Volatus Releases 2023 Financial Results and Provides General Corporate Update

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

Consolidated Statement of Loss and Comprehensive Loss

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

SUMMARY OF RESULTS