DroneShield denies knowledge of any agreement by directors to offload $67m worth of shares

Defence technology group DroneShield (ASX: DRO) has rejected assertions by the ASX that three directors, including CEO Oleg Vornik and chairman Peter James, had any sort of agreement to dump almost $67 million worth of shares earlier this month – a move that led to a wipeout of more than 30 per cent from the company’s share price.

In a tough week for the Sydney-based company, the shares were down another 19 per cent yesterday following news of the sudden departure of US CEO Matt McCrann, with the shares hitting a low of $1.94 – down from $6.70 in early October.

In response to detailed questions from the ASX, DroneShield today offered new insight into the inner workings of the group, covering the controversial mass sale of converted performance options.

The sale was announced two days after the company was forced to withdraw a previous ASX announcement touting a “new” $7.6 million order comprising three contracts that were received from the US Government.

DorneShield corrected this on 10 November, revealing that the order was not new but one that the company had already disclosed in September.

The company blamed the embarrassing blunder on a US representative for failing to perform “the necessary manual check on the orders”. DroneShield has appointed external auditors HLB Mann Judd to review its processes.

While this was a serious oversight by the company, it pales in comparison to the share rout caused by the sale of almost 20 million shares by DroneShield’s CEO Oleg Vornik, chairman Peter James and non-executive director Jethro Marks.

Vornik’s haul from the sale totalled $49.47 million, while James reaped $12.35 million and Marks $4.89 million from the share sales which occurred from 6-12 November.

The shares were among 44.455 million performance options that were vested in accordance with the company hitting revenue of $200 million in a rolling 12-month period.

DroneShield announced on 4 November this year that this target had been reached, noting also that another tranche of options will be issued when the company hits performance targets of $300 million, $400 million and $500 million in annual revenues or cash receipts.

In its response to ASX questions about what the company knew ahead of the share sale by the directors, DroneShield says the sale was done in accordance with ASX listing rules.

The company also noted that the options were issued in early 2024, approved by shareholders at a time when DroneShield’s revenue was about $54 million.

However, DroneShield took issue with wording from the ASX regarding an “agreement” by the three directors to “dispose of their entire ordinary shareholding” in the company.

DroneShield says it prefers to refer to it as a “decision” rather than an agreement.

“DRO was not aware of any decision to dispose, or actual disposal, of DRO shares by the three directors or any of them until after the market closed on 12 November 2025,” says DroneShield.

“DRO was not a party to (nor was it aware of) any agreement among the three directors regarding the sale of all (or any part) of their DRO shares,” the company added.

“DRO has been informed by the directors that they did not have an agreement to dispose of all (or any part) of their DRO shares, and that the shares were sold on-market, in the ordinary course of trading, and in accordance with programmed trading parameters agreed by each director with their broker.”

DroneShield also notes that while the three directors disposed of all the DroneShield shares that they held following exercise of the performance options, they did not dispose of their entire security holding in the company.

“Each of the directors retained vested performance options over DRO shares that they are entitled to exercise into DRO shares,” says the company.

Vornik retains 193,167 vested performance options, while James retains 250,000 options and Marks has 40,000 options. None of these directors actually hold shares in the company.

DroneShield also says that it has fully complied with its disclosure obligations regarding the share sales by the directors, which include separate ASX announcements that the performance options had been vested and that the shares had been sold, as is customary, after this occurred.

“DRO acknowledges that there may be some instances in which a share sale might constitute information that is market sensitive, however, an assessment at the relevant time would depend upon the specific prevailing facts and circumstances and the company's knowledge of the same,” says the company.

“In this particular instance, DRO was not aware of a decision to dispose, or of the disposal itself, until it was notified after market close on 12 November 2025.

“DRO believes that it has fully complied with its disclosure obligations regarding the director sales and the market is fully informed about those sales.”

The mass sale of the shares by directors and the significant impact this had on the DroneShield share price has led to widespread criticism of the company and rattled investor confidence.

The issue has even led to calls for changes to the way directors sell their shares on the market.

DroneShield shares hit a low of $1.84 this morning in the wake of the resignation of the US CEO and were trading at $1.93 at 12.28pm (AEDT).

At the current price, the $67 million pocketed by the three DroneShield directors earlier this month would now be worth just $38 million.