● Successful merger between ParaZero and Delta Drone South Africa
● Raised A$5 million at $0.04 a share following strong support from domestic and international investors
● Funds to be used to establish Australian operations, initially targeting local mining and agricultural industries for the Company’s commercial drone data services
● Delta Drone International well placed to take advantage of US Department of
Transportation Federal Aviation Administration (FAA) final rules for Unmanned Aerial Systems (UAS), for Operations Over People (OOP), Remote ID, and Night Operations.

Drone based data systems provider, Delta Drone International Limited (ASX:DLT) is pleased to provide a business update for the quarter ending 31 December 2020 (Q4 2020), along with its

Appendix 4C quarterly cash flow report. Commenting on the Company’s progress over Q4 2020, Delta Drone International (DLT) CEO Christopher Clark said:

“We are thrilled to have completed our merger to become Delta Drone International. Combined with a successful capital raise in December 2020, we are now in a strong position to enter the Australian market to supply the vast mining and agricultural sectors – last year worth A$277 millioni

– with our world leading data collecting capabilities.

“The combined business has an opportunity to develop a truly international drone services company, based on its unique advanced technologies and capable of operating in both urban and rural environments, providing drone data services to a broad range of industrial and commercial markets.

“Our R&D team has harnessed DLT’s industry-leading expertise releasing two next-generation products and finalising two additional OEM integration projects over the last three months.
“With continued industry-leading product design, a new market to support business capabilities, and a strengthened balance sheet, Delta Drone International is well-positioned to capitalise on the many growth opportunities available in the drone services space, both in Australia and globally.”

OPERATIONAL UPDATE

Company

Q4 2020 saw the creation of Delta Drone International after the successful merger of ParaZero and Delta Drone South Africa. Delta Drone International relisted on the ASX, receiving a new ticker code (ASX: DLT) and undertook a successful capital raise, as detailed in the financial overview.

R&D

Next-generation technology

Two market-first drone safety technologies were created and released, along with one in the early stage of development:

1) The next generation of Flight Termination Systems (FTS) – designed to provide an even higher level of reliability when terminating a drone’s flight, while extending the operating time of the system. The new technology, even though more advanced, is lower in cost for drone models DJI M200 and M300. These are expected to be of key interest to users in a number of industries/verticals, including mining, mapping, surveillance, inspections, and public safety.

2) The next generation Desktop Application – designed with basic fleet management capabilities and enhanced flight debriefing tools to increase user engagement and provide more value and user data. This has been developed after feedback from key customers and partners, and will allow DLT to accumulate user data faster and assist in developing and monetizing data related services

3) The next generation of High Reliability Hardware is currently in development that will provide manned aviation design and features to the industry, focusing primarily on the urban mobility and delivery sectors. The new hardware is completely redesigned from the ground up, and takes into consideration all the knowledge accumulated over the
past years, both technological and regulatory, to bring a game-changing product,
and is expected to be released to market in Q4 2021.

OEM Integration Projects

DLT completed two OEM projects with the popular Pixhawk 4 and 2.1 autopilots running both Ardupilot and PX4. Both companies commissioned DLT to integrate its advanced support technology to their software systems to strengthen their product offering. This opens many new integration opportunities with other Pixhawk-based OEMs, for both VTOL and multirotor configurations.

RULES & REGULATIONS
Federal Aviation Administration (FAA) final rules announced (US)
The US Department of Transportation – Federal Aviation Administration (FAA) announced its
final rules in December for Unmanned Aerial Systems (UAS) across three categories:
● Operations Over People (OOP);
● Remote ID and;
● Night Operations.

These final FAA rules will enhance DLT’s value proposition and product offering in the market, as DLT’s SafeAir autonomous parachute technology is specifically designed and tested to meet regulatory compliance for expanded operations, according to risk-based kinetic energy thresholds established by civil aviation authorities around the world. This can provide operators
using DLT’s parachute technology with expanded legal flight envelopes.

Federal Aviation Administration (FAA) 107.39 Waivers update (US)
Although a slow period in waiver approvals, new ‘107.39 Waivers’ or ‘Operations Over People
Waivers’ using DLT drones and safety systems were granted in Q4 2020 by the FAA to five
companies, including The New York Times.
As detailed above, DLT’s systems and parachute technology lead the industry in safety
standards and were a key reason for the 117FAA granted waivers under the 107.39 rule.

Test deliveries in Israel
DLT in collaboration with its partners, completed two drone deliveries in Israel that to date, had
never been achieved. Including:

  1. Israel’s first certified Beyond Visual Line of Site (BVLOS) drone delivery and;
  2. Israel’s first medical drone delivery (Covid19 testing kits)
    Drone delivery initiatives in Israel continue to grow, with DLT’s autonomous parachute
    technology playing a central role in providing safety and expanded legal flight envelopes in
    urban environment operations within Israel.

FINANCIAL OVERVIEW
On 3 December 2020, shareholders of Delta Drone International Limited (DLT or the Company)
(formerly Parazero Limited) approved the acquisition of Delta Drone South Africa (DDSA) from
Delta Drone SA pursuant to which the Company acquired 100% of the issued share capital in
DDSA (Transaction). The Transaction has been accounted for as a reverse acquisition under
the accounting standards. A reverse acquisition occurs when there is a business combination
in which the entity issuing securities is designated as the acquiree for accounting purposes.
DDSA is identified as the accounting acquirer (legal acquiree) and Delta Drone International
Ltd (DLT) is the accounting acquiree (legal acquirer).
As such, the YTD cash flows represent transactions for the financial year for DDSA and its wholly
owned subsidiaries for the 12 months ended 31 December 2020 and cash flows for DLT are
included from the date of acquisition, being 22 December 2020 to 31 December 2020. The
current quarter cash flows represent transactions for DDSA and its wholly owned subsidiaries
for the quarter ended 31 December 2020 and cash flows for DLT from 22 December 2020 to 31
December 2020.
COVID-19 continued to impact revenues in the previous ParaZero business, while drone service
operations from the previous Delta Drone South Africa business were largely unaffected in Q4
2020.

Delta Drone International Limited | ACN 618 678 701
T +61 8 6189 1155 | A: Level 27, 101 Collins Street, Melbourne VIC 3000
Total net operating outflows during the quarter totalled US$187K. Cash at the end of the
quarter was in line with expectations, at US$3,959K. All DDSA cashflows during the quarter were
in line with expectations, with receipts from customers of US$633k and major expenses being:
• US$221k on product manufacturing and operating costs;
• US$192k on staff costs; and
• US$320k on administration and corporate costs.
In conjunction with the acquisition, DLT raised A$5 million (before costs) in new capital at $0.04
per share. Funds from the capital raise will be used to expand into the Australian market to
establish an Australian-based ‘drones-as-a-service’ business.

DLT’s Australasian activity will initially focus on the mining and agriculture sectors. Both sectors
have expressed interest in outsourcing their complex data collecting needs which will provide
DLT an accelerated path to revenue.

Furthermore, the funds raised will support DLT’s expansion into additional commercial and
industrial sectors in Southern Africa.

Payments to related parties of the entity and their associates In item 6 of the attached Appendix 4C cash flow report for the quarter, payments to related parties of US$63K comprised of director fees paid to both executive and non-executive directors.

Use of Funds

The Company was reinstated to official quotation on 31 December 2020 and as such there
were no capital raising funds used in the quarter ending 31 December 2020.
In accordance with the ASX Listing Rules, the Company will start reporting against the use of
funds disclosed in its prospectus, from the period ending 31 March 2021.

OUTLOOK

2021 is set to be a year of growth for Delta Drone International. As the business moves into its
next lifecycle, CEO Christopher Clark will relocate to Australia in the first quarter (travel restrictions permitting) to support the organisation’s Australian operations. Delta Drone International is already in extensive discussions with several Australian based mining and agriculture businesses, a positive sign for fast growth in the new region.

Elsewhere it has also been a busy period of business development and we expect to announce new contracts over coming months.

This announcement has been authorised for release by the Board of Delta Drone International
Limited.

About Delta Drone International

Delta Drone International is a multi-national drone-based data service and technology solutions provider for the mining, agricultural and engineering industries. It provides aerial surveying and mapping, security and surveillance, and blast monitoring and fragment analysis through a fully-outsourced service with AI and fast data turnaround that allows enterprise customers to focus on operations on the ground while Delta Drone International takes care of everything in the air.

It has in-house enabling proprietary technology, an R&D and integration centre and specialist expertise in designing, developing and providing best-in-class autonomous safety systems for commercial drone deliveries, drone flights for crowd monitoring and in urban areas, as well as ‘beyond visual line of sight’ (BVLOS) missions.

www.parazero.com

By Press

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