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Friday, October 30, 2020

The Interesting Rise of Valmie Resources Inc (OTCMKTS:VMRI)

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Valmie Resources Inc (OTCMKTS:VMRI) is a stock that’s been running up the charts once again, even though it would appear very little has changed for the company of late. The appeal is in terms of growth potential as a viable emerging player in what is likely to be one of the truly cutting-edge market segments over the next 5-10 years: unmanned aerial vehicles, also commonly known as “drones”.

According to a new headline on Yahoo! Finance by a newsletter called “Emerging Markets Report”, VMRI is an amazing company with an amazing future due to the unbridled upside ahead for anyone well-situated in the drone space. And that may be true. But, with a little digging, you will find that the originator of the Emerging Markets Newsletter is actually an investor awareness firm that writes promotional material for the purpose of entertainment and advertisement. In fact, right on their website, you will find the following quote, “We do not conduct any due diligence whatsoever for any of our publications”. That said, VMRI may still be an amazing company with an amazing future, so we need to dig a bit deeper here.

Valmie Resources Inc (OTCMKTS:VMRI) bills itself as a drone play that focuses on providing unmanned aerial vehicle software, hardware, and cloud services for a range of commercial applications worldwide.

The company offers aerial data collection hardware, software, and data storage solutions. It develops Autonomous Intelligence for Mobilized Devices (AIMD) Platform as the intersection point for real-time operational intelligence and workflow accessible anywhere and anytime; and AIMDx that enables clients to connect, communicate, and collaborate within a cloud-based network.

The company is also developing V-1 Drone, a multi-rotor unmanned aerial vehicle, which meshes with the Company’s overarching conception of itself as actively pursuing opportunities for the commercialization of leading edge products and services in the rapidly expanding technology industry.

VMRI pursues an identity as an incubator as well, with valid business models positioned to make a significant impact within the four key “mega sectors” of technology: software, hardware, networking, and semiconductors.

The value-add, they maintain, is in bringing operating talent, tools, and leadership to emerging companies in these sectors, promoting industry awareness and developing economically sustainable partnerships while increasing shareholder value.

Valmie went public on January 20 of last year after a reverse merger. The shell was originally incorporated in 2011 as a Nevada-based materials sector play.

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As noted at the introduction of this piece, very little has changed for the company of late. The company just put out its new 10-Q, and once again, we see basically no cash on hand, no revenues, no significant financial trends.

What we do find is a very thorough bit of perspective. VMRI is really about one Gerald B. Hammack, the company’s sole officer and director since 2014.

Mr. Hammack is a veteran software development guy with back end and systems experience, and he’s been developing an AI platform for integration with drone operations. The company added a partner last year (Veritek) through share exchange for 1mln shares of common stock. The acquisition gave VMRI in-house access to the technology and experience in the design and manufacture of UAVs in order to design and build prototype units to test and refine products equipped with Mr, Hammack’s tech.

Last April, VMRI JV’d into accord with a Mr. James Stafford creating AeroLift, which is “led by a team of military trained pilots, mission commanders and specialists with more than 60 years of combined aviation experience. AeroLift’s aircraft are military grade construction adapted for commercial applications. Together with state of the art ground control stations and flight control software, AeroLift intends to deliver cutting edge unmanned services to clients in a variety of challenging environments.”

Here’s a major point as well: This is still early days for VMRI. “To date, we have not generated any revenue through the sales of UAVs or the provision of software, hardware or cloud based services, either through Vertitek, AeorLift or otherwise. As we are still developing our technologies, we have not yet launched our manufacturing, sales or marketing operations and have not yet identified any customers for our systems or solutions. We have never declared bankruptcy, receivership or any similar proceedings nor have we had any material reclassifications, mergers, consolidations, or purchases or sales of a significant amount of assets not in the ordinary course of business.”

We should also point that the company has already taken care of a key regulatory piece of the puzzle:

“During the past four years, the FAA has obligated commercial unmanned aircraft operators in the U.S. to have a 333 Exemption in order to fly legally. This was a time-consuming regulatory obstacle but necessary for businesses that were committed to operating professionally,” said Gerald B. Hammack, President and CEO of Valmie Resources. “We are pleased that we did not wait for the Part 107 rules to take effect, and as an early adopter, Valmie was interested in operating as an FAA authorized professional company as quickly as possible. To this end, we sought our 333 Exemption to fly commercially, and received it in February.”

Again this is a truly cutting-edge market segment, so its easy to see the appeal VMRI of products would have in the market, the question is does VMRI have something mainstream? Now commanding a market cap of $97.2M, VMRI has minimal cash on the books, with total assets greater than $100K, which is balanced by very little total accumulated debt.

According to several industry analysis sources, the drone market is expected to surpass the $100 Bln mark in the years to come as unmanned aerial functionality goes from pure military application to commercial and mainstream application. That said, with just about no cash on hand and some very expensive work to be done, this company is going to need more funding. If you want a bull catalyst, it’s likely to be that: more funding through private placement on good terms. We will be watching out, and plan to update here again soon. For continuing coverage on shares of $VMRI, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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