Drone killer DroneShield expects to spend $1.6 million this quarter — despite having slightly more than half that in the bank at the end of September.

DroneShield (ASX:DRO) makes anti-drone devices such as the DroneGun — a rifle-style, battery-powered product designed to knock out enemy drone models by interfering with their electronics.

The company posted its September quarterly today, which revealed an operating cash burn of $937,000 for the period, leaving $855,428 in the bank. The business expects to spend $1.6 million this quarter.

Quarterly customer receipts fell 30 per cent to $296,000 — down from $432,000 in the previous quarter.

However a $3.2 million order from the Middle East for 70 DroneGuns — the company’s biggest to date — is expected in the bank in the next six months.

Meantime DroneShield has today shored up funding with a $1.9 million credit facility from an affiliate of its majority shareholder, Long Hill Capital.

The company said it “elected to put the facility in place in order to provide it with additional working capital, should such working capital be needed, in order to capitalise on the company’s sales pipeline”.

The cash at bank also does not include potential proceeds from an ongoing share purchase plan, which closes tomorrow.

In June the ASX sent Droneshield a note expressing concern about whether it would have “sufficient cash to continue funding its operations”. At the time, DroneShield had $2.1m in the bank and expected to spend $1.7m.

DroneShield shares (ASX:DRO) over the past year.

DroneShield told the ASX it did not take into account any customer receipts.

DroneShield had a few wins in the September quarter.

It got the go-ahead to sell DroneGuns to an undisclosed Middle Eastern country, was invited by NATO to participate in a training exercise and also received an order from an undisclosed Central American country.

Meanwhile, another company in the defence sector, Department 13 (ASX:D13) has increased its cash position by 223 per cent.

At the end of September it had $2.4 million in the bank and increased customer receipts by 52 per cent to $202k.

DroneShield shares were flat on the news at 16c, while Department 13 shares fell 12 per cent to 4.5c.