fund growth initiatives including potential strategic acquisitions, to repay the Company’s outstanding debentures due on July 24, 2021 (CAD$1.8M) and for general corporate purposes.
July 22 - Announces Closing of Oversubscribed Private Placement to Fund Growth Initiatives: Issued 8,828,818 common shares at $0.75 for CAD$6,621,615. Insiders contributed 10% of the Offering total.
A new insider of the Company was created who now controls greater than 10% of the Common Shares of FLYHT.
July 27 - Retires Secured Convertible Debentures: Repayment in full of its outstanding secured convertible debentures (CAD$1.8 million), including any accrued and unpaid interest, on July 23, 2021.
Aug. 4 - Announce Second Quarter 2021: FLYHT granted incentive stock options; 43,760 common shares ($0.93 cents)
Sep. 20 - Acquires Water Vapor Sensing System from SpectraSensors: The Water Vapor Sensing System (“WVSS-II”) product line. WVSS-II is a sensor that provides water vapour measurements in near real-time throughout an aircraft’s flight. These observations benefit weather forecasting and improve weather support to aviation.
The WVSS-II product line was purchased by FLYHT from SpectraSensors for $500,000 USD.
Oct. 6 - Receives Additional Purchase Order from a Long-Time OEM Partner: For Iridium modems and license fees from a long-time OEM partner. This order is valued at approximately US$1.5 million and builds upon the relationship previously discussed in press releases dated July 15, 2014, August 1, 2019, February 18, 2020 and July 6, 2021.
Under the terms of the existing agreement, the OEM customer will be licensing FLYHT’s technology and delivering the Automated Flight Information Reporting System (AFIRS 228S) to their European airframer customer for three certified aircraft platform types. The orders require shipment throughout the second half of 2021 and the first quarter of 2022.
Oct. 28 - FLYHT to be Factory Installed on COMAC’s C-919: Signed a multi-year contract with Commercial Aircraft Corporation of China, Ltd. (“COMAC”) for the installation of AFIRS 228 on the COMAC C-919 aircraft, and has received an initial purchase order. COMAC currently has confirmed orders for 305 aircraft mostly from Chinese leasing companies or airlines. This initial order is valued at $98,000 USD. We anticipate this initial purchase will be the first of many future orders and look forward to growing with COMAC in 2022 and beyond.
Nov. 4 - Reports Third Quarter 2021 Results
Nov. 8 - Promotes Kent Jacobs to President and Gurjot Bhullar to VP of Operations: In addition, incentive stock options of 100,000 common shares ($0.77 cents) were granted to Mr. Jacobs and Mr. Bhullar.
The Company also amended its investor relations agreement with FNK IR, LLC (“FNK”). FNK will receive US$6,000 per month from FLYHT on a month-to-month basis and has been granted a further 30,000 options.
Mr. Derek Graham, VP Business Development, has resigned to pursue opportunities in the industry.
Nov. 12 - Announces Proposed Warrant Amendment: Amend the exercise price and expiry date of 2,667,610 previously issued and outstanding warrants to expire on June 15, 2022 with an exercise price of $1.25. The Warrants were originally set to expire on November 15, 2021 (2,396,200 Warrants) and November 25, 2021 (271,410 warrants) at $1.75.
Dec. 7 - Signs Agreement with Frontier Airlines: To equip Frontier’s near-term deliveries of A320 and A321 aircraft with FLYHT’s AFIRS solution, Initial order is valued at USD $680,000.
Jan. 11 - Signs Actionable Intelligence Agreement with Coral Jet: Future fleet of seven A319/320 aircraft with AFIRS™ and to provide SaaS services from FLYHT’s Actionable Intelligence suite of applications.
Coral Jet is a start up airline that will serve the Caribbean, United States, and Canada with plans to increase its aircraft fleet over the coming years. Installations will start early in the second quarter of 2022. The contract is expected to generate revenue of approximately US$760,000 over the five year contract term.
Jan. 25 - Achieves Amazon Web Services Travel and Hospitality Competency Status: As an AWS Travel and Hospitality Competency Partner, FLYHT has demonstrated customer success and technical proficiency in connecting their customers’ aircraft, crews, and operations. The AWS Travel and Hospitality Competency designation helps customers to identify and validate the most experienced AWS partners who can help industry customers to succeed.
Jan. 27 -Acquires CrossConsense, Adding Capabilities in Aircraft Maintenance and Expanding European Presence:
CrossConsense develops and markets software to support commercial aviation maintenance management. Products include: i) A predictive maintenance troubleshooting and engineering tool; ii) Software to support aircraft maintenance, repair and data migration; and iii) Live data dashboards to assist aircraft maintenance teams.
CrossConsense has also constructed a progressive web application plus native apps that offer up-to-date data on an airline’s fleet status. Additionally, CrossConsense offers consulting and support services as well as hosting, database operation and performance monitoring of commercial aircraft maintenance applications.
Transaction Details: Acquire all of the outstanding securities of CrossConsense for CAD$1,250,000 in cash and 1,900,000 common shares of FLYHT. The shares will be held in escrow and will be released equally in 1/3 increments at 4, 16 and 28 months following issuance on the transaction's closing date.
Feb. 2 - Partners with SITA: Signed a reseller agreement with SITA for its AIRCOM® Cockpit Services, initially focusing on developing the market for Iridium Certus. This relationship will benefit both parties by aligning sales endeavors and enables FLYHT to provide additional inflight satellite internet connectivity to AFIRS Edge customers.
Feb. 24 - Appoints Industry Veteran Bruce Gowling: as Director of Digital Transformation & Data Solutions.
Mar. 1 - Receives TSX Venture Exchange Approval for Acquisition of CrossConsense
Summary
Appointments
Ken Jacobs to President and Gurjot Bhullar to VP of Operations (November 2021). FLY.V also ammended its investor relations agreement with FNK IR, LLC (“FNK”).FNK to receive US$6,000 per month on a month-to-month basis.
Bruce Growling was recently appointed to Digital Transformation and Data Solutions (February 2022).
Milestones
June 2021, FLY.V signed a contract with a Major Chinese Cargo Operator for AFIRS. A total of $3.6M in revenue over the next five years is anticipated. July 2021, a follow up order from an OEM Partner ($0.33M) for Iridium Modems and Licenses Fees (AFIRS 228S) was received. Another follow up order from an OEM Partner ($1.5M) for Iridium Modems and Licenses Fees (AFIRS 228S) was obtained in October 2021. In the same month, a FLY.V was awarded a multi-year aggreement to factory install AFIRS 228S on the COMAC C-19 with an initial order is for $0.09M USD. At the time of the announcement, Commercial Aircraft Corporation of China, Ltd. (“COMAC”) had confirmed orders for 305 aircraft.
December 2021, FLY.V signed Frontier Airlines to equip its A320 and A321 Aircraft with AFIRS. At the time, FLY.V disclosed an initial order of $0.6M. Frontier Airlines also operates out of Denver, CO and has subsquently announced the intent to acquire Spirits Airlines which would make it the fifth lsrgest US Carrier. January 2022, FLY.V signed Coral Jet to equip its future fleet of seven A319/A320 with AFIRS and Actionable Intelligence SaaS services.
Financing
A $6.6M Non-Brokered Private Placement (8.8M shares at $0.75 cents) for funding growth initiative and retire debenture debt of $1.8M was undertaken in July 2021. This offer was closed within two weeks with 10% insider participation. One week later, FLY.V announced that the the secured convertible debentures were retired.
Acquisitions
Two acquisitions were completed in this period. First, Water Vapor Sensing System was acquired from SpectraSensors in September 2021 for $0.5M USD. Included were: manufacturing assets, inventory, aviation-specific intellectual property, and a license to SpectraSensors’ Tunable Diode Laser Absorption Spectroscopy (“TDLAS”) technology.
Secondly, CrossConsense was recently (January 2022) taken over for $1.25M CAD and 1M Shares of FLY.V. This company develops and markets software to support commercial aviation maintenance management.
Partnerships
Last month (February 2022), FLY.V disclosed that it had partnered with SITA. Specifically, a Reseller aggreement for AIRCOM Cockpit Services to focus on developping market for Iridium Certus. Note that SITA is a leading IT provider for the industry which integrated its AIRCOM Cockpit Service portfolio with Iridium Certus.
Earnings
FY 2021 earnings to date are the weakest of the last four years. However, they appear to be the most consistent. Furthermore, loss are relatively contained compared to the last two quarters of FY 2020.
Covid-19 continues to be a factor for the airline industry; Capacity and other metrics are still lower than FY 2019.
Global air-passenger traffic remained 58% lower last year than in the pre-coronavirus environment of 2019, according to figures published by the International Air Transport Association. - Bloomberg
In sum, FLY.V is not significantly under-indexing the industry and is adapting to the new realities.
Stock Options and Warrants
August 2021, 43,760 common shares at $0.93 cents were granted as incentive stock options. In November 2021, 2.66M warrants were amended from $1.75 to $1.25 and extended from November 2021 to a June 2022 expiry date.
In short
Overall, in the last eight months FLY.V's valuation ranged from $0.60 cents to $1.02. FLY.V has recently tested S2 ($0.60 cents) but is gravitating closer to S1 ($0.67 cents) than the pivot point of $0.75 cents (i.e. price of the last financing).
Despite relatively weak earnings in FY 2021 YTD, FLY.V has been able to contain its net loss. In addition, FLY.V recently reported $26 million in backlog with >50% recurring @ >65% margin (see investor presentation February 2022).
Moreover, the company continues to secure more engagements (OEM Partner, COMAC, Frontier Airlines) and make incremental acquistions (CrossConsense) which strenghten its value proposition.
Furthermore, the recent partnership with SITA is perceived to be instrumental in providing FLY.V's with another revenue stream while potentially giving AFIRS EDGE greater visibility.
A recent report by KCR Insight expects a $11.7M in revenue for FY2021 and $24.2M for FY2022. The numbers for FY2021 are realistic but FY2022 seems very bullish. However, FLY.V is very likely due to outperform FY2021.
In a difficult climate for the industry, Flyth is managing to expand its offerings and extend its reach.
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