TICKERS: DRO; DRSHF

Antidrone Company Rocketing Skyward

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Source: Streetwise Reports (7/28/23)

DroneShield has had an incredible string of successes, including an AU$33 million contract and being issued NATO stock numbers. Read on to see where this company's upward trajectory will take it next.

DroneShield Ltd. (DRO:ASX; DRSHF:OTC) has announced that several of its products have received a NATO Stock Number (NSN), which allows member countries to purchase supplies from a military catalog. This development is expected to bump up the value of DroneShield significantly, especially since its previous contract with the Department of Defense increased its stock by 18%.

DroneShield has announced that several of its products have received a NATO Stock Number, a numeric code that identifies all of the supply items as they are recognized by all NATO countries, including the Department of Defense in the U.S.

The items can now be purchased by the militaries of NATO countries from a catalog. An NSN is also relevant to non-NATO customers as it signals that the item meets a certain quality threshold. DroneShield expects that the receipt of the NSNs will boost sales across the board.

There were five items that were issued NSNs:

RfPatrol Mk2 handheld drone sensor
DroneGun Mk3 ultra-light handheld drone defeat
DroneGun Mk4 handheld drone defeat
DroneSentry-X vehicle/ship-based detection and defeat
DroneSentry-X vehicle/ship-based detection

DroneShield was also awarded a US$33 million contract with the U.S. Government, which included DroneShield equipment and services for several years.

According to DroneShield CEO Matt McCrann, "We’re honored to receive this award and support this customer. This award is a result of their trust in DroneShield and our solutions and reflects our commitment to their mission." The company expects to receive full payment for the order before the end of 2023 and is anticipating another record-breaking year for the company.

Rising Tensions Driving Up Demand

U.S. military spending has increased in the past few years. On March 9, 2023, Congress received a proposed budget of US$842 billion for the Department of Defense in 2024, which represents an increase of US$26 billion over 2023 and US$100 billion more than 2022.

According to Maund, "Price / volume action in DroneShield is very bullish indeed, and the fundamental outlook for the company could scarcely be better."

Among several factors driving increased spending is rising tensions with The Peoples Republic of China.

According to Deputy U.S. Defense Secretary Kathleen Hicks, "Our greatest measure of success, and the one we use around here most often, is to make sure the PRC (Peoples Republic of China) leadership wakes up every day, considers the risks of aggression, and concludes, 'today is not the day." This budget represents a first for the DoD, as it is being used to buy multi-year contracts for munitions and equipment, as is the case with DroneShield.

A Record of Success

Previous successes with the Department of Defense appear to have paved the way for the company's deal with NATO. DroneShield recently closed an AU$9.9 million "Five Eyes" Department of Defense contract. The term "Five Eyes" refers to a collaboration between the U.S., UK, Australia, New Zealand, and Canada. This collaborative deal drove the company's value up by 18%, from AU$0.22 to AU$0.26. In July of 2023, the company completed an AU$3.8 million contract, which started in June of 2021.

There were several qualities that Darren Odell of Peloton Capital noted as attractive, including the fact that Epirus, a shareholder in the company, is an unmanned aerial vehicle firm. Another was that the U.S. government recommends DroneShield.

Analysts predicted at the beginning of the year that DroneShield would be worth keeping an eye on. Technical Analyst Clive Maund has bought shares DroneShield and has maintained that investors should hold on, as he expects the company's value to increase.

According to Maund, "Price / volume action in DroneShield is very bullish indeed, and the fundamental outlook for the company could scarcely be better. It is therefore believed to be just beginning a major bull market that should take it to much higher levels."

Darren Odell of Peloton Capital predicted in March that DroneShield would be cashflow positive in 2023. There were several qualities that he noted as attractive, including the fact that Epirus, a shareholder in the company, is an unmanned aerial vehicle firm. Another was that the U.S. government recommends DroneShield.

Streetwise Ownership Overview*

DroneShield Ltd. (DRO:ASX; DRSHF:OTC)

^*Share Structure as of 7/27/2023

Source: DroneShield Ltd.

Ownership and Share Structure

11% of the company is held by management and insiders.

Carla Balanco owns 1.44% of the company with 8.45 million shares. Angus Bean owns 1.26% with 7.39 million shares. Paul Jonathan Shaw owns 0.95% with 5.58 million shares. Oleg Vornik owns 0.86% with 5.03 million shares, and Peter James owns 0.65% with 3.82 million shares.

13.99 % is with strategic investors.

Epirus Inc. owns 3.15% with 18.50 million shares. Beta Gamma Pty. Ltd. owns 2.30% with 13.50 million shares. Ravenscourt Pty. Ltd. owns 1.36% with 8.00 million shares. SR Bennet Pty. Ltd. owns 0.91% with 5.35 million shares, and P&B Shaw FT CB Pty. Ltd. owns 0.59% with 3.43 million shares.

The rest is with retail investors.

There are 586.9 million shares outstanding and 496.03 million free-float traded shares. There is a market cap of AU$107.73 million. It trades between AU$0.16 and AU$0.42 in the 52-week period.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd.
Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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