Draganfly Announces Closing of US$3.76 Million Registered Direct Offering

Rhea-AI Summary

Draganfly has closed a registered direct offering of 1,600,000 units at US$2.35 per unit, raising gross proceeds of US$3.76 million. Each unit consists of one common share (or pre-funded warrant) and one warrant to purchase one common share. The warrants have an exercise price of CA$3.3086 (US$2.35), exercisable immediately with a five-year expiration. Additionally, the company amended the exercise price of existing warrants from previous offerings to CA$3.3086. The net proceeds will be used for general corporate purposes, including product development, marketing, potential acquisitions, and working capital requirements.

Positive

• Secured US$3.76 million in gross proceeds through registered direct offering
• Five-year warrant term provides long-term financing flexibility
• Funds allocated to support product development and growth initiatives

Negative

• Potential dilution from issuance of 1,600,000 new units
• Downward adjustment of existing warrant exercise prices indicates pricing pressure
• Additional share issuance may impact stock value

Insights

Financial Analyst

This $3.76 million registered direct offering represents a significant capital raise for Draganfly, though at a relatively low price point of $2.35 per unit. The deal structure, including warrant amendments lowering previous exercise prices, suggests challenging market conditions and potential dilution concerns. The reduced warrant exercise prices from previous offerings (ranging from $3.75 to $4.12) to $2.35 indicates downward pressure on the stock value.

The offering's impact on the company's $8.9 million market cap is substantial, potentially leading to significant dilution. While the capital injection provides operational runway, the pricing and warrant modifications may signal near-term challenges in maintaining shareholder value. The broad use of proceeds for "general corporate purposes" offers flexibility but lacks specific strategic initiatives that could drive immediate value creation.

Saskatoon, SK., Nov. 19, 2024 (GLOBE NEWSWIRE) -- Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8A) (“Draganfly” or the “Company”), a drone solutions, and systems developer, today announced that it has closed its previously announced offering of 1,600,000 units of the Company, with each unit consisting of one common share (or one pre-funded warrant to purchase one common share in lieu thereof) and one warrant to purchase one common share. Each unit was sold at an offering price of US$2.35, for gross proceeds of US$3.76 million (the “Offering”), before deducting placement agent discounts and offering expenses. The warrants have an exercise price of CA$3.3086 (or US$2.35) per share, are exercisable immediately and will expire five years following the date of issuance and the exercise price is in Canadian currency.

Maxim Group LLC acted as sole placement agent for the Offering.

Pursuant to previous offerings in the United States, the Company issued warrants to purchase 256,000 common shares at an exercise price of CA$5.6925 (US$4.1152) on October 30, 2023 (“October Warrants”), warrants to purchase 540,541 common shares at an exercise price of CA$5.625 (US$4.1155) on May 1, 2024 (the “May Warrants”) and warrants to purchase 666,667 common shares at an exercise price of CA$5.12 (US$3.75) on August 21, 2024 (the “August Warrants”, collectively with the October Warrants and May Warrants, the “Existing Warrants”). In connection with the closing of the Offering, the ‎Company and the holder of the Existing Warrants entered into an amendment agreement (the “Amendment Agreement”), whereby the ‎exercise price of the Existing Warrants was reduced to CA$3.3086 (or US$2.35) per share, respectively (the “Warrant Amendments”).‎

Draganfly currently intends to use the net proceeds from the Offering for general corporate purposes, including to fund its capabilities to meet demand for its new products including growth initiatives and/or for working capital requirements including the continuing development and marketing of the Company’s core products, potential acquisitions and research and development.

The Offering was made pursuant to an effective shelf registration statement on Form F-10, as amended, (File No. 333-271498) previously filed with and subsequently declared effective by the U.S. Securities and Exchange Commission (“SEC”) on July 5, 2023 and the Company’s Canadian short form base shelf prospectus dated June 30, 2023 (the “Base Shelf Prospectus”). Draganfly offered and sold the securities in the United States only. No securities were offered or sold to Canadian purchasers.

A prospectus supplement and accompanying Base Shelf Prospectus relating to the Offering and describing the terms thereof was filed with the applicable securities commissions in Canada and with the SEC in the United States and is available for free by visiting the Company’s profiles on the SEDAR+ website maintained by the Canadian Securities Administrators at www.sedarplus.ca or the SEC’s website at www.sec.gov, as applicable. Copies of the prospectus supplement and accompanying Base Shelf Prospectus relating to the Offering may be obtained by contacting Maxim Group LLC, at 300 Park Avenue, 16^th Floor, New York, NY 10022, Attention: Syndicate Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Draganfly

Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE: 3U8A) is the creator of drone solutions, software, and AI systems.

Media Contact
Erika Racicot
email: media@draganfly.com

Company Contact
Email: info@draganfly.com

Forward Looking Statements

Certain statements contained in this news release may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown. In this news release, such forward-looking statements include, but are not limited to, statements regarding the anticipated use of proceeds from the Offering. Actual future events may differ from the anticipated events expressed in such forward-looking statements. Draganfly believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and Draganfly is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable securities laws.‎ Investors are cautioned not to unduly rely on these forward-looking statements and are encouraged to read the offering documents, as well as Draganfly’s continuous disclosure documents, including its current annual information form, as well as its audited annual consolidated financial statements which are available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.

FAQ

How much did Draganfly (DPRO) raise in its November 2024 offering?

Draganfly raised US$3.76 million in gross proceeds through a registered direct offering of 1,600,000 units priced at US$2.35 per unit.

What is the exercise price of the new DPRO warrants issued in November 2024?

The new warrants have an exercise price of CA$3.3086 (US$2.35) per share and are exercisable immediately with a five-year expiration period.

How will Draganfly (DPRO) use the proceeds from its November 2024 offering?

Draganfly intends to use the proceeds for general corporate purposes, including funding new product development, marketing initiatives, working capital requirements, and potential acquisitions.