Draganfly Inc. (CSE: DFLY) (OTCQB: DFLYF) (FSE: 3U8)
(“
Draganfly” or the “
Company”),
an award-winning, industry-leading systems developer within the
commercial Unmanned Aerial Vehicle (“
UAV”) and the
Unmanned Vehicle Systems (“
UVS”) industry, is
pleased to announce that it has entered into an arm’s length
definitive share purchase agreement dated January 15th, 2020 with
the shareholders of Dronelogics Systems Inc.
(“
Dronelogics”), whereby Draganfly has agreed to
acquire all of the shares of Dronelogics (the
“
Transaction”) for cash and common shares of
Draganfly (“
Draganfly Shares”).
Transaction Highlights
- The Transaction continues
to establish Draganfly as a leading, diversified drone
organization. Dronelogics has been growing steadily with
revenues in excess of CAD$3.0 million and expected 2019 year over
year growth of 20.0%. Draganfly management believes the Transaction
will generate combined pro forma revenue of between CAD$6 to CAD$7
million for the fiscal year 2020, representing an increase in
Draganfly’s revenue of between 23% and 43%.
- Strategically Positioned to
Leverage Draganfly’s Brand: Dronelogics is a complementary
business to Draganfly and the acquisition of Dronelogics will
expand the product offering of Draganfly in the integration and
engineering segments. This will expand Draganfly’s total
addressable market and enhance its position as a leader in the UAV
and UVS industry.
- Expanded Customer
Base. Draganfly and Dronelogics have limited overlap in
customer base representing an opportunity to cross sell the
expanded product offerings and further customized solutions to
existing clients.
- Established History of
Providing Drone Services. Dronelogics has been in business
for 10 years, working closely with Fortune 500 companies to provide
insights into inventory metrics, asset management, volume-metric
calculation and digitizing assets, among many other
applications.
- Enhanced Management
Expertise. The acquisition will add a team of 9 employees.
Post-closing, Mr. Justin Hannewyk (“Mr. Hannewyk”)
will be President of the operating subsidiary and will also be
appointed to Draganfly’s board of directors. The Dronelogics
employee base brings a wealth of industry experience and knowledge
to Draganfly.
Cameron Chell, Chairman and CEO, stated, "We are
excited to welcome the whole Dronelogics team as part of Draganfly.
Dronelogics has established itself as a trusted drone service
provider. Its business is highly complementary to our business and
the combined entity will deliver an enhanced product and service
offering to the combined client base. This transaction further
establishes Draganfly as a leading, publicly traded drone company,
and provides a strong platform for us to pursue continued
consolidation in the industry. "
Material Terms of the Agreement with
Dronelogics
- On closing of the Transaction (the
“Closing”), the Company will pay the shareholders
of Dronelogics (the “Sellers”) CAD$2.0 million,
which will consist of the following: (i) a cash payment of
CAD$500,000, subject to a working capital adjustment, and (ii)
CAD$1.5 million in value plus certain closing adjustments to be
satisfied by the issuance Draganfly Shares at a deemed price of
CAD$0.50 per share.
- The Sellers will receive a
nomination right to appoint one person to the board of directors of
the Company for a period of two years from the Closing or as long
as Mr. Hannewyk holds a senior executive position with the
Company.
- The Draganfly Shares issued under
the Transaction will be subject to resale restrictions in the form
of pooling terms providing for release of these Draganfly Shares
over a period of 24 months and a right to place in favour of
Draganfly during the same 24-month period.
- Completion of the Transaction is
subject to a number of closing conditions customary for a
transaction of this nature, including the filing of required forms
with the Canadian securities Exchange (the
“CSE”).
- The two Sellers will enter into
executive employment agreements with the Company.
The Transaction has been approved by the board
of directors of Draganfly and Dronelogics. In connection with the
Transaction, the Company will pay fees of $160,000 to certain
advisors; as to $100,000 by way of 200,000 in Draganfly Shares at a
deemed price of $0.50 per share and as to $60,000 in cash or
Draganfly Shares at a deemed price of $0.50 per share. At Closing,
the Company will issue: certain additional Draganfly Shares to the
Sellers, at a deemed price of CAD$0.50 per Draganfly Share, in
satisfaction of accrued management bonuses in connection with their
services to Dronelogics; (ii) grant 445,000 incentive stock options
to certain employees of Dronelogics pursuant to the Company's share
compensation plan, exercisable at a price equal to closing price of
the Draganfly Shares on the CSE on January 15, 2020. The options
shall have a term of 10 years and vest in three equal tranches, on
the first, second and third anniversaries of the date of grant, and
(iii) award 375,000 restricted share units (the
“RSUs”) to certain directors and officers of
Dronelogics. RSUs were awarded to certain directors and officers of
Dronelogics pursuant to the Company's share compensation plan. The
RSUs shall vest in three equal tranches, on the first, second and
third anniversaries of the date of award.
Advisors
Scotiabank is acting as Draganfly’s financial
advisor, and Gowling WLG (Canada) LLP is acting as Draganfly’s
legal advisor. Stikeman Elliott LLP is acting as Dronelogics legal
advisor.
About Dronelogics
Dronelogics is a solutions integrator for custom
robotics, hardware and software that provides a wide scope of
services including sales, training, rentals, maintenance, flying
and data processing services based in Vancouver, Canada. The wide
variety of services, products and innovations that Dronelogics
provides results in a unique one-stop-shop solution for their
clients which aids in higher customer retention, diversified
revenue streams, repeat business and protection against market
volatility. Dronelogic’s customer base comprises well over 10,000
independent names and the company enjoys high repeat business due
to its expertise, unique focus on service and broad scope of
offerings.
About Draganfly
Draganfly Inc. (CSE: DFLY; OTCQB: DFLYF; FSE:
3U8) is the creator of quality, cutting-edge, unmanned vehicle
systems and software that revolutionizes the way people do
business. Recognized as being at the forefront of technology for
over 21 years, Draganfly is an award-winning, industry-leading
manufacturer within the commercial UAV and UVS space, serving the
public safety, agriculture, industrial inspections and mapping and
surveying markets. Draganfly is a company driven by passion,
ingenuity and the need to provide efficient solutions and
first-class services to its customers around the world with the
goal of saving time, money and lives.
For more information on Draganfly, please visit
us at: www.draganfly.com. For additional investor information,
visit www.thecse.com searching DFLY or visit
https://www.boerse-frankfurt.de/ searching 3U8.
Media Contact Arian Hopkins email:
arian@businessinstincts.com
Company Contact Paul Sun, CFO
Email: paul.sun@draganfly.com
Forward-Looking Statements
This release contains certain “forward looking
statements” and certain “forward-looking information” as defined
under applicable Canadian securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as “may”, “will”, “believe” or
similar terminology. Forward-looking statements and information
include, but are not limited to, statements with respect to
expected closing of the Transaction or the expected closing date of
the Transaction, Transaction benefits, expected additional
revenues, expected growth, results of operations, performance,
industry trends and growth opportunities. Forward-looking
statements and information are based on forecasts of future
results, estimates of amounts not yet determinable and assumptions
that, while believed by management to be reasonable, are inherently
subject to significant business, economic and competitive
uncertainties and contingencies. Forward-looking statements and
information are subject to various known and unknown risks and
uncertainties, many of which are beyond the ability of the Company
to control or predict, that may cause the Company’s actual results,
performance or achievements to be materially different from those
expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out here in, including but not limited to: the risk that the
Transaction may not be completed as expected or at all; the
expected benefits of the Transaction and additional revenues may
not materialize; the inherent risks involved in the general
securities markets; uncertainties relating to the availability and
costs of financing needed in the future; the inherent uncertainty
of cost estimates and the potential for unexpected costs and
expenses, currency fluctuations; regulatory restrictions,
liability, competition, loss of key employees and other related
risks and uncertainties. For more information on the risk,
uncertainties and assumptions that could cause anticipated
opportunities and actual results to differ materially, please refer
to the public filings of Draganfly which are available at
www.sedar.com. The Company undertakes no obligation to update
forward-looking information except as required by applicable law.
Such forward-looking information represents managements’ best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. Readers are advised not to place undue
reliance on forward-looking statements or information.
This news release also contains future-oriented
financial information and financial outlook information
(collectively, “FOFI”) about the pro forma revenue
of the resulting issuer which are subject to the same assumptions,
risk factors, limitations and qualifications as set forth in the
above paragraphs. FOFI contained in this news release was made as
of the date of this news release and was provided for the purpose
of providing further information about Draganfly’s anticipated
future business operations. Draganfly disclaims any intention or
obligation to update or revise any FOFI contained in this press
release, whether as a result of new information, future events or
otherwise, unless required pursuant to applicable law. FOFI
contained in this news release should not be used for purposes
other than for which it is disclosed herein. Such future-oriented
production information is provided for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that such outlook or
information should not be used for purposes other than for which it
is disclosed in this news release.
The CSE has not in any way passed upon the
merits of the listing of the common shares of Draganfly and has
neither approved nor disapproved the contents of this news
release.
Draganfly (CSE:DFLY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Draganfly (CSE:DFLY)
Historical Stock Chart
From Sep 2023 to Sep 2024