Sienna Resources

Volatus Aerospace Releases 2023 Financial Results and Provides General Corporate Update

12 May 2024
  • 2023 Revenue of $34.87M and Gross Profit of $11.14M

TORONTO, ON / ACCESSWIRE / May 12, 2024 / Volatus Aerospace Corp. (TSXV:VOL) (OTCQB:VLTTF) ("Volatus" or "the Company"), a leader in the drone industry, is pleased to announce its financial results for the year ended Dec 31, 2023.

The Company generated revenues of $34,872,815 for the year ended Dec 31, 2023, with a 32% gross margin, and adjusted EBITDA improvement of $1,981,972 from ($5,616,940) in 2022 to ($3,634,968) in 2023.

The Company announces that it has restated its financial results for the financial years ended December 31, 2022 and 2021. The identification of the need for the restatements arose in the course of the Company's new auditors review of the financials statements for the years ended December 31, 2022 and 2021. The restatements reflect changes in recognition of contingent consideration, recognition of acquired intangible assets, amortization of intangible assets, creation of deferred tax liability due to acquisition, and recognition of additional goodwill and bargain purchase gain. A summary of the restatements is set forth below. Management is of the view that the restatements do not have a material impact on the Company's revenue, gross profit, adjusted EBITDA and the reported net cash provided by operating activities and does not result in a change to the cash balance for any restated periods.

Annual (2023) Performance Highlights:

Revenue increased to $34,872,815 from $24,414,418 in 2022, a 43% improvement on a comparative and normalized basis.

Gross profit was $11,135,842, an increase of $4,578,391 compared to 2022 on an adjusted basis after excluding charter services.

Gross margins increased to 32%, an increase of 4% compared to 2022.

Available cash on hand on December 31, 2023 was $1,682,402.

Comprehensive loss of ($9,693,626) in 2023 compared to ($5,449,917) restated for 2022. This 2022 restatement includes a bargain purchase gain of $2,112,19. If excluded, the 2022 losses would have been ($7,562,113).

Adjusted EBITDA improved by 35% to ($3,634,968) from ($5,616,940) in 2022. Efficiency measures implemented in late Q3 2023 will continue to be realised over the next few quarters. Management feels that adjusted EBITDA is an efficient measure of the performance of the Company.

Quarterly (Q4 2023) Performance Highlights:

Revenue increased to $10,500,995 from $7,213,129 in Q3 2022, a 46% improvement.

Gross Profit increased by $777,964, to $2,800,114 from $2,022,150 in Q4 2022.

Adjusted EBITDA improved by 80% to ($769,943) from ($3,768,238) in Q4 2022.

Notable Operational Accomplishments During the Year:

Continued expansion in the US with the strategic acquisition of Empire Drones of New York and Skyscape Industries of New Jersey.

Signed a 3-year Master Service Agreement to provide pipeline right-of-way asset and environmental monitoring throughout Ontario.

Signed a multi-year Master Service Agreement worth up to $60 million with a US based power utility.

Entered a strategic partnership to automate airborne gas leak detection.

Expanding its Scientific Experiential Aerial Research (SEAR) Program in the US.

Received regulatory approvals to expand operations in wildfire suppression and to operate heavy spray drones for precision agriculture.

Was issued a Canadian Transportation Agency (CTA) License for cargo deliveries using drones.

SUMMARY OF RESTATEMENTS

Consolidated Statement of Financial Position

 

December 31, 2022
Previously reported

Adjustments

December 31, 2022
As restated

Intangible assets

8,815,125

(4,686,451)

4,128,674

Goodwill

689,835

273,769

963,604

Total Assets

33,609,987

(4,412,682)

29,197,305

    
    
Other short-term liabilities

373,163

3,165,943

3,539,106

Total current liabilities

6,165,334

3,165,943

9,331,277

    
Deferred tax liability

-

619,511

619,511

Long-term borrowings

10,063,911

(3,165,942)

6,897,969

Contingent consideration

2,356,850

(1,252,307)

1,104,543

Total non-current liabilities

13,246,800

(3,798,739)

9,448,061

Total Liabilities

19,412,133

(632,795)

18,779,338

    
Deficit

(8,971,689)

1,844,287

(7,127,402)

Contributed Surplus

2,989,819

(2,777,988)

211,830

Non controlling interest

1,066,963

(2,846,185)

(1,779,222)

Total Shareholders Equity

14,197,852

(3,779,886)

10,417,966

 

January 1, 2022
Previously reported

Adjustments

January 1, 2022
As restated

Intangible assets

5,811,929

(4,204,325)

1,607,604

Goodwill

583,188

273,769

856,957

Total Assets

22,668,821

(3,930,556)

18,738,264

    
Deferred tax liability

-

260,319

260,319

Total non-current liabilities

3,788,122

260,319

4,048,441

Total Liabilities   
    
Non controlling interest

288,768

(1,254,379)

(965,611)

Deficit

(2,345,515)

(158,509)

(2,504,024)

Contributed Surplus

2,989,819

(2,777,988)

211,831

Total Shareholders Equity

15,260,042

(4,190,876)

11,069,166

Consolidated Statement of Loss and Comprehensive Loss

 

For the year ended December 31, 2022
Previously reported

Adjustments

For the year ended December 31,
2022
As restated

Depreciation and amortization

-

(482,126)

(482,126)

Bargain purchase gain

-

2,112,197

2,112,197

Fair value changes in contingent consideration 

(33,846)

(33,846)

Deferred tax expense

-

(71,311)

(71,311)

Net Loss and comprehensive loss

6,974,830

(1,524,914)

5,449,916

    
Owners of Volatus Aerospace

(6,626,174)

2,002,796

(4,623,378)

Non-controlling interest

(348,656)

(477,882)

(826,538)

    
EPS - basic and diluted

($0.06)

$0.02

($0.04)

Consolidated Statement of Changes in Equity

 January 1, 2022
Previously reported
AdjustmentsJanuary 1, 2022
As restated
Non-controlling interest

288,768

(1,254,379)

(965,611)

Deficit

(2,345,515)

(158,509)

(2,504,024)

Contributed Surplus

$2,989,819

(2,777,988)

211,831

 

December 31, 2022
Previously reported

Adjustments

December 31, 2022
As restated

Non-controlling interest

$1,066,963

(2,846,185)

(1,779,222)

Deficit

($8,971,689)

1,844,287

(7,127,402)

Contributed Surplus

$2,989,819

(2,777,989)

211,831

Consolidated Statement of Cash Flows

 

For the year ended December 31, 2022
Previously reported

Adjustments

For the year ended December 31,
2022
As restated

Net loss

(6,974,830)

1,524,914

(5,449,916)

Depreciation and amortization

1,367,503

482,126

1,849,630

Deferred income taxes

-

71,311

71,311

Bargain purchase gain

-

(2,112,197)

(2,112,197)

Fair value changes on contingent consideration

-

33,846

33,846

Total cash outflows from operating activities

(7,112,174)

-

(7,112,174)

SUMMARY OF RESULTS

 
 Twelve months ended Dec 31 
 
 2023  2022  2021 
 
         
Product and Services Revenue
  34,872,815   24,414,418   9,913,953 
Aircraft Sale
  -   5,356,721   - 
 
            
Direct Cost
  23,736,973   21,425,786   7,385,243 
Gross Profit
  11,135,842   8,345,353   2,528,710 
   32%  28%  26%
OPERATING EXPENSES
            
Advertising & marketing
  1,856,220   2,225,224   521,250 
IT & tech
  669,096   512,056   169,571 
Personnel
  6,984,713   5,660,069   2,080,871 
R&D
  1,341,377   541,023   - 
Office cost
  2,830,861   1,513,960   425,355 
Travel
  479,163   419,823   196,998 
External partner cost
  1,281,121   1,556,278   318,844 
Depreciation
  4,033,731   1,866,791   637,203 
Share based Payments
  723,804   1,244,858   459,152 
 
  20,200,086   15,540,082   4,809,244 
 
            
(Loss) from Operations
  (9,064,243)  (7,194,729)  (2,280,534)
 
            
OTHER ITEMS - INCOME/(EXPENSE)
            
Finance cost
  (1,775,236)  (526,238)  (438,954)
Goodwill Impairment
  -   -   (1,399,029)
Bargain Purchase Gain
  221,808   2,112,197   - 
FV changes in Contingent Consideration
  386,731   (33,846)    
Other income (expense)
  15,405   411,502   192,963 
Gain (Loss) on disposal of drones
  92,782   9,969   37,006 
Foreign exchange translation
  (35,089)  (157,460)  (25,958)
Net loss and comprehensive loss before tax
  (10,157,842)  (5,378,605)  (3,914,506)
 
            
 
            
Deferred Tax Income/ (Expense)
  464,216   (71,311)    
 
            
Net loss and comprehensive loss after tax
  (9,693,626)  (5,449,916)  (3,914,506)
 
            
Total comprehensive loss for the period attributable to:
            
 
            
Owners of Volatus Aerospace Corp.
  (9,464,043)  (4,623,378)  (2,953,117)
Non-controlling interest
  (229,583)  (826,538)  (961,389)
 
  (9,693,626)  (5,449,916)  (3,914,506)
 
            
Loss per share
            
Basic and Diluted
  (0.08)  (0.04)  (0.03)
 
            
Weighted average number of common shares outstanding
            
Basic and Diluted
  117,887,327   104,932,598   84,447,725 
 
            

SUMMARY OF QUARTERLY RESULTS

 
 Q4 2023  Q3 2023  Q2 2023  Q1 2023  Q4 2022  Q3 2022  Q2 2022  Q1 2022 
 
                                
Revenue
  10,500,995   8,274,349   8,684,991   7,412,480   7,213,129   11,120,589   6,629,593   4,807,829 
 
                                
Direct Cost
  7,700,881   5,265,775   5,724,516   5,045,802   5,190,979   7791145   4728672.918   3714988.951 
Gross Profit
  2,800,114   3,008,574   2,960,475   2,366,678   2,022,150   3,329,444   1,900,920   1,092,840 
 
  26.67%  36.36%  34.09%  31.93%  28.03%  29.94%  28.67%  22.73%
OPERATING EXPENSES
                                
Advertising & marketing
  278,781   541,635   629,686   406,118   575,539   599,285   591,365   459,035 
IT & tech
  28,439   243,602   211,960   185,095   164,260   140,392   110,775   96,629 
Personnel
  1,312,983   1,727,086   1,788,347   2,156,297   1,552,913   1,393,606   1,565,456   1,148,094 
R&D
  771,861   104,832   364,263   100,420   541,023   -   -   - 
Office cost
  605,396   722,276   610,650   892,539   490,740   378,474   416,589   228,157 
Travel
  126,710   90,804   167,364   94,285   144,372   140,622   54,456   80,373 
External partner cost
  436,686   243,443   326,979   274,013   602,171   403,238   168,371   382,497 
Depreciation
  1,647,364   843,744   797,487   745,136   604,849   270,081   300,511   209,224 
Share based Payments
  173,671   195,372   178,361   176,401   340,761   330,918   290,103   283,076 
 
  5,381,891   4,712,793   5,075,097   5,030,304   5,016,628   3,656,616   3,497,626   2,887,086 
(Loss) from Operations
  (2,581,777)  (1,704,219)  (2,114,622)  (2,663,626)  (2,994,477)  (327,172)  (1,596,707)  (1,794,246)
 
                                
OTHER ITEMS - INCOME/(EXPENSE)
          -                     
Finance cost
  (667,949)  (425,671)  (368,635)  (312,982)  (249,798)  (121,672)  (81,239)  (73,528)
Bargain Purchase Gain
  221,808               2,112,197   -   -   - 
Changes in Fair Value of Contingent Consideration
  386,731               (33,846)  -   -   - 
Other income (expense)
  14,955   (39,229)  41,237   (1,558)  192,498   79,640   31,576   107,788 
Gain (Loss) on disposal of equipment
  (125,476)  228,769   (0)  (10,511)  414   10,566   (1,011)  - 
Foreign exchange translation
  (24,156)  19,946   (16,191)  (14,688)  (195,277)  6,430   20,484   (14,412)
Net loss and comprehensive loss before tax
  (2,775,864)  (1,920,403)  (2,458,211)  (3,003,365)  (1,168,290)  (352,208)  (1,626,897)  (1,774,398)
 
                                
Deferred Tax Income/ (Expense)
  464,216               (71,311)            
 
                                
Net Loss and comprehensive loss after tax
  (2,311,647)  (1,920,403)  (2,458,211)  (3,003,365)  (1,239,601)  (352,208)  (1,626,897)  (1,774,398)
 
                                
 
                                
Loss per share
                                
Basic and Diluted
  (0.02)  (0.02)  (0.03)  (0.02)  (0.01)  (0.01)  (0.02)  (0.02)

RECONCILIATION OF ADJUSTED EBIDTA TO NET LOSS

 
 Three months ended Dec 31  For the year ended Dec 31 
 
 2023  2022  2023  2022 
 
            
Adjusted EBITDA (loss)
  (769,943)  (3,768,238)  (3,634,968)  (5,616,940)
Interest
  667,949   249,798   1,775,236   526,238 
Depreciation
  1,647,364   604,849   4,033,731   1,866,791 
Share-based Payments
  173,671   340,761   723,804   1,244,858 
Loss from LATAM Operations
  -   -   286,423   - 
Loss from Sale of Drones
  125,476   (414)  (92,782)  (9,969)
Lease Termination
  -   -   405,000   - 
Crewed Revenue
  -   (1,787,902)  -   (1,787,902)
Bargain Purchase Gain
  (221,808)  (2,112,197)  (221,808)  (2,112,197)
FV changes in Contingent Consideration
  (386,731)  33,846   (386,731)  33,846 
Deferred Tax Income
  (464,216)  71,311   (464,216)  71,311 
Net Loss
  (2,311,647)  (1,168,290)  (9,693,626)  (5,449,916)
 
                

Other Corporate Update:

Further to the Company's press release dated July 27, 2023, in respect of TSX Venture Exchange's extension of the non-brokered private placement of up to $250,000 of convertible debenture units of the Company, the Company has decided not to pursue this private placement and as such the private placement has been terminated.

Further to the Company's press release dated January 9, 2024, the Company announced that it had completed the acquisition of Aerial Motion Pictures Ltd., dba UAVHub and Open Sky Consulting International Ltd., dba The Drone Mentor by issuing 1,680,000 common equity shares instead of 1,575,000 common equity shares of the Company as previously mentioned.

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.

Note Regarding Non-GAAP Measures

In this press release we describe certain income and expense items that are unusual or non-recurring. There are terms not defined by International Financial Reporting Standards (IFRS). Our usage of these terms may vary from the usage adopted by other companies. Specifically, gross profit, gross margin, and Adjusted EBITDA are undefined terms by IFRS that may be referenced herein. We provide this detail so that readers have a better understanding of the significant events and transactions that have had an impact on our results.

Throughout this release, reference is made to "gross profit," "gross margin," and "Adjusted EBITDA" which are non-IFRS measures. Management believes that gross profit, defined as revenue less operating expenses, is a useful supplemental measure of operations. Gross profit helps provide an understanding on the level of costs needed to create revenue. Gross margin illustrates the gross profit as a percentage of revenue. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as IFRS comprehensive loss excluding interest expense, depreciation and amortization expense, share-based payments, income tax expense, integration and due diligence costs, one time profit or loss (non-recurring), and impairment of goodwill, property, plant, and equipment and right-of-use assets (ROU). The Company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Readers are cautioned that these non-IFRS measures may not be comparable to similar measures used by other companies. Readers are also cautioned not to view these non-IFRS financial measures as an alternative to financial measures calculated in accordance with International Financial Reporting Standards ("IFRS"). Adjusted EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers and should not be construed as alternatives to comprehensive loss or income determined in accordance with IFRS. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP Measures and Additional GAAP Measures"‎ section of the Company's most recent MD&A which is available on SEDAR.

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

Chief Financial officer
+1 833-865-2887
This email address is being protected from spambots. You need JavaScript enabled to view it.

COMPANY WEBSITE
https://volatusaerospace.com

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