ASX-listed small cap, DroneShield Ltd (DRO), which specialises in counter-drone disruptor technology have just released they will enter into a contract with the US Department of Defense in an announcement released only yesterday. While the exact quantity of their patented DroneShieldCompleteTM Command-and-Control system to be ordered is still undisclosed, this is a significant milestone for the company as it gains access to an organisation with the largest defence budget globally. The market also agreed with this sentiment seeing the share price rise 36.67% by the end of days trading with nearly 71 million shares traded.
The counter drone market is set to massively expand into the future with predictions of this being a $4.5 billion industry by 2026 as rising global tensions and political instability continues to unfold. Furthermore, DRO have already felt the benefit of growing military budgets as government grants have provided them with considerable non-dilutive cash injections to fund operations.
DroneGun TacticalTM (depicted) can disrupt drones with a range of 2km (DRO August Investor Presentation, 2020)
From their Half Yearly Accounts, it can be seen DroneShield have a cash balance of just over $4 million. On top of this, DRO have recently undergone a placement which raised approximately $7.5 million at an issue price of $0.125 along with a share purchase plan (SPP) to existing investors and therefore should have more than enough cash to service their debts for the next 12 months. This sizable cash balance is said to enable the company “to substantially scale up its sales and engineering teams, its demo/sale inventory and its manufacturing processes” as well as allow them to pursue emerging opportunities across the United States, Europe, Australia and Asia.
|Market Capitalisation (10/09)||$47 million|
|Share price (as at 10/09)||$0.205|
|52 Week High||$0.465|
|52 Week Low||$0.084|
|Cash and cash equivalents (Half-year accounts)||$4,068,832|
Currently DRO has a relatively small market capitalisation of approximately $47 million and hosts an extensive array of cutting-edge products from the DroneGun TacticalTM (above) to the DroneSentryTM which can detect drones up to 8km away. It will therefore be interesting to see how they can leverage these products in order to gain further traction in international markets as they have historically done so, raising revenue by 45% for the half-year ended 30 June 2020. A concrete agreement with the US Department of Defense will bode well in regard to this however with the dollar value of this contract yet to be released only time will tell the true impact this will have on the share price.
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