Draganfly Announces Pricing of US$2.0 Million Registered Direct Offering

Rhea-AI Summary

Draganfly Inc. (NASDAQ: DPRO) has announced a US$2.0 million registered direct offering with a single institutional investor. The offering includes 16,666,666 units at US$0.12 per unit, each consisting of one common share (or pre-funded warrant) and one warrant. The warrants have an exercise price of US$0.15 per share and a 5-year expiration. Maxim Group is the sole placement agent. Draganfly plans to use the proceeds for general corporate purposes, including funding new product demand, growth initiatives, working capital, and potential acquisitions. The offering is expected to close around August 21, 2024, subject to customary conditions and regulatory approvals.

Positive

• Secured US$2.0 million in funding through a registered direct offering
• Warrants included in the offering have a 5-year expiration, providing long-term potential
• Proceeds will support growth initiatives and new product development

Negative

• Potential dilution of existing shareholders due to the issuance of new shares
• Offering price of US$0.12 per unit may be below current market price
• Additional warrants could lead to further dilution if exercised

Financial Analyst

Draganfly's $2.0 million registered direct offering is a double-edged sword for investors. While it provides necessary capital for growth initiatives and product development, it comes at the cost of significant dilution. The offering price of $0.12 per unit represents a substantial discount to the current market price, potentially pressuring the stock in the short term.

The inclusion of warrants with a $0.15 exercise price could lead to further dilution if exercised. However, this structure also provides potential upside for the company if the stock price appreciates above the exercise price. The five-year expiration gives Draganfly ample time to execute its growth strategy.

Investors should closely monitor how effectively management deploys this capital, particularly in developing and marketing core products. The mention of potential acquisitions suggests a focus on inorganic growth, which could be a catalyst if executed well.

Tech Expert

Draganfly's focus on drone solutions and systems positions it in a rapidly growing market. The additional capital from this offering could be important for accelerating product development and meeting demand for new products. In the competitive drone industry, staying ahead technologically is vital.

The company's intention to use funds for research and development is promising, as innovation is key in this sector. However, the challenge lies in efficiently allocating resources to areas with the highest potential return. Draganfly's ability to capitalize on market opportunities and differentiate its offerings will be critical in justifying this dilutive financing.

Investors should watch for upcoming product announcements or partnerships that could validate the company's strategy and use of funds.

Market Research Analyst

This offering highlights the challenging funding environment for small-cap tech companies. Draganfly's decision to raise capital through a dilutive offering suggests alternatives, possibly due to market conditions or company-specific factors. The single institutional investor participation might indicate a lack of broader market interest, which is concerning.

The timing and pricing of this offering could signal management's belief that near-term catalysts are needed to drive value. Investors should scrutinize upcoming quarterly results and product launches to gauge the company's progress. The market's reaction to this offering will be telling - a sharp decline could indicate waning investor confidence, while stability might suggest acceptance of the growth strategy.

Long-term success will hinge on Draganfly's ability to capture market share and improve financial metrics, justifying this capital raise.

Saskatoon, SK., Aug. 20, 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 entered into a securities purchase agreement with a single institutional investor to purchase 16,666,666 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 a public offering price of US$0.12, for gross proceeds of approximately US$2.0 million (the “Offering”), before deducting underwriting discounts and offering expenses. The warrants will have an exercise price of approximately US$0.15 (CA$0.2048) per share, are exercisable immediately and will expire five years following the date of issuance and the exercise price will be in Canadian currency.

Maxim Group LLC is acting as sole placement agent for the Offering.

The Offering is subject to customary closing conditions including receipt of all necessary regulatory approvals, including approval of the Canadian Securities Exchange and notification to the Nasdaq Stock Market.

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 is expected to close on or about August 21, 2024 (the “Closing Date”), subject to the satisfaction of customary closing conditions.

The Offering is being 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 will offer and sell the securities in the United States only. No securities will be offered or sold to Canadian purchasers.

A prospectus supplement and accompanying Base Shelf Prospectus relating to the Offering and describing the terms thereof will be filed with the applicable securities commissions in Canada and with the SEC in the United States and will be 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, when available, 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 timing of closing of the Offering and the anticipated use of proceeds from the Offering. Closing of the Offering is subject to numerous factors, many of which are beyond Draganfly’s control, including but not limited to, the failure of the parties to satisfy certain closing conditions, and other important factors disclosed previously and from time to time in Draganfly’s filings with the securities regulatory authorities in the Canadian provinces of British Columbia, Ontario and Saskatchewan and with the SEC. 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

What is the size and price of Draganfly's (DPRO) recent offering?

Draganfly (DPRO) announced a US$2.0 million registered direct offering, selling 16,666,666 units at US$0.12 per unit to a single institutional investor.

What does each unit in Draganfly's (DPRO) offering consist of?

Each unit in Draganfly's (DPRO) offering consists of one common share (or one pre-funded warrant) and one warrant to purchase one common share.

What are the terms of the warrants in Draganfly's (DPRO) offering?

The warrants in Draganfly's (DPRO) offering have an exercise price of US$0.15 per share, are exercisable immediately, and will expire five years from the date of issuance.

How does Draganfly (DPRO) plan to use the proceeds from this offering?

Draganfly (DPRO) intends to use the proceeds for general corporate purposes, including funding new product demand, growth initiatives, working capital, potential acquisitions, and research and development.