Okay, everybody, good morning. It is 8:00 A.M. here in Canberra. This morning, we've made two announcements on the Australian Stock Exchange this week, one on Monday and one on Wednesday. On the Monday announcement, we covered a new order that we received for AUD 20 million, and the Wednesday announcement related to the acquisition of the interceptor drone business. Today's call is to provide you a little bit more information about these and just an update on the high-energy laser landscape. Andreas is going to talk through some materials. We have some slides that will shortly be filed on the Australian Stock Exchange. They will appear on the screen, and they'll be distributed just after the call with the filing on the ASX. Andreas, I'm going to hand over to you.
We will talk through some slides, and then there will be Q&A available at the end. Please feel free to put questions into the chat box. David, who's on the call from our team, will help moderate the questions at the end. With that, Andreas, over to you.
Thank you very much, Clive. My name is Andreas Schwer, Managing Director and Chief Executive Officer of Electro Optic Systems. Today, we have a very remarkable day in the history of the company. It is very remarkable because we did an acquisition of a product Clive was mentioning, an interceptor drone product, which is extremely strategic for us and which fills up a gap in our product portfolio, which will become of extreme importance in the future. Why that? It's not only because of the range gap, it's because of the capability of our type of interceptor drone, which is helping our clients to defeat large quantities of drones, drone attacks in large swarms. That is something which is today the biggest kind of threat scenario where you need to have a highly versatile multi-layer defense system.
There are only a few effectors on the market which could cope with this kind of mass attack problem. The laser weapon is one of that. Any other kind of system, whether it's rockets, missiles, or cannons, has limitations in terms of the number of kills per minute. Our type of interceptor drone is unique because you can simply launch as many as you want at the same second, at the same time. I will come back to all those arguments in a minute. Just have a review quickly on our kind of product focus. EOS is focusing on hard kill solutions. We have in our portfolio now remote weapon systems. We are the world market leader in cannon-based air defense with our benchmark system, which is called Slinger. We have the high-energy laser weapon in our portfolio.
We only started recently with the commercialization, and we have had recently the first announcement of the world's first 100 kW sale, and several more to come over the next months and years in the subject. We have, obviously, in our multipurpose remote weapon system platforms, also the opportunity to integrate 70 millimeter rocket systems, which are also quite affordable and quite effective over long ranges. Now we are adding to this the interceptor drones. Those drones are launched from ground and flying into the attacking drones and killing them by a hard kill. That is very interesting. There are multiple options on the market from different vendors. We believe that we have acquired with this particular kind of design one of the leading ones, because they are optimum in terms of cost and efficiency.
I will tell you in the next few minutes why we are absolutely sure that this is a big differentiator in the marketplace. You can see we have a broad portfolio. There is nobody on the market with this kind of broad portfolio, and that gives us the confidence why EOS will become the leading anti-drone company worldwide. I think we are on a good track, and we will show you over the next months and years that we will develop into this position to be undisputed the leader in this domain. Please move on. Our interceptor, how does it differentiate? Our interceptor is a high-speed, high-agility, and a fully autonomous type of interceptor. Why is high speed required?
High speed is required in order to be able to shoot down drones which are flying at high speed, not only class one drones, not only quadricopters, but even Shahid type of drones flying also at a similar level of speed. With 290 km per hour, our drone belongs to the absolute fastest flying objects. By that, we have the highest probability of kills against fast-moving objects. We have a high agility. Why do we have high agility? Our drones are navigated and controlled by AI, embedded AI software on the drone, which allows you to predict movement patterns, dynamic patterns of the targets. With this kind of prediction, being able to have a higher kill rate and also a much higher range than most of the other systems. We are offering this kind of product in two versions: a medium range and a short range.
The short range is very small, with 30 centimeters of wingspan, which you can easily integrate on the side arms, on launching tubes, on remote weapon stations. The medium range one has 70 centimeters of diameter and a range of five, maybe even more kilometers. It is quite a long-range type of weapon system. It comes in our system at a very low price, very low recurring price. Our target is to offer those kinds of systems to the market for less than $10,000 per piece. Just for comparison, some of our competitors or most of our competitors with similar type of attack drones are offering the system to the market for $50,000-$60,000 per piece. We are much more affordable. By that, being able to defeat swarms at very low cost. The system is battery-driven. There is no kind of fuel on board.
The kill mode is hard kill by impact. We have a titanium nose, and by the sheer kinetic power, it is destroying its target. If it is a small target, it can fly on, and you can hit even a second or third target. If it is a large target like a Shahid drone, it will destruct also itself. There is no warhead included, but optionally, we can include a high-explosive fragmentation warhead, if you want, with a proximity fuse, allowing us to have a diameter of kill or kill zone of more than 10 meters in diameter. In its basic version, it has no chemicals on board, no fuel, no explosives. By that, it is easy in terms of any kind of safety and security mechanism to handle on ground. That is also a very significant differentiator. This is our product, how it looks like. Let's move on.
We have two versions. Again, we have the short range with one to two kilometers and the long range or medium range with five kilometers. The medium range can not only kill one class one and two UAVs. We also believe that we can kill class three UAVs if they are not flying at maximum speed. We believe that this is something which will make a difference because most of the interceptors can only kill small class one drones. One aspect which is extremely important, which I didn't mention before, is our system is operated in a fire-and-forget mode. You do not need to have an operator which is connected with some goggles on the eyes, connected to the drones, and is leading or guiding the drone into its target. That's not required here. We can do that optionally, but the drone is fired.
It's locked on the target by the command and control system. Once it's fired, you forget about it. You can concentrate on other items, and it's finding its way autonomously into the target. Why is that important? It's important because you don't need 100 operators to operate 100 interceptor drones to fly into 100 attacking drones. You just need one operator, and the fleet will operate by itself. That is a key differentiator in the future to be very effective in mass attacks. It has, again, low collateral damage potential because there is no explosive on board, no chemical, no nothing. You can use those kinds of drones in any kind of non-militarized zone, in civil, in urban areas, or around airports. That's also an important factor that EOS now becomes also able to better equip with anti-drone systems, civil installations in the future.
It's an absolutely reduced type of product with a very, very low cost per kill. Next one. I will show you over the next few slides how this thing is operating. You can see here on ground some launch boxes. The systems will be launched in a vertical way out of those boxes. You can install as many boxes as you want. We expect that an airport in the future will be equipped with between 50 and 100 of those drones. The investment per airport is around about AUD 1 million. That means AUD 1 million of investment of CapEx for critical infrastructure. Each country has lists of identified critical infrastructures in the range of three-500.
That means per country, we have a kind of sales potential of EUR 300 million-EUR 500 million or $300 million-$500 million, roughly, to give you an impression of what the market size is for this type of product. It is launched through those kinds of boxes. Let's move on. In a second. You see they are coming in a vertical way out of the boxes. Again, fire and forget. You do not need to be online with them anymore. They are fully autonomous. They acquire the targets, the targets which have been instructed to them with the coordinates when they are launched. Thanks to their infrared seeker head and thanks to their AI imaging and onboard intelligence, they are able to identify their target, again, to predict their movement patterns and to directly fly into the targets. Let's move on. I mentioned fire and forget.
Again, the range is about five km in terms of altitude. We are sure that we can make at least 2 km of altitude. That is the kind of ceiling below which most of the drones are operating today. Again, the speed of 290 km per hour is almost unmatched in this type of market and makes a big difference in the future. Please move on. In the terminal phase, obviously, we are flying into the target. It's either one-on-one or if the client decides to have a warhead, an explosive warhead in it with a proximity fuse, we only need to get in the kind of vicinity of five-six m to the target, and that's enough to kill the drone.
That is the next stage, but we believe most of the clients will go for the standard version with a normal kind of titanium nose and with a kinetic impact one by one, hard kill. Okay. Depending on the target, our drone, the interceptor drone, might continue its flight, its operation, and can go against a second or a third target. If the target is a larger drone, a class two drone, we expect that in most of the cases, our drone will be destroyed as well. We will lose it, and it is designed for that particular purpose. That is the reason why we try to keep the cost very low. With less than AUD 10,000 sales price, we are almost unmatched in the market for this type of interceptor drone. There is nobody being able to offer hard kill impact drones at this price level.
Let's talk about intellectual property. There was one key reason why we've decided to acquire this particular product. It comes not only as a piece of hardware. It comes with very high sophisticated software, software with, again, libraries, libraries of drones, catalogs, which have not only visible and infrared images of all the kinds of drones being operated on the market, but also acoustic and electromagnetic libraries. With all those libraries and with our AI software, which is embedded in this very small onboard computer system, we are able to achieve a kind of tracking, a kind of detection, and a kind of hit rate, which is unmatched in the market. All that is proprietary with sensor fusion, target classification capabilities. We are probably the leading edge in this kind of upcoming market segment. There are only very few competitors on the market.
Most of the competitors are operating interceptor drones, which are kind of quadricopter flying at very low speed. Most of them are using a kind of net in order to capture the target. Only very few of them are able to impact the target and to kill it by impact because of the minimum speed. We can do that because of our 290 km per hour maximum speed. The hardware is very sophisticated. It is a titanium nose. We have a composite airframe. It is extremely lightweight. It is a very clever architecture. That is allowing us to keep the production cost extremely low, lower than AUD 10,000 if ordered in larger quantities. Let's move on.
I would like to hand over to Clive to give you some aspects of the transaction summary and to explain to you why I believe that from a commercial perspective, this deal was really highly attractive to EOS.
Yeah, thanks, Andreas. A couple of comments. We have said previously that we are looking for the right kind of acquisition. This is an interceptor, but it's also quite heavy on software. It uses a lot of software and AI to make it very effective. We have said that we're going to use a disciplined approach when we assess acquisitions, and that's what we've done here. We believe this is a very low-cost acquisition for what it is. There are advanced technologies like this in defense that are changing hands for relatively high prices.
We wanted to find something that was at the appropriate stage of development and had the right investment characteristics. We think it's a good size. The business we're buying is based in the U.K. The total investment is just under about AUD 10 million. We expect a further 12-24 months of development. This product is an advanced prototype at this time. It is flying, and it is in demonstrations. The business has a very significant demonstration it's doing next month in the United States under some customer-funded work that it's been doing. We are very impressed with the technology that we've seen. We've assessed this opportunity as much faster and lower risk than the option to develop this in-house.
We see that we may invest as much as AUD 10 million over the next three years or so in this product, although it will be significantly less than that if we can secure the next rounds of customer funding that this business has been working on. We think that's a fairly modest investment with AUD 10 million upfront and a bit more potentially over the next two to three years. The cash will come from EOS existing cash reserves. There is no borrowing or need for funding in relation to this. The transaction has been signed, and it will complete following customary approvals and conditions. In terms of revenue, we're not looking for any revenue from this, obviously, in 2025, but years really out. In 2026, there is the possibility for some revenue from customer development funding.
We think commercial launch with meaningful sales is more likely to be in 2027, although naturally, we are aiming a little bit earlier than that in-house. We do see the launch pattern for this as being similar to some of our more recent product launches. Our Slinger product was launched in 2023 and has been enormously successful with small batch initial orders and is well on its way to a rapid growth curve. The high-energy laser contract that we announced took a significant amount of time to negotiate and is now being commercialized. We see this piece of this opportunity as something that EOS is quite good at, is commercializing advanced technology, selling into militaries. In this case, we expect to sell into the dual-use market with civil application, as Andreas said. I am going to hand back to Andreas just now.
We're now going to talk about our other opportunities as well, the Slinger and high-energy laser area. Andreas will touch on these. We will come back to questions at the end. If you have questions, please put them in the chat box, and David will moderate at the end. Thank you, Andreas.
Thanks, Clive. One point before we move into Slinger. Clive was mentioning this is a U.K.-based business. What does it mean for EOS? It means that it ticks also another box. We told you that we want to target and we want to strengthen our footprint and position in Europe. Europe means predominantly in some core countries like U.K., France, Germany, maybe Poland. Here we can tick the U.K. box.
We will use this entity in the U.K. to become EOS U.K. and to also do other businesses, to our other business lines activities in the U.K. over the short and medium term. Also from that perspective, it was highly attractive to us. Let's talk now a little bit about Slinger. I mean, you have heard a lot in the past. Slinger is moving forward. Slinger is becoming more and more the kind of baseline in the market. Obviously, procurement programs coming up following the normal type of pattern, which is slow and coming in smaller and medium-sized quantities before customers go into large volume orders. We have here announced this week one order for AUD 20 million, which is one of those customers ordering the next batch and testing it and then hopefully going also into large quantity orders.
It's extremely important because it's another client using Slinger in its fleet. That is just one further success. We have ongoing discussions with various clients outside and inside Europe. Most of them follow this kind of procurement pattern. We hopefully will be able in the next future to announce further sales for Slingers in the marketplace. Let's move on. This is our 100-kW Apollo laser weapon system. Now we can talk only about the client. In the beginning, I was only allowed to say it's a NATO client. It is the Netherlands. The Netherlands government has decided to play a leading role, if not the leading role in the European future laser weapon business because they believe this is a strategic niche, which will become a very big business in the future. The Dutch industry is not in the forefront in any military technology.
Here, they believe they could become the leading nation in the laser weapon business. They have decided after going into a kind of worldwide check on who can deliver this kind of capability, they have selected finally to go with EOS, which is a very great success for us. We will become the partner for also future acquisition programs. The first sales was for EUR 71 million. It included lots of non-recurrings, as I was mentioning in previous investor calls. The recurring price for this kind of 100-kW laser weapon system is for low quantities between $45-50 million. If you order in large quantities, it can go down to $25-30 million. It is becoming very affordable. We are in negotiation with a couple of clients. Those negotiations are progressing. Not only for small quantities, some clients want to order in medium and even larger quantities.
We are very optimistic to sell and to sign further contracts in the course of next year. There is not too much competition in the 100-kW class. We have only one competitor in the global market, which is an Israeli company. Based on our hand, we own all the IP, which our competitor does not have. We can sell and we can license and we can transfer IP into any kind of client country to satisfy localization and transfer of IP requirements, which makes it extremely interesting. Laser weapons are also ideal for swarms of drones to defeat them. Why? Because our laser weapon, they have been optimized to kill up to 20, sometimes even 30 drones per minute. This kind of kill rate is unmatched.
Normal kind of launcher platform missiles, rockets, or cannon-based air defense system like our Slinger cannot handle more than four to five drone kills per minute. Here we are then factor five, six higher. You might ask us, why do you now have interceptors, killer drones in your portfolio? We believe in the future, critical infrastructure like an airport might have one or two laser systems. They can kill 50 or 60 drones per minute. If those drones are launched in the vicinity of an airport, you do not have a minute of time, maybe only 10, 20, or 30 seconds. That means the two lasers can only bring down 10, 20 drones. There are still maybe quite a number of drones left over. What to do with that? How to shoot them down? Here our very affordable interceptor drone comes into play.
If an airport has 50 or so installed, they can shoot down 50 drones in one instance. That makes the interceptor drone so important for our kind of hybrid installation. That was the key driver for us to invest very little money into a very strategic business line. Overall, we believe that with a laser weapon, as we are almost the only company in the market, plus the interceptor business, where there is almost nobody with this kind of capability, we will be best positioned to become the leading player in the anti-drone business. On this slide, we have modified it slightly compared to the past. You can see here now the current power levels of different consortia operating on the market or trying to develop something. You can see again the United States being leading in terms of power levels, but very much restricted in terms of export.
We do not bother too much on U.S. competition. Our main competition is from Israel, where we have a company which is working and operating on a 100-kW level. They have shared IPs. Nobody of them in standalone mode can export those kinds of systems. They need to agree all among themselves. It is three companies, and the government needs to say yes. So far, the Israeli government has not allowed any export of IPs or to start a foreign-based production, which we can do. On France, they have just received a 50-kW contract for around €130 million, as I remember. We are in close contact with this consortium.
We are in contact also with the French government, and there is a certain likelihood that they will join us and localize our IP also in France in cooperation with this consortium to become a member of the French laser market in the future. In Germany, we have also approached the German government. You might have read some articles in the press. We have offered for the German Navy our 100-kW system for a fraction of the price a German consortium has asked for. We are optimistic also to have a very competitive position in an upcoming tender in the German market. The German laser market will be by far the biggest one in Europe. In the U.K., a consortium is working on a 50-kW solution. They want to bring the 50-kW to market by 2028. Again, we are already here with 100-kW and more.
We also believe that we have a solid standing in case there's an open tender coming up on the U.K. market. The Chinese competitors are power-wise at the same level, but we know from our clients they are testing it. They have even fielded some Chinese systems. The beam quality is very, very bad. That's the reason why the Saudi Arabian client has taken off service. They have decommissioned the Chinese systems because of bad performance. We hope that in the Middle East, again, where the UAE and Saudi have tested those kinds of Chinese systems, and they're highly disappointed. We believe that in the Middle East, we have a great chance to sell many of our laser weapons in the future. We have the 100-150 kW class ready for production.
We have sold the first unit, and we are negotiating with a client a fully funded development program for a 300-kW version. If we are successful in the acquisition of this program, we will have a 300-kW laser ready for production in about three to four years from now. This will cement our market-leading position because nobody outside the U.S. is working in this power domain. If you get this, this will give us a leading-edge position for at least 10 years. With 300-kW, we do not only have a laser weapon, which is good for anti-drone warfare. With 300-kW, we can have a fully CRAM type of defense system that means we can shoot down rockets, some missiles, artillery shells, and mortars. It is a highly versatile laser system.
I can tell you one of our clients, which was focused in the beginning on a large fleet of 100-kW systems, he already indicated to us in the course of this week's Dubai Airshow that he wants to have the majority of this large volume order he is looking forward. Most of the systems should be 300-kW laser systems. A 300-kW laser system, the acquisition cost of that one is beyond $100 million, to give you an idea of what it means for us revenue-wise. I think we are in an extraordinarily good competitive situation on the laser weapon side. Please move on one slide. We are coming to the outlook. We have a very solid remote weapon system business where we will add one after the other in terms of contracts for Slinger, but also for ground-to-ground remote weapon systems application.
As we mentioned before, we believe that we can triple or quadruple our today's revenue base on weapon stations over the next three to five years. It will be a kind of AUD 400 million- AUD 500 million annual business in that period of time. The bigger change we expect from the high-energy laser weapon business, where we believe that given the competitive edge we have today, we can achieve a kind of market share of around 50% in the non-U.S. market and an annual revenue base of between AUD 1.5 billion and AUD 2 billion in about three to five years from now. We did not touch on space control. Space control is a combination of the application of high-energy laser weapons, the same portfolio we just discussed, with our capability of adaptive optics and the highly sophisticated capability of building high-aperture telescopes.
This is a business which comes much faster than expected because of the U.S. Golden Dome program. We also here got inquiries from various European nations. We have welcomed recently also the leading commanders from all the major European countries in Australia at our facility. We expect another visit from a high-level French delegation in the course of December at our facility. This is coming earlier than expected. We expect the first revenues to come into play by 2027, so much earlier than expected. This business, from a size perspective, I believe it will be larger than the laser weapon business because the space control or space warfare business, with the ability to shoot satellites from ground, will be more decisive, if even more strategic. That will add up on top of the numbers I've given you before.
Again, it comes later into play. Overall, the U.S. is in a very solid position. We have a tremendous market outlook. We will operate our business in a very traditional, conservative, disciplined way. We are extremely aware of the cost situation, and we keep our dollars, our pennies together. As you can see, with this acquisition of the interceptor, we pay only a little bit of money to get a huge quant leap in terms of additional capabilities into the company. That is our basic principle of operation. We will continue like that to invest customer funding like the 300-kW laser weapon development program we are negotiating. It will be fully customer funded. We do not want to use shareholders' money for all those kinds of activities.
We will stick to this kind of principle and only invest in a modest amount, like the AUD 10 million Clive was mentioning before, in the completion of this interceptor business. The big dollars for the big development programs will come from clients or third parties. With this kind of outlook, maybe Clive, you want to add some more points on the financial side, on the commercial side?
Yeah. Look, I think the order book for our business is at the highest level it has been for several years. That is not an accident. We are in an industry that is growing very strongly. We have products that are demanded in the marketplace, and we have now got a sales team in place that is capable of securing orders that generate significant returns. We are going to continue to be disciplined with our capital, as Andreas said.
We are going to continue to execute contracts in a way that is cash flow positive and profitable. We are just going to continue to run the business the way we've been doing it for the last three years and to continue to grow it in a disciplined way. That is all we were going to cover in this presentation. We want to have the facility for questions. If people have got questions, please put them into the chat box. David, do we have any questions?
Yeah. We do have a number of questions. Thanks, Clive. The first question I have is from Tim. He asks, "Do you see a risk of cannibalization on your laser weapon or Slinger market from the interceptor?" I take this question. No, we don't think so because the kind of operation mode is different.
Parties will only use those kinds of interceptor drones if they believe the threat scenario has a significant element of large drone swarm attacks. Otherwise, it will not come into play. We still believe that the laser weapon is indispensable as a cannibalized air defense. At the end, it's the mixture, depending on the threat scenario, depending on the types of drones attacking. If, for example, the threat scenario is characterized by very large drones, the laser weapon is more effective than this interceptor. If you talk about civilian installations, people will tend more towards those types of interceptors. If the threat scenario is driven by small class one or quadricopters, then people will tend more towards those kinds of interceptor drones. It depends case by case. There is little to no cannibalization from our perspective.
That's great. Another technical question.
Michael asks, "Does the interceptor have the ability to return home once it's been deployed?"
Yes. We could program it in a way that it returns back home, but we believe that in most of the cases, the first hit would also mean it's a destruction of the interceptor drone. It is designed and kept low in price in order to do this type of mission. We will see with the first kind of qualification tests in what is the kind of probability of survival. If that is a significant number, we will program them in a way that they return back to the home base. We do not expect that to happen too often.
Great. Baxter asks, "Who do you see as your key competitors in the interceptor space? And how does EOS's interceptor differentiate from these?"
Yeah. I do not want to mention the concrete competitors here.
There are companies from Israel selling their type of systems for AUD 60,000 and more. We are six times cheaper than them. There is a company in Germany who is also in developing. Also, their price is beyond EUR 50,000. It is significantly more expensive than ours. There is a U.S. product which is even more expensive from the market. There are some products which are cheaper, but they are flying at much lower speed. They are quadcopter type of drones and do not show as a kind of competitor to our type of application. We believe they have by far the best value for money proposition for our clients with this product. That was one key driver for our decision to buy this technology because it is quite a unique design.
Great. Clive, perhaps one for you.
Peter asks, "Can you comment on the influence on profitability in the near future regarding this recent news?"
That's a great question. We think the impact on profitability in 2026 will be minor. We do not think this will be significantly accretive or dilutive to margins in 2026. We do think this will open up significant new markets for the company in time. As Andreas said, this is a low collateral damage solution that is very significant in non-military markets and in urban areas. While we do not think this is going to have a significant accretive or dilutive impact to margins in 2026, we see significant absolute growth opportunities in 2027 and 2028. It may also allow us more access to markets that we would not get into for our remote weapon systems and laser weapons as well. It is a comprehensive layered suite of products. Thank you.
Owen asks, "We see that you are broadening your product portfolio. Can you talk through the investment case? For example, how many units are required to get return on your investment? What does the contract profile look like, etc.?"
Yeah. Maybe an example for the interceptor. As Andreas said, the target price is under $10,000 per unit. If one airport wants 100 or 500 of these, that's a revenue basis of AUD 1 million- AUD 5 million. Excuse me. We think the margins on these sales would be quite high, certainly as high as our existing margins, which are 50% gross margin. We think per airport at AUD 1 million- AUD 5 million of revenue at a 50% margin, you do not need very many sales to individual sites in order to achieve a significant return on investment.
We think that this acquisition is a very low-cost investment compared to the cases that some of these projects are changing hands at in the market, particularly in transactions where PE are buying and selling. The vendor is keen to focus on their core business and invest proceeds in their core business. For that reason, we think we've been able to secure a very attractive price for this investment. We think the returns are going to be very compelling over time, particularly as we get into 2027 and 2028.
If I may add some points here, Clive was mentioning AUD 3-5 million or euro of investment of CapEx per critical infrastructure. Again, per country, we have 300-500 pieces of critical infrastructure. You can see that is the market potential per country. It is adding up a lot.
That is the direct benefit, but there's also lots of indirect benefit. Having this kind of effect in our portfolio makes us more the kind of one-stop supplier, the turnkey solution supplier for an integrated counter-UAS system. We believe we get into markets which otherwise you would not be able to access. With the kind of indirect impact, collateral impact, we will be also able to sell more Slingers and to sell more laser weapons into certain markets. That obviously has a huge knock-on effect and additional benefit for the company.
Yeah. David, I might answer the other part of Owen's question. I think in terms of CapEx for manufacturing, we do not envisage investing significant amounts of capital to set up manufacturing this product. There are options for contract manufacture, and there's options for customer funding for manufacture for this product.
I have to say the smart part of this product is the software and the technology, and that's what really creates the value. That exists already. We don't see a big investment burden on that front to answer Owen's question.
There's a follow-up question from Ken on that, basically acknowledging that a large part of the competitive advantage is in the software and the AI models for these interceptor products. The question is, how is EOS planning to continue to stay ahead in this domain?
The opposite one, we acquire a company with some very clever software engineers who have developed those kinds of AI algorithms. We want to use this kind of capacity and capability not only for the interceptor drones, but also to use that kind of software code for our fire control software for remote weapon systems.
That is part of our storyline to develop the next generation weapon stations to have the leading edge in terms of detection, identification, and tracking. There is huge synergy potential. We will have the same kind of algorithms in the interceptors as in the lasers as in the weapon stations. The same kind of software, the same kind of engineering capability behind.
Troy asks, "Are there any earnouts or contingent payments with this recent acquisition, perhaps done for Clive?"
Yeah. No, the total investment here is EUR 5.5 million. There is no earnout. We always want to retain and motivate senior managers, and we will obviously be working to make sure we do that, particularly with the very skilled engineers in this company. There are no earnouts or deferred or contingent consideration.
Troy also asks, "Have militaries globally concluded that kinetic hard kill systems are the ultimate solution to the counter-drone defense, or will soft kills still play a part?"
Maybe I can answer that one. I mean, most of the soft kill companies have now announced they're going to hard kill. Also, a prominent overseas company has announced last week to look into hard kill. I mean, that should answer the questions. If you read into any kind of military report from Ukraine, that is underlining the trend that soft kill is becoming less and less effective in the military context, not in the urban and civil, but in the military context. That's the reason why I believe that this interceptor drone is probably one of the best solutions.
It is considered by most of the militaries as one of the most promising anti-swarm type of effectors if it is cheap. If you look, what does it mean cheap? We got an answer from the German procurement agency. They say our threshold price for purchasing this is EUR 15,000. If it is higher, we do not look at it. If it is lower, it is becoming super attractive. We believe with $10,000 U.S., we are significantly below and should be quite a good offer or value for money for all of our clients. Again, the invitation by the U.S. Army to participate in trials in the U.S., where they have only invited a handful of companies, is underlining the superiority of this type of technology.
Great. Okay. A few just more general questions. Thomas asks, "What is the status of the manufacturing facility for high-energy laser systems?
Is it on track?
It's on track. We will formally inaugurate our new facility in Singapore in the course of the Singapore Airshow beginning of February. You will hear and see that also in the press. We will also publicize some pictures.
Yeah. It's time for an advert, Andreas. When we open the manufacturing facility in Singapore, we will be arranging an investor day in early February, and we will communicate details of that before Christmas. It will be first week of February.
Another just more general question. Ken notes the increasing advances around fiber optic drones on the battlefield. Are there risks of drones being applied with some sort of anti-laser material, for example, reflective?
Yes, that is coming. By the way, we are testing those kinds of things also in our laser test tunnels.
Under contract by some clients, they're coming with drones being coated with very specific materials such as tantalum, for example, or palladium. We do those kinds of tests. I mean, I cannot disclose all the details, but I can tell you it's not helping. It takes a little bit longer, 10%-15% more time to go through all those materials, but not more. It could only have a significant impact if you spray on wall thicknesses which are so thick, so large that the weight of the drone would go up too much and the payload capacity would go down too drastically. Today, there is no way to defeat, no way to protect the drones against lasers.
Great. One more question on the Slinger. Does your Slinger system have the ability to fire rounds that explode on proximity to the drone?
Yes, we have it. We have different types. Our Slinger with a small 30-millimeter round has a so-called proximity round. It is a round which has an infrared seeker head in each bullet, measuring the distance to the target and exploding usually 2 meters ahead of the target, creating this kind of cloud of particles destroying the target. For the R-800, we have so-called programmable ammunition. That means the ammunition is programmed before it leaves the barrel. Because of the laser rangefinder, it understands and it is programmed to explode after a certain period of time, depending on the speed of the round and resulting in the same kind of impact. That means an explosion a few meters ahead of the target. Yes, we have that. It is state of the art. It is common practice in the counter-UAS cannon-based air defense.
Great. Thank you.
Maybe just one or two final questions. Jasper notes this is our first small bolt-on acquisition in our M&A strategy. Are there any other areas or capabilities which we are considering M&A as well?
I'll do that, David. Thank you. I mean, we have said that we're interested in software and AI. We'll continue to think about that. There's always the question whether you do stuff in-house, whether you partner with people, or whether you acquire. I think what we've announced yesterday demonstrates that EOS has a disciplined approach to acquisitions. We've been disciplined in every other aspect of our business for the last three years, and we're going to continue to do that with acquisitions. We are interested in the areas that I've just mentioned.
Thank you. The final question, perhaps for Andreas.
Rheinmetall has just announced that they have a laser system for the German Navy. Why do you believe that yours gets a chance to compete against the German system beside the cost factor?
Because we have a qualified 100-150-class technology available for production and ready to be delivered within two and a half years or two years even after contract signature. Rheinmetall today has 30 kW and has proposed a development to get to 50, maximum 60 kW over a period of time of five years with a risky development program. A development program which costs the German government EUR 502 million to purchase three 50-kW lasers at the end. We have offered to the German Navy three 100-kW systems to be delivered in two and a half years for the price of EUR 150 million.
It is less than half the price for twice the power in less than half the time. We have had talks with the leadership of the German Navy. We have discussions ongoing with the German government. I can tell you that they are all highly interested in our solution, and we expect to get a fair chance in this German contest.
Great. That covers most of the questions. Andreas, would you like to wrap it up for us?
Okay. Again, I want to thank you for the interest in Electro Optic Systems. I think that what we've shown you today is a very good and classical example of how we want to operate our business. We are very pragmatic. We are very cost-concentrated, and we want to keep our dollars together. We invest only if you see a crystal-clear business case.
We have now a strategic portfolio of effectors together which allow us to be seen as a kind of turnkey one-stop-shop provider for most of the clients. We will continue on this track, and our target will remain the same. We will strictly follow our strategy to become the anti-drone company number one and to become the worldwide leading company for space warfare. The connecting element between the two will be our high-energy laser weapon business, where our clear target is to become the number one outside the U.S. as well. We are on a good track, and we will keep you updated on the progress over the next few weeks and months. We want to thank you for your loyalty in the company as an existing investor and your interest to become a future investor. Thanks a lot for being with us.