DroneShield Ltd (ASX:DRO) (“DroneShield” or the “Company”) is pleased to provide the following update on its activities during the three-month period ended 30 June 2020 and its Appendix 4C quarterly cash flow report for the same period.
The quarter’s key highlights are as follows.
- Substantial qualitative and quantitative progress
- Cash inflows from customers and grants were approximately $2.1 million, a quarterly record
- First approximately breakeven operating quarter for DroneShield
- Cash balance has increased relative to the start of the quarter
- Substantial increase in the U.S. government business – currently delivering first fixed site deployment for detect-and-defeat DroneSentry™ system for the US Department of Defense
- The Company continues to work towards the execution of a formal contract in relation to the previously announced $70-$85 million Middle Eastern bid.
- The Company has won a four-year framework agreement to supply European Union police forces with DroneGun Tactical™
Financial Performance and Outlook
While the Company was affected by the COVID-19 pandemic, and the pandemic has impacted the Company’s ability to conduct customer meetings, demonstrations and product trials, as well as delaying logistics (and consequently, payments for products shipped) and installation approvals, the Company recorded record operating cash receipts of approximately $2.1 million during the quarter.
Importantly, with the net operating cash outflow of only approximately $50,000, the Company recorded its first quarter in which its operating cashflows were approximately breakeven.
Additionally, the Company received approximately $600,000 in non-dilutive funding against its forthcoming 2020 R&D Tax Incentive payment and approximately $150,000 from the US Government Paycheck Protection Program, bringing the Company’s total cash in-flows to approximately $2.9 million for the quarter. The breakeven operating cashflows, together with this additional non-dilutive funding, resulted in the Company being cash flow positive for the quarter, without an equity fund-raising, for the first time in its history – the Company’s cash balance increased by approximately $500,000 relative to that at the start of the quarter. This cashflow positive quarter was achieved despite a higher spend relating to a build-up of additional inventory in order to make rapid deliveries for future sales. This cashflow positive quarter compares positively to the 31 March 2020 quarter which saw a $1.9 million net cash outflow.
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