DroneShield (ASX:DRO) reports it has achieved its goal of raising about $10.9 million through a placement that received firm commitments from sophisticated, professional, and institutional investors.
The company says it achieved this goal through the issue of about 36.3 million fully paid ordinary shares at an issue price of $0.30 per share, as well as from 2 record $11 million orders received from 2 independent Government defence departments in December and January.
Adding on, DroneShield reports in recognition of its retail shareholders it will provide eligible shareholders with the opportunity to participate in a Share Purchase Plan (SPP) to raise an additional $3 million. Shares issued under the SPP will also be issued at $0.30 per share, with each eligible shareholder being entitled to apply for up to $30,000 worth of shares from 7pm (AEDT) 3 February 2023.
“This is underpinned by rising defence and security budgets and an increasing role of drone technology in armed conflicts, terrorism and other nefarious applications”
The company notes post transaction pro forma cash balance of about $27.2 million will be utilised to fund the build-up of inventory in response to recent and anticipated contract wins, and the scaling on engineering, manufacturing, and sales teams.
Speaking on the placement, DroneShield Chief Executive Officer (CEO) Oleg Vornik says: “This capital raise enables DroneShield to take full advantage of opportunities for rapid growth, following our two record $11 million sales announced in December 2022 and January 2023, as the market demand for counterdrone equipment is rapidly heating up around the world.
This is underpinned by rising defence and security budgets and an increasing role of drone technology in armed conflicts, terrorism and other nefarious applications. DroneShield welcomes the new domestic and international institutional investors to the company.”
DroneShield also notes it expects to be sustainably cashflow positive during 2023 following a record $16.9 million revenue (unaudited) for 2022, which represents an increase of 60% on previous record year.
In addition, the company has signed a strategic partnership and investment with ‘high-growth’ US-based defence technology company Epirus, which will provide DroneShield with ‘significant’ US cross-sell opportunities.
With the $10.9 million now raised, the company reports settlement of the shares under the placement is expected to take place on 9 February 2023, with allotment to occur on 10 February.
DroneShield is an ASX-listed company that provides artificial intelligence based platforms for protection against advanced threats such as drones and autonomous systems. The company offers its customers bespoke counterdrone and electronic warfare solutions, as well as off-the-shelf products designed to suit a variety of terrestrial, maritime or airborne platforms.