Draganfly Announces Pricing of US$3.6 Million Underwritten Public Offering
Draganfly Inc. announced the pricing of its underwritten public offering of 13.4 million units, generating approximately US$3.6 million in gross proceeds. Each unit comprises one common share and one warrant to purchase another share, with warrants exercisable at US$0.36 per share. The net proceeds will be utilized for general corporate purposes, new product development, growth initiatives, working capital, potential acquisitions, and research and development.
The announcement of Draganfly Inc.'s public offering is a significant event that warrants the attention of investors and analysts. The pricing of the offering at US$0.27 per unit, with additional warrants, could potentially dilute existing shareholders but also provides the company with necessary capital. The gross proceeds of US$3.6 million, before expenses, suggest a targeted infusion of funds to bolster the company's financial position.
From a financial perspective, the key factors to consider include the immediate exercisability of the warrants and their five-year expiration . This structure can impact the stock's liquidity and volatility in the short term. The exercise price of US$0.36 represents a potential premium to the current trading price, which could incentivize warrant holders to contribute additional capital in the future if the company's share price appreciates.
Investors should also scrutinize the intended use of proceeds, as it reflects management's strategic priorities. Allocating funds towards growth initiatives, working capital and research and development indicates a focus on expanding the company's market presence and product offerings. However, the mention of potential acquisitions introduces an element of risk, as the success of such endeavors is not guaranteed and could affect the company's financial health if not executed prudently.
The drone industry is experiencing rapid growth and innovation, with increasing applications across commercial, industrial and governmental sectors. Draganfly's move to raise capital through a public offering can be seen as an attempt to capitalize on market opportunities and strengthen its competitive position . The reference to funding capabilities to meet demand for new products suggests that the company is responding to market trends and consumer needs.
It is important to note that the effectiveness of the capital raised in driving growth will depend on the company's ability to execute its strategic initiatives effectively. The drone market is characterized by fast-paced technological advancements and a highly competitive landscape . Companies that are not agile or fail to innovate may quickly fall behind. Therefore, Draganfly's research and development efforts, as well as any potential acquisitions, should be closely monitored for their potential to enhance the company's product offerings and market share.
The legal implications of a public offering are multifaceted, particularly concerning regulatory compliance and disclosure requirements. Draganfly's engagement with Maxim Group LLC as the sole book-running manager indicates a structured approach to managing the offering. It is imperative for the company to adhere to securities laws and regulations , ensuring transparent communication with investors regarding the terms of the offering and the use of proceeds.
Additionally, the issuance of warrants as part of the units adds complexity to the transaction. Warrants are contracts that grant the holder the right to purchase additional shares at a specified price, which can affect the company's shareholder structure and capitalization table . The legal team must ensure that all aspects of the warrant terms, including exercisability, pricing and expiration, comply with applicable laws and are clearly articulated to potential investors.
02/21/2024 - 11:00 PM
Saskatoon, SK., Feb. 21, 2024 (GLOBE NEWSWIRE) -- Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8A) (“Draganfly” or the “Company”), a drone solutions, and systems developer, today announced the pricing of its previously announced underwritten public offering (the “Offering”) of 13,400,000 units, with each unit consisting of one common share (or one pre-funded warrant to purchase one common share in lieu thereof) and one warrant to purchase one common share. Each unit was sold at a public offering price of US$0.27 , for gross proceeds of approximately US$3.6 million , before deducting underwriting discounts and offering expenses. The warrants will have an exercise price of US$0.36 per share, are exercisable immediately and will expire five years following the date of issuance.
Maxim Group LLC is acting as sole book-running manager for the Offering.
Draganfly currently intends to use the net proceeds from the Offering for general corporate purposes, including to fund its capabilities to meet demand for its new products including growth initiatives and/or for working capital requirements including the continuing development and marketing of the Company’s core products, potential acquisitions and research and development. The Offering is expected to close on or about February 26, 2024, subject to the satisfaction of customary closing conditions.
The offering is subject to customary closing conditions including receipt of all necessary regulatory approvals, including approval of the Canadian Securities Exchange and notification to the Nasdaq Stock Market.
The Offering is being made pursuant to an effective shelf registration statement on Form F-10, as amended, (File No. 333-271498) previously filed with and subsequently declared effective by the U.S. Securities and Exchange Commission (“SEC”) on July 5, 2023 and the Company’s Canadian short form base shelf prospectus dated June 30, 2023 (the “Base Shelf Prospectus”). Draganfly will offer and sell the securities in the United States only. No securities will be offered or sold to Canadian purchasers.
A preliminary prospectus supplement and accompanying Base Shelf Prospectus relating to the Offering and describing the terms thereof has been filed with the applicable securities commissions in Canada and with the SEC in the United States and is available for free by visiting the Company’s profiles on the SEDAR+ website maintained by the Canadian Securities Administrators at www.sedarplus.ca or the SEC’s website at www.sec.gov , as applicable. A final prospectus supplement with the final terms will be filed with the securities regulatory authorities in each of the Canadian provinces of British Columbia, Saskatchewan and Ontario and the SEC. Copies of the preliminary prospectus supplements, accompanying Base Shelf Prospectus, and final prospectus supplement, when available, relating to the Offering may be obtained by contacting Maxim Group LLC, at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Syndicate Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com .
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Draganfly
Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE: 3U8A) is the creator of drone solutions, software, and AI systems.
Media Contactmedia@draganfly.com
Company Contactinfo@draganfly.com
Forward Looking Statements
Certain statements contained in this news release may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown. In this news release, such forward-looking statements include, but are not limited to, statements regarding the timing, size and expected gross proceeds of the offering, the satisfaction of customary closing conditions related to the offering and sale of securities, the intended use of proceeds, and Draganfly’s ability to complete the offering. Closing of the Offering is subject to numerous factors, many of which are beyond Draganfly’s control, including but not limited to, the failure of the parties to satisfy certain closing conditions, and other important factors disclosed previously and from time to time in Draganfly’s filings with the securities regulatory authorities in the Canadian provinces of British Columbia, Ontario and Saskatchewan and with the SEC. Actual future events may differ from the anticipated events expressed in such forward-looking statements. Draganfly believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and Draganfly is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable securities laws. Investors are cautioned not to unduly rely on these forward-looking statements and are encouraged to read the offering documents, as well as Draganfly’s continuous disclosure documents, including its current annual information form, as well as its audited annual consolidated financial statements which are available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar .
What is the public offering price of Draganfly Inc.'s units?
The public offering price of Draganfly Inc.'s units is US$0.27 per unit.
How many units were offered in Draganfly Inc.'s public offering?
Draganfly Inc. offered 13,400,000 units in its public offering.
What is the exercise price of the warrants included in the units?
The warrants included in the units have an exercise price of US$0.36 per share.
Who is the sole book-running manager for Draganfly Inc.'s Offering?
Maxim Group LLC is acting as the sole book-running manager for Draganfly Inc.'s Offering.
How long are the warrants included in the units valid for?
The warrants included in the units are valid for five years following the date of issuance.
