HTG: Signs MoU in Ukraine to test its comms strengthening tech in “unmanned aerial systems (drones), ground robotic platforms and AI-enabled systems” - on real battlefield.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 61,250,000 HTG Shares. The Company has been engaged by HTG to share our commentary on the progress of our Investment in HTG over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

10 days ago, the EU launched an EU-Ukraine "Drone Deal" worth ~€1BN.

(source)

Meaning the EU is going to spend €1BN on drones (and drone tech) tested and in use in Ukraine...

Makes sense the EU is going so hard on drones given Ukraine's development and use of small drones and remotely operated vehicles turned the direction of the war in their favour.

More than 80% of strikes in Ukraine are now being carried out by drones (source)

...and every military around the world is watching and rethinking their strategies and procurement decisions.

With the rise of comms reliant small drones and remote operated vehicles on the battlefield - comms jamming has become a key tactic.

Resilient communications connections have become mission critical.

Here is where comms is critical on the modern battlefield:

Our Investment Harvest Technology Group (ASX:HTG)’s “communication resilience” tech keeps communication links open even in the most degraded network environments.

HTG is already generating revenue from selling its commercially proven tech in civilian applications like shipping and oil & gas - where stable comms in remote areas with little to no internet is critical.

We Invested in HTG because we like its plan to adapt its commercially proven tech to military applications, to help solve a new and urgent battlefield problem.

Where resilient comms are the difference between winning and losing a battle...

HTG reminds us of ASX listed Elsight - after years of selling its own comms resilience tech in the civilian commercial space, 18 months ago it pivoted to defence and the share price went up 30x since (after a string of military deals).

(the past performance of Elsight is not an indicator of the future performance of HTG)

🚨THIS MORNING:

HTG signed its first non-binding MoU in Ukraine...

(Where the war is in its 5th year and has become the birthing ground for battle ready small, remote operated drones)

Partnering with a Ukrainian technology and research organisation to look at ways to integrate HTG’s tech into drones, ground robots and de-mining platforms.

AND the big one - to field test it under real electronic warfare conditions.

(source)

The key takeaway from today's announcement is this:

“Any test reports and expert conclusions that come out of this work can be used by HTG to demonstrate the reliability of its systems to defence and government customers across NATO and AUKUS countries”

(keep in mind this is a non-binding MoU - so we would need to see it turn binding before any of the real work begins)

IF successful, we think it could open the door to the NATO and AUKUS contracts...

Ukraine's massive deployment of uncrewed systems has forced a global military revolution.

Militaries worldwide are shifting spending toward massive drone swarms, localised air defenses, and electronic warfare (where stable comms are critical).

The use of FPV (First-Person View) drones that cost less than $1,000 to destroy multimillion-dollar assets has upended traditional cost-exchange calculations in defense planning

After the US-Iran war the US Pentagon announced a US$54BN pivot “toward AI-powered war” - funding going directly into “autonomous drones” and other unmanned vehicles.

(source)

And then BREAKING NEWS just 12 hours ago - Ukraine agreed to export drones to the US as part of that plan...

(So the test in Ukraine, sell across the rest of the world thing is happening)

(source)

European allies are investing directly in Ukrainian drone production know-how to scale up manufacturing.

For example, the LEAP (Low-Cost Effectors & Autonomous Platforms) initiative by France, Germany, Italy, Poland, and the U.K. which is focussed on mass-producing autonomous drones and cheap air defence systems

Ukraine has slowly transitioned from importing military equipment to becoming an exporter of battle proven tech...

Even countries like Saudi Arabia and the UAE are looking to Ukraine for drone expertise:

(source)

Why?

Because Ukraine has become a sort of battlefield testing ground for Western defence tech.

Last month Ukraine's government approved international grant programs worth over €100M - including cooperation frameworks with NATO, Norway, France, Germany and Lithuania. (source)

And Brave1 (a Ukraine government backed program) now runs a "Test in Ukraine" platform where foreign makers of UAVs, ground robots, electronic warfare companies can officially test their products in the country. (source)

Whatever survives Ukraine's battlefields is “validated” ready for purchasing by other countries' militaries.

(HTG is also going for Brave1 accreditation too) (source - page 15 of the presentation)

So HTG will have two pathways in Ukraine to get its tech “battlefield validated” across three different areas:

1. Hardware integration - putting HTG’s tech onto unmanned aerial and ground robots.
   
2. Software and AI integration - combining HTG’s video/telemetry tech with its partners.
   
3. Command-and-control integration - building HTG’s tech into ground control stations so robots can be operated from a long distance.

Basically everything needed to make this happen - HTG’s tech on all the robots, and then in the command and control centre too:

This is the first agreement from HTG’s new defence focused management team

Over the last four months HTG has:

• Completed an independent Defence Strategy Review, then a US market entry assessment supporting a US defence opportunity
  
• Appointed Jeff Sengelman as Executive Chairman - a retired 2-star major general who ran Australian Special Forces
  
• Appointed Veronica Bainton as CEO - ex-Raytheon Australia (the local arm of US defence contractor RTX), ex-Optus Satellite & Space Systems
  
• Expanded its US and European defence teams under "Plan Consilience" (source)
  
• HTG appointed Dr Oleksandra Molloy as its Defence Strategic Advisor for Europe.

(Dr Molloy is an Australian-Ukrainian drone warfare expert who wrote a two-part study on drones in the Ukraine war for the Australian Army Research Centre)

And only 6 weeks into her role as CEO - Veronica has delivered her first partnership looking to take HTG’s tech and apply it to the defence space.

All we need now is for HTG’s tech to be validated in Ukraine and then that getting turned into partnerships/sales all over the world.

Similar to what ASX peer Elsight did...

HTG reminds us a lot of $1.4BN Elsight

We think Elsight Ltd (ASX: ELS) is a good measure of “what success could look like” for HTG.

(Elsight’s success verifies the demand for military/defence comms resilience tech)

Elsight plays in a similar (but slightly different) field to HTG.

Elsight owns a drone connectivity platform that lets unmanned aircraft stay connected across LTE, 5G and satellite networks simultaneously.

Elsight’s tech works in drones and unmanned systems basically as a smart modem - taking whatever connection is available at any given time and then combining them into a single, more reliable connection.

So Elsight's strategy is essentially: "Use MORE networks to guarantee a connection."

HTG’s tech is more about bandwidth optimisation/compression technology - squeezing high-quality video, audio and data through a single weak, slow or unstable connection.

HTG’s tech is more so designed for when networks are being jammed or contested (like they are on battlefields).

So HTG's strategy is essentially: "Use LESS bandwidth so even one single bad connection works... on ANY type of connection that happens to be available"

Both spent years deploying and refining their tech in the civilian commercial space - now both are applying their tech to a new and urgent battlefield problem.

(interestingly, HTG’s and Elsight’s tech are complementary and looks like they can be used together/ combined)

Only 12 months ago, ELS was still trading at ~30c with a pretty modest $2.1M in revenues squeezed out of the commercial sector for FY24.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Then in March 2025 Elsight signed what at the time looked like a pretty small deal... with a European defence manufacturer for $475k. (source)

Within 16 months, that small deal snowballed into 10s of millions of dollars in deals across North America and Europe.

Elsight has now in the last 12 months had:

• Lockheed Martin integrated its Halo tech into its Indago4 quadcopter.
  
• Northrop Grumman brought Elsight into its FedTech Accelerator (8 picked from 223 global applicants).
  
• The US Department of War's Drone Dominance Program added Elsight to its engagement list.
  
• European defence drone customer wrote ~A$32M of contracts in 2025 (a 600% jump on Elsight's entire FY24 revenue).

Now, Elsight’s market cap is ~$1.4BN and its share price at its peak was up almost 30x.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We are Invested in HTG to see it try to execute on a similar playbook.

And hopefully, we get to live deals a lot quicker than anyone thinks, given HTG’s tech is TRL 9 certified (the highest US Department of Defence readiness level - proven in real operations), with 500,000+ operational hours...

We want to see HTG land contracts or partnerships with customers in the defence or telecom space.

The holy grail would be the Pentagon OR someone like SpaceX (Starlink).

IF HTG can embed its tech into Western defence programs (drones, surface vessels, submarines) then we think the market could start to believe in the defence pivot story for the business.

...and at that point, HTG’s technology enters stage 3 of the tech “hockey stick growth” trajectory - which we as Investors in these types of businesses hope opens up more deals (stage 4):

Here's where we think those deals could come from:

1. Converting existing trials - the Five Eyes customer (60 units to Guerrilla Technologies), the NATO contractor, the US contractor testing HTG’s tech in its drone program, the Japanese Self-Defence Force trial - into larger, repeat, paid contracts.
   
2. The US market - an independent US advisory firm concluded HTG has "a credible and differentiated opportunity" in defence applications where comms resilience is a requirement.
   
3. Ukraine, via Brave1 - if accreditation converts into live battlefield deployment that will give HTG a nice way of proving its tech to European (and US) defence contractors.
   
4. The satellite operators (across the US, Europe and Asia Pacific) - Think satellite operators like Starlink (SpaceX).

8 reasons why we are Invested in HTG

Here are the 8 reasons we Invested in HTG, exactly as we set them out in our launch note last week (with two updates after today’s news).

1. HTG’s tech enables remotely operated and unmanned drones, robots, boats, submarines and vehicles

HTG’s tech connects video and audio streams across remotely operated and unmanned drones, robots, boats, submarines, vehicles and infantry - anything that needs stable comms to be effective in contested and degraded communication channels.

(basically a way of bulletproofing network connectivity)

HTG’s tech can also be applied to other remote locations like offshore oil rigs, facilities in the middle of deserts and in parts of the world where connectivity is limited.

2. We are backing the defence focused team

HTG’s Executive Chairman is Jeff Sengelman - a retired 2-star major general who ran Australian Special Forces operations for years.

We think that Jeff’s networks in the highest levels of the AUKUS, Five Eyes and the NATO communications procurement stack can help generate new sales momentum in the defence industry.

We also think HTG’s recent strategic advisor appointment, Veronica Bainton, has the right set of expertise - Ex-Optus Satellite & Space Systems and Raytheon Australia (big US defence contractor).

🚨 UPDATE:

Veronica Bainton is now CEO.

3. Tired, stale shareholder base means opportunity for new Investors like us

Some of our best tech Investments have been companies with existing shareholders that are stale and tired given the years of delays landing the transformational “mega deal” that has been around the corner for years:

• We Invested in Oneview Healthcare (ASX: ONE) in March 2021 at 6c per share - at its highest point ONE was up ~858%.
• We Invested in AML3D (ASX: AL3) in June 2024 at 6.4c per share - at its highest point AL3 was up ~431%.

• We Invested in Rocketboots (ASX: ROC) in March 2025 at 8c, at its highest point ROC was up ~513%.

The past performance of ONE, AL3 and ROC is not an indicator of the future performance of HTG.

We think HTG is in a similar position to where those companies were when we first Invested - where there is fatigue in the current shareholder register and the market is pricing the company for the big mega deal never landing.

4. HTG’s tech has >500,000 operational hours and is TRL 9 certified.

HTG has logged >500,000 operational hours in commercial sectors already - shipping, oil and gas and even part of a NATO trial.

HTG’s tech has been used by companies the size of US$642BN Exxon Mobil. (source)

“Technology Readiness Level 9” (TRL 9) certified is the highest possible US Department of Defence technology readiness level.

It means HTG’s tech is actually deployed and proven in operations rather than "tested in a lab".

HTG’s tech has also been independently verified for defence-grade deployment with NATO-linked field testing and US contractor integration underway.

5. Full focus moving to defence

On the 2nd of April 2026 HTG released the outcome of an independent “Defence Strategy Review”. (source)

Straight after, HTG also commissioned an independent third-party technical validation of its technology with a "respected defence and aerospace advisory group" active across US and allied defence ecosystems.

Then on the 14th of April 2026, HTG announced the "Independent Assessment Supports US Defence Opportunity". (source)

We think this marks HTG’s full pivot to focusing its business on defence.

6. HTG already has defence market traction

HTG has already had:

• Secured multiple orders from a significant Five Eyes defence customer (source)(source) (The Five Eyes is a premier intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States) for intelligence, surveillance and reconnaissance applications, including the deployment of 60 units to military robotics company Guerrilla Technologies. (source)
  
• Supplied telemedicine remote kits to the European Union Defence Force (EUDF) for naval fleet use. (source)
• Orders from a major NATO contractor following successful field trials. (source)
  
• A US defence contractor is testing HTG’s technology within its drone product development program. (source)
  
• Trialled its tech with drones in the Japanese Self-Defence Force (source), and

AND is currently going for Brave1 accreditation, which is Ukraine's Government-backed defence-tech cluster (testing foreign vendors in real battlefield conditions) - think of it like Amazon for deliveries but it delivers pre-approved battle tech to locations in a battlefield.

7. ASX listed peer has gone from 30c to $7 per share on defence pivot

A similar story to HTG that’s done very well recently is Elsight Limited (ASX: ELS).

Elsight plays in a similar (but slightly different) field to HTG - it owns a drone connectivity platform that lets unmanned aircraft stay connected across LTE, 5G and satellite networks simultaneously.

Over the last 12 months Elsight’s business has transformed from a pivot to defence - integrating its tech with Lockheed Martin, Northrop Grumman, The US Department of War's Drone Dominance Program and winning orders from inside Europe.

Now, Elsight’s market cap is ~$1.3BN and its share price at its peak was up almost 20x.

(From ~30c to a high of $7 off the back of its defence pivot)

We think HTG has similar potential if it can execute a successful defence pivot too.

The past performance of Elsight is not an indicator of the future performance of HTG.

🚨 UPDATE:

Elsight’s market cap is now ~$1.4BN, with the share price having been over $8.50

8. Small $18M market cap - leveraged to a re-rate

HTG is capped at ~$18M, just raised $6.5M and has ~$13M in convertible notes outstanding.

So its enterprise value is ~$24M.

We think HTG’s share price would have been multiples of where it is today IF the capital structure didn't have a convertible note overhang.

We see those notes as one of the reasons HTG is investable at this market cap.

Strip them away, and then we think the underlying business should be worth multiples of where it trades today.

We think that IF HTG lands a defence contract big enough to get the share price moving, then the note overhang becomes less of a problem and the company’s share price is allowed to move higher on good news.

🚨 UPDATE:

At last close, on a fully diluted basis (allowing for the shares yet to be issued from the recent placement) HTG's market cap is now ~$19.4M at 1.0c.

With the convertible notes added on top, HTG’s enterprise value is ~$32M.

Ultimately, we are hoping a combination of the reasons above will lead to HTG achieving our Big Bet, which is as follows:

Our HTG Big Bet:

"HTG re-rates to a $200M+ market cap by embedding Nodestream into one or more major Western defence programs, attracting strategic interest from a defence contractor or satellite operator"

NOTE: our "Big Bet" is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including technology adoption risk, defence procurement timing risk, dilution risk, and competition risk - just some of which we list in our HTG Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What we want to see next from HTG?

🔄 Land a major US or NATO defence contract

• ✅ CEO hire (done - Veronica Bainton appointed)
• 🔄 CFO hire
• 🔄 Convert the existing NATO defence-force trial into a paid contract
• 🔲 Sign a follow-on order with the existing Five-Eyes customer at a materially larger size
• 🔲 Contract with US defence contractors
• 🔲 Contract with EU defence contractors

🔄 Brave1 accreditation & Ukraine live deployment

• 🔄 Secure Brave1 accreditation
• 🔄 (NEW - via today's MOU) Establish a direct Ukrainian testing partnership
• 🔄 Convert the MOU into a binding agreement (with export approvals in place)
• 🔲 Deploy HTG's tech into a live Ukrainian defence-tech use case
• 🔲 Publish independent benchmarking results from Brave1 testing

Every box ticked here is match footage for the scouts in NATO and AUKUS procurement.

What could go wrong?

The two key risks for HTG over the short-medium term is “capital structure risk” and “defence procurement timing risk”.

Capital structure risk

HTG has ~$12.8M in convertible notes outstanding with 239M options on issue (with a weighted average share price of ~2.86c per share).

IF HTG’s market cap doesn’t re-rate to a level high enough to absorb/pay off its debts, existing shareholders could be seriously diluted.

On the other hand the 239M options mean there is also a weight on HTG’s share price when those options get in the money - so there will be a period of churn around ~3c per share.

IF the balance sheet/capital structure isn’t cleaned up through execution + cashflows then it could be a drag on HTG’s share price.

Source: “What could go wrong” - HTG Investment Memo 27 May 2026

Defence procurement timing risk

Even when the defence customer is willing to buy, defence procurement cycles are notoriously slow.

NDAA compliance, Defence Federal Acquisition Regulation Supplement (DFARS), security clearances - any of these can add 6-18 months.

HTG's path to revenue depends on procurement clocks that HTG does not control.

Source: “What could go wrong” - HTG Investment Memo 27 May 2026

Other risks

Like any small-cap defence technology company there are other risks worth identifying.

Today’s Ukrainian agreement is currently a non-binding MoU, meaning there is no guarantee it will progress into a binding contract, generate actual revenue, or result in broader NATO and AUKUS procurement.

Field testing under active electronic warfare conditions in Ukraine carries operational risk, as extreme signal jamming could expose technical flaws or bandwidth limitations in the Nodestream technology.

Deploying defence technology internationally requires navigating complex regulatory frameworks and securing Australian defence export approvals, which could create unforeseen delays.

Well-capitalised defence contractors and agile technology competitors may rapidly develop alternative comms-resilience tools, potentially squeezing HTG's market opportunity.

Expanding international sales operations across the US and Europe requires substantial ongoing expenditure, which could increase cash burn and lead to shareholder dilution if defence sales cycles take longer than expected to land.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our HTG Investment Memo

You can read our HTG Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our HTG Investment Memo covers:

• What does HTG do?
• The macro theme for HTG
• Our HTG Big Bet
• What we want to see HTG achieve
• Why we are Invested in HTG
• The key risks to our Investment Thesis
• Our Investment Plan