Slide 1: Artificial Intelligence For Multi-Mission C-UxS
Artificial Intelligence For Multi-Mission C-UxS Equity Capital Raising Presentation (ASX:DRO) 1 August 2024 Not for release to US wire services or distribution in the United States
Slide 2: Contents
Contents 01 Insert divider title 3 A Insert divider title 7 1 Accelerating & Expanding R&D Investment 6 2 DRO Overview & Results 11 3 Capital Raising 17 4 Risk Factors 21 5 International Offer Restrictions 27 6 Placement Agreement summary 31 A Other information 34
Slide 3: Summary
Summary DRO Overview ● DRO provides world-leading Artificial Intelligence platforms for protection against drones ● Hardware and software to detect and safely neutralise small drones used for warfare, terrorism, contraband delivery, and airport disruptions ● DRO’s market leading software, hardware a
Slide 4: The Changing Landscape of Warfare
The Changing Landscape of Warfare Technology in warfare is advancing rapidly, making it crucial to stay at the cutting edge to maintain military superiority Role of ● Advanced technology is crucial for maintaining military superiority – the integration of sophisticated systems enhances Technology in
Slide 5: A Decade of Prediction, Execution and Agility
A Decade of Prediction, Execution and Agility Investment in next generation R&D will enable DroneShield to capitalise on the next phase of evolution in counter drone technology Counter Drone Phase 1 Counter Drone Phase 2 Transitional moment PIONEER STAGE COMPETITION STAGE CONSOLIDATION STAGE EXPANSI
Slide 6: Accelerating & Expanding R&D Investment
1 Accelerating & Expanding R&D Investment
Slide 7: Unique Opportunity to Accelerate Development of DRO New Products & Software Capabilities
Unique Opportunity to Accelerate Development of DRO New Products & Software Capabilities Expansion of DRO solution pipeline will accelerate towards a SaaS based revenue model Opportunity Approach Outcome ● Next-generation R&D is critical for C-UxS To further entrench DRO’s market leading ● The prima
Slide 8: Accelerating the Development of Next Generation Products
Accelerating the Development of Next Generation Products Development of comprehensive ability to detect and counter next generations of drones Existing Product Development of AI-enabled Next generation AI software Improvement hardware systems platform development ● Ultra-low power, frequency agile,
Slide 9: DRO Proprietary AI Software Engines
DRO Proprietary AI Software Engines Next generation, responsive approach for enhanced detection and defeat of UAS threats Current: NextGen: Detects drone signals via an True responsive detection RF library of signals and defeat ● DRO’s Machine Learning and AI based detection and ● In-house developme
Slide 10: Investment in R&D Programs to Accelerate Growth
Investment in R&D Programs to Accelerate Growth R&D activity expected to increase focus on a SaaS model driving recurring revenue Accelerate SaaS Subscriptions Incremental revenue opportunities ● The rapid evolution of drone technology expected from investment R&D means the software subscriptions, a
Slide 11: DRO Overview & Results
DRO Overview & Results NN ae |
Slide 12: Deep and High Quality $1.1bn Government Customer Pipeline
Deep and High Quality $1.1bn Government Customer Pipeline (as at 15 July 2024) Multiple projects at each development stage improving predictability of cashflows 6-18 months from lead to sale, but can be much shorter for repeat orders P-Go vs P-Win Probability weighting Credible on a project is a ble
Slide 13: Sales Pipelines Doubled in the last 3 months to $1.1bn
Sales Pipelines Doubled in the last 3 months to $1.1bn (as at 15 July 2024) USA continues to be the major contributor to the sales, however the global pipeline is also growing rapidly $202m / 44 projects $156m / 22 projects ● DRO won the NATO European ● Multiple military/Govt order discussions frame
Slide 14: Accelerating the Business
Accelerating the Business Capital raise will enable DRO to continue to accelerate the business and expand its technical moat ● 1H24 revenues of $24.1 million, up 110% on 1H23 ($11.5 million) - Highest ever first half year revenues in DRO’s history ● 1H24 customer cash receipts of $21.4 million, up 4
Slide 15: Highest First Half Revenues and Cash receipts in DRO history
Highest First Half Revenues and Cash receipts in DRO history ($m, Dec YE) Growing use of nefarious drones and low existing market saturation are driving the growth Strong Revenue Growth (A$m) Cash Receipt Growth (Sales + Grants) (A$m) 55.1 73.4 110% growth on 1H23 24.1 40% growth on 1H23 16.9 21.4 1
Slide 16: Market Pioneer in C-UAS Technology at the Forefront of Innovation
Market Pioneer in C-UAS Technology at the Forefront of Innovation Complete Multi-Mission Counter-Drone Arsenal with the Best Product for Every Scenario Dismounted Defeat Dismounted Detection On-The-Move/Portable Fixed-Site DroneGuns RfPatrol Mk2 DroneSentry-X Mk2 DroneSentry RfOne CompassOne DroneCa
Slide 17: Capital Raising
3 Capital Raising
Slide 18: Capital Raising Overview
Capital Raising Overview DRO has raised $120 million via a fully underwritten Placement ● Fully Underwritten Placement for $120 million under the company’s existing placement capacity per LR7.1 (“Placement”) Placement ● 104.3 million new fully paid ordinary shares in DRO (“New Shares”) to be issued
Slide 19: Capital Raising and Use of Funds
Capital Raising and Use of Funds Capital Raising and Use of Funds DRO has raised $120m to accelerate and expand its R&D investment program and to fund potential strategic technology acquisitions Pro-forma Funding Capital Raise Use of Funds A$m A$m R&D Cash balance1 $146.0m DRO Technology Development
Slide 20: Offer Timetable
Offer Timetable Offer Timetable Indicative capital raising timetable1 Date (AEST) Trading Halt, Bookbuild Opens Wednesday, 31 July 2024 Trading Halt Lifted and announcement of Capital Raising Thursday, 1 August 2024 Settlement of Institutional Placement Tuesday, 6 August 2024 Allotment of New Shares
Slide 21: Risk Factors
Risk Factors —. ae
Slide 22: Key Risks (1/5)
Key Risks Key Risks (1/5) Business Strategy The Company’s growth and financial performance is dependent on its ability to successfully execute its growth strategy. Risk If the Company fails to execute on its business strategy, its business, financial condition and results of operations could be mate
Slide 23: Key Risks (2/5)
Key Risks (continued) Key Risks (2/5) Product Liability When developing and manufacturing new products, defects may arise in the Company’s initial releases of the products. Defects could expose the Company to product liability claims or litigation, resulting in monetary damages being awarded against
Slide 24: Key Risks (3/5)
Key Risks (continued) Key Risks (3/5) Insurance Coverage The Company faces various risks in conducting its business and may lack or may not be reasonably able to obtain adequate insurance coverage. The Company has arranged and maintains insurance coverage for its employees (such as health insurance
Slide 25: Key Risks (4/5)
Key Risks (continued) Key Risks (4/5) Additional The current funds held by the Company and to be raised under the Placement are considered sufficient to meet the current proposed Requirements for objectives of the Company. Additional funding may be required in the event future costs exceed the Compa
Slide 26: Key Risks (5/5)
Key Risks (continued) Key Risks (5/5) Intellectual A substantial part of the Company's commercial success is dependent on its ability to establish and protect its intellectual property, Property Rights maintain trade secret protection, and operate without infringing third party rights. There can be
Slide 27: International Offer Restrictions
5 International Offer Restrictions
Slide 28: International Offer Restrictions (1/3)
International Offer Restrictions International Offer Restrictions (1/3) Cayman Islands This document may be distributed, and the New Shares may be offered and sold, only from outside the Cayman Islands to institutional and professional investors in the Cayman Islands. No offer or invitation to subsc
Slide 29: International Offer Restrictions (2/3)
International Offer Restrictions (Cont.) International Offer Restrictions (2/3) New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (New Zealand) (the “FMC Act”). The New Shares are not being o
Slide 30: International Offer Restrictions (3/3)
International Offer Restrictions (Cont.) International Offer Restrictions (3/3) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section
Slide 31: Placement Agreement summary
6 Placement Agreement summary
Slide 32: Placement Agreement Summary (1/2)
Placement Agreement Summary Placement Agreement summary (1/2) DRO has entered into an underwriting agreement with the Joint Lead Managers in respect of the Placement (Placement Agreement). The Placement Agreement contains representations and warranties and indemnities in favour of the Joint Lead Man
Slide 33: Placement Agreement Summary (Cont.)
Placement Agreement Summary (Cont.) Placement Agreement summary (1/2) (b) ASIC (i) makes an application for an order under Part 9.5 of the Corporations Act in relation to the Placement; (ii) commences, or gives notice of its intention to commence, any investigation or hearing under Part 3 of the Aus
Slide 34: Other information
A APPENDICES Other information
Slide 35: How a Counterdrone System Works
How a Counterdrone System Works DRO Performs all steps of the Process Step 1 Step 2 Step 3 Step 4 Bespoke sensor solutions provide Machine Learning and AI based Respond / defeat technologies Review by visualizing event data optimal Detection and detection and classification offer solutions for the c
Slide 36: DRO “Secret Sauce”
DRO “Secret Sauce" C-UAS pioneer, full in-house suite of multi-mission products, culture of innovation and deep channels to market Market leading, differentiated AI technology Complete product, integration and geographic coverage All hardware (except radar and camera) developed and Body-worn, vehicl
Slide 37: Counterdrone Detection Solutions
Counterdrone Detection Solutions DRO uses Multi-sensor Drone Detection for Optimal Results, Unaffected by time of Day or Weather Radio Frequency Radar* Cameras* Acoustic* Imagery Overview ● Foundational layer ● Motion tracker - emits signals ● Electro-Optical (EO), Infrared (IR) ● Compares noise of
Slide 38: Counterdrone Defeat Solutions
Counterdrone Defeat Solutions DRO uses smart jamming which has advantages over other technologies, particularly, in its use across civil and military applications, and does not compete against large Defence Primes Large Defence Primes Exotic Tech, Dominance Area DRO Limited Reliability Safe – “soft
Slide 39: Leading Technology Utilising Exceptional Market Intelligence
Leading Technology Utilising Exceptional Market Intelligence Origin Integrator ü ü ü ü ü - ü - - - ü Most extensive DETECT product range from handheld Dismounted ü - - - - - ü - - - to fixed-site Vehicle ü - ü - - - ü ü ü ü solutions Fixed Site ü ü ü - ü - ü ü ü ü ü Large IP DEFEAT portfolio and rob
Slide 40: Geopolitical Environment Providing Market Tailwinds
Geopolitical Environment Providing Market Tailwinds ● Increased expenditure by Western Governments in response to small drones being used in virtually all conflicts globally - NATO members bordering Russia reported to be considering a “drone wall”1 - Iran’s recent attack on Israel reportedly using o
Slide 41: Counter-Drone Solutions Across Military & Civilian Sectors
Counter-Drone Solutions Across Military & Civilian Sectors The Rapid Proliferation of Drones has Escalated the Potential for Disruptive Incidents Commercial Airspace Payload Delivery Intel Gathering Swarms Nuisance Activity Cyber Attacks Deepening the Demand for Robust Countermeasures, Positions DRO
Slide 42: Artificial Intelligence in Electronic Warfare
Artificial Intelligence in Electronic Warfare DRO is Favourably Exposed to the Fast-growing Electronic Warfare Business Segment ● Electronic warfare (EW) is any action involving the use of the electromagnetic spectrum (EM spectrum) or directed energy to control the spectrum, attack an enemy, or impe
Slide 43: Visionary Team of Industry Veterans with Deep Industry Experience
Visionary Team of Industry Veterans with Deep Industry Experience Peter Oleg Jethro Carla Red Tom James Vornik Marks Balanco McClintock Branstetter Independent CEO and Independent CFO and Joint Sales Director U.S. Director of Non-Executive Managing Non-Executive Company Business Chairman Director Di
Slide 44: Capital Structure (pre Placement shares issued)
Capital Structure (pre Placement shares issued) Capital Structure (approximately 22,000 shareholders) Research Coverage DRO Shares on Issue 762,550,390 DRO Options on Issue1 56,144,000 Fully Diluted Shares on Issue 818,694,390 Fully Diluted Equity Value2 $1,138.0m Cash (as at 30 June 2024) $145.5m D
Slide 45: Legal Disclaimer (1/3)
Legal Disclaimer (1/3) These presentation materials (the Presentation Materials) have been prepared by DRO Limited (the Company). The distribution of this document in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. By accepting, viewing or acces
Slide 46: Legal Disclaimer (2/3)
Legal Disclaimer (2/3) FORWARD LOOKING STATEMENTS Certain statements contained in the Presentation Materials, including information and statements regarding the future financial or operating performance of the Company and its projects and the industry and markets in which the Company operates, and s
Slide 47: Legal Disclaimer (3/3)
Legal Disclaimer (3/3) JOINT LEAD MANAGER DISCLAIMER “Bell Potter Securities Limited, Macquarie Capital (Australia) Limited and Shaw and Partners Limited (each a JLM, and together the JLMs) are acting as joint lead managers, underwriters and bookrunners to the Placement. Each JLM its affiliates, dir
Slide 48: Artificial Intelligence For Multi-Mission C-UxS
Artificial Intelligence For Multi-Mission C-UxS DRO Limited (ASX:DRO) Investor Presentation Oleg Vornik CEO and Managing Director oleg.vornik@DRO.com +61 2 9995 7280