CEO Paul Nangeroni CTO Haomiao Huang

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CEO Paul Nangeroni CTO Haomiao Huang CFO
Aaron Ligon CMO Jeremy Gillula
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The Market Opportunity
Unmanned Aerial Vehicles High endurance robots
for dangerous missions
Civilian Applications
Military Applications
Fighting Wildfires
Border Patrol
Law Enforcement
Search and Rescue
Utility Inspection
Farming
Environment Monitoring
Aerial Mapping
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The Problem
UAVs require greater autonomy

• Limited decision-making
• No self-awareness
• No interaction w/ATC
• Doesnt act like a manned plane!

DoD Goals
1975
1995
2015

• Limited pilot fail-safes
• Limited control system

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Our Solution
The 150M solution to the 6B problem

• Intelligent path-planning
• Self-awareness
• Automatic interaction w/ATC
• Follows flight rules!

• Limited decision-making
• No self-awareness
• No interaction w/ATC
• Doesnt act like a manned plane!

All Software Problems

• Model-based prediction of pilot control
• Intuitive user interface
• Meta-world representation

• Limited pilot fail-safes
• Limited control system

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Our Expertise
Who weve worked with
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Our Expertise
What weve worked on
Haomiao H Huang
Jeremy Gillula
Paul Nangeroni
Aaron Ligon
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Our Technology
Our research today solves UAV problems tomorrow
Our Research


Our Engineering Expertise
Human/Automation Interaction
Air-Traffic Control Automation

• Model-based pilot prediction
• Contingency mgmt. algorithms

• POMDP-based ATC simulation
• Hybrid control techniques

Enhanced Autonomy for UAV Manufacturers
Our Secret Sauce
Practical Autonomy Product Line
Software Customization And Support Services


Smart Mission Planning Suite
Air Traffic Interaction Module

• Voice-command of UAV actions
• Ability to follow flight rules

• Meta-world representation
• Intelligent path-planning

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Smart Mission Management Suite
Our software increases UAV autonomy with the
ground station
High-Level Commands
Mission Tasks
Human Operator
Command Interpretation
Operator Notification
Operator Safety Check
UAV Mission Execution Monitor
UAV Flight Command Generation
Waypoints
UAV
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Business Model
Who are the customers and what are they buying?
Our company provides software and services to the
UAV industry

• We use a B2B model to sell direct to our
  customers
• Target market share is 30 (576M)

Practical Autonomy
Profit, SGA, RD
Cost of Goods (Software, Hardware)
Customer Discounts
Profit, SGA, RD
Customer Discounts
Cost of Goods (UAV Airframe, Sensors, Software)
End User
UAV Systems Integrator
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UAV Market Profile
Setting our Sales Channels
We target our customers by weight class
21,300
Nearly 50 independent companies
Ultra Low Altitude
10 year Cumulative US Production
3150
Medium Altitude
620
130
2-20M
20-80M
0.5-2M
10-500K
Relative Cost per Aircraft
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Business Model
Targeting Partners by Class
Products
Smart Mission Planning Suite
Collision Avoidance
Air Traffic Interaction Module
Automated Aircraft Health Management
Terrain Awareness and Avoidance
Packaging
DARPA SBIR Research Grants
Customer Specific Apps
Tailored Solutions to Customer Needs (Software
and Support)
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Development Risks
And how we mitigate them
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Product Development Timeline
How we go from research to physical product
Company Founded
Smart Mission Management Suite
R
Packaging
Terrain Awareness Avoidance
R
Aircraft Health Management
R
Air Traffic Interaction Module
R
Aerial Collision Avoidance
R
6
Eng. Headcount
2007 2008 2009 2010 2011 2012
6
R
Development
Improvement
Research
Engineering Staff
Product Launch
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Financial Assumptions Overview
Key parameters in our model

• Production makes up 25 of the value in the UAV
  market
• Software makes up 30 of the sale price of a UAV
• Practical Autonomy software will be on 80 of Low
  and Ultra Low Altitude UAVs sold in the US by
  2015.
• Our software will make up 30 of the software
  cost on these UAVs.

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Revenue
A closer look at pricing and units sold.

• Pricing
• Software price at under 10 of the average total
  system cost in each UAV weight class
• Service price 170,000 per support engineer per
  year

• Units
• Start with single partner/customer for most of
  2009-2010
• Average ULAV customer sells 250 UAVs per year.
• Average LAV customer sells 50 UAVs per year.

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Revenue
A closer look at pricing and units sold.
18
14
10
7
4
2
1

• Smart Mission Management Suite launch in 2009
• UAV on-board software launch in 2010

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Cost of Goods Sold
Software, hardware and services

• Software/Hardware Package
• Major cost item is the hardware black box
• Processor, Memory, Board, Power and Flight
  Certification
• 5,000 to 50,000 depending on weight class
• Low cost of goods for software licenses sold

• Services and Support
• Major cost is the labor and travel of the support
  engineers.
• Gross margins of 30 on services and consulting
• Customers with higher weight class UAVs require
  more engineers due to increased system
  complexity.
• 3 to 10 engineers depending on size of project.

18
Cost of Goods Sold
Software, Hardware and Services

• COGS averages 50 of revenues for 50 gross
  margin

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Headcount
Our hiring plan

• Growth Phase 2010-2015
• Rapidly expand sales support
• Shift stack to 35 rD, 35 Service/Support, 17
  Sales.

• Development Phase 2008-2009
• 6-8 software engineers 2 GA
• Focus on rD with 70 of operating stack.

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Operating Stack
So whats it going to cost?

• Operating costs 30 of revenues in steady state.
• Net income is 18 in steady state.

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Cash Flow
Breakeven and cash flow positive

• Breakeven in 2012 and Cash Flow positive in 2013
• Maximum funding need is 5 million.

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Proxy Analysis Startup Phase
Our sanity check, part I

• iRobot
• A robotics company that brings research from the
  labs directly to the defense and commercial
  markets.
• Develops both the hardware and software for their
  robots.

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Proxy Analysis Steady State
Our sanity check, part II

• In the steady state we function as a software and
  services company.
• Our financials resemble those of a enterprise
  software company

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Helping UAV Manufacturers Meet Customer Needs
By Selling Customized Autonomous Software Packages
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Backup Slides
What we didnt want you to see
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Backup Slides
WARNING! ACHTUNG! AVERTISSEMENT! BACKUP
SLIDESBEYOND THIS POINT! WARNING! ACHTUNG!
AVERTISSEMENT!
What we didnt want you to see
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Industry Validation
Getting out of the building

• Researchers
• Dr. Claire Tomlin Director, Stanford Hybrid
  Systems Lab
• Roland Weibel MIT International Center for Air
  Transport
• Industry Experts
• Dr. Ken Zemach
• Jim Payne Global Hawk Test Manager, USAF
• Dr. Alex Fax Navigation and Applied Sensors,
  Northrop Grumman
• Mark Dockser Former Irobot Marketing
• UAV Manufacturers
• Dr. Steve Morris CEO, MLB Aircraft
• Steve Sliwa CEO, The Insitu Group
• Mark Zanmiller Cloudcap Technology
• Dr. Tad McGeer CEO, AeroVel
• UAV Pilots
• Dr. Steve Morris
• Dr. Tad McGeer

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The UAV Market
An in-depth look
10-yr Cumulative Value of US UAV Market, 2006-2016
Software as a fraction of UAV cost, 6B Market
Target Market Share 576M
Billions of 2004 dollars
Est. 2013
November 17, 2009
Practical Autonomy - Overview
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Our Partners
How we enter the market
Profile of US UAV Manufacturers
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Competitive Analysis
How do we justify our market share?
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Detailed Manpower Timeline
How we go from research to physical product
First Customer
Company Founded
Smart Mission Management Suite
8
12
6
10
4
4
R
Aircraft Computing Hardware
2
4
6
3
5
2
Terrain Awareness Avoidance
4
8
3
4
6
R
Aircraft Health Management
1
3
6
R
8
10
Air Traffic Interaction Module
R
2
8
3
5
Aerial Collision Avoidance
R
3
6
6
6
10
19
25
38
50
Eng. Headcount
2007 2008 2009 2010 2011 2012
6
R
1
2
Product Development
Product Improvement
Research
Engineering Staff
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Product Line

• UAV onboard products
• Air-Traffic Control Interaction Module
• Aircraft Health Contingency Management Module
• Aerial Collision Avoidance Module
• Terrain Avoidance Awareness Module
• Ground Station products
• Automated UAV Air Traffic Control
• Operator Interface Management Toolset
• Mission Manager for Planning Dynamic
  Re-Planning

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Air to Air Safety

• Requirements
• See Avoid
• Interactions with ATC acting within ATC
  framework
• Features to meet requirements
• Voice recognition synthesis for ATC interaction
• Air to Air sensing
• Representations of airspace
• Tactical collision avoidance
• Strategic encounter avoidance
• Technology to implement features
• COTS voice recognition/synthesis tailored to air
  traffic management
• Buy or build later
• MetaMap database representation
• Hybrid Systems Lab-developed collision avoidance
  research
• HSL ATC automation research (Jeremy)

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Air to Ground Safety

• Requirements
• Dont hit the ground
• Features to meet requirements
• Terrain representation
• Terrain sensing
• Terrain avoidance decision-making
• Terrain avoidance maneuver planning
• Tech to implement features
• MetaMap database representation
• Build or buy later
• HSL collision avoidance research
• HSL path planning research (H)

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Crash Safety

• Requirements
• Dont crash from internal error
• Dont crash from pilot error
• Features to meet requirements
• Internal health monitoring
• Internal health contingency management
• Pilot interaction modeling (for design
  verification)
• Pilot interaction management
• Tech to implement features
• HSL probabilistic error mode estimation research
• HSL error recovery research
• HSL human/automation interaction modeling
  research (H)
• HSL human/automation management research (H)