Artificial Intelligence For Multi-Mission C-UxS

Investor Presentation (ASX:DRO)

May 2024 Image: DroneSentry-X Mk2 in rapid field deployment
 Accelerating the Business
• 1Q24 revenues of $16.4 million, up 10x vs 1Q23 ($1.6 million)
– Exceptional ongoing momentum, following reaching $9.3m profit after tax in 2023

• 1Q24 customer cash receipts of $7.1 million, up vs 1Q23 ($7 million)

– Highest ever March quarter

• Strong start to 2024 given strong seasonality in revenues and cash receipts, with the March quarter being the slowest period
– Most payments are from US Government, with net30 payment terms (December and January being quieter months),
hence only one “business as usual” month of February being captured under net30 in the March quarter cash receipts)
– End of calendar year often corresponds to the start of a new budget cycle for many customers
– Accordingly, the cost base of the business reflects annual rather than first quarter revenues

• 1Q24 SaaS revenues doubled to $561k vs 1Q23 ($239k)

– Customers require Company’s AI software engines, upgraded quarterly, in response to a rapidly evolving drone threat
– Additional SaaS based solutions planned for launch in the next 12 months

• Pro-Forma Cash balance of approx $171 million as of 31 March 2024, no debt or convertibles
– Based on $56m as at 31 March 2024, $100m Placement (Tranche 2 of $30m subject to EGM approval) and $15m SPP
– DroneShield hardware carries sophisticated componentry (which assists high margins and competitive differentiation),
driving requirement for componentry purchasing in advance due to the build time
– Funds to be used for a significant inventory investment, corresponding to a high -quality sales pipeline, and a further
investment into Artificial Intelligence R&D, underpinning the Company’s products and the SaaS model

• $27 million contracted backlog and pipeline of over $519 million1 (as at 31 March 2024)

Image: DroneGun Mk4

• Current manufacturing capacity of $400 million per annum

• Favourable environment for DroneShield with rapidly rising counter-drone, defence and security spending globally

• Signed NATO Framework Agreement a significant milestone

– DroneShield awarded first procurement framework agreement for C-UAS in NATO history
– 3-year procurement framework agreement with extension options
– Magnitude of sales under the NSPA framework over the initial 3 years is expected to be significant
2
1 There is no assurance that any of the Company’s sales opportunities will result in sales.
Rapid Profitable Growth ($m, Dec YE)

The business is accelerating its rate of growth, and is now profitable

Strong Revenue Growth (A$m) Cash Receipt Growth (Sales + Grants) (A$m)
55.1 73.5

~10x growth
over Q1 2023

16.9 16.5
10.6 14.8 15.6

3.6 5.6 5.4 7.0 7.1

1.2 1.6 1.8 3.7

2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
FY Q1 FY Q1

SaaS Revenue Growth (A$000) Profit After Tax (A$m)

1,394
9.3
~2x growth
over Q1 2023
561
331
189 239
(0.9)
38 2 17
Shift to
(5.9) (5.3)
2018 2019 2020 2021 2022 2023 2024
(6.3) Profitability
(7.7)
2018 2019 2020 2021 2022 2023
FY Q1 FY

SaaS model was fully introduced in 2021

3
DroneShield “Secret Sauce”

C-UAS pioneer, full in-house suite of multi-mission products, culture of innovation and deep channels to market

Market leading, differentiated technology Complete product, integration and geographic coverage

All hardware (except radar and camera) developed and

✓ made in-house (with outsourced manufacturing to DRO’s ✓ Body-worn, vehicle/ship and fixed site systems
specifications for large batches)
- low in-house capex as heavy industrial work is outsourced
at lower margins to DRO specifications Both integrator and sensor maker – can integrate third
✓ party sensors/effectors, and have its sensors easily
All SaaS software, including AI engines for RF sensors, integrated into larger systems
cameras, sensorfusion; and EW work, done in-house
✓ - robust software and digital infrastructure to support Global presence in around 70 countries via experienced
enterprise grade software updates, monitoring and retrieval ✓ and trained distributor network

100+ in-house engineers (out of team of 130) developing

Mature technology development roadmap executed by a
and integrating IP into product updates
✓ - FPGA, AI/ML, RF/waveform, data engineering, field service ✓ seasoned counterdrone team, ensuring solutions adapt
to counterdrone market shifts
engineering, front-end, back-end, platforms, mechanical
engineering, industrial design, UI/UX, and production
engineers, quality managers
Numerous other differentiators

Global pioneer with strong team and brand ✓

Substantial and growing in-house AI databases for RF,
sensorfusion and optical/thermal AI

The original counter-drone pioneer, with a strong global

✓ brand and reputation for innovation and quality ✓
Deep sales pipeline and relationships with end users and
channel partners, following multi-year nurturing and growth

Experienced in-house veteran sales team (complemented

✓ by global distributor network) ✓
Security clearances, certifications, NATO Stock Numbers.
Non-ITAR solutions
4
 Deep and High Quality Government Customer Pipeline
(as at 31 March 2024)
Multiple projects at each development stage improve predictability of cashflows

6-18 months from lead to sale, but can be much shorter for repeat orders
P-Go vs P-Win
Credible
Lead (10%) Confirmed
Probability weighting on
Scope/
Final demos a project is a blend of
Proposal DroneShield
Shortlisted and other Formal final 1. P-Go (deal going
submitted Customer
(30%) prelim steps quote with ahead on time,
(25%)
conducted view to advised they without material
are placing PO
(40%) purchase changes) and
processing Order Book
(50%) order with (100%) 2. P-Win (probability of
DRO (70%) on customer
the deal awarded to
end (85%)
DRO vs competitor)
93 Projects 80 Projects 75 Projects 67 Projects 59 Projects 40 Projects 27 Projects 20 Projects
$519m $409m $368m $237m $195m $82m $39m $27m P-Go is managed by
building proactive
2024: $375m relationships with
customers and having a
large amount of projects
2025+: $145m
The pipeline does not include orders issued on on the go.
short notice from repeat customers.
Additionally, as the year progresses, additional P-Win is generally
orders are likely to appear in the 2024 pipeline. exceptional, based on
numerous product
differentiators.

Notes:

Denotes a significant ($5m+) 2024 project at a particular stage of a funnel

The pipeline is cumulative – eg, the 80 projects at Confirmed Scope stage are included as part of the 93 projects at the Credible Lead stage
Order Book = current Purchase Orders (POs), less amount already paid to DRO (eg deposit) under those POs 5
There is no assurance that any of the Company’s sales opportunities will result in sales
 2024 Pipeline of $375m, with a further $145m of projects
tracked for 2025+ (as at 31 March 2024)
USA continues to be the major contributor to the sales and is the primary focus for the business, however the
global pipeline is also growing rapidly

2024 Pipeline: $226m / 43 projects 2024 Pipeline: $111m / 19 projects

• Multiple military/Govt order discussions • Well advanced on several major
acquisition programs
• Well advanced on several major
acquisition programs • Diverse pipeline across countries,
USA Europe products and use cases

2024 Pipeline: $4m / 5 projects

2024 Pipeline: $22m / 3 projects
• Execution continues on the $10m, 2
• Sales associated with BT partnership year DoD contract
• Primarily Ministry of Defence focused • Substantial upside, not currently in the
United Kingdom Australia pipeline, from Government allocating
funding towards C-UAS (such as
• 13 pipeline projects (across 2024) of over $5m each LAND156) and additional Ukraine aid
• Several of these are estimated to be awarded in current
quarter (note: Government contracts have delay risks)
• The largest 2024 pipeline project is $77m 2024 Pipeline: $11m / 14 projects
• The large projects are substantially US, UK and West Europe • Diverse range of geographic and
Governments as end customers product opportunities
• DroneShield expects to secure several large framework • Middle East continues as an active
purchasing agreements in next 12 months
Other focus, however conservatively small
allocation in the pipeline

Notes:
The pipeline includes existing defined sales opportunities at various stages of maturity
The opportunities are unweighted, and measured as cash receipts to December 2024 6
Quoted in Australian dollars. AUD.USD FX rate at 0.66, AUD.EUR FX rate at 0.61, AUD.GBP FX rate at 0.52
Necessarily, not all, and there can be no assurance that any, of the Company’s sales opportunities will result in sales
Explosive Growth Based on a Strong Foundation

2014-2017 2018-2022 2023 2024-2028

Building the Foundation “Green Shoots” Explosive Growth Transforming to Next Level

• Setting up in Australia and • Multiple $1m+ orders • $33m U.S. Govt sale • 5-year target*:
US • $3.8m 2-year R&D contract • $9.9m 2-year R&D contract - $300-$500m annual
• ASX IPO (raising $7m) • $9.6m and $17m capital revenue
• Numerous other multi-million
• R&D and productizing the raises, $3.7m Epirus contracts - 50% of revenue in SaaS
initial product family: investment and Electronic Warfare
• $40m capital raise in March
- DroneGun Mk1 and Mk2 • Completing the product line- 2023 to fund working capital • This revenue is expected to
up: and scale the team be supported by 150-170
- Acoustic detection
sensors - DroneGun Tactical • 105 staff in Sydney and staff

• Team grows to 11 staff - RfPatrol Mk1 and Mk2 Virginia

• Global partner network setup - DroneSentry-X • Exploding market, with

Ukraine highlighting the need
• C-UAS market in infancy - Refinement of
for C-UAS products
DroneSentry
• Customers demos, trials and • $30m order backlog
initial smaller orders - Introducing SaaS model
• $400m pipeline
• From nil to $300k/year • First-ever ACMA licence to
annual revenue manufacture jammers • First profitable year
• Team grows to 60 staff
• From $1m to $17m annual
revenue

* There is no assurance that any of the Company’s sales opportunities will result in sales.
7
DroneShield Overview
Summary
• Founded in 2014 and listed on the ASX in 2016, DroneShield provides Artificial Intelligence platforms for protection
against drones
DroneShield • Hardware and software to detect and safely neutralise small drones used for warfare, terrorism, contraband delivery,
Overview and airport disruptions
• Key customer areas include military, intelligence community, Homeland Security, law enforcement, critical
infrastructure, prisons and airports globally

• Three streams of revenue: hardware (drone detection and defeat devices), SaaS (device software updates) and R&D
Business • Sales through an experienced in-house veteran salesforce with distribution partners across over 70 countries
Model • SaaS is expected to become a significant proportion of overall revenue over the next 5 years
• R&D contracts are adjacent to the core technology, and contribute advanced capability in-house

• RFAITM (radiofrequency spectrum engine), DroneOptIDTM (optical AI engine), SFAITM (sensorfusion AI engine)
SaaS via • The engines undertake real-time, at the edge, detection and identification of drones and other potential threats
Proprietary AI • The result is an increase in detection responsiveness, lower false positives and an increase in the speed at which
Software new threats are detected, classified and tracked by DRO systems
Engines • Customers receive regular software updates via enrolling in a SaaS model at the time of purchase of their systems
• All solutions except for radars and cameras hardware fully developed in-house, with no reliance on third party IP

• US$10 billion worldwide addressable market

Addressable
• Rapidly improving and easily available drone technology is driving demand for counterdrone solutions
Market
• Current geopolitical conflicts make extensive use of drones by all sides

• Today, over 75% of revenues is derived from defence

Growth
Strategy • Defence, intelligence community and border security will continue to be the key focus, however there is a major
opportunity for growth into civilian airports, critical infrastructure, prisons, stadiums and corporates

9
 Market Pioneer in C-UAS Technology at the Forefront of Innovation

Complete Multi-Mission Counter-Drone Arsenal with the Best Product for Every Scenario

Body-Worn Vehicle / Stationary Fixed Site

DroneGun DroneSentry-X
DroneGun Mk3 DroneGun Mk4 RfPatrol Mk2 DroneCannon RfOne DroneSentry
Tactical Mk2
2023
2% 17% 41% 29% 6% 5%
Revenue
% expected to rise in % to reduce, replaced % expected to stay % expected to rise in Smaller amount due to f ixed sites being a smaller market at present. This will rise
older model 2024 as def ence bases, airports, prisons and similar customers commence adoption
2024 by Mk4 stable

Best in Breed, Proprietary Technology Protecting Against a Wide Range of Threats With An Established Competitive Moat

Veteran Sales Force Top Tier Customer World Class

Base incl US DoD Engineering Talent

Multi-Sensor World Class Aerial Ground Surface Underwater

World Class Security clearances,
Detection, ID Detection Vehicles Vehicles Vehicles Vehicles 70+ countries
Defeat Range certifications, NATO
and Tracking Range Distributor Network stock numbers
Software (SaaS and R&D contracts) Replacement Cycle
Substantial majority of the purchases are to f ill new or additional requirements, not
to replace existing C-UAS stock (due to low market penetration)

Hardware lif e of approx. 5 y ears (use dependent), but likely to be replaced as new
generations of hardware come out (2-3 y ear release cy cles)

Sof tware/SaaS quarterly release cy cles (applies to Rf Patrol, Rf One, DroneSentry -X,
DroneSentry-C2 (incl SensorFusion DroneSentry -C2/DroneOptID, DroneSentry -C2 Tactical). DroneGun SaaS due in
Electronic Warfare and SIGINT RFAI (Radiofrequency AI engine) 2025
AI) and DroneOptID
10
 How a Counterdrone System Works

DroneShield Performs all steps of the Process

Step 1 Step 2 Step 3 Step 4

Detect Assess Respond Review

Machine Learning and AI based Respond / defeat technologies offer Review by visualizing event data and
Bespoke sensor solutions provide
optimal Detection and Identification detection and classification software is solutions for the controlled recorded information to harden
of UAS threats used to undertake near-real time management of UAS threats systems and procedures against future
tracking and assessment of drones threats
and UAS threats

11
 Counterdrone Detection Solutions

DroneShield uses Multi-sensor Drone Detection for Optimal Results, Unaffected by time of Day or Weather

Radio Frequency Radar* Cameras* Acoustic*

Imagery

• Electro-Optical (EO), Infrared

• Foundational layer
• Motion tracker - emits signals (IR) and Thermal • Compares noise of drone
• Detects drone comms
Overview which are then reflected back • Video analytics and image blades or motor to a database
protocols (via conventional RF to the radar by targets of acoustic signatures
capture identification of drone
library or an AI engine)
activity

✓ No interference with other

sensors ✓ Best used for verification,
✓ Tracks multiple targets classification and tracking of a
✓ Passive – cannot be “seen” ✓ Picks up drones without RF target detected by other ✓ Passive, cost effective
Advantages emissions sensors ✓ Supporting sensor, filling gaps
✓ Low false alarm rate
✓ Tracks multiple targets ✓ Potential identification of from other sensors
✓ Direction-finding capability payloads
✓ Long ranges ✓ Provides “eye on target”
✓ Cost effective

 False alarms (birds etc)  Short range

 Not well suited for detection on
 Doesn’t pick up RF-silent  Is “seen” as emits energy  False alarms
its own due to field-of-view vs
Disadvantages drones  Longer range detection is distance trade-off  Cannot locate or track
 Requires firmware updates expensive  Requires signature database
 Short ranges
 Struggles with hovering drones updates

* Third party hardware, integrated into DroneShield combined multi-sensor solution, with differentiated offering via AI-powered software
layers 12
 Counterdrone Defeat Solutions
DroneShield 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
DroneShield Offering Safe – “soft kill” Limited Reliability Kinetic – “hard kill”
No intentional damage to the drone Physical force used with potential for destructive damage

Spoofing/Cyber/ Projectile Fire Kinetic Directed Energy

Smart Jamming Counter-Drone Drones
Protocol Manipulation Systems (Laser or Microwave)

Imagery
!
• Lasers and high-power
• Radio waves force a • Remote weapons
• Hijacks the control of a • “Kamikaze” or “catching” microwave systems
Overview drone to fly back, hover, systems shoot down
“dazzle” or destroy a
drone drones
or land drones
drone

✓ Universal effectiveness ✓ Allows for the re-routing

✓ Effective against Govt-
✓ 360-degree defeat and re-direction of ✓ Effective against Govt-
coverage malicious drone flight ✓ “Catching” the drone is grade drones
grade drones
Advantages paths
available to a wider range ✓ Systems can be mounted
✓ Effective against swarms of customers ✓ Established technology
on naval vessels for
✓ Civil and military ✓ Applications in both civil for military operations
complex defence systems
environments and military environments

 Not effective against all

drones
 Potential for collateral  Higher chance of  Generally slow to deploy  Collateral damage  In early stages
Disadvantages interference (for a “dirty” collateral damage  Not effective against  Unsuitable for use in a  Only available for military
jammer)  30-90sec per drone to swarms civil environment applications
engage, can’t engage
multiple drones same time

13
 At a Critical Inflection Point, capitalizing on numerous Growth Vectors

Continue Market Grow Adjacent

Accelerate SaaS Expand into Adjacent Strategic Alliances & Future Contracts
Leadership & Expand Electronic Warfare
Subscriptions Markets Partnerships
Wallet Share (EW) Capabilities

• Leverage industry • Capitalize on the • Intensify focus on • Increase penetration • Forge strategic
pioneer status to ~$10m Five Eyes SaaS model to drive in civilian sectors alliances with
deepen penetration DoD contract to recurring revenue such as airports, defence contractors
in key markets enhance EW offering through subscriptions infrastructure, and and technology firms ✓ 13 major (>$5m)
facilities, where drone to integrate solutions 2024 contracts
• Expand wallet share • Expand EW • Expand userbase for threats are escalating into broader security representing >$250M
among existing capabilities, utilizing key products: RFAI systems
clients by embedding software-centric and DroneSentry-C2 • Extend market reach
more solutions into approaches to into non-traditional • Collaborate with
• Leverage in-house ✓ Initial contracts
key customer systems provide scalable and sectors like shipping government bodies
AI & ML engines and often serve as a
versatile solutions points, first response, for co-development
• Capitalize on U.S. capabilities to foothold in forming
and prisons, where projects
DoD • Explore broader continuously enhance lasting, high-sales-
DroneShield’s tech
recommendation and distribution threat detection & can add unique value • Pursue partnerships volume customer
track record with other opportunities within response, ensuring with private security relationships
top customers to the AUKUS alliance to high customer • Capitalize on firms to expand the
reinforce brand enhance global reach retention geopolitical tensions reach into commercial
strength in EW to identify new and VIP protection
markets for expansion markets

14
 Exceptional Brand and Differentiated Market Position

Origin

Integrator ✓ ✓ ✓ ✓ ✓ - ✓ - - -
 Most extensive
DETECT product range on the
market
Dismounted ✓ - - - - - ✓ - - -

Vehicle ✓ - ✓ - - - ✓ ✓ ✓ ✓
 Unrivaled versatility
Fixed Site ✓ ✓ ✓ - ✓ - ✓ ✓ ✓ ✓ from handheld to
fixed-site solutions
DEFEAT

Dismounted ✓ - - ✓ ✓ ✓ ✓ - - -
 Large IP portfolio
Vehicle ✓ - - - - - ✓ ✓ - ✓ and robust AI
capabilities
Fixed Site ✓ ✓ - ✓ - - ✓ ✓ ✓ ✓

COMMENTARY
 Battle-tested,
✓ Integrator v ia • Substantially • Roll up by • Announced • Handheld • Lower • RF detect- • Of f er an • Protocol superior
its Lattice an integrator Highlander to be Dronekiller perf ormance and-def eat expensiv e, manipulation
platf orm Partners of acquired by jammer gun v s DRO (v ia Citadel competing – similar performance
• Acquired
AVT, a Litey e, Black Axon in May • Lacks a f ull • European purchase) product to legal
smaller Sage and 2024 product suite customer • LOCUST DroneSentry restrictions to
integrator Radio Hill (in • Focus on law f ocus laser def eat jamming,
Platform Feb 24) less
enf orcement • Handheld • Acquired
information reliability , no
• Integrator/C2 • Acquired def eat is on- Verus Mar 23
supplier, and swarm
Aerial Armor the-body
handheld protection
Jan 23 based,
disruptors creating
potential
issues

Note: Competitor analysis based on publicly available information

15
Appendices
 Geopolitical Environment Providing Market Tailwinds
Increased expenditure by Western Governments in response to small drones being used
in virtually all conflicts globally
– Iran’s recent attack on Israel reportedly using over 100 drones
– US DoD proposed 2024 budget of over US$840bn, a record peacetime amount 1
– Germany increasing spending to over 2% of GDP (from 1.53% in 2021), including
a new EUR100bn fund to modernise military2
– Poland have announced a record 2023 Defence budget at 3% of GDP 3
– Australia completed Defence Strategic Review (DSR), with expectations to
increase the allocations to asymmetric, high-tech and greyzone warfare. The next
step is the release of Integrated Investment Plan, which will lay out implementation
blueprint of the DSR

In Australia, the Government is seeking to rapidly grow sovereign defence capability, with
several key focus areas directly matching DRO expertise, including counter-robotics,
Electronic Warfare, and battlefield surveillance (ISR)
Record Defence and Security budgets, combined with a demonstrated use of drones in
conflicts worldwide for payload delivery, directing artillery strikes, collecting field
intelligence and general use, has put increasing focus on both drone and counterdrone
systems for all major militaries
Increasing global tensions and use of drones across hot zones, including Ukraine, Hamas
attack on Israel, and in the Armenia/Azerbaijan ongoing conflict
DroneShield is one of very few fielded and proven counterdrone systems with US DoD
recommendations and based in Australia and US, hence well positioned to supply to
Western allies

Combined, these factors are expected to lead to meaningful and consistent order flow for
DroneShield across near and medium term

Iranian Shahed drones used by the Russian military

1 https://www.cbo.gov/publication/59511#:~:text=The%20proposed%20budget%20for%20DoD,2024%20in%20the%20previous%20FYDP.
2 https://www.reuters.com/business/aerospace-defense/germany-hike-defense-spending-scholz-says-further-policy-shift-2022-02-27/
3 https://www.trade.gov/market-intelligence/polands-defense-spending
17
 Urgent Need for Counter-Drone Solutions Across Both
Military & Civilian Sectors
The Rapid Proliferation of Drones has Escalated the Potential for Disruptive Incidents…

C ommercial Airspace
Payload Delivery Intel Gathering Swarms Nuisance Activity Cyber Attacks

Deepening the Demand for Robust Countermeasures, Positions DroneShield for Sector-wide Market
Capture with its Sophisticated, Proprietary C-UAS Solutions

UAM Corridor
Growing Counter-Drone Applications Across End Markets

Government Law Protective

Military Facilities Enforcement Details Airports Stadiums

Low-Level Airspace
Commercial Energy High Profile Shipping / LNG Rescue / Fire Correctional
Venues Production Events Ports Response Facilities

18
Benefits and Applications of Safe, Layered, Counterdrone
Systems over Kinetic Systems
Safe Counter-drone Systems Have Many Advantages over Kinetic Counter-drone Systems,
which are only Practical for Deployment in War-like Scenarios

Avoidance of Collateral Evidence for Legal Multi-Platform with Scale

Intelligence Gathering
Damage Prosecution Benefits

• DroneShield safe defeat • A drone which has been • Drones can often carry • Safe solutions can be
solutions force drones to forced to land can be sensitive instruments or carried on-the-man,
pre-set emergency collected by local law technology mounted on light skinned
protocols causing the drone enforcement to track the vehicles and provide
to fly back to its starting whereabouts of its controller • When forced to land, this continuous passive
technology can be
point, hover, or land, safely protection unconstrained by
neutralizing the threat
• As drones are usually exploited by military
ammunition stores
accompanied by an image personnel to aid in
• Alternatively, kinetic recording device, this can be intelligence gathering • Kinetic counter-drone
solutions could see a used as legal evidence to operations solutions are often mounted
destroyed drone fall on prosecute offenders on heavy, remote weapon
crowds of people or inflict stations and constrained by
“friendly fire” from magazine depth
projectiles

19
DroneShield AI Software Sees Through Noise –
Radiofrequency Spectrum
World Leading Proprietary RF AI Platform for Protection Against Advanced Threats, such as Drones

• Drones operate in the densest parts of the Radio Frequency (“RF”) Spectrum
with “noise” coming from all kinds of other emitters including Wi-Fi, Bluetooth,
cell towers and antennas
– Drone detection technology needs to be able to pull a signal out of all the
other “noise”, while maintaining low false alarms

• DroneShield has developed a cutting-edge spectrum awareness capability

using proprietary AI techniques through its RFAITM engine

• The RFAITM engine receives quarterly updates (intra-quarter updates also

available) which get pushed to the devices globally

• Why is this more advanced than the cell phone technology?

– Need to detect all protocols, all the time, on all bands, while cell phones
are specific dedicated protocols on specific channels
– Cell phones are a well-defined protocols with defined timing, frequency,
and identifying signals to lock onto. This allows to optimize the system
from the hardware bands being made narrow band so there is no
interference. The Government licensed bands allow no interference
sources, so the algorithms are defined, which means the math is defined
– In C-UAS, there is no set sample rate, sample frequency, bands, licensed
channel control, so there is no optimization about any one algorithm

20
DroneOptID AI Software – Optical and Thermal Spectrum
Counterdrone Surveillance
DroneShield’s DroneOptID AI engine detects and tracks complex threats such as drones in cluttered environments

• Drones are small, fast-moving objects, hard to detect with naked eye more than
50m away, against complex background

• Cameras on their own cannot detect and track drones at any meaningful distance,
due to
– the trade-off between the camera Field-of-View (FoV) and Depth. A wide FoV
would only see drone at a close distance. A narrow FoV means only looking at
a tiny part of the area
– Even once an object is detected, separating drones from birds is difficult,
especially for fixed wing drones

• To enable cameras to accurately detect and track drones and other objects,
DroneShield has developed a proprietary AI engine DroneOptIDTM , in conjunction
with University of Technology Sydney, with DroneShield retaining the IP
– DroneOptID uses the latest in Computer Vision technology to detect, identify
and track drones in real time, cutting through all the other “noise”
– The software takes geographical and environmental data from other sensors
in order to slew and validate a drone threat. Once the drone is in the field of
view of the camera, using proprietary DroneShield algorithms, the DroneOptID
software uses motion tracking and machine learning techniques to identify and
track the target

21
Cutting-Edge Proprietary AI-Based Software Capabilities

Adv anced Computer Vision & ML to detect and

track drones in complex environments

Sophisticated, Proprietary Algorithms to enhance

real-time threat analysis and response

Substantial & Grow ing Threat Database leverages

35,000+ database of drone samples to precisely
classify drones

Regular Softw are Updates maintains technological

edge and responsiveness

22
Artificial Intelligence in Electronic Warfare

DroneShield 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 impede enemy assaults

• The purpose of electronic warfare is to deny the opponent the advantage of -

and ensure friendly unimpeded access to - the EM spectrum

• Demand for smart EW technologies to jam, degrade, disrupt or neutralise an

adversary capability are rapidly growing and are an essential part of modern
warfare

• Given the overlap with DroneShield’s counter-drone AI technology and the

minimal Australian based competition in EW technology, DroneShield is in the
box seat to exert dominance in this rapidly growing area

• In July 2023, DroneShield received a $9.9 million, 2-year R&D contract with the
Five Eyes Department of Defence
– Contract was awarded on a sole source basis

• Additional, and larger, contracts are expected, as DroneShield builds up its AI

capabilities in the EW and Signals Intelligence arena

23
 Visionary Team of Industry Veterans with Deep Industry
Experience

Peter James Oleg Vornik Jethro Marks Carla Balanco Red McClintock Tom Branstetter
Independent Non-Executive CEO and Managing Director Independent Non-Executive CFO and Joint Company Sales Director U.S. Director of Business
Chairman Director Secretary Development

Angus Bean Lawrence Marychurch Paul Cenoz Matt McCrann Raffael Battner Carl Norman
General Counsel and Joint Vice President, Embedded
Chief Technology Officer Vice President, Design U.S. CEO Operations Manager
Company Secretary Systems

Majority of the DroneShield senior team has been with the business for most of its history, delivering rapid growth.

24
Capital Structure
Capital Structure (approximately 17,000 shareholders) - 13 May 2024 Research Coverage
DRO Shares on Issue 723,154,247
DRO Options on Issue1 57,434,000
DRO Shares Placement Tranche 22 37,875,000
Fully Diluted Shares on Issue 818,463,247

Fully Diluted Equity Value3 $802.1m

Cash4 $171.4m
Debt -
Fully Diluted Enterprise Value $630.7m
1 Options issued at various strike price and maturities
2 Subject to shareholder approval at EGM
3 At 98c per share as at 13 May 2024
4 Using 31 March 2024 cash balance of $56.4m and applying $100m Placement and $15m SPP gross proceeds

Director and Employee Shareholdings

Oleg Vornik,
15,000,000 options 1.83% *
CEO and Managing Director
Peter James, Independent 935,345 shares
0.48% *
Non-Executive Chairman 3,000,000 options
Jethro Marks, Independent
1,500,000 options 0.18% *
Non-Executive Director
10,450,391 shares 1
Other Employees 5.72% *
36,384,000 options 2
Notes: Percentages are on a fully diluted basis and assume the completion of Tranche 2 of the Placement
1 Shares held by 38 employees (out of the team of 130)
2 Options held by 36 employees (out of the team of 130)

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Legal Disclaimer
These presentation materials (the Presentation Materials) hav e been prepared by DroneShield Limited (the Company ). By receiv ing the Presentation Materials, y ou acknowledge and represent to the Company that
y ou hav e read, understood and accepted the terms of this disclaimer. It is the responsibility of all recipients of these Pres entation Materials to obtain all necessary approv als to receiv e these Presentation Materials
and receipt of the Presentation Materials will be taken by the Company to constitute a representation and warranty that all relev ant approv als hav e been obtained.

NOT AN OFFER

These Presentation Materials are f or inf ormation purposes only . The Presentation Materials do not comprise a prospectus, product disclosure statement or other of f ering document under Australian law (and will not
be lodged with the Australian Securities and Inv estments Commission) or any other law. The Presentation Materials also do not constitute or f orm part of any inv itation, of fer f or sale or subscription or any solicitation
f or any of f er to buy or subscribe f or any securities nor shall they or any part of them f orm the basis of or be relied upon in connection therewith or act as any inducement to enter into any contract or commitment with
respect to securities. In particular, these Presentation Materials do not constitute an of f er to sell or a solicitation to buy , securities in the United States of America.

NOT INVESTMENT ADVICE

The Presentation Materials are not inv estment or f inancial product adv ice (nor tax, accounting or legal adv ice) and are not intended to be used f or the basis of making an inv estment decision. Recipients should obtain
their own adv ice bef ore making any inv estment decision.

SUMMARY INFORMATION

The Presentation Materials do not purport to be all inclusiv e or to contain all inf ormation about the Company or any of the assets, current or f uture, of the Company . The Presentation Materials contain summary
inf ormation about the Company and its activ ities which is current as at the date of the Presentation Materials. The inf ormation in the Presentation Materials is of a general nature and does not purport to contain all the
inf ormation which a prospectiv e inv estor may require in ev aluating a possible inv estment in the Company or that would be required in a prospectus or product disclosure statement or other of f ering document
prepared in accordance with the requirements of Australian law or the laws of any other jurisdiction, including the United St ates of America. The Company does not undertake to prov ide any additional or updated
inf ormation whether as a result of new inf ormation, f uture ev ents or results or otherwise.

FORWARD LOOKING STATEMENTS

Certain statements contained in the Presentation Materials, including inf ormation as to the f uture f inancial or operating perf ormance of the Company and its projects, are f orward looking statements. Such f orward
looking statements:

a)are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company , are inherently subject to signif icant technical, business, economic, competitiv e, political and
social uncertainties and contingencies;

b)inv olv e known and unknown risks and uncertainties that could cause actual ev ents or results to dif f er materially f rom estimat ed or anticipated ev ents or results ref lected in such f orward looking statements; and

c)may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, and are or may be based on assumptions and estimates related to
f uture technical, economic, market, political, social and other conditions.

The Company disclaims any intent or obligation to publicly update any f orward looking statements, whether as a result of new inf ormation, f uture ev ents or results or otherwise.

The words “believ e”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may ”, “will”, “schedule” and similar expressions identif y f orward looking statements.

All f orward looking statements contained in the Presentation Materials are qualif ied by the f oregoing cautionary statements. Recipients are cautioned that f orward looking statements are not guarantees of f uture
perf ormance and accordingly recipients are cautioned not to put undue reliance on f orward looking statements due to the inherent uncertainty therein.

NO LIABILITY

The Company has prepared the Presentation Materials based on inf ormation av ailable to it at the time of preparation. No representation or warranty , express or implied, is made as to the f airness, accuracy or
completeness of the inf ormation, opinions and conclusions contained in the Presentation Materials. To the maximum extent perm itted by law, the Company , its related bodies corporate (as that term is def ined in the
Corporations Act 2001 (Commonwealth of Australia)and the of f icers, directors, employ ees, adv isers and agents of those entities do not accept any responsibility or liability including, without limitation, any liability
arising f rom f ault or negligence on the part of any person, f or any loss arising f rom the use of the Presentation Materials or its contents or otherwise arising in connection with it.

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Artificial Intelligence For Multi-Mission C-UxS

DroneShield Limited (ASX:DRO)

Investor Presentation

Oleg Vornik
CEO and Managing Director
[email protected]
+61 2 9995 7280