Mr. Abhinav Singhvi reports

VOLATUS AEROSPACE CORP. ANNOUNCES CLOSING OF PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURE UNITS

Volatus Aerospace Corp. has completed a closing of its previously announced brokered private placement offering of 12-per-cent senior unsecured convertible debenture units of the company. Pursuant to the offering, the company has issued and sold 2,646 debenture units for aggregate gross proceeds to the company of $2,646,000.

The offering was completed pursuant to the terms and conditions of an agency agreement dated May 11, 2023, among Echelon Wealth Partners Inc., as lead agent and sole bookrunner, and Canaccord Genuity Corp. and the company.

Each debenture unit comprises a $1,000 principal amount senior unsecured convertible debenture and 1,000 common share purchase warrants of the company. The debentures will mature on May 11, 2025, and shall bear interest at a simple rate of 12 per cent per annum. Interest will be payable semi-annually in arrears in cash on the last day of June and December in each year, with the first interest payment deferred until June 30, 2024. The principal amount of the debentures, or any portion thereof, may be converted at the election of the holder thereof into common shares in the capital of the company at a conversion price of 50 cents per common share, being a conversion rate of 2,000 common shares per $1,000 principal amount of debenture units, at any time prior to the maturity date. The principal amount of the debentures may be converted at the election of the company into common shares at the conversion price on not more than 60 days and not less than 30 days of notice to the holders of debentures (i) in the event that the daily volume weighted average trading price of the common shares on the TSX Venture Exchange (TSX-V) is greater than $1.00 per share for 10 consecutive trading days on the TSX-V, or (ii) in connection with a qualified equity or similar financing involving common shares or warrants resulting in aggregate gross proceeds to the company of not less than $10.0-million, subject to the conversion price being ratcheted down to equal the price per security under the qualified financing. The debentures will be redeemable, in whole or in part, at the option of the company, on or after the date that is 12 months from the issue date at price equal to 105 per cent of the principal amount of the convertible debentures then outstanding plus any accrued and unpaid interest that would otherwise be payable to the holders from the time of such redemption until the maturity date.

Each warrant is exercisable to acquire one common share at a price of 50 cents per common share until May 11, 2025. If, at any time following the date that is 4 months and one day following the closing date, the daily volume weighted average trading price of the common shares on the TSX-V is greater than $1.00 per share for the preceding 10 consecutive trading days on the TSX-V, the corporation shall have the right to accelerate the expiry date of the warrants to a date that is at least 30 days following the date of notice to holders of warrants.

For its services in connection with the closing of the offering, the company has paid to the agents: (i) a cash commission equal to $210,930, being an amount equal to 8 per cent of the gross proceeds raised from the offering (reduced to 3 per cent for subscribers identified on the company's president's list); and (ii) 421,860 non-transferrable agent warrants, being such number of agents' warrants as is equal to 8 per cent of the gross proceeds raised from the offering (reduced to 3 per cent for subscribers identified on the company's president's list) divided by the conversion price. Each agents' warrant is exercisable to acquire one common share at an exercise price of 50 cents per share until May 11, 2025.

The company intends to use the net proceeds of the offering for research and development and for general working capital purposes. For further details concerning the offering, see the prior press release of the company dated April 13, 2023.

The completion of the offering remains subject to the final approval of the TSX-V. All securities issued pursuant to the offering are subject to a statutory four-month-plus-a-day hold period from their date of issuance.

About Volatus Aerospace Corp.

Volatus Aerospace is a leading provider of integrated drone solutions throughout North America and growing into Latin America and globally. Volatus serves civil, public safety and defence markets with imaging and inspection, security and surveillance, equipment sales and support, training, as well as research and development, design, and manufacturing. Through its subsidiary, Volatus Aviation, Volatus is introducing green and innovative drone solutions to supplement and replace traditional aircraft and helicopters for long-linear inspections such as pipeline, energy, rail and cargo services. Volatus is committed to carbon neutrality; the fostering of a safe, equitable and inclusive workplace; and responsible governance.

We seek Safe Harbor.