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TICKERS: VOL; VLTTF

Drone Solutions Co. Lands Contract Worth CA$4M
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The work, to begin in October, entails inspections of the client's energy infrastructure in the States, noted an Echelon Capital Markets report.

Volatus Aerospace Corp. (VOL:TSX; VLTTF:OTCQB) landed its first contract with a large, unnamed, U.S.-based energy company for CA$4M, and is to commence related operations next month, reported Echelon Capital Markets analyst Rob Goff in a September 11 research note.

"We view this contract positively where it signifies the company's strategic move into a larger market, building on its expertise and capabilities in the oil and gas industry," Goff wrote.

He explained that energy companies and oil and gas pipeline users employ drones to monitor their infrastructure for safety and regulatory compliance.

Potential 241% Gain

Based on the news, Echelon reiterated its Speculative Buy rating and CA$0.75 per share target price on the Canadian provider of unmanned area vehicle solutions, noted Goff. Volatus' current share price, in comparison, is CA$0.22 per share.

The difference between the current and target prices reflects a substantial return for investors of 241%.

Benefits of Contract

The new contract should help Volatus grow to CA$4M in annualized revenue and surpass a 10% EBITDA margin, according to management, Goff reported.

Landing this work should also help the company develop a "track record that favors it in future contract pursuits, either through a request for proposal (RFP) or direct," added the analyst.

Large U.S. Market

Goff highlighted the scope of the oil and gas pipeline industry in the U.S., and, thus growth potential for Volatus. The network in the States encompasses about 4.2 million kilometers of pipeline, five times the size of Canada's.

Further, the industry in the U.S. is estimated to reach US$1.1 billion in value over the next ten years.

Pursuing Similar Contracts

Volatus has been vying for contracts for long-line inspection work through the RFP process. The duration of long-line inspection contracts is typically three to five years, and the likelihood of renewal is high.

"The recurring nature of the business warrants a premium against equipment sales," Goff wrote.

This year alone, Volatus management expects to generate CA$12−14M in revenue from long-line inspection.

The company is well-situated versus competitors given its two significant advantages, Goff noted. They are its proprietary Aerial Information Reporting System technology and its partnerships with artificial intelligence and advanced sensor companies. Given its technological capacity, Volatus compiles inspection data for clients in a database. As such, it can and does inform them of any changes in the numbers over time.

Also, the company can offer and provide clients with drone technology to replace manned aircraft, a prospect with fewer financial and environmental impacts.


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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. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. 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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Disclosures For Echelon Wealth Partners, Volatus Aerospace Corp., September 11, 2023

Important Information and Legal Disclaimers Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money. Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.

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Canadian Disclosures: To make further inquiry related to this report, Canadian residents should contact their Echelon Wealth Partners professional representative. To effect any transaction, Canadian residents should contact their Echelon Wealth Partners Investment advisor.

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners Inc. is not registered as a broker-dealer in the United States and is not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. For U.S. persons only: This research report is a product of Echelon Wealth Partners Inc, under Marco Polo Securities 15a-6 chaperone service, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. Research reports are intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a-6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Echelon Wealth Partners Inc. has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo"). Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer.

U.K. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. ECHELON WEALTH PARTNERS INC. IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed onto persons described in part VI of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.

Copyright: This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express written consent of Echelon Wealth Partners.

ANALYST CERTIFICATION Company: Volatus Aerospace Corp.| VOL-TSX I, Rob Goff, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

IMPORTANT DISCLOSURES

During the last 12 months, Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or private placement of securities of this issuer.

During the last 12 months, Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this Issuer.





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