One critical decision that OTC traders may be faced with soon is how to gauge the real potential for tiny technology name Drone USA Inc (OTCMKTS: DRUS). The stock has been all over the place over the past two months as the government contract business becomes a more kinetic issue. We have seen several example of this dynamic come into play over late.
The company is a service provider and reseller of drones and distributor of products to the U.S. Government that just announced that its subsidiary, Howco Distributing Co., received a $659,000 dollar contract to supply the U.S. Government with diesel cylinder heads. Michael Bannon, Drone USA’s Chief Executive Officer, commented: “Melissa worked hard on this contract and it paid off. I love managing the Howco employees; they know and embrace where we are heading.”
Drone USA Inc (OTCMKTS: DRUS) casts itself as a company that focuses on the research, design, development, testing, manufacture, distribution, export, and integration of advanced low altitude unmanned aerial vehicles systems, services, and products. It offers quadcopter and fixed-wing unmanned aerial vehicles to government and commercial markets.
The company, through its subsidiary, HowCo Distributing Co., also provides product procurement, distribution, and logistics services to the United States Department of Defense and Defense Logistics Agency. In addition, it provides drone operator training services; and licensed piloted services, such as search and rescue, utility inspection, real estate marketing, construction, engineering, and agriculture. Further, the company offers spare and replacement parts to various federal government agencies, the U.S. military prime contractors, and commercial customers worldwide.
Drone USA, Inc. is headquartered in West Haven, Connecticut.
According to company materials, “Headquartered at 16 Hamilton Street, West Haven CT, Drone USA is everything drone for U.S. Law Enforcement, Fire Fighters, U.S, Industry and the U.S. Government… Drone USA, Inc. (OTCQB: DRUS), headquartered in West Have, CT., is a service provider, manufacturer and reseller of drones and distributor of products to the U.S. Government. Our competitive advantage stems from offering superior service, high quality products and establishing and maintaining life-long customer friendships. Our primary markets U.S. police, firemen, U.S. industry and the U.S. Government.”
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Recent action has seen better than 130% tacked on to share pricing for the company in the past month, a rally that has pushed up against longer standing distributive pressure in the stock. In addition, the listing has benefitted from a jump in recent trading volume to the tune of exceeding 850% beyond its prior sustained average level.
Matt Wiles, Howco’s VP of Business Operations, stated: “Historically this is not the type of contract Howco wins, but through developing a partnership with our supplier, we are now competitive. We expect to win many more contracts like this one because of the tenacity of our staff and a great supplier on the other end.”
Melissa Fradenburg, Howco’s Lead Estimator, stated: “This contract win gives us a real boost as we all have the same goal; help our warfighters, keep local companies busy, and further show what Howco is capable of.”
At this time, carrying a capital value in the market of $4.6M, DRUS has virtually no cash on the books, which stands against about $10.6M in total current liabilities. One should also note that debt has been growing over recent quarters. DRUS is pulling in trailing 12-month revenues of $21M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -18.1%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $DRUS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $DRUS, either long or short, and we have not been compensated for this article.