At the recent AGM, a new round of performance options were approved. These performance options are tied solely to revenue. It is a quite black and white, all or nothing incentive:

"the Company achieves $200 000 000 of revenue or cash receipts in any rolling 12 month period, within 60 months of the date of issue".

This equates to a revenue CAGR of 29% if the goal is achieved in year 5.

The problem with this incentive structure is that it can be gamed. If management is unable to achieve the stated target organically, then they can choose to acquire the revenue, which may go against shareholder interests.

There also is no incentive to ensure the revenue growth of profitable, other than in the valuation of the shares management will subsequently freely acquire.

Going by past incentive schemes, the goal is one that management are confident in achieving, and is well below high level guidance of $300-500 M in revenue by 2029. Interestingly, they guide for 600% revenue growth, and only 50% headcount growth.

Given the enormous impact drones are having on the battlefield, in an increasingly unstable world in this 4th turning era, they unfortunately have strong tailwinds. Droneshield CEO, Oleg Vornik, said today:

"We are ready to deliver a strong 2024, after a record 2023. We are seeing continuing peak demand from our customer base globally,...."

DISC - HELD