Delta Drone International Limited has entered into a binding agreement with a consortium of investors* led by NASDAQ-listed Medigus Ltd and facilitated by Israeli venture capital firm L.I.A Pure Capital Ltd (collectively “Buyers”) to sell ParaZero Technologies Ltd (“ParaZero”) which operates the Company’s drone safety business, for a total consideration of A$6 million in cash.
This transaction allows the Company to focus on becoming one of the leading drone service providers globally after its successful acquisition of the Delta Drone South Africa business in December 2020 and the purchase of Arvista Pty Ltd
in Australia in September 2021. Post-sale this will leave the Company with a strengthened balance sheet and a substantially reduced need for cash to fund the ongoing R&D investment that had been required by the ParaZero business, allowing the Company to focus on aggressively growing its global drone services business.
Key terms of the sale include:
• Purchase price of A$6 million payable to the Company in cash, with $5.1 million to be received on completion and $0.9 million to be released from escrow after 12 months (subject to there being no warranty claims);
• The Company to retain usage rights in relation to the use of the technology and products developed by ParaZero (see the Appendix for more information); and
• The Company to retain additional equity upside in the transaction value from the issue of Warrants to invest in ParaZero again in the future under certain conditions (see the Appendix for more information).
As the Company has sought and obtained confirmation from ASX that Listing Rules 11.1.2, 11.1.3 and 11.2 do not apply to this transaction, there are no regulatory conditions that would prevent completion of the transaction, which is expected to complete in January 2022. Additional details on the terms of the transaction are included in the Appendix to this announcement.
Commenting on the sale, Delta Drone International CEO, Christopher Clark said: “ParaZero and its dedicated team were the inspiration for listing the Company on the ASX in 2018 and have been an important part of the Company since that time. With the drone services side of our business experiencing rapid growth, we believe now is the time to focus on
the drone services business and still retain the opportunity to utilise the ParaZero products and services on a commercial basis. The exposure to ParaZero that we have retained through the transaction will also enable the Company’s shareholders to benefit from the future success of the ParaZero technology.”