Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are the patented safe, secure, smart drone delivery receptacle. Through the DRONEDEK Platform we are able to ship and receive food, beverages, pharmaceuticals and parcels. We are app driven and are feature-rich with several offerings including a UV treatment process to disinfect deliveries from Coronavirus and other viral hazards.
In 5 years we hope to have saturated 1% of the total addressable market (TAM) or 1,600,000 addresses. We hope to be accelerating our growth as drone delivery becomes commonplace and we believe the only receptacle solution to be DRONEDEK. These are future looking projections and are not guaranteed.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.

Milestones

DRONEDEK Corporation was incorporated in the State of Delaware in April 2020.

Since then, we have:

• DRONEDEK has contracted for 3rd Generation Prototype development
• We have the First US Patent issued in the drone delivery receptacle space. We have 2 issued patents. The patents belong to the CEO / founder Dan O'Toole, and are being licensed out to the company.
• We believe DRONEDEK is the funnel where all drone & autonomous delivery will terminate. The welcome mat to commerce.
• Licensing agreement includes two newly filed US Utility Patents for examination at the USPTO currently.
• Licensing agreement includes a fifth patent currently. Successful issuance will total 102 claims to DRONEDEK
• Invest in something that you and your family will use.

Historical Results of Operations

Our company was organized in April 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended April 30, 2020, the Company had revenues of $0.
• Assets. As of April 30, 2020, the Company had total assets of $0, including $0 in cash.
• Net Loss. The Company has had net losses of $4,000 for 2020.
• Liabilities. The Company's liabilities totaled $187,088 for 2020.

Related Party Transaction

Refer to Question 26 of this Form C for disclosure of all related party transactions.

Liquidity & Capital Resources

To-date, the company has been primarily financed with $187,088 in debt and $416,600 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

DRONEDEK Corporation cash in hand is $325,962, as of October 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $1,000/month, for an average burn rate of $1,000 per month. Our intent is to be profitable in 60 months.

Since the latest financial report dated April 30, 2020, we have raised significant capital through Reg D, 506(b), which we just recently closed out. We have also taken on additional liabilities, including: $107,438 for the DRONEDEK development contract, $50,000 accrued liability to Dan O'Toole, and $29,650 accounts payable to Dan O'Toole. This totals $187,088 in liabilities. 

We expect to make no revenue over the next 24 months. Forecasted expenses over the next 6 months will be focused on research and development, and will fall in the range of $500,000 to $750,000 in accordance with the company's financial projections that include a 18-24 month pre-revenue phase. We will cover these expenses through the current Wefunder raise and supplemented with our past raise of $416.6K. Additional fund raising will follow the Wefunder raise to meet the company's forecasted capital requirements. We also plan to have two of our officers go full-time after our Wefunder raise. 

We have a 7 year financial projection, and have an 18 - 24 month pre-revenue phase. In order to reach end of year 2 in our projections, we need around $5M. In year 3, we go live with revenue generation and subscription. Because it's a new utility, we expect there to be market adaptation. $153M total is needed to go to market in total over the course of the 7 years. 

The company currently does not have any other capital sources that are readily available on which the company may rely upon at this time, but are actively pursuing multiple opportunities in the market. 

At the end of May 2020, the Company executed a $200,000,000 loan agreement with Bashar Investments WLL, a Bahrain-based investment fund. The closing on the agreement is contingent upon the company procuring a UAE Central Bank Certified Surety Bond from a Dubai based Surety Company to stand as collateral for the loan. The company is no longer pursuing this financing option as of November 5, 2020.