Collaboration Announced to Commercialize Drone Station With Advanced Remote Integration

Volatus Aerospace Corp. (TSXV: VOL, OTCQB: VLTTF) and Drone Delivery Canada Corp. (TSXV: FLT, OTCQX: TAKOF, Frankfurt: A3DP5Y, ABBA.F) have announced a significant collaboration to commercialize the Volatus Aerieport Drone Nesting Station in conjunction with DDC's Remote Operations Center.

The companies said this partnership, following their planned merger disclosed on May 21, showcases their combined strengths and capabilities. The Aerieport, designed for drone nesting and autonomous operations, will be relocated to DDC's Remote Test Site. This strategic move is intended to train DDC's Remote Operations Center team and integrate the Aerieport into their advanced remote operating systems. This initiative aims to demonstrate the Aerieport's versatility through reliability testing and customer demonstrations, potentially boosting equipment sales and generating recurring service revenue from managed services.

The Aerieport boasts a drone-agnostic design, allowing flexibility in accommodating various drone models. It features a solar power option for sustainable and autonomous operations and is capable of functioning in extreme temperatures. The weatherproof construction enhances durability, with an integrated optical detect and avoid system, and advanced communication capabilities are provided by a robust 4-SIM, 5G modem with a satellite communication option for independent operations.

Steve Magirias, CEO of Drone Delivery Canada, emphasized the significance of this partnership, stating, "This is just one of many key revenue-generating initiatives we have underway with Volatus Aerospace. We are mutually focused on capturing market share, bringing new technologies to the market, commercializing our solutions, and bringing it all to numerous customers across various geographies and verticals."

The World of Drones

According to Mordor Intelligence, the Unmanned Aerial Vehicle Market is on the rise. As they wrote in a recent report, "The Unmanned Aerial Vehicles Market size is estimated at US$17.31 billion in 2024, and is expected to reach US$32.95 billion by 2029, growing at a CAGR of 13.74% during the forecast period (2024-2029). UAVs have come into existence mainly to reach and traverse areas that are arduous for humans to maneuver. The UAV market was nascent for several years, and there was a lack of adoption in the commercial sector. Initially viewed as a military device, UAVs have established a significant presence in the commercial world over the past five years."

Goldman Sachs Research sees commercial and civil use of drones also on the move, stating, "The fastest growth opportunity comes from businesses and civil governments. They're just beginning to explore the possibilities, but we expect they'll spend US$13 billion on drones between now and 2020, putting thousands of them in the sky. Here's where you might see them."

In a May 2024 report on Verified Market Research, with so much potential mixing with current technological advancements, the outlook for this sector appears promising. They write, "The UAV Drones Market is witnessing robust growth driven by advancements in technology, increasing demand for drones across various industries, and supportive regulatory frameworks. Military applications continue to dominate the market, with surveillance and reconnaissance being key areas of deployment. However, the commercial segment is rapidly expanding, fueled by the adoption of drones for tasks like precision agriculture, aerial photography, and parcel delivery. The ongoing development of autonomous capabilities and the integration of artificial intelligence are expected to further accelerate market growth, creating lucrative opportunities for industry players. Key challenges include regulatory hurdles, concerns regarding privacy and safety, and competition from alternative technologies. Overall, the UAV Drones Market presents promising prospects for stakeholders willing to navigate these challenges and capitalize on the evolving landscape of unmanned aerial vehicles.

Catalysts

Volatus Aerospace and Drone Delivery Canada are poised to benefit from several key catalysts through this collaboration. The Aerieport will be operated as a managed service from DDC's Remote Operations Center, ensuring comprehensive drone operation services for clients globally. The integration will facilitate extensive drone operations tailored to meet the demands of various clients worldwide. This collaboration is expected to significantly enhance recurring revenue from managed services provided by the Remote Operations Center. Furthermore, the partnership underscores the technological and strategic synergies between the two companies, positioning them as leaders in aerial intelligence and drone logistics technology.

In addition to this collaboration, Volatus Aerospace recently announced a partnership with Mitsubishi Electric U.S., Inc. to integrate the AnyMile™ drone-based logistics operations management platform into its services. This strategic move aims to enhance Volatus' logistics capabilities, providing end-to-end management for drone delivery operations. A funded trial is set to commence later this year, focusing on delivering logistics to offshore oil rigs, contingent upon the successful merger with Drone Delivery Canada. Volatus Aerospace's stock (TSXV: VOL) recently closed at US$0.22, showing a 2.33% increase. The company's market capitalization stands at US$27.65 million, with a price-to-book ratio of 11.00. The average volume over the past 30 days is 109.76k, reflecting steady investor interest.

According to the company, Drone Delivery Canada Corp. is recognized for its advanced operational capabilities and extensive experience in managing complex drone operations. Based in Vaughan, Ontario, the company has completed over 7,000 remotely operated flights and is expanding its services globally in both cargo and drone service sectors. Volatus Aerospace Corp. is an international provider of aerial intelligence solutions, serving civil, public safety, and defense markets. The company focuses on introducing green and innovative drone solutions to supplement and replace traditional aircraft for long-linear inspections and cargo services. Volatus is committed to carbon neutrality, fostering a safe and inclusive workplace, and responsible governance.

This collaboration between Volatus Aerospace and Drone Delivery Canada marks a significant step in advancing drone logistics technology and expanding their market presence. The integration of the Aerieport with DDC's Remote Operations Center is expected to set new standards in the industry, offering comprehensive and scalable drone solutions to a global customer base.

What Analysts Are Saying About Volatus Aerospace Corp.

Analysts are showing strong support for Volatus Aerospace Corp., reflecting a positive outlook on the company's future. Marketbeat lists Volatus as a "buy" with a target price of CA$0.75, highlighting the confidence in the company's growth potential.

Rob Goff from Echelon Capital Markets was particularly optimistic about Volatus' prospects. He emphasized the company's innovative capabilities in agricultural drone technology in an April 22 report, noting, "The company estimates that it can cover 400 acres per day with drone spraying technology." This efficiency in drone spraying positions Volatus as a significant player in the agricultural sector, offering a lower cost, more effective, and environmentally friendly alternative to traditional methods.

Goff also underscores the potential for financial improvement, stating, "We forecast a modest free cash flow drain of roughly CA$0.7M for 2024, although subject to WC moves. With available capital at attractive terms, we could envision a material positive recalibration of forecasts." This suggests that with proper financial management and access to capital, Volatus could see even more favorable financial outcomes in the near future.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 61.65% of the company. According to Reuters, Director and Chairman Ian Alexander McDougall owns 31.04% of the company with 39.02 million shares, and President and CEO Glen Lynch owns 30.6% of the company with 38.06 million shares.

Reuters reports that institutional investors in the form of Palos Management Inc. owns 0.10% of the company with 0.13 million shares.

According to Reuters, there are 125.68 million shares outstanding with 48.2 million free float traded shares, while it has a market cap of CA$23.4 million.

Market Watch notes that the company trades in the 52-week period between CA$0.08 and CA$0.35.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volatus Aerospace Corp.
2. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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