Volatus Aerospace Corp. (VOL:TSX; VLTTF:OTCQB) has news related to its recent acquisition of Sky Scape Industries LLC, which it expects to generate around CA$1.4 million. The acquisition of Sky Scape has made Volatus a leader in power utilities across North America.
Volatus Aerospace Corp. is an aviation company that focuses on bringing new technologies to commercialization. The company's CEO is Glen Lynch, and the Vice President is Luc Masse.
Sky Scape Acquisition
"We missed the strong runup in Volatus about a week ago but adverse market conditions have brought it back down into buying territory near to its moving averages which are about to cross. Longer-term charts show it turning gradually higher and starting to ascend away from the Double Bottom that formed from October through January after a bear market phase from the start of 2022. Volatus is an interesting company that operates in the drone services market." - Clive Maund
Volatus Aerospace Corp. completed the acquisition of Sky Scape Industries LLC as of March 2nd, 2023. Volatus expects this acquisition to generate about CA$1.4 million, with CA$1 million recurring with margins, net income, and expenses within historical norms for past projects. The acquisition of Sky Scape Industries has made Volatus as the leading power utilities provider across the North American region. According to Glen Lynch, CEO, "this was a strategic move for Volatus and in line with our objective to become a dominant provider for corridor inspections in oil and gas, power utilities, and railway. With more than 10,000 structure inspections already contracted and underway for 2023, power utilities have become a key industrial sector for Volatus, second only to our pipeline surveillance services for oil and gas." The total purchase price for the acquisition, US$585,000, was paid in an initial payment of US$275,000 in common shares. The earn-out payment of US$310,000 is to be paid twelve months after closing in the form of additional shares, and the payment is conditional on Sky Scape retaining about CA$1 million of inspections already contracted for 2024.
Rising Defense Budget Boon to Aerospace
The Aerospace industry has been bolstered by increases in spending on national defense. The pentagon released its desired budget for 2024, which stands at US$842 billion, an increase of US$69 billion from 2023. It is estimated that over half of this money will fund government contractors like Boeing and Lockheed Martin, who are both big names in the industry.
The newly created Space Force's budget was set at US$30 billion in this proposal. According to the Department of Defense, it's "the largest space budget ever," and "procures and modernizes capabilities to secure the use of space in the face of increasing threats to U.S. national security space systems." The majority of this money is allocated to missile warning systems and launch services. According to Frank Kendall, this budget is driven by a need to keep up with the cutting edge of the aerospace industry: "we have to make a transformation to next-generation capabilities. And it's a journey. Time is our greatest concern. We did a lot of work over the past year to analyze those problems and look at various ways to try to address them."
Future Steps for Volatus
According to Clive Maund, "We missed the strong runup in Volatus about a week ago but adverse market conditions have brought it back down into buying territory near to its moving averages which are about to cross. Longer-term charts show it turning gradually higher and starting to ascend away from the Double Bottom that formed from October through January after a bear market phase from the start of 2022. Volatus is an interesting company that operates in the drone services market."
Volatus has a number of short-term catalysts to report. On November 30th of 2022, the company introduced new mining technologies, and new defense technology on December 31st, 2022. The company saw aggressive expansion in the US in February of 2023, and saw the commercialization of Nesting Station on March 31st of 2023.
Volatus is the highest revenue generator in the drone industry, with minimum burn costs, and they demonstrated EBITDA positive capability in Q3 of 2022. They are a vertically integrated business with a focus on commercializing technologies and owned technology solutions developed out of industry needs with minimum viable product and go to market options. Volatus has an experienced team with decades of experience in aviation.
Ownership and Share Structure
Streetwise Ownership Overview*
Volatus Aerospace Corp. (VOL:TSX; VLTTF:OTCQB)
Volatus has a market cap of CA$30 million. There are 113,943,079 shares, 24,954,951 warrants, and 5,599,232 options.
Management and insiders own 54.24% of fully diluted shares. Ian Alexander McDougal owns 11.91%, Glen Lynch, the CEO, owns 11.42%, Michael W. Herman owns 0.54%, and Luc Masse, the Vice President, owns 0.07%. As for institutions, CharlesTown, Longstate, and PI Financial are all represented. There are no strategic investors, and 90% of the company is held by retail.
As of September 30th, 2022, Volatus has reported CA$6.8 million in the bank, with a monthly burn rate of $500k.
Volatus reports no potential sellers. There are two sets of warrants expiring on December 22, 2023, with an exercise price of CA$40.65 and CA$0.75. The third set expires on October 5th, 2024, at CA$0.50 exercise price.
Rob Goff of Echelon Wealth provides analysis of the company. Volatus works with three influencers: Ed Vranic of Seeking Alpha, Tim Weintraut of Alpha Wolf Trading, and Bill Cara. They work with a number of IR Firms, such as Capital Events Management (CEM), Peterson Capital, and BTV.
