Aquabotix secures the largest order in its history with major Asian military agency

UUV Aquabotix ASX largest order Asian military agency SwarmDiver EDGE drone
The purchase of Aquabotix's SwarmDiver EDGE UUV's by a major Asian military agency is valued at around A$520,000.

Underwater robotics company UUV Aquabotix (ASX: UUV) has secured the largest commercial order in its history via a major military agency in Asia.

The value of the deal is reported to be $520,000 and represents the first military procurement of its SwarmDiver EDGE hybrid micro unmanned underwater vehicle (UUV).

The sale also represents Aquabotix’s first international sale of its SwarmDiver devices although the company has remained tight-lipped about which Asian country executed the purchase order, other than saying that it was a “military agency of a major Asian country aligned with Australia and the United States”.

The SwarmDiver EDGE drone is an UUV that is ultra-small and portable and can be readily deployed on or below the surface of water, including seas and oceans.

According to the terms of the order, there are no conditions precedent in the contract and it is anticipated that the first units will be delivered in the first quarter of 2020 with “associated services” to be rendered through Q2 2020.

Powered by DC motors, SwarmDiver devices have a battery life up to 2.5 hours, can be deployed with a range of 7km and can reach a maximum speed of 4.3 knots (around 8km per hour).

According to Aquabotix, SwarmDiver UUV’s can function simultaneously as a single coordinated entity with dozens of units operating at the same time through the use of “synoptic data gathering” and algorithmic communication protocols.

They are said to be easily controlled by one operator on the surface and can perform dives on command to collect “valuable intelligence”.

“Aquabotix restructured its operations in mid-2018, de-emphasising short-term sales in favour of developing larger volume sales, with a focus on its new SwarmDiver hybrid micro UUV/USV family of products,” said Whitney Million, chief executive officer of Aquabotix.

“Since the roll-out of these products, the company’s sales have followed the right trajectory,” said Ms Million.

Aquabotix is gaining commercial momentum following the signing of a US$30,000 (A$44,000) contract with the United States Navy in April, followed up by a larger US armed forces contract of US$150,000 (A$220,000) soon after.

Today’s $520,000 order is, therefore, the largest in its short history following an increase in global awareness of Aquabotix’s product suite over the past year.

From testing to market deployment

To field test its range of underwater drones, Aquabotix signed a special purpose Cooperative Research and Development Agreement (CRADA) with the United States Naval Undersea Warfare Center (NUWC) Division Newport.

The NUWC is a Federal laboratory of the United States Department of Navy whose sole purpose is the performance of research, development and engineering.

At the lab site, Aquabotix robots are rigorously tested with the potential of being widely adopted by the US Navy.

For the time being, its SwarmDiver drones are being marketed at the defence and military sectors as an essential cost-effective solution for applications requiring specialised sensor payloads in oceanography, aquaculture, research and hydrographic surveys. However, additional uses are also on the horizon.

“The SwarmDiver suite of products has dozens of uses across the maritime domain, and as a result, the company is in discussions with dozens of potential customers and partners about a range of potential orders and revenue-generating partnerships,” said Ms Million.

“The placement of this order further cements Aquabotix’s place as an emerging trusted provider of autonomous systems for military applications. All SwarmDiver orders received to date have been developmental in nature or related to testing and evaluation activities. This order is also intended for field testing and evaluation; however, it represents the first order of the product line and a substantially larger contract value than the company has been awarded for similar activities in the past,” said Peter James, chairman of Aquabotix.

Mr James also hinted that the applications of SwarmDiver drones could be widely expanded to port and border security in the near future.

“We are delighted to be gaining traction with man-machine teaming for port security and harbour management purposes and are excited to continue developing our solutions for response to recent and persistent terrorist activities and militant threats,” he said.

This morning’s positive commercial news sent Aquabotix shares soaring; doubling in value to be trading at $0.008.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.