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Counterdrone defence technology company DroneShield (ASX: DRO) has upsized its capital raise by 40 per cent to $105 million following strong domestic and international investor support for its plans to bulk up inventory and the engineering team amidst a $500 million pipeline of prospects.
The Sydney-based company plans to use $80 million of the funds to build up inventory so it can capitalise on customer opportunities, with equipment ranging from from handheld detection and defeat systems to its DroneSentry-X Mk2 offering that can be mounted onto vehicle roof racks to both detect and take down drones.
After reporting a 10-fold revenue spike in the March quarter and noting strong demand from customers amidst ongoing conflicts as well as threats in non-military realms, last week DroneShield announced a $75 million capital raise comprising a fully underwritten $70 million and a $5 million share purchase plan (SPP) for shareholders.
The high level of interest in this raise from both new and existing investor institutions and sophisticated investors led DroneShield to lift the placement to $100 million, while the $5 million SPP will continue as planned with today as the opening date.
However, in the fine print DroneShield reports that it reserve the right to raise more or less than this amount via the SPP, subject to a maximum total of $15 million.
The company expects pro forma cash balance of approximately $161 million to support its ramping up of inventory production and the scaling up of its engineering team, with the latter budgeted at $10 million to accelerate the development of in-house artificial intelligence (AI) and machine learning (ML) engines and capabilities for the enhanced detection, identification and response of drone threats.
DroneShield has also budgeted $15 million from the raise for working capital and costs relating to the offer itself.
"DroneShield would like to thank existing shareholders for their support, and welcome new shareholders on our register," says DroneShield CEO Oleg Vornik.
"We are well positioned to capitalise on the pipeline of opportunities, supported by the current tailwinds through drones being used extensively for nefarious purposes globally."
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