Ann: Appendix 4C - quarterly, page-25

Assuming you can forgive the delay in cash receipts - this is an incredibly positive Quarterly. And it is nice that they confirmed expectations that the current quarter will be the largest for cash receipts to date.

Taking the report at face value, DroneShield is certainly mixing it with the whose who of defence, with the right array of product solutions, at just the right time.

Representatives in 120 countries. Ramp-up in manufacturing. Inventory boost for immediately delivery. All very positive.

As far as I am aware - DroneShield type RF jamming technology is the only viable counter-drone solution for civilian use and to combat swam attacks. The very swarm attack demonstrations that are discussed on pages 20 and 21 of the report.

When we look back, I think 2021 will be the major turning point for DRO. Post-covid when just everything fell into place.

However, it is probably the make or break year for the company too. Cash burn would have to be around $1 million per month now to support 40 staff, manufacturing costs and marketing expenses. So it was also nice that the company mentioned that it expects to be cashflow positive this quarter and going forward.

Having $13 million in the bank is a nice buffer - but only if company does indeed go cashflow positive.

My guess is we are at a point in time where DroneShield needs to make $2,000,000 in sales per month to break even. So we all need to be thinking $6 million in sales per quarter and $24 million per year.

My understanding is that DroneShield products sell for between $50,000 and $200,000 each. So on the high-end, the company needs to be selling at least 10 units per month. Is this possible? Well in my mind their is really no limit to the potential customer base - every public and military building, each platoon, each airport, each ship, each prison - the potential customer base is enormous.

Then there are the quarterly software updates which will basically be a must have subscription.

So the sales potential DroneShield remains enormous!

And then I read...

'Droneshield paid Sort Hub Pty Ltd $162,000 for shipping and inventory.'

Associated entity of Jethro Marks.

Perhaps someone can recall why Jethro was brought in as a director? I just hate these types of related entity payments. You just don't know if they are taking the Michael or not. Perhaps he is some guru on international logistics - but nevertheless, it carries a nasty odour.

SK.