L1ving - this is why: · Investors should be closely monitoring Drone Aviation for the announcement of new BiB orders
Drone Aviation Holding
With headquarters in Jacksonville, Florida, Drone Aviation Holding Corp. (OTC:DRNE) designs, develops, markets and sells lighter-than-air tethered aerostats and tethered drones for military and commercial markets.
An aerostat (which is sometimes referred to as a blimp or balloon) is a lighter-than-air (LTA), floating platform that uses gases, such as helium, for buoyancy. The key structural components include a lightweight skin envelope to contain LTA gas, tether system, winch motor, power generator, mission payload(s), mooring platform and a ground control station. Depending on the application, the payloads could be an electro-optical camera, a thermal imaging (infrared) camera and/or communications equipment, among others. Electrical power is provided through the tethering system, which allows for persistent monitoring during the flight.
Tethered aerostats are regulated by the FAA under FAR 101 Subpart B concerning moored balloons and kites. The operation limitations and requirements are far less restrictive than those for untethered, unmanned aerostats and untethered, free-flying drones. Also, by incorporating the data, control and power conduits into the tether, the company’s drones may fly within the FAA’s guidelines.
Though the company’s lighter-than-air systems appear to have fulfilled critical requirements of the military in recent field exercises, management’s strategic plan is not only to further develop the military market, but also to penetrate the commercial, government and law enforcement markets with lower-cost and easier-to-handle versions of its aerostat and drone systems. Leveraging the experience from its military model, Drone Aviation has developed specialized aerostats for the commercial market, along with launchers that are equipped with power systems, mooring arms, helium tank bays, all of which ease the launch, mooring and recovery processes. The company’s compact Blimp in a Box™ aerostat system is housed in a trailer, from which it can be rapidly deployed and quickly recovered. In addition, the company’s tethered lighter-than-air systems can be fielded and safely deployed from light trucks, like from the bed of a pickup truck.
Background
Drone Aviation Holding Corp. (DRNE) was formed on April 17, 2014 and merged with MacroSolve (previously MCVE) on April 30, 2014, with Drone Aviation being the surviving entity. Previously, MacroSolve pursued settlements (in the form of perpetual paid-up licenses or royalties) on U.S. patent #7,822,816, which it received in October 2010. The patent covered certain mobile information collection systems over wireless networks. In total, MacroSolve received 68 settlements However, in March 2014, the US Patent Office rejected all the claims concerning the patent, and the majority of shareholders voted upon a plan to merge with and into Drone Aviation Holding Corp. through a series of stock and debt exchange agreements, along with the cancellation of prior options and warrants. The CEO (James McGill) and several Directors resigned, and an interim CEO (Michael Haas) was appointed.
A few weeks after merging with MacroSolve, in May 2014, Drone Aviation acquired Lighter Than Air Systems Corp. (LTAS) from World Surveillance Group (WSGI: OTC Pink) for $335,000 and 10 million shares of Drone Aviation, which were later converted into 10 million shares of Series D convertible preferred stock. Since World Surveillance was being strategically re-focused on larger, mid-altitude, untethered lighter-than-air systems, the management of World Surveillance decided to exit the tactical tethered lighter-than-air market.Felicia Hess, founder and owner of LTAS prior to its acquisition by World Surveillance Group in March 2013, was appointed CEO and President of Drone Aviation.
Concurrent with the share exchange on June 5, 2014, Drone Aviation closed a private placement of 2.7 million Units, each consisting of one share of Series E preferred stock and one 3-year warrant exercisable at $1.00. The gross proceeds of the private placement were $1.35 million, from which the net proceeds are being used towards for sales and marketing, R&D and G&A expenses.
The following month, on July 15th, Drone Aviation Holding’s stock was up-listed to the OTCQB, which should benefit the company through better institutional investor awareness and increased share liquidity.
The Aerostat Industry
According to MarketsandMarkets in Dallas, the aerostat industry is projected to grow at an estimated CAGR of 16.68% over the next six years from $3.93 billion in 2014 to $9.96 billion in 2020. The industry is segmented by class (small, medium and large), by balloon type (spheroidal, ellipsoidal), by payload and by geography. Drone Aviation is targeting the small spheroidal segment for military, governmental and commercial applications, while larger companies [like Lockheed Martin (LMT), Raytheon (RTN) and Northrop Grumman (NOC)] tend to concentrate on the large ellipsoidal military and government markets.
Though strong demand for medium-large aerostat systems is expected, small tethered aerostats are gaining favor due to performance features and mobility, along with their lower acquisition and operating costs. Small aerostats can be easily towed to a mission, even to remote locations, and quickly inflated and launched by as few as two operators within minutes. Also, they can be retracted by the same two-man crew in short order.
Aerostats provide airborne platforms to deploy sensing devices (e.g. cameras), monitor activity, detect threats, gather intelligence and conduct reconnaissance missions. Just a few of the current applications include:
· Military battlefield ISR (Intelligence, reconnaissance and surveillance) and communications network platform
· Border security through visual and infrared aerial surveillance
· Natural disaster situational awareness allowing First Responders to respond properly
· Energy infrastructure security, especially nuclear facilities, dams, refineries and pipelines
· Public event (demonstrations, sports events, fairs, etc.) surveillance for crowd management
· Law enforcement IAA (Incident Awareness and Assessment): illegal activities, search & rescue, disaster management (especially evacuations) and traffic management
· Forestry management, including forest fire detection and surveillance of on-going fires
· Mapping and research applications (topographic research, land surveying and land management)
For the military, these “eye in the sky” aerial platforms provide security and ISR (Intelligence, Surveillance and Reconnaissance) functions and have proved to be valuable assets in the Iraq and Afghanistan. Aerostats provide real-time situational awareness to on-the-move forces and precision targeting capabilities on combatant and weapon locations, especially when embedded in dense population centers. The ISR critical observation capabilities include tracking hostile enemy movements as they set up for attacks on convoys, place IEDs (Improvised Explosive Devices) and conduct nefarious meetings. Aerostats are expected to be increasingly important to the military by providing safer ISR functionality, along cost-effective deployment versus fixed wing aircraft and helicopters.
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