Ep. 4 - Equity Crowdfunding Report - 12-13-19
In the Dec. 13th 2109 edition of The Equity Crowdfunding Report, Nick reviews the markets and crowdfunding news as well as interviews CEO of Parallel Flight Technologies, Joshua Resnick. Check out the episode, below!
Highlights include data on market closes, including Reg-A and Reg-CF raises, as well as an update from Andrew Dix, from Crowdfund Insider.
See Company Profile - Parallel Flight Technologies
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Interview Transcription:
[00:10:27] So let's bring on Josh Resnick, CEO of Parallel Flight Technologies. Josh, thanks for being on the show.
[00:10:35] My pleasure. Thanks for having me.
[00:10:37] All right. Just a quick review. Parallel Flight Technologies is an unmanned aircraft company focusing on building drones with hybrid drive trains that allow aircraft to fly longer and carry more payload. You've raised over a million dollars from over twelve hundred investors. The company has just closed its first S.F. offering and is now oversubscribed on START Engine and the company has recently awarded a grant from NASA. And you all have several government agencies eyeing the technology for future contracts. So, Josh, this is a very unique story. Tell us how the idea came to be. And tell us why this quest you are on is so important.
[00:11:18] This idea was formed in late 2017 after the terrible fire in Santa Rosa in California, which almost destroyed that town. And then we had another fire near to our home in the mountains of Santa Cruz. And it threatened our home and community. And I'm very thankful that the first responders were able to put that fire out. But it made me really start wondering what kind of technologies could be brought to bear in the fight against wildland fire. And so I reached out to experts in the field and found out that the future of wildfire support was unmanned systems and unmanned systems were already being used for a lot of situational awareness, but not for logistics, because there was nothing available that could do the heavy lift, long duration required for those missions. So I went back to first principles. I put together a team of engineers and we really redesigned drone power training from first principles around the idea of being able to lift heavy payloads for a long time.
[00:12:37] Ok. Talk about the drive system.
[00:12:40] So in your in your drones, you've you've built a hybrid parallel drive system. So why is this unique to the unmanned aircraft space?
[00:12:52] Good question. So power so hybrid drives have been around for a while and they're becoming very popular among drones. And the drive systems that are popular in the industry are called serial hybrids. And what it means is that they've taken essentially an all electric drone and they've strapped a generator with a gas engine on that drone to extend the flight time. Well, that's great for extending flight time. And some of these aircraft can fly even for five hours. However, it's very poor on fuel efficiency and also because the generator's quite heavy. It's not great for payload capability. So we've taken that model and totally rearranged it. And we've coupled gas electric units, which we call our hybrid power module, and we've put four of those modules on the drone. So one each corner of the drone. And what we've found is that this greatly increases the system efficiency. You're taking more of the energy from the fuel and putting it directly into spinning that propeller. And also, it reduces the overall system mass because you don't have to carry around that large generator head. So our drones are really built around heavy lift, long duration applications. And we've found that it's really a 10x solution over the all electric systems that are out there. And it's quite different from the other hybrid systems that are available.
[00:14:28] So this is still such a new market with lots of application opportunities. You have specifically chosen to focus on fire remediation over, let's say, agriculture. Talk about the different ways this can be specifically used and applied for firefighters and wildfires.
[00:14:47] Great in fire. There are a lot of different ways that unmanned systems can be leveraged. We are not focused on dropping water on the fire. Helicopters and airplanes are really good at that. We are focused on providing logistics for the firefighters on the ground. So that means bringing them tools, fuel, water, food, any kind of supplies that they need. And sometimes these firefighters are in the field for weeks at a time.
[00:15:21] And it and it's very grueling hikes to go get more supplies. So having a small unmanned system that can bring supplies to these guys while they're in the field will greatly improve their effectiveness and and their safety. And then the other application that we're working on is controlled burns. And we've partnered with really an expert, a leading company in the field, Drone Amplified, which has built a dispenser that drops these. Basically, they're Ping-Pong balls filled with a chemical. When they hit the ground, they burst into flame. And you can use it to light a prescribed fire, which is a very important tool to remove fuels ahead of an oncoming fire. And it's also an important tool for land management to be able to remove fuels before the fire season. So we're we're working on both of those applications as our initial fire applications. But there's plenty of other applications, including eventually helping to put spot fires out ahead of an oncoming fire. But that's really a future application for fire.
[00:16:29] Let's talk about it though for a little bit, because I think it is important, you know, even though this is pretty new for us to really look into the future, you know, is it possible to actually have an unmanned general solution to wildfire control?
[00:16:47] I believe that it is possible. I also want to state very emphatically that manned aircraft and manned solutions, I think will always play a role specifically in especially in moving people around, you know, at least in the foreseeable future. We're not going to be transporting people necessarily in unmanned systems. There's not really a reason to with these in a lot of these fire situations, except for maybe extracting someone from a very dangerous situation. I could see there the unmanned system coming and basically lowering a harness down and being able to extract somebody. I think that's an excellent application, but really a general solution. What I think it would look like is probably fixed wing aircraft flying high overhead, looking for any sign of fire. And then immediately upon seeing a sign of fire deploying heavy lift systems like the ones that we're developing to immediately fly out and try to suppress that fire. So I could see that, you know, in the future being more of a general solution and talk just touch on a little bit.
[00:18:02] What are some of the other industries or some of the other applications that you guys see this technology possibly being utilized for?
[00:18:11] There's a lot of different applications where we've already signed an Alawite with an agricultural group that's spraying basically environmentally friendly pesticides on on plants. And they want to use it, obviously, for spraying with agriculture. And it's a big savings there, because right now when you're doing aerial spray for for farming, you're basically just spraying a bunch of spray over the whole field. But with drone technology, you can have a drone that first analyzes the whole field and literally at the plant level identifies which plants need support. And then the spray drone could go and act on that data in a very, very precise way. So the solution for figuring out which parts of the field need attention that already exists and companies already selling those solutions, but now taking that and turning it into actionable data on the on the drones on a application side, that's where our drone could play a really significant role because, you know, it can it could fly carrying a much heavier payload than other systems that are available right now. So that that's an application for agriculture. We've gotten tons. Interest from a lot of different applications. Everything from removing invasive species on islands to spraying power lines and do and also where we're incredibly interested in developing some systems for remote logistics for, for example, ship to ship, shore to ship and and even, you know, remote villages in northern areas. So those are applications that we all see on the horizon for the technology.
[00:19:56] It looks like you've put together a great team. Tell us a little bit about your background as well as your team and explain why you think you guys are all well suited to keep this going.
[00:20:07] My background is most recently from Tesla. I was one of the lead engineers for the Tesla semitruck. I developed the electrical architecture for the semitruck program really from its inception, as well as a number of other components on the vehicle. And then prior to that, I lived in Alaska and I owned a marine power generation company. And so my company developed hybrid power systems for fishing boats. Literally, the boats that you've probably all seen on Alaska's Deadliest Catch, those guys were my customers and we were developing new hybrid drive systems for fishing boats. And I've been a long time model aviator. So I've been building and flying airplanes and helicopters since I was literally 13 years old. So that's been a lifelong passion. And then my team members, I have two two good friends. One, Dave Adams is a engineer for nuclear submarines. If he were he was in the Navy and most recently he was at vb. Surgical during surgical robotics. So he brings a tremendous amount of robotics background. And then my other co-founder, Bobby Holter, spent a number of years at a startup doing building the machines that build solar panels. And so that was a machine vision and industrial robotics background. So strong technical team with a lot of robotics and autonomous machine vision kind of background.
[00:21:50] So two thousand and was a great year. You guys talk about the grant from NASA and talk about any other goals that you achieved. And then let's focus then on 2020. What are the plans for next year?
[00:22:05] So we're right in the middle of this grant from NASA. We're very happy to receive a Phase 1 SBIR or Small Business Innovation Research Grant. And these are excellent grants for the company, but also for investors because, you know, this is non-dilutive capital and the Phase 1, if it's successful and if NASA sees the the wider application for the technology, it could progress into a Phase 2, which could really be almost over three quarters of a million dollars for this NASA grant. So we're right in the middle of this grant and it's specifically built around developing the systems in our drone to make it fault tolerant. So it's one of the unique aspects of the of the drone that we've invented is that if part of the system fails, there's a lot of redundancy. And NASA really saw the potential and is funding the testing and further developing that potential so that it can be part of our first products. Great.
[00:23:13] And for the coming year in 2020, what are the goals for next year in? And what do you guys have on them for the plans for 2020?
[00:23:23] Well, we're pushing forward real fast. We were going to wrap up this work for NASA in February and then from there we're working hard with our customers to identify all of their requirements so that we can deploy beta level drones by the end of 2020. So this would be our first sales with our customers flying, you know, the first drones. And we're going to work very closely with them so that we understand all of their needs and all of the things that they'd like to see in the technology and make sure that they're deployed effectively. And then following that, we'll scale our operation.
[00:24:04] Okay. So the offering itself is currently oversubscribed, but that doesn't mean that people can't still keep up with the company. How can people get updates and still continue to be involved?
[00:24:16] So the best thing to do would be to go to the start engine page, find our offering.
[00:24:22] It's still live and you know, join the wait list, get on that waitlist so that any updates that come through and we're trying to push out weekly updates, you can get those updates and then any other opportunities that are in the future, you'll be on that waitlist. So I highly recommend doing that to stay up to date with everything that we're doing it to support what we're working on.
[00:24:49] Josh, this is all very compelling. We're gonna be closely following the success of your company over the next few months. This is a very important, honorable venture. Thank you for joining us.
[00:25:00] Thanks for having me on the show. It's been a pleasure.