Commercial Drones the Future of Aviation

Recently Ian McDougal sat down with Streetwise Reports to provide some insight into how the industry adjusted to the Covid-19 pandemic and how the Volatus Aerospace Corp's (VOL:TSX; VLTTF:OTCQB) is prepared to adapt to the future of commercial drones in aviation.

Volatus: Meeting New Challenges

In addition to having experience with aviation, Ian McDougal graduated from law school, has experience in corporate governance and corporate finance, and has worked in the international oil and gas industry. He traveled extensively in Asia and Europe to finalize oil and gas deals with major industry players. He got his start in aviation as a pilot, flying both helicopters and fixed-wing airplanes.

The Covid-19 pandemic brought major changes to the aviation industry. McDougal says that he had to act quickly to adapt to the uncertain environment: "It was going to be a stress test for many companies that wouldn't succeed. In my own case, my companies, I knew I would have to make some changes, and I did very quickly to survive something that had a duration that was hard to predict."

According to McDougal, "When Covid hit, [Volatus] realized the world was going to change dramatically, and we made a pivot into the drone world, never expecting it to grow quite as fast as it has for us. It's been a very interesting, very demanding activity, and we realize that we're on the cusp of a fairly large shift away from conventional aviation in a great many areas, and that's going to benefit the drone space. It's becoming a much larger piece of our corporate world."

McDougal used the pandemic as an opportunity to streamline practices within the aviation industry. While most of the industry was shut down, certain sectors, such as drones, that were becoming more popular as a result of technological advancements became Volatus' focus.

Volatus has expanded drone technology to a wide range of applications, from agriculture to emergency cargo lift capabilities. Additionally, the company has proprietary designs that have already been used by the Canadian Armed Forces.

Agriculture has become one of the company's major areas of focus. Commercial drones can survey fields and identify threats to crop production, in addition to other precision tasks.

According to McDougal, "We could do in 20 minutes what you might not want to do as a farmer more than once a month . . .  we knew there were opportunities, we knew the opportunity development was going to be accelerated by the pandemic . . .  we knew that even before Covid, my companies were starting to look at various drone operators."

Volatus is hoping to lead the industry beyond drones alone. Volatus is approaching the market on the basis of delivering critical capabilities in a way that will provide broad possible revenues, as well as commercializing existing revenue.

Widespread Applications for Commercial Drones

The commercial drone industry saw increased demand under pandemic lockdowns. As a result of social distancing needs, a variety of industries turned to drones to accomplish essential tasks, such as medical emergency transportation, inspection and maintenance, filming and photography, surveying, surveillance, and precision agriculture. Drones are particularly well suited for precision tasks, enabled by technology like GPS.

At the moment, commercial drone technology is looking at obstacles such as a lack of infrastructure and a lack of adaptivity by air traffic control systems, which are by no means permanent setbacks.

Catalysts

Recently, Volatus announced it had successfully completed the Hinton GRID Testing evaluation process conducted by Alberta Wildfire Services, thereby obtaining qualification as a vendor capable of delivering infrared imaging services from drones for wildfire suppression. This accomplishment signifies that Volatus has met the necessary criteria and demonstrated its competence in providing such services.

Volatus underwent a thorough assessment during the Hinton GRID Testing evaluation process, examining their proficiency in utilizing drones with infrared imaging technology for wildfire monitoring and detection. The evaluation focused on assessing their ability to capture accurate and reliable imagery of wildfire situations using drones.

Through passing the evaluation process, Volatus has proven its expertise in drone operations, infrared imaging techniques, and knowledge of wildfire suppression protocols. 

Volatus has expanded aggressively across North America, LATAM, and Europe and has focused on commercializing technology, which it has developed out of industry needs or requests. It has an experienced management team with expertise in the aviation industry.

The company is growing laterally and vertically, according to McDougal, along with a broader range of activities than most others on the market. The company reports positive revenue growth and operating revenues, and its range of capabilities is very broad.

According to McDougal, "Our strategy is virtually growth."

Ownership and Share Structure

Management and insiders own 68.08% of the company. Ian Alexander McDougall owns 34.24% of the company with 39.02 million shares, Glen Lynch owns 33.76% with 38.7 million shares, and Luc Masse owns 0.08% with 0.08 million shares.

Palos Management Inc. owns 0.53% of the company with 0.60 million shares. The company reports no strategic investors.

Volatus reports that it has CA$6.8 million in the bank as of September 30, 2022, with a monthly burn rate of CA$500k.

The company reports no potential sellers. There are two sets of warrants expiring on December 22, 2023, with exercise prices of CA$0.65 and CA$0.75. A third set expires on October 5, 2024, with an exercise price of CA$0.50.

There are 113.94 shares outstanding, with 59.82 million traded shares. There are 24,954,951 warrants and 5,599,232 options. The company has a market cap of CA$29.83. It trades in the 52-week period between CA$0.27 and CA$0.50.

Important Disclosures:

1. Volatus Aerospace Corp. are billboard sponsor(s) of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000. In addition, Volatus Aerospace Corp. is an affiliate of has a consulting relationship with Streetwise Reports and has paid a consulting fee between US$8,000 and US$20,000. 
2. 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.
3. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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