Record Q2 Revenues, Cost Reduction Plan Drives Gross Profit & Gross Margins

TORONTO, ON / ACCESSWIRE / August 28, 2023 / Volatus Aerospace Corp. (TSXV:VOL)(OTCQB:VLTTF) ("Volatus" or "the Company"), a global leader in the drone industry, is pleased to announce its financial results for the quarter ending June 30, 2023 ("Q2 2023").

The Company generated revenue of $8,684,991 for the three months ending June 30, 2023.

• Revenue for Q2 2023 increased by 31% over the same quarter last year. The revenue increase in Q2 2023 was driven by scale in services.
• Gross profit for Q2 2023 was $2,960,475 an increase of $1,059,556 over the same period in 2022. The increase in gross profit was due to higher gross margins from the service segment.
• The Company has increased gross margins to 34%, representing an increase of 500 basis points (5%) over the second quarter of 2022.
• Volatus recorded a comprehensive loss of ($2,458,211) in Q2 2023 compared to ($3,003,365) in Q1 2023. The losses were reduced by 18% compared to the previous quarter.
• The Adjusted EBITDA loss for Q2 2023 was ($1,103,532) compared to ($1,602,690) for the previous quarter (Q1 2023). The reduction is due to higher gross margins and reduced expenses.
• Available Working Capital as of June 30, 2023, was $3,541,349.

Q2 Optimization Strategy Drives Efficiencies

Focused on achieving sustainable profitability, management began execution of an optimization strategy through Q2 2023 to be completed in Q3 2023.

"Our Q2 results clearly demonstrate that we're on track for immediate and long-term efficiencies across all our business lines," said Glen Lynch, Volatus Aerospace CEO. "Our team has demonstrated our ability to grow revenues while simultaneously reducing costs. Sustainable profitability is our highest priority and will be achieved by streamlining corporate objectives and maintaining a responsible culture that delivers results to our clients and rewards all our stakeholders."

The consolidation of minority interests and subsidiary operations in its drone services group has resulted in cost reductions of $2.5M or 17% of 2022 operating expenses with additional synergies under review to increase the savings to $3M or 20% of 2022 operating expenses. These cost savings account for 42% of 2022 annual operating cash flows or 58% of H1 2023 (Jan 2023 to June 2023) operating cash flows. The Q2 2023 operating expenses consist of certain one-time costs that will overflow in Q3 2023. However, the majority of the cost optimizations will be completed by the end of Q3 2023.

Notable Operational Accomplishments During the Quarter:

• Continued expansion in the US with strategic acquisition of Sky Scape Industries LLC. Sky Scape Industries uses remote sensing techniques to provide comprehensive inspection services for power utilities, emergency response for oil and gas, and façade inspection services for property management. The company has a strong presence and long-term contracts with utility companies in the US.
• The Company received regulatory approvals to expand operations in wildfire suppression and to operate heavy spray drones for precision agriculture.
  • The Company was granted a special authorization from Transport Canada to fly beyond visual line of sight and above 400 feet above ground level to support wildfire suppression agencies across Canada. These approvals enable the Company to target a $70M Serviceable Obtainable Market opportunity as per the management estimates. While wildfires restrict some routine aerial service activities, wildfire suppression will enable the Company to help authorities detect hotspots, save human lives, and diversify its business.
  • The Company also received a Transport Canada special authority to operate heavy crop spraying drones weighing over 25 kg anywhere in Canada. This special authority unlocks our ability to offer compliant drone crop spraying services across Canada for our precision agriculture clients.
• The Company signed exclusive distributor rights for markets in the Americas with Velos Robots Inc. and AEE Technology Inc. for use cases in public safety, utility, and oil and gas sectors. These partnerships are part of an ongoing strategy to expand the Company's NDAA (National Defense Authorization Act) compliant drone portfolio.

Webinar

In conjunction with this release, Volatus investor relations will host a webinar on Wednesday, August 30^th at 4 PM EST at which time Glen Lynch, CEO, and Abhinav Singhvi, CFO, will review the quarterly results and major milestones with Danielle Gagne, Head of Corporate Communications as moderator. Investors are invited to register for the webinar here.

https://us06web.zoom.us/webinar/register/WN_fk1TmmQbSb6FRvLHueBaWA

Audio Replay Options

An audio replay of the event will be archived on the Investor Relations page of the company's website here.

SUMMARY OF QUARTERLY RESULTS

RECONCILIATION OF ADJUSTED EBIDTA TO NET LOSS

Update: Volatus has received TSXV approval to complete the acquisition of all minority shares of Volatus Unmanned Services Inc., (VUS) allowing the company to optimize costs and consolidate business operations as previously announced on August 9, 2023. Under the terms of the agreements with eight minority shareholders, the Company has acquired the 33% of outstanding shares it did not already own for a total purchase price of C$2,399,339.00. This amount will be paid in the form of newly issued common shares of Volatus Aerospace Corp. A total of 7,270,724 VOL shares have been issued at a share price of $0.33. The transaction will close on August 29, 2023.

Volatus is pleased to announce that it has received an extension from the TSX Venture Exchange ("TSXV") to its proposed non-brokered private placement announced on April 13, 2023 of up to 250 convertible debenture units of the Corporation (the "Debenture Units") at a price of $1,000 per Debenture Unit for aggregate gross proceeds of up to $250,000 (the "Offering"). The extended final date for acceptance of the Offering is Sept 30, 2023.

All terms of the Offering remain unchanged, and the Company intends to use the net proceeds of the Offering for research and development and for general working capital purposes. The Company may pay a finder's fee on the Offering within the amount permitted by the policies of the TSXV. All securities issued in connection with the Offering, including any securities issuable upon conversion or exercise thereof, will be subject to a statutory hold period of four months and one day from the date of issuance of the Debenture Units. The Offering is subject to final approval by the TSXV.

The Debenture Units will be offered and sold by private placement in Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 - Prospectus Exemptions, and in certain other jurisdictions on a basis which does not require the qualification or registration of the securities offered, or any underlying securities.

About Volatus Aerospace:

Volatus Aerospace Corp. is a leading provider of integrated drone solutions throughout North America and growing into Latin America and globally. Volatus serves civil, public safety, and defense markets with imaging and inspection, security and surveillance, equipment sales and support, training, as well as R&D, design, and manufacturing. Through our subsidiary, Volatus Aviation, we are introducing green and innovative drone solutions to supplement and replace traditional aircraft and helicopters for long-linear inspections such as pipeline, energy, rail, and cargo services. Volatus is committed to carbon neutrality; the fostering of a safe, equitable and inclusive workplace; and responsible governance.

Forward-Looking Statement

This news release contains statements that constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs, and current expectations of the Company with respect to future business activities and operating performance. Often, but not always, forward-looking information and forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the foregoing) be taken, occur, be achieved, or come to pass. Forward-looking information includes information regarding: (i) the business plans and expectations of the Company; and (ii) expectations for other economic, business, and/or competitive factors. Forward-looking information is based on currently available competitive, financial, and economic data and operating plans, strategies, or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to the Company, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs. Any and all forward-looking information contained in this news release is expressly qualified by this cautionary statement. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Forward-looking information and forward-looking statements reflect the Company's current beliefs and is based on information currently available to it and on assumptions it believes to be not unreasonable in light of all of the circumstances. In some instances, material factors or assumptions are discussed in this news release in connection with statements containing forward-looking information. Such material factors and assumptions include, but are not limited to: the commercialization of drone flights beyond visual line of sight and potential benefits to the Company; and meeting the continued listing requirements of the TSXV. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. The forward-looking information contained herein is made as of the date of this news release and, other than as required by law, the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

TSXV: VOL

OTCQB: VLTTF

CONTACT DETAILS
Abhinav Singhvi
+1 833-865-2887
abhinav.singhvi@volatusaerospace.com

COMPANY WEBSITE
https://volatusaerospace.com

SOURCE: Volatus Aerospace Corp.