Volatus Aerospace Corp. Announces First Quarter 2023 Results

Revenue has grown 54% over same quarter last year, with a gross margin of 32%

TORONTO, ON / ACCESSWIRE / May 25, 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 March 31, 2023 ("Q1 2023").

The Company generated revenue of $7,412,480 in the first three months of 2023.

• Revenue for Q1 2023 was $7,412,480 an increase of 54% over the same quarter last year. The revenue increase in Q1 2023 was driven by equipment sales.
• Gross profit for Q1 2023 was $2,366,679 an increase of $1,273,839 over the same period in 2022. The increase in gross profit was due to higher gross margins from the service segment.
• The Company has experienced a gross margin of 32%, representing an increase of 900 basis points (9%) over the first quarter of 2022.
• Volatus recorded a comprehensive loss of ($3,003,365) in Q1 2023. The losses were reduced by 7% compared to previous quarter. This was due to increased investment in human resources, expansion in the UK and Latin America, expansion in long-linear pipeline inspections, and increased office, interest, and depreciation expenses.
• The Adjusted EBITDA loss for Q1 2023 was ($1,602,690) compared to ($1,208,569) for the same quarter last year (Q1 2022). The incremental loss per share is 4% though the revenue has scaled by 54% and gross profit by 117%.
• The cash on hand as of Mar 31, 2023, was $1,456,193. In a subsequent event, the Company raised additional cash of $2,646,000 from a private placement offering on May 11, 2023.

Notable Operational Accomplishments During the Quarter:

• Continued expansion in the US with strategic acquisition of Empire Drones based out of New York. This acquisition facilitates better gross margins and expanded market reach.
• The Company signed a contract for monthly recurring inspections to detect fugitive methane leaks at 14 water treatment facilities across the northwest of the United Kingdom. Under the terms of the 12-month contract, the Company will conduct remote analysis of infrastructure at water treatment facilities across the northwest UK using Optical Gas imaging cameras.
• In February 2023, the Company has been issued a Canadian Transportation Agency (CTA) License for domestic service, all-cargo aircraft. The addition of this license allows the Company to build its drone cargo capability under the Volatus brand in preparation for the anticipated Transport Canada/FAA regulatory changes. Positioning Volatus with this license is an important step toward the long-term vision of the Company in the drone cargo operations, since the Company is scheduled to take delivery of the first 3.8 tonne Natilus Kona uncrewed regional feeder aircraft in the near future.
• The Company has signed a 3-year master service agreement with a leading pipeline operator to provide pipeline right-of-way asset and environmental monitoring throughout Ontario. The agreement, signed on March 2nd, is estimated to generate revenues of up to $5M over the next three years with margins within historical norms for jobs of this nature. The Company provides data gathering and analysis services to the oil and gas sector. the Company provides pipeline right-of-way surveillance services across Canada from Kitimat, British Columbia to Ottawa, Ontario. Combined with weekly patrols on an annual basis, the Volatus Group patrols over 1,600,000 kilometers of pipeline.
• In March 2023, the Company signed an arm's length definitive agreement to acquire Sky Scape Industries, LLC., a New Jersey based company providing airborne intelligence data services. Founded in 2014, Sky Scape Industries uses remote sensing techniques to provide comprehensive inspection services including facility, structural, line, and right of way for power utilities, emergency response for oil and gas, and façade inspection services for property management. The company utilizes crewed and uncrewed aircraft and has operated nationwide in over 24 states.

"In spite of a seasonal quarter, our team continued to execute. Market challenges shifted some of our revenue targets to the right, but the quarter also marked a more aggressive expansion in the US," said Glen Lynch, CEO of Volatus. "The acquisition of Empire Drones and Sky Scape Industries will help Volatus capture a larger market share and improve gross margins across the board."

Webinar

In conjunction with this release, Volatus investor relations will host a webinar on Tuesday, May 30^th at 9 AM EST at which time Glen Lynch, Chief Executive Officer, and Abhinav Singhvi, Chief Financial Officer, 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_nEMt0lq0R76Ymaf2W942PQ

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

			Q1 2023				Q4 2022				Q3 2022				Q2 2022
Revenue			7,412,480				7,213,129				11,120,589				6,629,593
Cost of goods sold			(5,045,801	)			(5,190,979	)			(7,791,145	)			(4,728,673	)
GROSS PROFIT			2,366,679				2,022,150				3,329,444				1,900,920
Gross Margin			32%				28%				30%				29%
OPERATING EXPENSES
Audit fees			1,866				90,000				10,000				10,015
Advertising & marketing			406,118				575,539				599,285				591,365
IT & tech			185,095				164,260				140,392				110,775
Personnel			2,156,297				1,552,913				1,393,606				1,565,456
Research & development			100,420				541,023				-				-
Office cost			712,481				490,740				378,474				416,589
Travel			94,285				144,372				140,622				54,456
External partner cost			272,147				512,171				393,238				158,356
Depreciation			745,136				604,849				270,081				300,511
Share based Payments			176,401				340,761				330,918				290,103
Total Operating Expense			4,850,247				5,016,629				3,656,615				3,497,626
Operating Expense Ratio			65%				70%				33%				53%
(Loss) from operations			(2,483,568	)			(2,994,479	)			(327,171	)			(1,596,707	)
OTHER ITEMS - INCOME/(EXPENSE)
Finance cost			(312,982	)			(249,798	)			(121,672	)			(81,239	)
Other income (expense)			(1,558	)			192,498				79,640				31,576
Unrealized loss on investment			(180,058	)			-				-				-
Gain (loss) on disposal of drones			(10,511	)			414				10,566				(1,011	)
Foreign exchange translation			(28,590	)			(195,277	)			6,430				20,484
Net loss			(3,017,267	)			(3,246,645	)			(352,206	)			(1,626,896	)
OTHER COMPREHENSIVE LOSS
Foreign operations - foreign currency translation differences			13,902				25,314				-				-
Comprehensive loss			(3,003,365	)			(3,221,331	)			(352,206				(1,626,896	)
Comprehensive (Loss) per share
Basic			(0.023	)			(0.030	)			(0.013	)			(0.019	)
Diluted			(0.023	)			(0.030	)			(0.013	)			(0.019	)

RECONCILIATION OF ADJUSTED EBIDTA TO NET LOSS

		Three months ended March 31
		2023				2022
Adjusted EBITDA (loss)			(1,602,690	)			(1,208,569	)
Interest			312,982				73,528
Depreciation			745,136				209,224
Share-based payments			176,401				283,076
Unrealized loss on Investment			180,058				-
Net loss			(3,017,267	)			(1,774,397	)

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.

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