TORONTO, ON / ACCESSWIRE / August 30, 2024 / Drone Delivery Canada Corp. ("Drone Delivery Canada" or the "Company") (TSXV:FLT)(OTCQX:TAKOF)(Frankfurt:A3DP5Y)(Frankfurt:ABBA.F) and Volatus Aerospace Corp. ("Volatus") (TSXV:VOL)(OTCQB:VLTTF) are pleased to announce the successful completion of their merger of equals (the "Merger") announced on May 21, 2024, pursuant to which Drone Delivery Canada acquired all of the issued and outstanding common shares of Volatus (the "Volatus Shares") by way of a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement"). The Arrangement results in Volatus becoming a wholly-owned subsidiary of the Company. The completion of the Merger marks a new era for the companies, combining the power of Volatus' commercialization expertise with Drone Delivery Canada's proven remote operations and logistics technology. The Merger obtained requisite approval by the shareholders of both companies, with Drone Delivery Canada holding its meeting on August 26th and Volatus on August 23rd. The Arrangement was approved by the Ontario Superior Court of Justice (Commercial List) on August 27th.
In connection with the Merger, the Company will change its name to "Volatus Aerospace Inc.", leveraging the strength of the Volatus brand while maintaining Drone Delivery Canada's brand for cargo operations. The shares of the Company will continue to trade under the stock ticker symbols TSXV:FLT, OTCQX:TAKOF, Frankfurt:A3DP5Y, and Frankfurt:ABBA.F. The shares of the Company are expected to start trading on TSX Venture Exchange (the "TSXV") under the new name "Volatus Aerospace Inc." on or about September 5, 2024.
Under the terms of the Arrangement, each former Volatus shareholder is now entitled to receive 1.785 (the "Exchange Ratio") common voting shares of the Company for each Volatus Share held immediately prior to the effective time of the Arrangement (the "Consideration"). The Merger was structured as a 50/50 merger of equals with shareholders of both companies owning approximately 50% of the Company upon completion of the Arrangement.
In order to receive the Consideration, registered shareholders of Volatus Shares will be required to deposit their share certificate(s) representing Volatus Shares, together with the duly completed letter of transmittal, with Computershare Investor Services Inc., the depositary under the Arrangement. Shareholders whose Volatus Shares are registered in the name of a broker, dealer, bank, trust company or other nominee should contact their nominee regarding the receipt of the Consideration.
Volatus Options, Warrants and Convertible Debentures
Holders of Volatus options ("Volatus Options") have received replacement options under the Arrangement, exercisable for common voting shares in the capital of the Company at the same Exchange Ratio applicable to the Volatus Shares. All other terms and conditions of the replacement options, including the term of expiry, vesting, conditions to and manner of exercising, are the same as the Volatus Options for which they were exchanged.
Warrants to purchase Volatus Shares ("Volatus Warrants"), other than those that have been exercised prior to the effective time of the Arrangement, will continue to remain outstanding as warrants of Volatus which, upon exercise, will entitle the holder thereof to receive, the Consideration in lieu of a Volatus Share for each Volatus Warrant so exercised.
Convertible debentures of Volatus (the "Volatus Debentures") will be assumed by Drone Delivery Canada and the Volatus Debentures shall be amended so as to substitute for the Volatus Shares subject to such Volatus Debentures such number of common voting shares of the Company equal to (A) the number of Volatus Shares into which such Volatus Debentures may be convertible immediately prior to the effective time of the Arrangement, multiplied by (B) 1.785, rounded down to two decimal places.
As required by the warrant indentures in respect of certain Volatus Warrants and the debenture indenture in respect of the Volatus Debentures, Drone Delivery Canada has entered into supplemental warrant indentures and a supplemental debenture indenture. Copies of each of the supplemental warrant indentures and supplemental debenture indenture will be available on Volatus' and Drone Delivery Canada's respective SEDAR+ profiles at www.sedarplus.ca.
Management and Board Composition
The management team of the Company is led by Glen Lynch as CEO and Steve Magirias as COO. Ian McDougall, the current chairman of Volatus, has assumed the role of chairman of the Company's board. The other directors of the Company are Kevin Sherkin, Larry Taylor, Glen Lynch and Andrew Leslie.
"Our transformative merger of Drone Delivery Canada and Volatus marks the next major milestone for the Company," said Glen Lynch, CEO of the Company. "Back when Volatus transitioned from a private company to a public company in 2021, we reimagined our mission to be an integrator and consolidator of a fragmented industry-to build a streamlined and agile ecosystem for our customers. Volatus is taking the next evolutionary step with Drone Delivery Canada, combining its significant technological expertise together with our commercial experience to provide tested and proven remote operational capabilities and logistics technology to our customers."
Delisting of Volatus Shares
Volatus Shares are expected to be delisted from the TSXV as of the closing of the market on September 4, 2024.
Listed Volatus Warrants
Prior to the completion of the Arrangement, Volatus had outstanding a class of Volatus Warrants listed on the TSXV under the trading symbol "VOL.WT.A" (the "Listed Volatus Warrants"). The Listed Volatus Warrants will continue trading on the TSXV as Volatus Warrants, under their existing trading symbol, and will remain listed on the TSXV until the earliest to occur of their exercise, expiry or delisting.
Other Matters
An application has been filed with the applicable securities regulators of Volatus for exemptive relief from certain continuous disclosure and insider reporting requirements. In the event Volatus is granted such relief, holders of Listed Volatus Warrants will be directed to reference, and rely on, the public disclosure filings of Drone Delivery Canada.
In connection with the Merger and following approval by shareholders of Drone Delivery Canada, the Company has adopted a new equity incentive plan (the "Equity Incentive Plan") governing the terms and issuance of restricted share units, performance share units and deferred share units of the Company.
Full details of the Merger, the Arrangement, the Equity Incentive Plan and certain other matters are set out in the joint management information circular of Drone Delivery Canada and Volatus and can be found under Drone Delivery Canada's and Volatus' respective profiles on SEDAR+ at www.sedarplus.ca.
Early Warning Disclosure
Immediately before completion of the Arrangement, Drone Delivery Canada (6-6221 Highway 7, Vaughan, Ontario L4H 0K8) did not own or control, directly or indirectly, any Volatus Shares or other securities of Volatus. Immediately following completion of the Arrangement, Drone Delivery Canada owned 125,683,761 Volatus Shares, representing 100% of the outstanding Volatus Shares.
An aggregate of 224,344,723 common voting shares of Drone Delivery Canada were issued to holders of Volatus Shares in connection with the Merger. These common voting shares have a market value of approximately $38,138,602 based on the closing price of the common voting shares of Drone Delivery Canada on the TSXV of $0.17on August 29, 2024, being the last trading day prior to the closing of the Merger.
An early warning report will be filed by Drone Delivery Canada in accordance with applicable Canadian securities laws and will be available under Volatus' SEDAR+ profile at www.sedarplus.ca or may be obtained directly from the Company by mailing the Company at its head office: 6-6221 Highway 7, Vaughan, Ontario L4H 0K8.
Immediately before completion of the Arrangement, Mr. Glen Lynch owned or controlled, directly or indirectly, 38,461,667 Volatus Shares, representing approximately 30.60% of the outstanding Volatus Shares on a non-diluted basis, and 1,500,000 Volatus Options, representing approximately 31.42% of the outstanding Volatus Shares on a partially diluted basis (assuming the full exercise of such Volatus Options). Immediately before completion of the Arrangement, Mr. Lynch did not own or control, directly or indirectly, any common voting shares of the Company or other securities of the Company.
In connection with the completion of the Arrangement, Mr. Lynch disposed of all of his Volatus Shares and Volatus Options in exchange for, on the basis of the Exchange Ratio, 68,654,075 common voting shares of the Company, representing approximately 15.31% of the outstanding common voting shares and variable voting shares of the Company, and 2,677,500 stock options of the Company, representing approximately 15.81% of the outstanding common voting shares and variable voting shares of the Company, on a partially diluted basis (assuming the full exercise of such stock options of the Company). These common voting shares of the Company have a market value of approximately $11,671,192 based on the closing price of the common voting shares of Drone Delivery Canada on the TSXV of $0.17on August 29, 2024, being the last trading day prior to the closing of the Arrangement.
Early warning reports will be filed by Mr. Lynch in accordance with applicable Canadian securities laws and will be available under Volatus' and the Company's SEDAR+ profile at www.sedarplus.ca or may be obtained directly from the Company by mailing the Company at its head office: 6-6221 Highway 7, Vaughan, Ontario L4H 0K8.
Immediately before completion of the Arrangement, Mr. Ian McDougall, including through his 100% owned holding companies, Delta-Mike Inc. and Aligned Two Inc., owned or controlled, directly or indirectly, 39,017,267 Volatus Shares, representing approximately 31.04% of the outstanding Volatus Shares on a non-diluted basis, 1,208,461 Volatus Options and 555,600 Volatus Warrants, representing approximately 32.00% of the outstanding Volatus Shares on a partially diluted basis (assuming the full exercise of such Volatus Options and Volatus Warrants), and 206,188 Class A preferred shares of Volatus. Immediately before completion of the Arrangement, Mr. McDougall did not own or control, directly or indirectly, any common voting shares of the Company or other securities of the Company.
In connection with the completion of the Arrangement, Mr. McDougall disposed of all of the Volatus Shares he beneficially owned or controlled prior to completion of the Arrangement in exchange for, on the basis of the Exchange Ratio, 69,645,821 common voting shares of the Company, representing approximately 15.53% of the outstanding common voting shares and variable voting shares of the Company. Mr. McDougall further disposed of all of the Volatus Options he beneficially owned or controlled prior to completion of the Arrangement in exchange for, on the basis of the Exchange Ratio, 2,157,102 stock options of the Company and his Volatus Warrants became exercisable into 991,746 common voting shares of the Company, representing in the aggregate approximately 16.12% of the outstanding common voting shares and variable voting shares of the Company, on a partially diluted basis (assuming the full exercise of such stock options of the Company and Volatus Warrants). These common voting shares of the Company have a market value of approximately $11,839,789 based on the closing price of the common voting shares of Drone Delivery Canada on the TSXV of $0.17on August 29, 2024, being the last trading day prior to the closing of the Arrangement. Following completion of the Arrangement, Mr. McDougall will continue to beneficially own or control 555,600 Volatus Warrants (exercisable into 991,746 common voting shares of the Company as noted above) and 206,188 Class A preferred shares of Volatus.
Early warning reports will be filed by Mr. McDougall in accordance with applicable Canadian securities laws and will be available under Volatus' and the Company's SEDAR+ profile at www.sedarplus.ca or may be obtained directly from the Company by mailing the Company at its head office: 6-6221 Highway 7, Vaughan, Ontario L4H 0K8.
Advisors
Ventum Financial Corp. ("Ventum Capital Markets") acted as exclusive financial advisor to Volatus and Wildeboer Dellelce LLP acted as legal counsel to Volatus. Blink Capital Corp. acted as a strategic advisor on the Merger.
National Bank Financial Inc. acted as exclusive financial advisor to Drone Delivery Canada, Bennett Jones LLP acted as legal counsel to Drone Delivery Canada.
Issuance of Shares to Ventum Capital Markets
Pursuant to an engagement letter between Ventum Capital Markets (formerly, Echelon Wealth Partners Inc.) and Volatus dated February 1, 2024, the Company will issue $75,000 worth of common voting shares to Ventum Capital Markets as a success fee in connection with the completion of the Merger based on the 10-day volume weighted average price per common voting share as at closing of the Merger.
About Volatus Aerospace Inc.
Volatus Aerospace Inc., born from the merger of Volatus and Drone Delivery Canada, is a consolidator and integrator of aerial intelligence and logistics solutions. With deep technological and subject matter expertise and over 100 years' worth of combined institutional knowledge in aviation, the Company's mission has been to build a complete aerial intelligence and logistics ecosystem that provides agile and streamlined solutions for end users across various industries. The Company has achieved this through strategic partnerships and acquisitions that augment its operational, geographical, and technological capabilities, enabling best-in-class services, technologies, and training globally. We are committed to enhancing operational efficiency, safety, and sustainability through innovative, real-world aerial solutions.
Explore our services and connect with us at http://www.volatusaerospace.com to learn more about how we can support your operational goals.
Media Contact:
Danielle Gagne
Head of Marketing and Communications
Danielle.gagne@volatusaerospace.com
Cautionary Note Regarding Forward-Looking Information
Certain information contained in this news release may constitute forward-looking information, forward-looking statements and future-oriented financial information within the meaning of applicable securities legislation (collectively "forward-looking statements"). Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. Forward-looking statements may be identified by words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "indicates", "forecasts", "intends", "anticipates", "believes", "may", "could", "should", "would", "plans", "proposed", "potential", "will", "target", "approximate", "continue", "might", "possible", "predicts", "projects" and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this news release may include but are not limited to: (i) statements concerning the expected timing by which the Volatus Shares will be delisted from the TSXV; (ii) the continued listing and trading of the Listed Volatus Warrants on the TSXV; (iii) the granting of exemptive relief by applicable securities regulators as it relates to Volatus' continuous disclosure obligations and insider reporting requirements; (iv) the anticipated change of the Company's name to "Volatus Aerospace Inc." and the timing of the shares of the Company trading on the TSXV under the new name; (v) the anticipated benefits of the Merger; (vi) the anticipated timing of filing of necessary early warning reports; and (vii) the business plans, expectations, and goals of the combined company. These forward-looking statements are based on information available as of the date of this news release, and the current expectations, forecasts, assumptions, views and beliefs of management of each of Volatus and Drone Delivery Canada, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Volatus, Drone Delivery Canada or the combined company, as applicable, to differ materially from those expressed or implied by the forward-looking statements. Some factors that could cause actual results to differ include, among other things: (i) the ability to recognize the anticipated benefits of the Merger; (ii) unexpected costs related to the Merger; (iii) the commercialization of drone flights beyond visual line of sight and potential benefits to Volatus and Drone Delivery Canada; (iv) geopolitical risk and changes in applicable laws or regulations; (v) operational risks; (vi) meeting the continued listing requirements of the TSXV; (vii) other factors set forth in the joint management information circular of Volatus and Drone Delivery Canada under the section "Risk Factors", available on Volatus' and Drone Delivery Canada's respective SEDAR+ profiles at www.sedarplus.ca and (ix) other factors set forth in Drone Deliver Canada's annual information form under the section "Risk Factors", available under Drone Delivery Canada's SEDAR+ profile at www.sedarplus.ca. Although Volatus and Drone Delivery Canada have attempted to identify important factors and that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Readers are cautioned that forward-looking statements are not based on historical facts but instead reflect 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. The forward-looking statements contained herein are made as of the date of this news release. Accordingly, forward-looking statements should not be relied upon as representing Volatus' or Drone Delivery Canada's views as of any subsequent date, and except as expressly required by applicable securities laws, Volatus and Drone Delivery Canada disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on these forward-looking statements. Any and all forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
None of the securities to be issued pursuant to the Arrangement have been or will be registered under the United States Securities Act of 1933 (the "U.S. Securities Act"), or any state securities laws, and any securities issuable in the transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This news release does not constitute an offer to purchase or a solicitation of an offer to sell securities.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE: Volatus Aerospace Corp.
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