Growing Pipeline Creates Need for Expansion Capital
JACKSONVILLE, FL, Aug. 07, 2017 (GLOBE NEWSWIRE) -- Drone Aviation Holding Corp. (OTCQB:DRNE) ("Drone Aviation" or the "Company"), a manufacturer of tethered drones and lighter-than-air aerostats, today announced that it has secured up to $4 million in new funding and extended the maturity date of its outstanding $3 million convertible note. In addition, the Company provided an update on multiple recent successful product trials and demonstrations.
The new financing package was arranged by Chairman and CEO Jay Nussbaum and Dr. Phil Frost, Chairman of the Company's Strategic Advisory Board and lead investor, and was completed in anticipation of orders generating from the Company's expanding sales pipeline. This sales pipeline expansion follows the launch of new and upgraded products including WATT Tethered Drones, FUSE Tether System for select DJI drones, and the enhanced functionality of our WASP tactical aerostat that allows simultaneous use of communications and optical payload packages.
Since the beginning of 2017, Drone Aviation has participated in a number of invite-only U.S. Department of Defense (DoD) and U.S. Governmental product exercises where Drone Aviation's tethered systems including the WASP tactical aerostat, the WATT Tethered Drone and newly launched FUSE Tether System, were tested by prospective customers. Among just a few of the recent events that have been successfully completed include:
- U.S. Army CyberQuest 2017 - Drone Aviation's WASP participated in a month-long, soldier-operated program where it demonstrated its ability to support three airborne payloads simultaneously. The WASP provided communications range extension, ISR, and Electronic Warfare (EW) capability to deployed soldiers and division commanders. Operating from an austere location, WASP provided a persistent aerial platform to test technologies and concepts of operations for future requirements.
- U.S Department of Defense Technical Experiment (TE) 17-3 - Through new industry partnerships, Drone Aviation's tethered drone system was integrated with various networking solutions utilized by the U.S. Army from multiple vendors where it was used to evaluate rapidly deployable, extended duration communications and messaging range extension for up to 8+ miles. The event provided a platform to illustrate how a WATT-300 can operate on the edge of the battlefield, providing multi-mission capability with the potential to provide secured communications, ISR and EW in one tactical, highly mobile package.
- State of Florida HURREX Exercise Conducted at the NASA Shuttle Landing Facility - Drone Aviation' FUSE Tether System provided persistent aerial situational awareness during a hurricane preparedness exercise that coordinated emergency management officials, first responders and other organizations. During the exercise, FUSE enabled commercially available drones to provide continuous coverage of a simulated airplane crash for 4 hours. The live video was available to onsite first responders and utilizing its cellular LTE backhaul technology, full motion video was securely distributed and viewed by the Governor and staff at the Florida Emergency Operations Center in Tallahassee.
The Company believes that increased interest in testing of its products is in part being driven by tentative approvals for an expanded defense budget of $698 billion by the House of Representatives and the U.S. Senate's requested budget of $708 billion, which both represent significant increases over recent years. As the current Administration continues to focus on National Security, in particular with the Department and Defense and Department of Homeland Security, products such as WASP are demonstrating their capability to fulfill an urgent unmet need for mobile, persistent and cost-effective monitoring and communications.
To further support the sales efforts and production capabilities of the Company, Drone Aviation has secured new funding commitments of $4 million. The $4 million in financing is a combination of a $2 million bank line of credit personally guaranteed by Jay Nussbaum and up to $2 million convertible note line of credit provided by Dr. Phil Frost. Furthermore, Mr. Nussbaum and Dr. Frost, who hold equal portions of the $3 million of outstanding convertible notes, agreed to extend the maturity date of that debt until April 1, 2019 to further strengthen the Company's liquidity.
"It's clear that interest in drone and tactical aerostat technology within the Federal marketplace is expanding dramatically because of the need to improve real-time situational awareness, security and communications. Applications such as border patrol, law enforcement, and international military operations, to name a few, are increasingly being required to further protect the security interests of the United States of America, creating opportunities for companies like Drone Aviation," said Jay Nussbaum. "Our confidence in the business prospects for Drone Aviation is fully reinforced by the positive customer feedback of deployed systems and the results of continued government and commercial testing of the Company's tethered aerial products. Through this financing, the Company can scale-up its sales and production capabilities to capitalize on growing customer interest."
About Drone Aviation Holding Corp.
Drone Aviation Holding Corp. (OTCQB:DRNE) develops and manufactures cost-effective, compact and rapidly deployable aerial platforms, including lighter-than-air aerostats and electric-powered drones designed to provide government and commercial customers with enhanced surveillance and communication capabilities. Utilizing a patented tether system, Drone Aviation's products are designed to provide prolonged operational duration capabilities combined with improved reliability, uniquely fulfilling critical requirements in military, law enforcement, commercial, and industrial applications. For more information about Drone Aviation, please visit www.DroneAviationCorp.com or view our reports and filings with the Securities and Exchange Commission at http://www.sec.gov, including the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as well as information in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Statements in this press release that are not historical facts are forward-looking statements that reflect management's current expectations, assumptions, and estimates of future performance and economic conditions, and involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as "believe," "expects," "may," "will," "should," "plan," "intend," "on condition," "target," "see," "potential," "estimates," "preliminary," or "anticipates" or the negative thereof or comparable terminology, or by discussion of strategy or goals or other future events, circumstances, or effects. Moreover, forward-looking statements in this release include, but are not limited to, those relating to: the ability to support future military needs for advanced voice and data communications applications, the continuation of growing demand for drones for military and state and local law enforcement authorities and increased sales that may result from our product pipeline. The Company's financial results and the forward-looking statements could be affected by many factors, including, but not limited to, demand for the Company's products and services, economic conditions in the U.S. and worldwide, changes in appropriations by Congress and reduced funding for defense procurement and research and development programs, and our ability to recruit and retain management, technical, and sales personnel. Further information relating to factors that may impact the Company's results and forward-looking statements are disclosed in the Company's filings with the SEC. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/729231a1-0db8-40b5-a154-394fc3710ecf
Michael Glickman, Investor Relations
Drone Aviation Holding Corp.
Steve Gersten, Investor Relations
Drone Aviation Holding Corp.
Source: Drone Aviation Holding Corp.