Volatus Aerospace Inc. Announces Shares-for-Debt Settlement to Strengthen Balance Sheet

In a strategic move to enhance shareholder value and fortify its financial foundation, Volatus Aerospace Inc. has announced a proposed shares-for-debt settlement. This initiative, effective April 10, 2025, aims to convert outstanding convertible debentures into common shares and warrants, thereby optimizing the company's capital structure and setting the stage for sustainable growth.

The Proposed Settlement: A Closer Look

The proposed settlement involves the conversion of $2,646,000 in outstanding principal and accrued interest from convertible debentures into common shares and warrants. This move is subject to the approval of the TSX Venture Exchange (TSXV) and has been approved by the debenture holders through an extraordinary resolution.

Key Transaction Details

1. Debenture Conversion: The entire outstanding principal amount of $2,646,000 will be converted into common shares at a conversion price of $0.15 per share. This will result in the issuance of 17,639,995 Settlement Shares.

2. Interest Conversion: All accrued and unpaid interest will also be converted into common shares at the same conversion price, adding to the total number of shares issued.

3. Supplemental Shares: Debenture holders will receive an additional 10% of the principal amount in common voting shares, further increasing the total number of shares outstanding.

4. Warrants Issuance: Each debenture holder will receive one common share purchase warrant for each Settlement Share. These warrants will be exercisable into one common share at a price of $0.20 per share for a period of three years from the date of issuance.

Potential Benefits and Risks

# Benefits

1. Enhanced Shareholder Value: The conversion of debentures into common shares and warrants can enhance shareholder value by increasing the number of shares outstanding, potentially leading to a higher market capitalization and attracting more investors.

2. Strengthened Balance Sheet: Converting debt into equity reduces the company's debt burden, improving its financial health and creditworthiness.

3. Financial Flexibility: The restructuring provides added financial flexibility, allowing the company to pursue its goals more effectively.

4. Increased Liquidity: The issuance of warrants can increase liquidity in the market, as investors may exercise their warrants to acquire additional shares, potentially driving up the stock price.

# Risks

1. Dilution of Existing Shareholders: The conversion of debentures into common shares will increase the number of outstanding shares, diluting the ownership percentage of existing shareholders.

2. Market Reaction: The market may react negatively to the dilution of shares, potentially leading to a decrease in the stock price.

3. Regulatory Approval: The transaction is subject to receipt of TSXV approval, and failure to obtain this approval could result in the Company not proceeding with the Shares-for-Debt Transaction.

4. Interest Rate Risk: The conversion of accrued and unpaid interest into common shares at a conversion price of $0.15 per share may not fully compensate for the interest that would have been paid if the debentures were not converted.

Strategic Implications

The proposed shares-for-debt settlement is a strategic move by Volatus Aerospace Inc. to optimize its capital structure and strengthen its balance sheet. By converting debt into equity, the company aims to reduce its debt burden and interest payments, thereby enhancing its financial flexibility and liquidity. This move will allow Volatus to focus on its growth strategy, including expanding operations and developing new aerial solutions across key industries such as oil and gas, energy utilities, public safety, and infrastructure.

Conclusion

The proposed shares-for-debt settlement by Volatus Aerospace Inc. is a significant step towards optimizing the company's capital structure and setting the stage for sustainable growth. While the conversion of debentures into common shares and warrants offers potential benefits such as enhanced shareholder value, a strengthened balance sheet, and increased financial flexibility, it also carries risks such as dilution of existing shareholders, market reaction, regulatory approval, and interest rate risk. Investors should carefully consider these factors before making investment decisions.