Shares of DroneShield Ltd (ASX: DRO) have landed on the ASX today, reaping initial investors a very handy paper profit.

From an offer price of 20 cents per share, the shares soared as high as 38.5 cents before settling around 32 cents at midday. That represents a remarkable 60% paper profit, and shows that investors haven’t been deterred by the ASX’s recent blocking of music streaming company Guvera.

As the name suggests, DroneShield operates in the growing drone industry. Rather than actually producing drones however, DroneShield was formed to develop and sell proprietary hardware and software used for detecting drones, which are otherwise known as unmanned aerial vehicles — or essentially aerial robots.

In its prospectus, it said: “Governments and owners of infrastructure and other real assets are acutely aware of the threat posed by commercially available and affordable consumer drones. Until recently, there had been no cost-effective commercial detection and defence solution available to governments and real asset owners. DroneShield provides such a solution.”

Indeed, the potential role that drones could play in the future is huge, but it does present risks. Already they have been involved in various incidents including a drone that crashed into the White House in Washington early in 2015, while a drone controlled by terrorist group ISIS was also shot down in Iraq around the same time.

Power plants and other important infrastructure pose as potential targets in the future and may need protection such as that provided by DroneShield. Other potential clients include prisons (for instance, items being dropped from drones to prisoners), ultra-high net worth individuals and airports, amongst others.

While DroneShield’s technology could prove to be important, there are risks in such an investment. To begin with, regulations surrounding the industry are still unclear, while there is also the potential for competition to hinder the company’s growth prospects.

There are also the obvious risks involved with the company’s financials, including the recognition of just $123,862 in revenue for the period ended 30 September 2015. Indeed, there have been numerous listings on the ASX of businesses with low revenues and earnings, some of which, including Reffind Ltd (ASX: RFN), have thus far proven disastrous for shareholders.

Indeed, DroneShield is a risky investment prospect, but one that could still be worth keeping an eye on. Realistically, the industry is still young so if DroneShield does prove to be successful, investors are bound to be given another opportunity down the track.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.