From Wired's DangerRoom site.
On April 30, the Navy awarded Aerovel a second development contract to improve the Flexrotor’s engine and remote controls. The ultimate goal is to develop a version of the ‘bot equipped with sensors and capable of operating from small ships. “With Flexrotor, the two biggest benefits to sailors and Marines would be the ability to do extended maritime surveillance from a ship, and to do so with a small footprint,” said ONR’s John Kinzer.
As depicted in the video above, the Flexrotor takes off vertically like a helicopter, propelled by its roughly five-foot, tip-mounted rotor. Once it climbs high enough, small winglets pop out of the robot’s tail end and it tips over and dives, transferring lift from its rotors to its 10-foot-wide wing mounted in the middle of the tube-shaped body. The rotor becomes a propeller, and Flexrotor cruises along like any conventional airplane. The first drone’s first test transition between copter and plane modes took place in August.