Leading drone innovation

Leading Drone Innovation
Aeronavics is a world-leading designer and
manufacturer of remotely piloted aerial systems
(RPAS). We launched our first product in 2010
and target the professional / industrial segments
of the $11 US billion and growing global RPAS
market. We invite you to join our adventure.
Contents
Executive Summary4
Product Overview6
Team Overview9
Product
13
About Aeronavics
22
Product Range
29
Solution
30
Market Size, Trends and
Targeted Segments
32
Aeronavics Credentials
and Acknowledgements
38
Strategy
44
Financial Information
51
Offer 59
Executive Summary
Aeronavics is a world-leading designer
and distribution partners to innovate on
and manufacturer of remotely piloted aerial
its platform. This focus has shifted and
systems (RPAS). The company launched
Aeronavics now markets its branded
its first product in 2010, and targets the
products in key vertical applications,
professional / industrial segments of the
collaborating with existing channel
$11 US billion and growing global RPAS
partners, sensor vendors and others
market. Aeronavics has been able to
to create and deliver complete
secure premier international clients such
vertical application solutions.
as NASA, Disney and Dreamworks with
its best in class products across a range
Aeronavics plans to build a fast
of different applications, delivering long
growing, profitable $50-100m
flight times, high payload capabilities,
revenue company in the next
and smooth vibration-free performance
5-7 years. In order to deliver
complemented by a range of sensors.
this growth, Aeronavics
requires funds for working
RPAS, or drones, enable new and exciting
capital, ongoing leadership
opportunities to improve performance,
R&D, channel and partner
increase safety and reduce cost across
development, investment
a variety of industries from motion
in key personnel, tooling
picture filming through to emergency
and production line
services, farming and forestry. Historically
equipment.
Aeronavics shipped airframes under its
Droidworx brand, allowing end-users
executive summary
|4
funding target
The funding target for this investment round is $750,000 with
a funding cap of $1,500,000 for a maximum equity position
of 15%. At the minimum level, the funding will be used for
the completion of tooling and moulds for our new line of
ready to fly RPAS, for marketing, for formalizing contracts
with selected distribution outlets, for manufacturing
RPAS to send out for evaluation to potential high-value
domestic and international clients, and for selecting
unique opportunity
This is an exceptional and unique opportunity
for New Zealanders to invest in a company that
is already playing on the world stage, has a
solid reputation globally and more than
additions to the existing core team.
$5 million in sales to date. Aeronavics is a
If we raise more than $750,000, we will build the
expanding multi billion dollar market.
team faster and progress faster toward the revenue
and growth targets. We would also develop
products in our R&D pipeline at an earlier stage,
further increasing our competitive edge and
widening our range of solutions as well as
increasing and streamlining our production
capabilities.
leader in an industry that is set to be a rapidly
We chose equity crowdfunding for this first
round of investment as it offers the general
public the opportunity to invest in a dynamic
New Zealand company at the forefront of the
global drone revolution.
Invest in Aeronavics and invest in the future!
executive Summary
|5
product overview
Aeronavics produces professional and
industrial RPAS (or drone) solutions.
These systems solve a variety of problems
in several market segments, and our
products include a high level of service,
training and implementation support.
Systems are robust, easy to use and fit for
purpose, whether it’s shooting a Hollywood
blockbuster, mustering sheep, inspecting
bridges or finding lost bush walkers.
We were the first company in the world to
develop a professional multi-rotor airframe
solution, and as an early player in this
huge market, we have gained substantial
industry knowledge and have established a
airframe structures
Our airframe structures still differentiate us
from others in the market space. A blend of
aerodynamic features, robustness, durability
through high-quality industrial composite and
aerospace materials, functionality, and visual
appeal make our craft stand out in performance
as well as looks.
Although some of our earlier more basic
designs were copied, the increased design
complexity and our substantial investment
in tooling have kept copycats away; we
plan to pursue evaluation of proprietary
design elements of the new range for further
intellectual property protection.
trusted brand worldwide.
product overview
|6
performance
versatility
The performance of our craft further confirms
The basic design can be adapted
complete package solutions. An example
our leading edge, offering maximized flight
to different uses with the addition of
is our mapping/survey package that can
duration (over an hour) and payload capability
specialised equipment using a unique and
include a Sony camera (collaboration with
(15kg standard, and up to 20kg on specialized
easily exchangeable payload attachment
Sony) and a world class post-processing
craft) by finding the most efficient component
feature. Possible payload attachments
software package (collaboration with
configurations (motors/propellers/batteries)
include cinema-quality motion picture
Pix4D). We have similar arrangements with
matched with the right design geometry to create
cameras, industrial zoom cameras, NVDA
thermal imaging devices (FLIR), NVDA
a well-tuned and high-performance system. This
sensors, multispectral and hyperspectral
(Sentek) and LiDAR (Headwall Photonics)
is the result of years of design experience, and
devices, thermal imaging equipment,
as just a few examples.
built-up know-how.
spray pods, laser scanners, air sampling
equipment and more. This extends the
We are forming more collaborations as
Our craft ensure smooth and vibration-free
functionality of a single drone to become a
new sensor hardware emerges. Aeronavics
camera footage and sensor results through
valuable multi-purpose tool for a variety of
is contacted almost weekly now by new
our world class vibration absorbing gear-rail
operational tasks in the field.
companies wishing to align with us.
assembly, engine mountings and vibration
absorbing composites. Systems are easily
We have formed collaborations with third-
packed down for travel whilst retaining structural
party manufacturers to integrate their
integrity within the design.
devices and software programs in our
product overview
|7
world class
We build unique world class RPAS
systems with modular airframe
emergency services and law enforcement. These
clients use drones as a primary tool, where down
time is costly, and are looking to us for a reliable,
dependable and robust solution.
structures, cutting-edge flight
In cases of fire, safety and critical situational
capabilities, proven results through
awareness applications where lives are at risk,
proprietary vibration dampening
there simply are no compromises to be made.
technology and turn-key end to end
solutions all backed by extensive service,
support and user training / education.
Our clients include high-end movie producers, energy
companies, oil and gas, forestry, mining, security,
product overview
|8
team overview
Our team at Aeronavics is made up of
12 people consisting of 6 employees, 5
contractors and one independent Chairman.
Two of the employees form the senior
management and are also Directors of
the company. We will bolster the already
impressive senior management with an
experienced Operations Executive. Our team
have significant industry experience including
sophisticated design capabilities and a wealth
of international sales and channel management
know-how. Our staff and contractors have
the key skills and attributes which have
been translated to the current success of
Aeronavics, and they all have the passion,
drive, tenacity and energy to allow Aeronavics
to become the global market leader in
Linda Bulk
General Manager, Director
After a career of 10 years in the ICT
industry in various roles, Linda started
her own company in 2004 offering team
building and personal development
programs, optimising team efficiency and
facilitating change. In 2008 Linda and her
business partner Rob were introduced to
aerial robotic technology.
They ran a photography/360 virtual
environment business with this
technology and were taken by the
incredible potential. In 2010 Aeronavics
(formerly known as Droidworx) was born.
Linda is the General Manager with a focus
on marketing and sales.
Industrial Remotely Piloted Aerial Systems.
team overview
|9
Rob Brouwer
Head of R&D and Product Development, Director
Coenraad Brand
Flight Engineer
Rob’s interest in aviation and design
aviation in the civilian world. Aerial
Coenraad holds a BE in Electronics / BE (Hons),
began at an early age building balsa
robotics became Rob’s passion in
Information Security. With over ten years of experience
wood models, experimenting with
2008 and resulted in establishing
in developing and delivering products and projects
different shapes and wing types.
one of the world’s first professional
in various information technologies and engineering
This fascination for flight resulted
level aerial robotic airframe design
disciplines, Coenraad specialises in getting systems to
in a career as a commercial pilot in
and manufacturing companies
communicate effectively with one another, with a focus
Australia. Rob was approached by
(Droidworx). Rob can be credited
on integrating a range of technologies to add value
the Australian Air Force to train to
with all that has been invented
and solve problems. He has a great passion for UAV
fly fighter jets. Although extremely
and designed in the company, and
technology, and has played with model aircraft ever
flattered at the recognition of his
given his skills in engineering and
since he was a child and has gained a lot of knowledge
ability and skill, Rob declined
design, he aptly heads up product
over the years relevant now to his role as Flight
and turned his attention back to
development.
Engineer at Aeronavics.
team overview
| 10
Investor Rewards
Martin Riegel
Independent Chairman
New Zealand has a rich history of
Martin has a long-held interest
Broadbell Technologies,
in innovative technology and
Director of Vizzybell, and with
its commercialization. Martin
FarmIQ, Serato, and Callaghan
is a Principal at Broadfield
Innovation. Martin also
Advisory which he co-founded
volunteers as a University of
in 2013 with Al Monro to
Auckland SPARK competition
actively help New Zealand
judge and mentor. Martin has
technology companies expand
served as CEO, COO and CFO
globally. Martin is currently
for a number of technology
working with a number of
companies over his career
New Zealand companies
including NextWindow in New
and government entities
Zealand and 10 years with Intel
including as CEO/Director of
Corporation in the US. Martin
UbiquiOS Technology, Director
has a BBA from the University of
of Cemplicity, Chairman
Notre Dame and an MBA from
of Mixquake, Director of
Indiana University.
forward thinkers, innovators, inventors,
scientists, and visionaries. You
now have the opportunity to join the
Aeronavics family by investing in this
visionary company right before its new
line of high-end RPAS devices are
launched on the international stage.
In addition to the potential financial
returns associated with growth in share
price and future dividends, investors
will be given the opportunity to fly
one of the craft at Aeronavics annual
meetings (Snowball Effect Investors
will be responsible for their own travel
and/or other costs incurred to attend
the annual meeting and receive the
rewards).
team overview
| 11
The Drone Market
Under the headline “Technology in 2015 – the new gadgets coming your way”
The Telegraph in the UK states on the 31st of December 2014:
“Super drones
If 2014 was the year of the selfie, and ‘dronie’ is the likely successor, the coming months will continue to place unmanned aerial vehicles as
a fixture in our collective day-to-day consciousness. Drones may seem a trend that has already peaked, but expect to hear less about who
has hold of one (the answer may be everybody), and more about what they’re being used for. It may be common place to see an owner
controlling their own in a local park, but the discussion about practical and real-world uses has only just begun. Drones aren’t a one-off
fad; particularly with companies like Amazon keen on utilising them. More drones, being more useful, will be larger parts of our lives.”
A bit of history
The emergence of microsized processors, gyros, and sensors
businesses, have grown into multi-million dollar companies.
such as accelerometers have made this technology possible.
Currently drones are hugely popular and their popularity is still
Domestic drones began around 2007/8 with hobbyists and
rising. The emerging domestic / industrial drone market is now
enthusiasts tinkering in home garages and university labs, forums
being compared with the personal computer market in the 60s,
and users groups flourished as more joined these public-sharing
70s and 80s. Market projections for drones are in the tens of
spaces. Eventually some commercial ventures, started as home
billions of dollars a year.
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| 13
Market segments
The market can be divided roughly
into four segments:
Segment:
General Description
Key Requirements
Main Manufacturers
hobby / toy:
hobby+ /
entry-level pro
commercial /
industrial
military
Craft built for leisure –
generally small toys for
playing indoors or around
the house.
For hobby level and up to
semi-professional media
Applications and sometimes used
for proof of concept
Multi-purpose tools for gather
data and performing tasks increasing efficiency and safety
in general operations.
Military recon missions
up to and including
search and destroy
Public Services
Competitive price point – DIY selfbuilt
Robust, reliable, ease of use,
high level of service and support, fit for purpose
Robust Mission Critical
Reliability -
DJI – Align – Foxtech – 3D
Robotics – Tarot
DJI – Align – Foxtech – 3D Robotics – Tarot
See Competition Section
BAe / Boeing
Lockheed Martin
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| 14
Where does Aeronavics fit?
Aeronavics specializes in
solutions for the commercial /
segment (roughly 25% of the
total market).
This is where we can truly make a difference, offering
robust professional quality solutions that gather
information cheaper, cleaner and safer and enabling new
capabilities, new business models and saving cost. At
the same time we can help reduce man’s footprint on the
ecology and participate in solutions that better inform us
as to how we might live in a more sustainable relationship
with our planet. We are motivated by what is possible
through this technology.
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Market
sub-Segment
1
Media
Market segments
From a product
development perspective,
2
Public Services
we have initially divided
the commercial / industrial
market segment into 4
sub-segments, each with
3
Industry
several user groups:
4
Agriculture
Target User Groups
- Production Companies (movies / advertisements / TV)
- (Semi) Pro Camera Operators
- Camera Rental Companies
- Marketing Agencies
- Real Estate Agencies
- (Aerial) Photography Companies
- Police / Law Enforcement Agencies
- (Rural) Fire Brigades
- Search and Rescue Organizations
- Councils
- Coast Guard
- Federal
- Universities/Research Organizations
- Mining Companies
- Civil Engineering
- Oil and Gas
- Energy / Utilities
- Property Developers / Architects
- Insurance Companies
- Dairy Farmers
- Beef and Sheep
- Crop Farmers
- Vineyards
- Forestry
- Fisheries
- Agricultural Contractors
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Systems are easy to use,
affordable, quiet, and
Media:
environmentally friendly. Generally
Aerial shots from full-size aircraft are
News reporters put themselves in
speaking drones enhance business
expensive, highly weather dependable
danger to get that newsworthy shot
and difficult to re-schedule. Drones
in war zones or natural disasters,
offer a substantial cost saving, are
drones can keep them safe and offer
easy and quick to deploy in between
additional access to hard to reach
increase safety, and reduce
changing weather conditions and
areas and terrain.
operating costs. How, and to what
In addition they are quiet and can
extent, depends on the application
more safely, offering a unique added
models, improve performance,
and the application area – here are
are easily accessible and on hand.
get much closer to subject matter
creative perspective. Importantly, they
are environmentally friendly.
just a few examples.
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Public Services:
Full-size aircraft deployed in a
search and rescue (SAR) mission
Fitted with thermal imaging equipment
weeds in difficult terrain, or mapping
cannot fly into narrow gullies or
a drone can spot ‘hot’ bodies from
and inspecting waterways roads and
hundreds of metres away and can
infrastructure. In policing, drones provide
in fog and mist and generally
navigate towards the person when
police with the ability to swiftly obtain
operate only in daylight hours. A
identified to drop off a life-saving
situational awareness information without
package containing a communication
putting their personnel at risk.
drone can fly where the full size
aircraft can’t reach and has no
device, water, food, thermal blanket, and
first aid kit.
Disaster management and/or accident
reporting is another area where restrictive
Our equipment, for example, has been
operational situations can be overcome
operational restraints in fog or mist
used in a recent Australian bushfire,
in terms of access, situational awareness,
and reduces risks to airborne or
patrolling for hot spots and providing
safety, and communication.
critical information in conjunction with
ground SAR teams.
full-size aircraft. Local government also
sees a wide variety of possibilities to
increase efficiency and reduce costs,
for example monitoring for and spraying
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Industry:
Monthly stock pile measurement
in open mines takes a huge
Methods we would have previously
Civil engineering projects also see great
amount of time and effort. A large
employed were people on the ground
opportunity to reduce cost and increase
using GPD but now we’re using UAV
accuracy with tasks such as inspecting
mining firm executive in Australia
to do wholesale larger areas in a 25th
buildings and bridges– as well as
quotes in the Queensland Industry
of the time in much higher details so
increasing safety in the field and on the
it’s really proved itself from a surveying
job.
Advocate of January 2015: “They
perspective.” He also said he purchased
the UAV for less than $60k and saved
(drones) basically replace 80
about $500k in man hours over the past
percent of our data capture.
capabilities.
two years and while increasing surveying
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Agriculture:
This sector is predicted to be
the largest user group of UAV by
Drones used on farms can increase
Our technology dramatically reduces the
far, both because of the growing
efficiency by reducing time spent
amount of kilometres on the quad bike
driving around just to look for potential
as trials in the field have proven, directly
problems. On-board sensor equipment
contributing to an increase of safety.
demand for food driven by
population growth, and because
of the compatibility of our
technology with farming practices.
can offer valuable information for
precision agriculture in various
Forestry and fisheries can also enjoy
specializations.
great benefits from the use of drones
which can help in spotting schools of
International Business Times in Australia
fish, navigation (for example, warning
published an article on Saturday the 7th
of icebergs ahead), conducting
of February 2015 titled “New Zealand
environmental research, and providing
Farmers Have ‘Most Deadly’ Jobs In
data for workflow management.
The Country” - stating that “Quad bikes
and tractor accidents were the most
These are just some examples - there
common causes of death among
are many more uses emerging almost
farmers in New Zealand. Farming has
daily across an ever-widening scope of
been classified as the “most deadly”
applications.
occupation with one farmer killed every
three weeks on an average in a year.”
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about aeronavics:
However, in the past two years we have made the transition to fully
Aeronavics was the first company
• We recognized that professional
serviced, ready-to-fly solutions for the following reasons:
highly competitive; we needed to
/ industrial users had extended
climb in the value chain. Our designs
requirements (such as robust and
have since evolved and are now
airframe in 2010 to the then
reliable systems, training and
far more complex – we invested in
technical support) in order to include
tooling and moulding which makes
emerging domestic drone market
the technology in their operations.
copying our products very difficult –
and have been a leader in the
They needed to be able to trust their
and we have further protection to our
equipment and their supplier - we
brand and products.
to offer a professional grade
professional/industrial sector for
the past 4.5 years.
Our initial approach was to
construct drone structures
(airframes) onto which disributors
and end-users could add their
own components.
knew this could be our niche.
• Aviation authorities are indicating
• We experienced a gap in the level of
that future regulation will include
quality and support available from
certification of complete systems
our representatives / distributors and
straight from factory (rather than
other parties in the market to cater
through DIY or system integrators).
for the professional / industrial user.
• We had no control over the quality of
• Cheaper and out of the box flying
solutions flooded the market aimed
builds that our airframes were used
at hobby and entry level pro user.
for, which formed a risk to our brand.
This shifted the nature, perspective
• Cheap airframe solutions came on
the market which included copies
of our product – making this space
and expectation of the end-user from
DIY component based solutions,
to turn-key.
about aeronavics
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Ready to fly
We have invested largely in market
development and education
by exhibiting, presenting and
We worked with industry pioneers,
Our new product line is nearly ready to
government market developers and
go, awaiting final manufacturing set up
research institutes including various
and tooling.
demonstrating the potential of RPAS
universities. We saw the perception of
user groups such as farmers and local
This new line of products is designed
and our product range. We have
government shifting from “Don’t think
with ease of production and quality
learned about specific requirements
so” to “Possibly”, to “Probably” to
control in mind, suitable to produce and
“Inevitably” in just two years.
distribute in quantities and these systems
and tailored our solutions to the
are expected to pass any (future) aviation
These markets are now ripe and ready
authority regulation on airworthiness and
problems we discovered in the
to progress and those we have been
robustness.
various industries.
know us to be their trusted partner.
working with over the last two years
about aeronavics
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WHY AERONAVICS?
Our new range will no longer
be available as airframe
options; they will be marketed
as a turn-key solution.
The following aspects help differentiate Aeronavics and make up key
components of what our brand experience delivers:
Airframe Structure
The airframe structure is a critical component in the overall performance of the craft and
its effectiveness as a complete tuned system. The quality of the captured data and the
function it delivers, especially in adverse weather such as in New Zealand is an important
consideration. We specialize in the design and manufacturing of professional / industrial grade
airframe structures – our unique properties and innovative designs have made – and make – a
stand-out product in the UAV industry since we started in 2010.
about aeronavics
| 24
Innovation
Industry knowledge
Customization
We are at the forefront of development, ever
Having been at the very start of this
Our design department is capable of
pushing the envelope in system capability,
fast growing industry we have built
customizing solutions to customer
performance and application delivery. We
up considerable industry knowledge
specification if required. We offer base
have a track record of many “firsts” in the
regarding Aerial Robotics, technical
models that are based on flight capabilities
world to show this including the first system
possibilities, design characteristics,
employable throughout different sectors,
to carry a RED Epic (cinematography
and system performance. We have also
but we are also capable of tailoring these
camera for the film set), the first system
gained valuable knowledge about what
easily and affordably to particular payload
to carry 20kg, the first system to use
the customer groups require in terms of
or environment conditions. Customization
retractable landing gear in aerial robotics
support and education to assist in the
often leads to new vertical opportunities and
for unobstructed 360 degree video view,
adoption of this new technology and make
we have a keen eye for requests that can be
the first system to film at Mt Everest base
implementation successful. On the supply
extended substantially.
camp and summit climb. Customers are
and manufacturing side we have great
also offered affordable upgrade options to
knowledge and experience that can be
extend the operational use of the vehicle as
drawn upon.
innovation allows.
about aeronavics
| 25
Service and Support
Versatility
Reputation
We understand the requirements for
We are the only manufacturer with such
We are known to offer quality products
service and support in the commercial /
a wide range of craft. Although this has
and genuine service. We have a face to
industrial space. The system is only a tool
no relevance to those looking for a single
the public and are known to be fair and
– benefits and yields are only achieved
system for a specific task, we often see
honest. With many new players in the
if implemented successfully. We include
customers want to cover a range of
industry our track record of almost 5 years
in our offering help with application
applications or want to grow into larger
manufacturing and support offers peace of
and integration of this new tool in our
systems at a later stage. It makes sense to
mind and confidence to new clients.
customers’ operations. Our proposed
have all systems serviced and maintained
worldwide network of Service and Repair
by the same company, especially since
centres will be of great importance to
ground control units and some other
multinationals or travelling operators
support components (battery chargers and
using drone equipment. The first outlets
even propellers) are interchangeable.
in the US and Europe can be online within
a month of completion of the Snowball
Effect offer – they are keen to get our new
products into store.
about aeronavics
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Aviation Authority
Recognition and
Certification
Industry Associations
& Partnerships
Aeronavics craft were the first in the world
associates and partners throughout
to obtain Federal Aviation Administration
the industry, varying from industry
(FAA) operational exemption for a
groups, suppliers, value-add payload
Hollywood cinematography craft up to
manufacturers (such as sensors and
25kg take-off weight (October 2014).
cameras), government agencies and
Currently there is no provision for generic
research industries. These associations
manufacturer certificates in the RPAS
are a wealth of knowledge and support to
industry issued by aviation authorities.
draw upon in the growth of our company.
We have a widespread network of
Operators apply individually or collectively
for operator licenses, which includes
material assessment. Our systems have
been approved by aviation authorities
without exception and throughout the
world, and our manufacturer’s training is
well recognized.
about aeronavics
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BOT-V2
SkyJib X4
SkyJib Super X
Falcon HP
Falcon LF
Targeted Payload
1.2KG
3.5KG
7.5KG
4.5KG
3KG
Targeted Flight Time
30-45 Minutes
20 Minutes
15 Minutes
40+ Minutes
60-80 Minutes
Other
Most Compact
Retractable Landing
Gear
Retractable Landing
Gear
Solution Price
$8-15K
$18-25K
$25-35K
$30-45K
$40-60K
Portability
Versatility
Heavy Payload
Stable Performance
Long Flight Time
• Security and
Surveillance
• Infrastructure
• Inspection
• Mapping
• Border Security
• Forestry Operations
• Fisheries Operation
• Security and
Surveillance
• Infrastructure
Inspection
• Long Duration
Flight Operations
such as SAR
• Border Security
Range (Net $NZD
to Aeronavics)
Application
Characteristics
Targeted
Applications
• Farming - General
• Aerial Monitoring
• Sensor Deployment and Data Collection
• Fire and Public Safety
• Thermal Imaging
• Forestry & Fisheries
• Police and SAR Operations
• Security and Surveillance
• Aerial Film and Photography
• Advanced Hobby
• Mapping and Surveying
• Infrastructure Inspection
• Aerial
Photography
• Aerial
Videography
• Infrastructure
• Inspection
• Aerial Photography
• Aerial
Cinematography
• Heavy Lift Capable
• Ag-POD
applications such
as Spraying and
Seed Spreading
* Maximum payload and maximum flight time (endurance) do not occur in the same instance –
the higher the payload the shorter the endurance. Generally both maximums are stated (as shown above) exact endurance figures per payload mass vary as weather conditions change.
product range
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solution:
This includes the UAV, transport cases,
we have been part of a fast developing
mission control (ground control units)
market and based on customer feedback
training, (onsite) support, relevant
throughout the years, we believe that
We believe the commercial /
device and device attachment, and
the models we are now presenting
data processing software in some
constitute the broadest application
industrial market is best served
occasions. This broad but tailored
range in commercial and industrial grade
by turn-key solutions, tailored
offering will allow us to scale product
equipment.
sales in the market.
to a particular application
For example, a turn-key solution for a
When we started in 2010 we built an
mapping package includes the system,
and environment, solving an
extranet / electronic billboard on which our
ground control unit, training, camera,
customers and distributors could share
camera attachment and post processing
identified problem.
experiences with us and offer feedback
software for an end result which is
and design suggestions. This formed the
measured and referenced to the end-
basis of our product development and
user requirements. In this case, the
advancement of our craft – which included
end-to-end solution is a collaboration
extensive vibration dampening tools,
between Aeronavics, Sony, and Pix-4D,
easy pack down features whilst retaining
under Aeronavics branding and product
structural integrity within the design,
management. In some industry verticals
and expanded lift and flight duration
we collaborate with key industry parties
capabilities. Over the last five years
for learning, reference and promotion.
solution
| 30
Company
Capability
Gremsy & CineRebels
Camera Gimbals / Brushless Gimbal Controllers
Cyclops
Oil & Gas Industry Infrastructure Inspection
Unison / Transpower
Energy Sector Applications – Line Following
Scion
Forestry Applications
associations including the
Pix4D
Mapping
following key application
Studiocode
Video Analysis & Distribution
capabilities:
Sentek Systems
Agri Data Collection Systems
FLIR
Thermal Imaging Equipment
GoPro
HD micro imaging devices
Sony
Video and still image camera equipment
NZ Police and Fire Services
Situational assessment (trials)
Advanced Security
Government Security Contractors – Security applications
RED
Cameras - Cinema / big screen movie capturing
We have several
packages and industry
We are looking to develop our application
partner program further in the coming
months and years.
SOlution
| 31
Market size, trends &
targeted segments:
According to Frost & Sullivan
the global Drone market will be
over US$22 billion by 2020, with
over 25% in the commercial
space where Aeronavics
operates.
2015 offers a wonderful and exciting
identified the largest and fastest growing
opportunity to stake a large claim in the
areas of the market, and we are taking a
commercial RPAS market with the most
deliberate approach to build partnerships
advanced crafts in the world.
with complementary technology vendors
(sensors and application software) to
To be successful we have taken the
present a solution based on Aeronavics
view that we need to put together an
UAVs. The key segments, example
ecosystem that provides complete
applications and some of our solutions are
solutions on a segment-by-segment
outlined below.
basis. Through our research we have
market size, trends and targeted segments
| 32
Segment
Agriculture
Description
New sensors and data analytics are taking
precision agriculture beyond simply monitoring
crops for stress. Imagine farmers boosting
crop yields by optimizing the fertilizer mix
for different parts of a field, or winemakers
precisely controlling drip irrigation down to the
individual vine.
Example
Applications
• Livestock Monitoring
• Asset Monitoring
• Pasture Measurement
• Precision Spraying
• Temperature
Monitoring
Example Aeronavics
Applications / Solutions
Sentek Systems for agri data collection sensors – Craft Type BOT and Falcon
Aeronavics has an alliance with Sentek Systems which provides
a third party add-on sensor for precision agriculture applications
– allowing detailed and accurate crop monitoring and vegetation
analysis, vastly extending the capabilities of aerial robotics as a data
collection tool for all crop, dairy and agri-sector activities.
Pix4D for aerial mapping and surveying– Craft Type – BOT
Construction
On large-scale construction sites it can be
extremely difficult for contractors to get
the big picture. Drones make it simple for
construction giants like Downer, Bechtel
and DPR to monitor progress and supply
stockpiles on a day-to-day basis.
Energy
The energy industry uses drones for
applications far beyond pipeline and flare
stack inspection. In Alaska, BP uses drones
to monitor its gravel-extraction activities
to stay within environmental guidelines.
ConocoPhillips has used unmanned aircraft
in the Arctic, and Chevron has experimented
with them as well. First Solar employs drones
regularly to inspect for faulty solar panels.
• Large scale
• Local site monitoring
• Mapping & Surveying
• Mapping & Surveying
• Oil & Gas
• Pipeline Monitoring
• Power Line Surveying
• Inspection
Pix4Dmapper automatically processes terrestrial and aerial imagery
acquired by light-weight RPAS craft using innovative technology
based purely on image content. It converts images into highly
precise, customisable and timely results for a wide range of GIS and
CAD applications. Aeronavics is one of only 8 RPAS manufacturers in
the world with accreditation to package and distribute Pix4D with its
craft.
Aeronavics /Unison / Transpower / line following robot – Craft
Type – Falcon V2
The company is also in the final stages of a draft agreement with
one of New Zealand’s premier energy companies (Unison) to
collaboratively develop power-line following robots for this sector.
This will be a major implementation and a vertical market solution that
will be imminently exportable.
market size, trends and targeted segments
| 33
Segment
Description
Example
Applications
Mining
Mining giants like Rio Tinto are reducing risk to
their human workforce by using drone technology
to detect potential landslides and inspect safety
infrastructure, as well as to keep a more accurate
eye on how much mineral it extracts.
Film &
Television
Several American TV and film production
companies recently received FAA clearance to fly
camera-equipped drones (including Aeronavics)
in US airspace, offering major Hollywood studios
such as 20th Century Fox and Warner Bros. the
opportunity to leverage this technology on home
soil—something they’ve done for years in other
countries. Drone technology will bring much of that
overseas shooting back to the US.
• Cinematography
• Photography
• News Coverage
• Sporting Events
• Real Estate
• Broadcasting
Government
Local and National Government Agencies use
UAVs to enable new approaches to security, asset
management, enforcement, and delivering broader
services.
• Wildlife Research &
Monitoring
• Surveying & Mapping
• Climate & Pollution
• Border Security
• Environmental
Enforcement
• Search & Rescue
• Forestry and Fisheries
• Police and SAR
operations
Other
The applications for UAVs are evolving every day.
• Delivery
• Communications
• Asset monitoring
Example Aeronavics
Applications / Solutions
Our new BOT configured to mapping and combined with Pix4D
offers stockpile measurements and general information for
Mining Industries
Studiocode for video referencing and analysis – Craft Type SkyJib, BOT, Falcon
Studiocode is an innovative technology that revolutionises
video analysis and distribution – matched with an aerial capture
device such as an Aeronavics aerial robot the two technologies
create a fast and powerful analysis tool for a variety of industry
applications. Studiocode is currently looking at aligning their
global offices with Aeronavics distribution channels.
SCION - Crown Research Institute for NZ Forest Industry –
Craft Type – Falcon
SCION have commissioned Aeronavics to build specialised
forestry aerial robotic craft for a wide range of forest applications
– utilising LiDAR (laser scanning equipment) and multi-spectral
imaging devices attached to the craft. The implications for
the forestry industry are significant in terms of cost reduction
and the ability to collect precision data for analysis. SCION
have a three stage program with Aeronavics which will include
the development of aerial spray craft and airborne sampling
equipment marketable to the wider forest industry in NZ
and abroad.
Aeronavics will remain alert to market opportunities as they arise.
Aeronavics expects Agriculture
The market for UAVs is growing rapidly in both developed and emerging countries.
and Government to be two of its
distribution of RPAS crafts outside New Zealand include:
largest sectors based on early
Aeronavics sees potential markets in many parts of the world. Global usage and
vertical application partners
Africa – South Africa
Asia – Singapore, China, India, Indonesia, Japan, Malaysia, South Korea
Australia
Central America – Costa Rica
Europe – Albania, Belgium, Bosnia, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Kazakhstan,
Kosovo, Latvia, Lithuania, Malta, Macedonia, Netherlands, Norway, Poland, Portugal,
Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United
Kingdom
North America – Canada, Mexico, USA
South America – Argentina, Brazil, Chile, Columbia, Venezuela
and distributor capabilities
Initially, in addition to the local NZ and Australian market, we expect to target North
penetration. However, we
expect to take an opportunistic
approach to other sectors
given engagement with
and reach.
America and Europe given our existing distribution relationships. South America, and
Asia look to be the fastest followers.
market size, trends and targeted segments
| 35
Channel Model:
In addition to direct sales,
Aeronavics currently has an
established distribution network
to resell its airframes. The
distributors are often system
integrators in addition to
being resellers of airframes
These parties (less than 10 globally in the first instance) will become dedicated sales and
service centres of Aeronavics Turn Key Solutions, approaching target vertical markets
with complete Aeronavics branded solutions.
Within these vertical target markets, further channel partners / dealers will be assigned
who will fall back on the service centre in their country or region for technical support and
system maintenance of their clientele.
So the selected distributors will work with this network of dealers in their geographies to
market our product. We also expect to enable our solution partners, who have products or
technology of their own, to refer customers to us. Next step upon launch of the new range is
to provide demonstration and sales collateral to the distribution network. We also have a long
list (100+) of other potential distribution partners who have asked to resell our products.
and parts. With our selected
partners we will form our
distribution model tailored
to turn-key solutions.
market size, trends and targeted segments
| 36
Next step upon launch of the new range
We are already internationally recognised for high-end, high-quality, robust
is to provide demonstration and sales
products used by high-profile companies such as BBC, Redbull, NASA, Fox Sport,
collateral to the distribution network. We
Walt Disney, DreamWorks, Ericsson and others. Our equipment has been used for the
also have a long list (50+) of other potential
filming of the Twilight Saga, the broadcasting of the Monaco Formula 1 Grand Prix and
distribution partners who have asked to
other major sporting events (including the recent Cricket tests Sri Lanka and ODIs in New
resell our products.
Zealand), the filming of Master Chef New Zealand and The Block, as well as deployed to
fight recent bush fires in Australia to give a few examples.
We won the Mystery Creek 2013 Fieldays Innovation award as Most Viable Business and
were selected as a finalist of the New Zealand National Innovation and Export Awards in two
Aeronavics Credentials
and Acknowledgements:
categories (2013), as well as nominated as a finalist of the Waikato Innovation Awards (2014).
We have featured in numerous magazines, news articles and TV reports both nationally and
internationally and are grateful for a loyal customer base worldwide.
aeronavics credentials and acknowledgements
| 38
some customer
testimonials include:
“I was totally knocked out with the design and
“I am very impressed with your customer service
“You guys are amazing and make life so much
fabrication of the frame and components -
over there, and I plan to remain a loyal customer
easier. I appreciate that you are consistently a
everything just fitted!!! Just beautiful.”
as my fleet expands. Thanks for the speedy
group that I can count on :)”
- Charles Wannop – Flying Finish -
resolution, Aeronavics ROCKS!”
- Sarah – Arial Technology International -
- Silas Tyler “It’s the first time we had seen and touched
Aeronavics systems. They are so well made. Wow,
Aeronavics is awesome!”
- Tony Ngo – RC RUS –
aeronavics credentials and acknowledgements
| 39
competition:
Drones in the market today range
from the do-it-yourself kits found at
hobby shops through to high-cost,
fixed-wing, military unmanned
aircraft systems (UAS).
The highest volume of drone activity is
currently found in out of the box hobby
systems dominated by the Asian company
DJI, followed by 3D Robotics, Walkera,
and Align. Although these companies
don’t operate in the commercial / industrial
sector, they cannot entirely be ignored.
They offer a good value for money entrylevel user experience and are often
used for proof-of-concept projects. To
some extent they create our next market
(commercial / industrial) – a portion of
these entry-level users will move towards
professional systems after the benefits of
the technology have been experienced. In
early stage customer conversations these
budget solutions are often brought up and
sometimes preferred – as mentioned – for
proof-of-concept projects.
The commercial market is evolving
rapidly but is not yet dominated by any
particular manufacturer. There are a few
players globally who share the space with
Aeronavics in this market segment as per
schedule below:
aeronavics credentials and acknowledgements
| 40
name
location
strengths
weaknesses
Easy pack-down,
Poor performance in wind and
max
payload*
max flight
duration*
Draganfly
USA
Microdrone
Germany
Known Reliable platform
Limited payload capacity, nonupgradeable
3kg
AerialTronics
Netherlands
Attractive presentation
Just one model – non- upgradeable
2.9 kg
45 minutes
Aibotix
Germany
Protected propellers
Poor flight dynamics, poor customer
feedback
2 kg
30 minutes
Canada
Enclosed system with
Good features
Questionable performance in adverse
weather, limited payload capability,
over-priced
1kg
50 minutes
New Zealand
• Wide and superior
system capability
• multipurpose
• high performance
modular
• upgradeable
innovative
• affordable
• reliable brand
Funding – Scale / service coverage –
documentation
7.5 kg (up to 20
kg in custom
setups)
60 minutes (up to 90
minutes in custom
setups)
Aeryon
Aeronavics
US made and well
marketed, reliable brand
turbulence, limited payload capability,
single point of sale
0.8 kg
* Maximum payload and maximum flight time (endurance) do not occur in the same instance – the higher the payload the shorter the endurance. Companies however
25 minutes
45 minutes
aeronavics distribution model turnkey solutions
generally state both maximums (as shown above) and do not present exact endurance figures per payload mass as weather conditions create significant variations.
| 41
Competitive advantage:
We differentiate ourselves from
competitors on the following points:
• Airframe Structure
• Innovation
• Industry knowledge
• Customization
• Versatility
• Reputation
In general our products outperform
those of the competition and at a more
competitive price. This is what we
stand for as a brand – “engineering
mastery, functionality and beauty meet
here”. We believe that once our new
product line is officially launched we
will be offering the most advanced
RPAS craft in the world, along with
competitive vertical application offerings
and a channel to deliver and service our
solutions globally.
A targeted marketing and education
plan will ensure our target markets are
aware of this also.
• Service and Support
• Industry Associations & Partnerships
• Aviation Authority Recognition
and Certification
aeronavics credentials and acknowledgements
| 42
Happening Now:
Some of the highlights we are now
experiencing:
•
We have over 5000 registered users (people who created
a login on our website)
•
We have over 100 registered distributor applicants – these
are parties who have filled out a form to express interest
in becoming a distributor of our products.
•
On average we receive around 700 email enquiries per
month – there is now also a growing number of enquiries
from larger organizations and companies. •
Our US distributor has a customer (in the agriculture
sector) looking at 200 units as a first purchase order to
start with.
•
We have just signed an NDA with a large construction
company with 13,000 employees in Australia, 3000 in
NZ and well established in Asia – they are looking at the
potential of kitting their field crews with drones.
•
We have a connection in the Oil and Gas industry
representing 3500 oil platforms potentially looking at
stationing a drone at each.
The growth potential in the commercial / industrial segment is phenomenal
and about to explode; we are in an excellent position to become one of the
leading manufacturers.
Marketing, Media and PR
So far we have been mostly passive
Of” of the BBC documentary “Earth
in our Marketing, Media and PR,
Flight” - in which it was explained how
other than responding to autonomous
our equipment assisted in obtaining
demand, keeping our website
footage that film crews had never been
attractive, bringing news items or
capable of capturing before.
newsletters every so often and offering
presentations and demonstrations at
An intended pro-active marketing and
symposiums and other vertical market
PR approach will ensure a much wider
New Zealand tradeshows and events.
reach – we have contracted award
winning Hamiltion based marketing
Our autonomous influx of enquiry has
company MediaPA, who specialises
formed our “lead pool” for sales, and
in producing highly professional
we have also enjoyed a steady flow
customised content which is search
of interest from press nationally and
engine optimised for publication on
internationally. We have been featured
social media platforms and websites.
in various newspapers and magazines
Their clients saw their Google ranking
in New Zealand and abroad, featured
improve drastically, which – combined
twice on 7-Sharp and three times
with a new website tailored to our turn-
on the news (TVOne and TV3). Our
key offerings and a pro-active sales
products headlined in the National
strategy – will reach our now emerging
Geographics TV show “Showdown of
prospective customers.
the Unbeatables” and in the “Making
aeronavics credentials and acknowledgements
| 43
strategy
aeronavics distribution model turnkey solutions
Strategic Overview
We are an experienced company that
is at an inflection point in growth.
All the hard work has been done, the
new product line has been designed, the
branding is internationally recognised from
agriculture to emergency services, and
distributors are waiting for the new product
line to put into their show-rooms. This is
an exceptional and unique opportunity for
New Zealanders to invest in a company that
is already playing on the world stage, has
a solid reputation globally and more than
NZ$5 million in sales to date. Aeronavics is a
leader in an industry that is set to be a rapidly
expanding multi-billion dollar market.
We have identified several distributors
globally. We are not a one size fits all
product like some competitors. Our product
range is designed for applications in
industrial and commercial market segments
- our flight times and payload capacity are
unrivalled, not to mention the design features
and materials technology we use to build
some of the most advanced RPAS in the
world.
strategy
| 45
Growth plan:
Our growth plan is driven by our
BUILDING VERTICALS WITH LARGE
BUILDING STRONG DISTRIBUTION
own execution, market adoption,
VOLUME CAPABILITIES AND STRONG
CHANNELS
APPLICATION OFFERINGS
• We have a large existing network of
regulatory environments in different
•
targeting the highest volume entry points.
geographies, as well as general
economic factors around the
world. The key success factors
for Aeronavics are:
We understand the market and
•
We have a strong base of applications
already to draw from.
•
We have a number of key relationships
channel partners through our airframe
business as well as strong inquiries from
across the globe.
• We are narrowing that to the best of the
best to deliver on brand and in market.
with customers and service providers
interested in solving real problems in key
vertical segments enabling us to build our
application catalogue.
EXECUTING ON SCALABLE, AND POSSIBLY OUTSOURCED, MANUFACTURING
We intend to build a world class delivery team and will evaluate cost and quality options to
ensure delivery of the business plan.
strategy
| 46
The risks:
We have identified the risks
and mitigations below:
Risk:
many countries for its quality products
Building a world class team as we grow, and to
and is known by the relevant civil aviation
help us grow.
authorities in NZ (CAA), the USA (FAA) and
the UK (CAA). For example, FAA approved
Mitigation:
one of our models as the first aircraft
We have a wide network of professionals and
compliant for Hollywood movie making,
enthusiasts in the industry throughout the world
and Aeronavics is on a working group with
and have government support to attract talent
the CAA in New Zealand to help develop
to our company. Aeronavics is based in Raglan
workable regulation for the wider industry
to attract key staff and over time we’ll look to
as it advances.
expand our team around the world. On the
governance side we’ll be looking for industry
The recent UAV symposium held at Wings
level players in key verticals such as agriculture
Over Wairarapa in Masterton on January
and in channels.
16 2015 highlights the willingness and
dedication of aviation authorities to bring
Risk:
Retention of key staff.
Mitigation:
Risk:
the technology into alignment with current
Aviation authorities around the world may bring
aviation regulation so that manned and un-
in restrictive regulation, limiting the market size
manned craft can coinhabit airspace. This
for Aeronavics products.
view is widely held by aviation authorities
around the world as the trend toward un-
We strive to make Aeronavics a great place
Mitigation:
manned vehicles is rapid and inevitable in
to work. We encourage our employees to
As regulation comes in it will be welcomed by
our skies and on the ground.
become involved in many aspects of our very
us as we believe we will comply without any
dynamic workplace environment and also
significant cost to the company (post funding).
provide attractive work-life balance options.
The company already has a high standing in
strategy
| 47
Risk:
Risk:
With respect to Intellectual Property, we do not
Competition gets there ahead of us.
Lack of funds to finish the relevant tooling and
expect that there will be large opportunities
moulds to launch new product line.
for protecting intellectual property sufficiently
Mitigation:
to prevent competitors from participating
Execution and building our networks in an
Mitigation:
in the market. We will however evaluate
efficient and timely fashion will put us in a
The funding through Snowball Effect will enable
any innovations that we do come up with to
position to compete.
us to launch the new product line.
determine if it does make sense to protect
them. We plan to pursue evaluation of
Operational execution and building our
application and distribution networks in an
Risk:
proprietary design elements of the new range
efficient and timely fashion will help us win.
Ongoing working capital requirements
for further intellectual property protection. That
said, our competitive differentiation is through
Delivering on our points of difference below (as
represented in our brand) will continue to give
Mitigation:
the brand experience we create by delivering
us a competitive edge:
We plan to take two approaches to addressing
all of the items listed above. This is what is
our ongoing working capital needs. First,
going to win the day for us.
• Airframe Structure
• Innovation
• Industry knowledge
• Customization
• Versatility
• Reputation
• Service and Support
• Industry Associations & Partnerships
• Aviation Authority Recognition and
Certification
we intend to carefully manage working
capital through appropriate sales terms and
inventory management through common
parts to minimize cash requirements. Second,
we expect to need future funding to support
growth and working capital which could be in
the form of either debt and/or equity. We will
look to bank debt, additional private equity and
at some point potentially listing the company.
strategy
| 48
growth plan:
Critical to this is the new product line which we
targeted $20K ASP) need to be 870, 1800, 5010
Key target performance metrics:
have described in the product section and is ready
respectively to achieve our revenue goals.
The chart below shows what we believe will be the
to be produced and scaled. The product range
Our core financial plan is based on unit sales of
key financial performance targets moving forward
offers multiple solutions which cater to different
our solutions. Revenues are shown net of channel
and based on our base case P&L estimates. We
market performance sectors within and across
margins. We believe there are incremental growth
are looking to add product and vertical application
sectors. In our three forecasts, Conservative with
opportunities in leasing units, as well as a potential
/ distribution metrics over time to allow us to
a growth rate of 45.6%, Base Case with a growth
large revenue business in training, service, support
evaluate and continually improve performance.
rate of 64.3% and Aggressive Case with a growth
and spares.
rate of 94.9% our FY20 annual shipments (at our
base case
fy15
fy16
fy17
fy18
FY19
fy20
Revenue $NZD
1,005,600
3,200,000
6,570,000
`11,550,000
19,800,000
36,000,000
Revenue Growth
-45%
218%
105%
76%
71%
82%
20,000
20,000
20,000
20,000
20,000
53%
55%
60%
60%
60%
11
26
48
83
150
Average Selling Price $NZD
Gross Margin %
Units Per Month
52%
strategy
| 49
Distribute or re-invest profits:
expense
nzd $K
Manufacturing Tooling, Equipment, Facilities and Stock
385
Marketing - Staff, Web, Social Media, Trade Shows, Collateral
195
Other Operating Expense
110
Fund Raising
60
Subtotal Expenses Based on Minimum Target
750
Production Team, Equipment, Stock
230
Marketing - Promo Equip, Staff
195
R&D - Diagnostics and Tablet App
110
Admin Processes
65
Reserves
105
reaching the same goals, although at a slightly
Fund Raising
45
delayed pace should we not achieve the targeted
Subtotal Additional Expenses
750
Total
1,500
For the foreseeable future any profits will be reinvested either to fund ongoing expansion or
working capital needs. Once the company starts to
generate significant cash flows it will determine an
appropriate dividend strategy.
Exit strategy:
At this point in time Aeronavics believes it has the
platform in place and the capabilities to build a
strong public global company in the UAV space.
Use of raised funds:
We are targeting a raise of $750K with a maximum
of $1.5m to support the company’s near term
growth. Our forecasts are based on achieving the
$1.5m and in the event we do not achieve that goal
in this round we will continue to seek additional
funds in the near term. That said we will look to
maximum. The following is a summary of our
planned use of funds:
strategy
| 50
information
key assumptions:
• Note: Company operates on a 31 March
Financial Year
• Global commercial / industrial UAV market
growing to $6.4B by FY20
• Average Selling Price for Aeronavics RFT UAVs
of $20K
• Revenue growth is going to be driven by our
new product line and building our vertical
application program. The new product line
is ready to go. We have a number of vertical
programs already going and are getting new
inquiries regularly. In our conservative case we
project to grow to 8 units per month next fiscal
year and 73 per month by FY20. In our base
case we see those numbers at 11 growing to
150, and in our aggressive case forecast we
start at 14 per month next year growing to over
400 a month in FY20.
• Slow but deliberate progress in aviation
regulations globally
• Gross margins growing to 60% and Op-Ex of
40% in FY16 and beyond
• COGS reduction through scale and
operating efficiencies. Currently units are
hand assembled and production runs of
• Op-Ex expenditures will be primarily in three
areas: Channels and Channel Management,
Vertical Application Programs, and Product
Research and Development.
• Continued investment in product development
and channels
• Significant working capital needs, but
CNC or Mould produced parts are small
favourable receivable model with most
batch
customers pre-paying
• Channel costs remain circa 25%
• Our optimum manufacturing may include
outsourcing in or outside of New Zealand
and we expect to continually evaluate that
as volumes grow. Key considerations our
access to components, material and labour
costs, quality control, and access to markets
(freight).
• Revenue opportunities in training, service/
support, spare parts, extended warranty,
finance/rental are viewed as upside
opportunities. In addition the projected
average selling price (and gross margin) are
based on a low mix of sensor package sales.
We believe this could be a significant revenue
upside which will be clarified as we build our
capabilities in this area.
financial information
| 52
finANCIAL Performance:
Management has evaluated three scenarios for growth. A conservative case
Internally, Aeronavics management is taking an aggressive approach to
showing 45.6% Compound Annual Growth Rate (CAGR) for revenue, a
growth with its $100m goal. In a large and growing market we intend to
base case showing 64.3% CAGR and an aggressive case showing 94.9%
shoot high based on our core capabilities, experience, relationships and
CAGR. In each instance we looked at unit sales growth to help determine
brand. There are many risks to being able to achieve these targets including
reasonableness. Our forecasts are based on achieving the $1.5m and in
those listed above as well as our ability to execute, the overall economic
the event we do not achieve that goal in this round we will continue to seek
environment, and the ability to raise sufficient capital as required by the
additional funds in the near term.
company to support future growth. As a result we are presenting what we
consider a conservative view as well as what we think we have the highest
probability of achieving (base case).
Revenue by product type:
base case
Revenue
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Airframe
1.657,700
703,042
600,000
300,000
0
0
0
RTF
172,134
302,558
2,600,000
6,270,000
11,550,000
19,800,000
36,000,000
Total
1,829,833
1,005,600
3,200,000
6,570,000
11,550,000
19,800,000
36,000,000
As described above Aeronavics has switched its focus from its historical
is the same and the net is the RTF forecast. While this switch has caused a
Airframe / Droidworx focus to complete RTF solutions. The base case split is
drop in overall revenues from FY14 to FY15 we believe our focus on RTF will
shown above. In the conservative and aggressive cases the Airframe revenue
pay off through the highest level of profitable growth.
financial information
| 53
income statement:
The P&L’s for each case is shown below.
Other income below is comprised of
historical grants and interest which we
have not incorporated in our forecast
going forward.
conservative case
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Revenue
1,829,833
1,005,600
2,620,000
5,250,000
8,550,000
12,600,000
17,400,000
Gross Margin
823,117
527,843
1,388,600
2,887,500
4,702,500
6,930,000
9,570,000
GM %
45%
52%
53%
55%
55%
55%
55%
Total Op-Ex
870,023
606,124
1,048,000
2,100,000
3,420,000
5,040,000
6,960,000
Other Income
109,333
900
0
0
0
0
0
Pre-Tax
62,428
(77,382)
340,600
787,500
1,282,500
1,890,000
2,610,000
base case
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Revenue
1,829,833
1,005,600
3,200,000
6,570,000
11,550,000
19,800,000
36,000,000
Gross Margin
823,117
527,843
1,696,000
3,613,500
6,930,000
11,880,000
21,600,000
sales of our solutions. Revenues are
GM %
45%
52%
53%
55%
60%
60%
60%
Total Op-Ex
870,023
606,124
1,568,000
2,628,000
4,620,000
7,920,000
14,400,000
shown net of channel margins. We
Other Income
109,333
900
0
0
0
0
0
Pre-Tax
62,428
(77,382)
128,000
985,500
2,310,000
3,960,000
7,200,000
Our core financial plan is based on unit
believe there are incremental growth
opportunities in leasing units, as well
as a potential large revenue business in
training, service, support and spares.
aggressive case
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Revenue
1,829,833
1,005,600
3,920,000
13,620,000
30,030,000
52,920,000
100,200,000
Gross Margin
823,117
527,843
2,077,600
7,491,000
18,018,000
31,752,000
60,120,000
GM %
45%
52%
53%
55%
60%
60%
60%
Total Op-Ex
870,023
606,124
1,568,000
5,448,000
12,012,000
21,168,000
40,080,000
Other Income
109,333
900
0
0
0
0
0
Pre-Tax
62,428
(77,382)
509,600
2,043,000
6,006,000
10,584,000
20,040,000
financial information
| 54
120m
projected revenue growth
100m
Aggressive
Base
80m
Conservative
60m
40m
20m
FY14
FY15
FY16
FY17
FY18
FY19
FY20
financial information
| 55
Financial Position:
Re: Current Net Assets: As of 31 December
2014 there is a shareholder current account
balance of $475,958. The shareholder current
account remains interest free for as long as
the company requires the use of the funds.
No repayment will commence before April
2017. In order for any repayments to be made,
the Independent Director must determine
that the funds are surplus to the company’s
Aeronavics Limited - summary balance sheet as of 31/12/2014
Assets
NZD
Current Assets
Cash
55,286
Accounts Receivable
18,622
Inventory
342,686
Total Current Assets
416,594
Fixed Assets
Net Fixed Assets
66,586
Total Fixed Assets
66,586
Non-current Assets
Capitalized Development Costs
2,114
Total Non-Current Assets
2,114
Total Assets
485,294
the company (which includes all shareholders).
Liabilities
NZD
Previous Rounds:
A/P, PAYE
70,986
GST
(15,917)
Tax
(341)
Total Current Liabilities
54,728
requirements and that payment in part or in
full can only be made in the best interests of
Notes, there have been no prior equity rounds
in the company. As of the date of this offering
there are 8,300,000 issued shares and share
Current Liabilities
Non-Current Liabilities
Shareholder Current Accounts
475,958
Total Non-Current Liabilities
475,958
unexercised for a total of 200,000 shares held
Total Liabilities
530,686
by one director. Total fully diluted shares
Net Assets
(45,393)
Equity
NZD
Current Year Earnings
20,312
Retained Earnings
(65,707)
Shares
2
Total Equity
(45,393)
options granted by the company that remain
pre-offer is 8,500,000 shares.
financial information
| 56
Valuation:
The Board has agreed on a pre-money valuation of
valuation. While Aeronavics is currently based in New
And in October 2014, early-stage mapping-focussed
$8,500,000. Key factors (which relate to financial
Zealand, it is raising capital to pursue a global growth
drone manufacturer, Kespry, raised a US$10m Series A
performance) are the stage of the company, its core
opportunity.
at a valuation of US$32m.
list of vertical application and distribution partners, and
In the drone industry we have seen raises from
Given Aeronavics’ position, experience and know how
the large and growing UAV market it is addressing.
hundreds of thousands to tens of millions in the last
in the global industrial drone market, the Board believe
three years although the valuations and financial details
that the valuation of $8.5m NZD is reasonable and
The drone industry is expected to be a high growth
for most of the companies are not readily available
provides investors with excellent value.
industry, and Aeronavics is at the forefront of this
making direct comparisons difficult. Most recently,
industry. A US 2014 study of VC’s investment in similar
however, early-stage hobbyist drone manufacturer,
Ultimately we believe we can achieve a strong return
stage companies (Series A round) in high growth
Ehang, raised a US$10m Series A in December 2014 at
on capital for our investors.
segments showed a median US$9.5m pre-money
a valuation of US$100m.
technology, products and team, its current and growing
implied ebit multiple under different scenarios
FY17
FY18
Conservative
Base
Aggressive
Conservative
Base
Aggressive
Valuation (Post-Money)
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
EBIT
787,500
985,500
2,043,000
1,282,500
2,310.000
6,006,000
Multiple
12.6
10.1
4.9
7.8
4.3
1.7
financial information
| 57
Management and Governance Remuneration
Person
Role
Cash Compensation
Equity
Rob Brouwer
Head of R&D and Product Development, Director
$52,000 per annum
4,150,000 shares
Linda Bulk
General Manager, Director
$52,000 per annum
4,150,000 shares
Martin Riegel
Independent Chairman
$48,000 per annum
200,000 options
Coenraad Brand
Contract Flight Engineer
$40 per hour.
*
It is expected that Rob and Linda’s salaries will be
normalized over time as cash flows permit. The
company is also looking to engage Coenraad full
time on an ongoing basis as cash flows permit.
Note, the options shown with respect to Martin
Riegel are in the name of Broadfield Investment
Partnership #1 a partnership between Martin Riegel
and the Monro Family Trust.
* Linda and Rob will each transfer 207,500 shares
to Coenraad Brand post financing. Mechanics and
terms of those transfers are to be finalized.
Martin Riegel is responsible for setting remuneration
for Rob and Linda. Note; the options shown
with respect to Martin Riegel are in the name of
Broadfield Investment Partnership #1 a partnership
between Martin Riegel and the Monro Family Trust.
financial information
| 58
offer
Fund Raising Summary:
Details of the Offer
Purpose of the current fund-raising
Funding Target
a maximum equity position of 15%. At the minimum level, the funding will be
$750,000.00
Funding Cap
$1,500,000.00
Shares on Offer
Maximum on Offer: Up to 15.00%
Offer Price per Share
$1.00 per share
Type of Share Offered
Ordinary voting shares
Minimum Investment
$1,000.00
Offer Period
30 days
The target for this investment round is $750K with a funding cap of $1,500K for
used for the completion of tooling and moulds for our new line of ready to fly
RPAS, the manufacture of RPAS to send out for evaluation to potential high-value
domestic and international clients (including NZ Police, Australian Police, NZ Fire,
Australian Fire, Oil & Gas, Forestry and a high profile security company), core
sales and marketing activities, and extending our manufacturing and product
development capabilities as well as select additions to the existing core team.
If we are able to achieve the higher end of the range we will be able to build the
team faster and progress toward the revenue and growth targets more quickly.
Future funding
As a result of its planned rapid growth, Aeronavics expects to have to raise
significant incremental capital in the future to fund working capital (for
receivables, inventory and capital expenditures) and organizational needs as
the company expands. The company expects to do this through a combination
of debt facilities and/or equity. Future equity funds may come from New
Zealand. However, due to the global nature of Aeronavics, it is likely that future
equity funds will come from a strategic or financial international investor. The
company expects such funds to be raised at a higher valuation, given company
performance. Existing shareholders may have the opportunity to participate in
such fund raising. However, the Board has some discretion to issue shares
on a non-pre-emptive basis (as described fully in the subscription and
shareholder agreement).
offer
| 60
Management of Shares
Wynn Williams in Auckland will be
coordinating the share subscriptions
during the equity crowdfunding
investment round. To date,
Aeronavics’ has maintained its
own share registry. With many new
shareholders joining the company this
is the auspicious time for transition to a
specialist share registry service.
balance of $475,958. The shareholder
current account remains interest free
for as long as the company requires
the use of the funds. No repayment
will commence before April 2017.
In order for any repayments to be
made, the Independent Director must
determine that the funds are surplus
to the company’s requirements and
that payment in part or in full can
only be made in the best interests
Aeronavics will communicate with its
of the company (which includes all
shareholders on a quarterly basis.
shareholders).
Investor Entitlements
As indicated under management
All investors are invited to attend an
annual investor meeting and a technology
tour at our plant in Raglan, New Zealand. The next annual meeting will be in the
Spring of 2015.
Related party transactions:
As of 31 December 2014 there is a
shareholder current account balance
of $475,958. As of 31 December 2014
there is a shareholder current account
and governance there have been
options for 200,000 shares issued to
Broadfield Investment Partnership
#1 with respect to Martin Riegel’s
engagement as Independent
Chairman. The exercise price is $1
per share.
Third Party Advisors:
Accounting: BDO Waikato
Legal: Baldwins Auckland,
Wynn Williams Auckland
Banking: ASB Hamilton
Snowball Effect fees: Snowball Effect
charges a fee if a company successfully
reaches its funding target. This fee is
the larger of $20,000 or 6% of the funds
raised. Snowball Effect may amend this fee
in discussions with a company before an
offer is listed on Snowball Effect.
offer
| 61
Disclaimer:
This information memorandum has been prepared by Aeronavics Limited. The information
contained in this information memorandum is confidential. This information memorandum has
been compiled from information believed to be reliable as at the date of this document. The
purpose of this document is solely for information purposes to assist recipients in making
their own evaluation of whether they wish to invest in Aeronavics Limited through its offer on
Snowball Effect. Aeronavics Limited’s offer is only capable of acceptance on Snowball Effect’s
website. Snowball Effect is licensed and regulated by the Financial Markets Authority.
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