Key Highlights

• Boresight is building a factory in Huntsville, Alabama.

• Its target drones are used to train forces against hostile drones.

• Demand is coming from United States military customers.

• The company supplies attritable aerial target drones.

Boresight (ASX:BST) is building a factory in Huntsville, Alabama because its core product, low-cost target drones used to train forces against hostile drones, is finding demand from United States military buyers. The expansion comes while the company, listed only since 10 June 2026, is spending cash faster than it is collecting it.

What Boresight makes

Boresight (ASX:BST) supplies attritable aerial target drones, mission-planning software and ground control stations for counter-uncrewed aircraft system (counter-UAS) Training and testing. "Attritable" means the drones are cheap enough to be shot at and lost.

Its main products are the BQ-400 and the BQ-750 Block 2, which was released in July 2026. The company has teams in Australia, the US and Europe, and the ASX classifies it as Industrials, in Capital Goods.

Latest results

For the year to 30 June 2026 Revenue was A$6.38 million, up 46.3 per cent from A$4.36 million. The loss after tax attributable to owners was A$6.66 million, compared with A$0.72 million a year earlier.

Most of that widening came from a non-cash share-based payment expense of A$3.60 million. Excluding it, the underlying operational loss was A$3.06 million.

Net Assets rose to A$7.82 million and net tangible assets to 3.69 cents per share, from 0.20 cents, reflecting the IPO proceeds.

Revenue is concentrated. Four customers accounted for 36, 23, 17 and 13 per cent of FY26 revenue, so losing or delaying one order would be noticeable.

Orders and the US factory

On 6 September 2026 Boresight (ASX:BST) announced a repeat order from a North American military customer, placed through its US reseller Mountain Horse Solutions. The purchase order is worth US$383,275, or about A$532,000, for more than 340 BQ-400 drones, ground control stations and an operator training course for the US National Training Center at Fort Irwin. It is about three times the end user's previous order.

The Huntsville Lease was announced on 19 July 2026. The 812 square metre Facility has initial capacity of more than 5,000 BQ-400 drones a year. In the September 2026 quarter Boresight (ASX:BST) reported its 6,300th BQ-400 manufactured and delivered, and said it had delivered 120 BQ-400s to the Australian Defence Force for counter-UAS training.

The cash picture

Its quarterly cash-flow report for the three months to 30 September 2026, released on 19 October 2026, showed customer receipts of about A$1.1 million and net operating cash outflow of A$2.28 million. Unaudited quarterly revenue was about A$829,000, and receipts fell from A$2.04 million in the June quarter. Cash fell to A$5.39 million. Inventory rose to A$1.45 million from A$0.51 million as it bought stock ahead of deliveries.

The report's own estimate was about 2.4 quarters of funding at the current rate of spending.

Risks and milestones

That runway is the central risk. Unless receipts rise or new capital is raised, the company's capacity to fund the US build-out is limited, and any raising could dilute existing holders. Options over 34.2 million shares at A$0.25 are also outstanding.

Boresight (ASX:BST) has registered as a supplier to Lockheed Martin through the Exostar portal, but no contract value has been disclosed. Defence procurement can be lumpy, and Boresight depends on resellers and on a handful of government customers.

Management's priorities for the December 2026 quarter include delivering the Fort Irwin order, completing the high-volume Huntsville facility by the end of that quarter, supplying BQ-750 Block 2 drones for an international counter-UAS activity, and finishing design for manufacture of the BF-100 fixed-wing target. Delivery and payment timing on those items will show whether the funding gap narrows.