Volatus Aerospace Corp. Announces $3 Million Brokered Private Placement of Convertible Debenture Units

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TORONTO, ON / ACCESSWIRE / April 13, 2023 / Volatus Aerospace Corp. (TSXV:VOL)(OCTQB:VLTTF) ("Volatus" or the "Company") is pleased to announce that it has entered into an agreement with Echelon Wealth Partners Inc. ("Echelon") pursuant to which Echelon will act as lead agent and sole bookrunner, on behalf of a syndicate of other agents including Canaccord Genuity Corp. (the "Agents"), in connection with a brokered private placement of up to 3,000 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 $3,000,000 (the "Offering"). The Agent has been granted an option, exercisable at any time up to 48 hours prior to the closing of the Offering, to increase the size of the Offering by up to 450 additional Debenture Units for maximum aggregate gross proceeds under the Offering of $3,450,000.

Pursuant to the Offering, each Debenture Unit will be comprised of $1,000 principal amount senior unsecured convertible debenture (each, a "Debenture") and 1,000 common share purchase warrants of the Company (each, a "Warrant"). The Debentures will mature on the date that is 24 months from the date of issuance (the "Maturity Date") and shall bear interest at a simple rate of 12% per annum. Interest will be payable semi-annually in arrears in cash on the last day of June and December in each year, with the first coupon payment deferred until June 30, 2024. The principal amount of the Debentures, or any portion thereof, may be converted at the election of the holder thereof into common shares in the capital of the Company ("Common Shares") at a conversion price of $0.50 per Common Share (the "Conversion Price"), being a conversion rate of 2,000 Common Shares per $1,000 principal amount of Debenture Units, at any time prior to the Maturity Date. The principal amount of the Debentures may be converted at the election of the Company into Common Shares at the Conversion Price on not more than 60 days' and not less than 30 days' notice to the holders of Debentures (i) in the event that the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange ("TSXV") is greater than $1.00 per share for 10 consecutive trading days, or (ii) in connection with a qualified equity or similar financing involving Common Shares or warrants resulting in aggregate gross proceeds to the Company of not less than C$10.0 million (the "Qualified Financing"), subject to the Conversion Price being ratcheted down to equal the price per security under the Qualified Financing. The Debentures will be redeemable, in whole or in part, at the option of the Company, on or after the date that is 12 months from the issue date at price equal to 105% of the principal amount of the Convertible Debentures then outstanding plus any accrued and unpaid interest that would otherwise be payable to the holders from the time of such redemption until the Maturity Date.

Each Warrant will entitle the holder thereof to acquire one Common Share at a price of $0.50 per Common Share for a period of 24 months from the closing date of the Offering. If, at any time following the date that is 4 months and one day following the Closing Date, the daily volume weighted average trading price of the Common Shares on the TSXV is greater than $1.00 per share for the preceding 10 consecutive trading days, the Corporation shall have the right to accelerate the expiry date of the Warrants to a date that is at least 30 days following the date of notice to holders of Warrants.

The Company has agreed to: (i) pay the Agents a cash fee equal to 8% of the gross proceeds raised from the Offering (reduced to 3% for subscribers identified on the Company's president's list); and (ii) issue to the Agents such number of non-transferable Common Share purchase warrants (the "Agent's Warrants") as is equal to 8% of the gross proceeds raised from the Offering (reduced to 3% for subscribers identified on the Company's president's list) divided by the Conversion Price. Each Agent's Warrant will entitle the holder thereof to acquire one Common Share at an exercise price of $0.50 per Common Share for a period of 24 months from the closing date of the Offering.

In addition, the Company is undertaking, concurrent with the Offering, a non-brokered private placement of up to 250 Debenture Units, having the same terms and conditions as those offered under the Offering, for gross proceeds of up to $250,000 (the "Non-Brokered Offering").

The Company intends to use the net proceeds of the Offering and the Non-Brokered Offering for research and development and for general working capital purposes. The Company expects the closing date of the Offering and the Non-Brokered Offering to occur on or about May 4, 2023.

The Debenture Units, Debentures, Warrants, and 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 Debenture Units, Debentures, Warrants, 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 Statements

This news release may contain forward-looking information and forward‐looking statements (within the meanings of applicable securities laws) which reflect the Company's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the future success of the Company's business. Forward-looking statements in this news release include: statements regarding the Offering and Non-Brokered Offering; the expected gross proceeds of the Offering and the Non-Brokered Offering; the use of proceeds of the Offering and Non-Brokered Offering; the final terms of the Debenture Units and the securities underlying the Debenture Units; any potential exercise of the Agents' option; and the anticipated closing of the Offering and Non-Brokered Offering.

The forward-looking statements in this news release are based on current assumptions and expectations of management of the Company. The forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Actual events and conditions could differ materially from those expressed or implied in this news release as a result of known or unknown risk factors and uncertainties affecting the Company. Several factors could cause results to differ materially from those discussed in the forward-looking statements, including risks regarding the industry in which the Company operates, economic factors, the equity markets generally and risks associated with growth and competition. Additional risk factors are also set forth in the Company's annual information form and other filings available on the Company's SEDAR profile at www.sedar.com. Although the Company has attempted to identify certain factors 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 Therefore, readers should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise any forward-looking statement publicly, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has in no way passed upon the merits of the Offering or the Non-Brokered Offering and has neither approved nor disapproved the content of this press release.

TSXV: VOL

Contact Details
Abhinav Singhvi
+1 833-865-2887
abhinav.singhvi@volatusaerospace.com

Company Website
https://volatusaerospace.com

SOURCE: Volatus Aerospace Corp.