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Red Cat's Black Box for Drones Preparing for Take Off

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The platform uses blockchain technology to make the data immutable.

The commercial drone industry is rapidly evolving. Google's Wing Aviation, Amazon and UPS have received Federal Aviation Authority (FAA) approval for drone delivery, and Uber and others may not be far behind. UPS just announced a partnership with CVS to develop prescription drug delivery via drone. Aside from deliveries, drones are being used in numerous industries, including agriculture, mineral exploration, construction and real estate.

The increasing use of commercial drones is accompanied by the need for reliable and secure flight data that's required by regulators, insurers and fleet operators for tracking and accountability.

Small-cap Red Cat Holdings Inc. (RCAT:OTC) is a leader in developing a black box drone flight recorder that uses distributed data storage—blockchain—for security, encryption and privacy. The company also is acquiring Rotor Riot, a well-known name in the drone racing space.

The firm recently completed a reverse takeover, a reverse stock split and changed its ticker symbol to RCAT on the OTC market. It is working toward listing on NASDAQ.

"Red Cat's software is basically replicating what a black box does on an airplane," Jeff Thompson, Red Cat CEO, told Streetwise Reports. "Not only do we record all the elements of every fight so that the flight can be replayed to find out what happened, we also can provide advanced analytics. We record every detail of the flight including the video, the temperature, the electronics, the CPU usage, the battery sag, the RPM of the motors."

If something goes wrong, regulators, insurers and operators have access to a trusted source of information. "Plus the analytics make it possible for Red Cat to provide the operator with information, such as why some drones perform better than others, why some fleets perform better than others or why using certain propellers could result in a better battery life, all things that could save large fleet operators tens of millions of dollars," Thompson stated.

Red Cat is pairing its software with artificial intelligence (AI) to take the platform to the next level and anticipate problems before they occur. "We can tell the operator that we see a situation starting to form and using AI and machine learning over millions of flights we've been looking at, we think it would be a good idea to get the drone down now. This can be based on a weird noise that AI identifies, or other factors," Thompson explained.

"And if that drone comes down, because we're using blockchain and it's encrypted, and blockchain has never been hacked, no one can break into that drone," Thompson added.

Being a trusted third party with secure data is important. "Drones are basically flying chainsaws. They can be dangerous. If a drone flies into a person who becomes injured, the insurance company wants to make sure that the data is authentic before writing a check. Unsecured data can be changed. The same with the FAA; if it says to a drone operator, 'We think you were flying over an airport,' and the data recorder is not secure, the operator could alter the data. But the data on Red Cat's platform cannot be altered," Thompson explained.

"Blockchain provides the best way to encrypt data," Thompson stated. "It's distributed architecture, which means it's distributed across the globe, making it immutable. Which means no one can ever change it. On top of that, because we are using distributed storage, it brings down the costs of storing information.

Red Cat's platform is currently in beta mode and the firm expects to begin commercial sales around the end of the year. It plans to use a Software as a Service subscription model (SaaS).

Red Cat is growing quickly through acquisitions. The firm is acquiring Rotor Riot, a company active in FPV (first person view) drone racing. "This deal is another significant milestone in our strategy for rapid growth," explained Thompson. "Rotor Riot is a trusted resource and deeply embedded in the global FPV community. Combining our companies provides a solid foundation for us to build upon the success of Rotor Riot's well-established influence and follower base, as we develop new and exciting technologies that advance the freestyle, racing and commercial drone industry."

"Our acquisition targets and acquisition rollout for the next six to nine months is going to be very robust," Thompson said.

Red Cat has approximately 16.9 million shares outstanding and a market cap of $35 million.


1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Red Cat. Please click here for more information. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Red Cat.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Red Cat, a company mentioned in this article.

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