News: Kunene Resources takes flight as drones rule the skies

Kunene Resources (ASX:KNE) is taking flight into the lucrative drone sector with the signing of the acquisition of  U.S. drone defence and cyber security company Department 13 LLC (D13).

Virginia based D13 recently completed a full scale demonstration to U.S. defence/security agencies for a “Full Take Over” of a commercial drones system.

Of note, incoming chairman will be Gavin Rezos who is also the chairman of Alexium International (ASX:AJX) and a non-executive director of Iluka Resources (ASX:ILU).

It business model is to commercialise counter drone systems, monetise patents by licencing technology and by taking advanced cyber security technology to the commercial sector.

D13 has patented advanced communications and networking technologies and currently has engagements with five U.S. Government agencies and two commercial customers.

Business Insider Intelligence has estimated that US$111 billion will be spent on drones by 2024, with US$15 billion spent on commercial/civilian applications.

Airports throughout the world are also seeking regulations and defensive measures to protect aircraft from drones straying into commercial airspace and risking collisions.

These opportunities represent significant potential annual sales and include work in the areas of drone defence, mobile phone cyber security and development of secure advanced android network systems.

Transaction Details

Kunene will issue 200 million shares at a deemed issue price of $0.025 as consideration for the acquisition.

It will also issue 200 million performance shares hat convert into KNE Shares in the event that the 20 trading day volume weighted average price of KNE Shares as traded on ASX equals or exceeds $0.05 along with certain milestones being met.

Kunene has also agreed to issue approximately 40 million shares each to lenders of $1 million of investor loans to be made to D13.

The agreement is subject to conditions including completion of due diligence by 30 September 2015 and Kunene raising $4 million through a prospectus priced at not less than $0.04 per share.

With this agreement and change of direction, this is a bird that will soar.

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