Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – application for wholly-owed subsidiary (Subsidiary) of parent company (Parent) for a decision exempting Subsidiary from Continuous Disclosure Requirements and insiders of Subsidiary from Insider Reporting Requirements subject to terms and conditions – Subsidiary is a reporting issuer and has certain convertible securities outstanding; convertible securities entitle securityholders to acquire common shares of Parent; convertible securities do not qualify as “designated exchangeable securities” under exemption in section 13.3 of NI 51-102; and relief granted on conditions substantially similar to the conditions contained in section 13.3 of NI 51-102.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 107 and 121(2)(a)(ii)

National Instrument 51-102 Continuous Disclosure Obligations, ss. 13.1 and 13.3

National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, s. 8.6

National Instrument 55-102 System for Electronic Disclosure by Insiders, s. 6.1

National Instrument 55-104 Insider Reporting Requirements and Exemptions, s. 10.1

March 27, 2025

In the Matter of

the Securities Legislation of

British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (the Jurisdictions)

and

In the Matter of

the Process for Exemptive Relief Applications in Multiple Jurisdictions

and

In the Matter of

Volatus Aerospace Corp. (Volatus) and Volatus Aerospace Inc. (formerly Drone Delivery Canada Corp.) (DDC, and together with Volatus, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) that:

• the continuous disclosure requirements under the Legislation including the requirements of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) (together, the Continuous Disclosure Requirements) do not apply to Volatus;

• the requirements of National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109) (the Certification Requirements) do not apply to Volatus; and

• the insider reporting requirements under the Legislation including the requirements of National Instrument 55-104 Insider Reporting Requirements and Exemptions and the requirement to file an insider profile under National Instrument 55-102 System for Electronic Disclosure by Insiders (together, the Insider Reporting Requirements) do not apply to any insider of Volatus.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application;

(b) the Filers have provided notice that section 4.7 of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, the Northwest Territories and Nunavut; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filers:

Volatus

1. Volatus is a corporation existing under the Business Corporations Act (Ontario) (the OBCA).

2. Volatus is a reporting issuer in all of the provinces and territories of Canada.

3. The authorized capital of Volatus consists of an unlimited number of common shares (Volatus Shares) and an unlimited number of Class A preferred shares (Volatus Preferred Shares).

4. As of May 20, 2024, Volatus had 11,741,034 warrants to purchase Volatus Shares that were listed on the TSX Venture Exchange (the TSXV) under the trading symbol “VOL.WT.A” with an expiry date of October 6, 2024 (the Listed Volatus Warrants) issued pursuant to a warrant indenture between Volatus and TSX Trust Company (TSX Trust) dated October 6, 2022. The Listed Warrants have now expired.

5. As of May 20, 2024, Volatus also had:

(i) unlisted warrants outstanding to purchase an aggregate of 3,947,335 Volatus Shares (the Unlisted Volatus Warrants, and together with the Listed Volatus Warrants, the Volatus Warrants);

(ii) options outstanding to purchase an aggregate of 8,067,691 Volatus Shares (the Volatus Options);

(iii) principal amount of $2,646,000 in senior unsecured convertible debentures convertible into Volatus Shares at $0.50 per share (the Volatus Debentures) issued pursuant to a debenture indenture between Volatus and TSX Trust dated May 11, 2023 as amended (the Debenture Indenture); and

(iv) 206,188 Volatus Preferred Shares.

6. In connection with the closing of the Arrangement (as defined below), effective as of the close of business on September 4, 2024, the Volatus Shares were de-listed from the TSXV.

7. The Listed Volatus Warrants traded on the TSXV as Volatus Warrants under their existing trading symbol and remained listed on the TSXV as securities of Volatus, until their expiry on October 6, 2024.

DDC

8. DDC is a limited company existing under the Business Corporations Act (British Columbia) (the BCBCA).

9. DDC is a reporting issuer in all of the provinces of Canada.

10. The authorized capital of DDC consists of an unlimited number of common voting shares (DDC Common Shares) and an unlimited number of variable voting shares (DDC Variable Voting Shares, together with the DDC Common Shares, the DDC Shares).

11. As of May 20, 2024, there were issued and outstanding: (i) 224,199,312 DDC Shares; and (ii) options to purchase an aggregate of 9,056,669 DDC Shares.

12. The DDC Shares are listed on the TSXV under the symbol “FLT”.

The Plan of Arrangement

13. DDC and Volatus entered into a business combination agreement on May 20, 2024, which provided the terms and conditions under which DDC would acquire all of the issued and outstanding Volatus Shares by way of a court-approved plan of arrangement under the OBCA (the Arrangement).

14. Under the Arrangement, in exchange for each Volatus Share, DDC issued to shareholders of Volatus (Volatus Shareholders) 1.785 DDC Shares for each Volatus Share held (the Share Consideration), subject to the terms of the Arrangement.

15. As a result of the Arrangement, Volatus became a wholly-owned subsidiary of DDC.

16. On July 10, 2024, Volatus obtained an interim order from the Ontario Superior Court of Justice (Commercial List) (the Court) specifying certain requirements and procedures for an annual and special meeting of the Volatus Shareholders for the purpose of, among other things, approving the Arrangement (Volatus Meeting).

17. In connection with the Arrangement and pursuant to the interim order from the Court, Volatus delivered to Volatus Shareholders and holders of Volatus Warrants, Volatus Debentures and Volatus Options a joint management information circular of Volatus and DDC dated July 12, 2024 containing prospectus-level disclosure of the business and affairs of each of Volatus and DDC and information on the Plan of Arrangement, a copy of which has been posted on SEDAR+ under Volatus and DDC’s respective profiles.

18. On August 23, 2024, Volatus Shareholders approved the Arrangement with an affirmative vote of 99.99% of the votes cast by holders of Volatus Shares eligible to vote the Volatus Meeting.

19. On August 27, 2024, Volatus received a final order of the Court approving the Arrangement.

20. The Arrangement was completed on August 30, 2024; under the Arrangement, among other things, the following occurred:

(a) all Volatus Shares, other than Volatus Shares held by any Dissenting Shareholder (as defined in the Plan of Arrangement), were exchanged by the holders thereof, without any further act or formality for the Share Consideration;

(b) Volatus Shares held by Dissenting Shareholders in respect of which Dissent Rights (as defined in the Plan of Arrangement) have been validly exercised were deemed to have been transferred by such Dissenting Shareholders to DDC;

(c) each Volatus Option outstanding prior to the Effective Time was exchanged for an option to acquire from DDC (each a New DDC Option) the number of DDC Shares equal to (A) the number of Volatus Shares subject to such Volatus Option immediately prior to the Effective Time, multiplied by (B) 1.785, rounded down to the nearest whole number of DDC Shares, at an exercise price equal to the quotient obtained by dividing: (X) the exercise price per Volatus Share subject to such Volatus Option immediately before the Effective Time, by (Y) 1.785, provided that the aggregate exercise price payable on any particular exercise of New DDC Options was rounded up to the nearest whole cent;

(d) each Volatus Warrant remained outstanding as warrants of Volatus that upon exercise entitle the holder thereof to receive in lieu of each Volatus Share to which such holder was theretofore entitled upon exercise of such Volatus Warrants, the Share Consideration;

(e) each outstanding convertible debenture of Volatus (Volatus Debenture) prior to the Effective Time was continued on the same terms and conditions as were applicable immediately prior to the Effective Time, except that the terms of the Volatus Debentures were amended so as to substitute for the Volatus Shares subject to such Volatus Debentures such number of DDC Common Shares equal to (A) the number of Volatus Shares into which such Volatus Debentures may be convertible immediately prior to the Effective Time, multiplied by (B) 1.785, rounded down to two decimal places; and

(f) all Class A preferred shares of Volatus outstanding immediately prior to the Effective Time were unaffected by the Plan of Arrangement.

21. On September 3, 2024, the TSXV approved the listing of the DDC Shares to be issued as a result of the Arrangement (including those DDC Shares issuable upon exercise or conversion of the Volatus Warrants, the Volatus Debenture and the New DDC Options).

22. On September 4, 2024, the Volatus Shares were delisted from the TSXV.

23. On October 6, 2024, the Listed Volatus Warrants expired and ceased to be listed on the TSXV.

24. In connection with the Arrangement, Volatus, DDC and TSX Trust entered into a supplemental indenture to the Debenture Indenture, pursuant to which DDC assumed all of the obligations of Volatus under the Volatus Debentures and the Debenture Indenture, including the performance and observation of every covenant of Volatus, the obligation to repay principal and pay interest on the Volatus Debentures and the obligation to issue shares of DDC upon the conversion of the Volatus Debentures.

25. As a result of the Arrangement and as of the date hereof, the only securities of Volatus that are held by persons other than DDC are the outstanding Unlisted Volatus Warrants and Volatus Debentures, which are exercisable for or convertible into, as applicable, the Share Consideration, and the Volatus Preferred Shares, which are redeemable for cash.

26. As a result of the Arrangement and as of the date hereof, there are no securities of Volatus that are traded on a marketplace (as defined in National Instrument 21-101 Marketplace Operation).

27. As required by the terms of the warrant indenture dated Volatus and TSX Trust Company dated May 11, 2023 (the Warrant Indenture), DDC and Volatus have entered into a supplemental warrant indenture with TSX Trust Company with respect to the Listed Volatus Warrants.

28. The Warrant Indenture governing certain of the Unlisted Volatus Warrants includes a covenant that Volatus will use commercially reasonable efforts to maintain its status as a reporting issuer not in default of the requirements of the securities laws in each of the jurisdictions in Canada of which it is a reporting issuer.

29. The Warrant Indenture does not require Volatus to deliver to holders of certain Unlisted Volatus Warrants any continuous disclosure materials of Volatus.

30. None of the Filers is in default of any of its respective obligations under securities legislation in the jurisdictions in which it is a reporting issuer, other than Volatus, which issuer is currently in default of the requirement to prepare and file, on or before, November 29, 2024, interim financial statements, management’s discussion and analysis and related certificates for the period ending September 30, 2024.

31. Volatus cannot rely on the exemption available in s. 13.3 of NI 51-102 for issuers of exchangeable securities because the Volatus Warrants are not “designated exchangeable securities” as defined in NI 51-102.

32. None of the holders of the Volatus Warrants will have voting rights in respect of DDC in their capacity as warrantholders.

33. Volatus has no intention of accessing the capital markets in the future by issuing any further securities to the public and has no intention of issuing any securities to the public other than those that are outstanding on completion of the Arrangement.

34. It is information relating to DDC, and not to Volatus, that is of primary importance to holders of Volatus Warrants as outstanding Volatus Warrants are exercisable for the Share Consideration. In addition, as Volatus is a wholly-owned subsidiary of DDC, DDC will consolidate Volatus with DDC for the purposes of its financial statement reporting. As such, the disclosure required by the Continuous Disclosure Requirements and the Insider Reporting Requirements applicable to Volatus would not be meaningful or of any significant benefit to the holders of the Volatus Warrants and would impose a significant cost on Volatus.

Decision

The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

1. The decision of the Decision Maker under the Legislation is that the Continuous Disclosure Requirements do not apply to Volatus provided that and for so long as:

(a) DDC is the beneficial owner of all of the issued and outstanding voting securities of Volatus;

(b) DDC is a reporting issuer in a designated Canadian jurisdiction (as defined in NI 51-102) and has filed all documents it is required to file under NI 51-102;

(c) Volatus does not issue any securities, and does not have any securities outstanding other than:

(i) the Unlisted Volatus Warrants, the Volatus Debentures and the Volatus Preferred Shares;

(ii) securities issued to and held by DDC or an affiliate of DDC;

(iii) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; or

(iv) securities issued under the exemption from the prospectus requirement in section 2.35 [Short-term debt] of National Instrument 45-106 Prospectus Exemptions (NI 45-106);

(d) Volatus files in electronic format:

(i) if DDC is a reporting issuer in the local jurisdiction, a notice indicating that it is relying on the continuous disclosure documents filed by DDC and setting out where those documents can be found in electronic format; or

(ii) copies of all documents DDC is required to file under securities legislation, other than in connection with a distribution, at the same time as the filing by DDC of those documents with a securities regulatory authority or regulator;

(e) DDC concurrently sends to all holders of any Unlisted Volatus Warrants all disclosure materials that would be required to be sent to holders of similar warrants of DDC in the manner and at the time required by securities legislation;

(f) DDC complies with securities legislation in respect of making public disclosure of material information on a timely basis;

(g) DDC immediately issues in Canada and files any news release that discloses a material change in its affairs; and

(h) Volatus issues in Canada a news release and files a material change report in accordance with Part 7 of NI 51-102 for all material changes in respect of the affairs of Volatus that are not also material changes in the affairs of DDC.

2. The further decision of the Decision Makers under the Legislation is that the Certification Requirements do not apply to Volatus provided that:

(a) Volatus is not required to, and does not, file its own Interim Filings and Annual Filings (as those terms are defined under NI 52-109);

(b) Volatus files in electronic format under its SEDAR+ profile either: (i) copies of DDC’s annual certificates and interim certificates at the same time as DDC is required under NI 52-109 to file such documents; or (ii) a notice indicating that it is relying on DDC’s annual certificates and interim certificates and setting out where those documents can be found for viewing on SEDAR+; and

(c) Volatus is exempt from or otherwise not subject to the Continuous Disclosure Requirements and Volatus and DDC are in compliance with the conditions set out in paragraph 1 above.

3. The further decision of the Decision Makers under the Legislation is that the Insider Reporting Requirements do not apply to any insider of Volatus in respect of securities of Volatus provided that:

(a) if the insider is not DDC:

(i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning Volatus before the material facts or material changes are generally disclosed; and

(ii) the insider is not an insider of DDC in any capacity other than by virtue of being an insider of Volatus;

(b) DDC is the beneficial owner of all of the issued and outstanding voting securities of Volatus;

(c) if the insider is DDC, the insider does not beneficially own any Unlisted Volatus Warrants other than securities acquired through the exercise of the Unlisted Volatus Warrants and not subsequently traded by the insider;

(d) DDC is a reporting issuer in a designated Canadian jurisdiction;

(e) Volatus has not issued any securities, and does not have any securities outstanding, other than:

(i) the Unlisted Volatus Warrants, the Volatus Debentures and the Volatus Preferred Shares;

(ii) securities issued to and held by DDC or an affiliate of DDC;

(iii) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; or

(iv) securities issued under the exemption from the prospectus requirement in section 2.35 [Short-term debt] of NI 45-106; and

(f) Volatus is exempt from or otherwise not subject to the Continuous Disclosure Requirements and Volatus and DDC are in compliance with the conditions set out in paragraph 1 above.

“Lina Creta”

___________________________________________

Lina Creta

Manager, Corporate Finance Division

Ontario Securities Commission

OSC File #: 2024/0504