United States securities and exchange commission logo
July 13, 2020
Cameron Chell
Chief Executive Officer
Draganfly Inc.
2108 St. George Avenue
Saskatoon, Saskatchewan, Canada S7M 0K7
Re: Draganfly Inc.
Offering Statement
on Form 1-A
Filed June 16, 2020
File No. 024-11239
Dear Mr. Chell:
We have reviewed your offering statement and have the following
comments. In some of
our comments, we may ask you to provide us with information so we may
better understand your
disclosure.
Please respond to this letter by amending your offering statement
and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response. After reviewing any amendment to your offering statement and
the information you
provide in response to these comments, we may have additional comments.
Offering Statement on Form 1-A filed June 16, 2020
Cover Page of Offering Circular, page 1
1. Please disclose on the
cover page the number of units, the number of shares and warrants
in the units, and the
number common share underlying the warrants. For guidance, see
Item 1(d) of Form 1-A.
Use of Proceeds to Issuer, page 26
2. Please revise the table
to include columns for net proceeds received from the sale of units
based on the company
receiving 25%, 50%, 75% and 100% of the maximum gross
proceeds.
3. Please disclose the
amount of proceeds from the offering that will be used to fund the
compensation payable to
your Chief Executive Officer. Also, we note your disclosure in
the last paragraph on
page 26 about the use of proceeds for repayment of indebtedness of
Cameron Chell
Draganfly Inc.
July 13, 2020
Page 2
the company. Please provide the disclosure required by Instruction 6
to Item 6 of Form 1-
A.
Director and Named Executive Officer Compensation, Excluding Compensation
Securities, page
47
4. You disclose compensation of "Nil" for a number of your directors and
the title in this
section discloses that the summary compensation table is "excluding
compensation
securities." Please include a dollar amount for your disclosures in
the table and revise the
title in this section. Please include all compensation during your
last completed fiscal year.
See Instruction 11(a) to Form 1-A.
Securities Being Offered, page 51
5. Please revise to include disclosure regarding your units and warrants,
and clarify, if true,
that holders of common shares receive one vote per share. See Item 14
of Form 1-A.
Financial Statements
21. Subsequent Events, page F-32
6. On April 30, 2020, you completed the acquisition of Dronelogics
Systems Inc. by
acquiring all of the shares of Dronelogics, resulting in Dronelogics
becoming a wholly-
owned subsidiary. On closing of the Dronelogics acquisition, you paid
the Dronelogics
shareholders $2,000,000, consisting of a cash payment of $500,000,
subject to a post-
closing working capital adjustment and issued the Dronelogics
shareholders 3,225,438
common shares in satisfaction of the balance of the purchase price.
Please tell us what
consideration you gave to including the financial statements of
Dronelogics Systems Inc.
and pro forma financial information related to this acquisition in
accordance with
paragraphs (b)(7)(iii) through (iv) of Part F/S of Form 1-A.
Exhibits
7. Please have counsel revise the legal opinion to disclose the number of
units, the number of
common shares and common share purchase warrants in the units, and the
number of
common shares underlying the common share purchase warrants.
8. Please tell us why counsel included assumptions (a) - (f) on pages 2
and 3 and exceptions
and qualifications (a), (b) and (c) on page 4 of the legal opinion.
9. It appears from footnote "*" on page III-1 that you have omitted
portions of an exhibit
FirstName LastNameCameron Chell
containing confidential information. However it is unclear from the list
of exhibits as to
Comapany
whichNameDraganfly
agreement hasInc.
been been filed as an exhibit contains
confidential information that
has been omitted.
July 13, 2020 Page 2 Please advise or revise.
FirstName LastName
Cameron Chell
FirstName LastNameCameron Chell
Draganfly Inc.
Comapany
July NameDraganfly Inc.
13, 2020
July 13,
Page 3 2020 Page 3
FirstName LastName
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
prior to
qualification.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
You may contact Ernest Greene, Staff Accountant at (202) 551-3733 or
John Cash,
Accounting Branch Chief at (202) 551-3768 if you have questions regarding
comments on the
financial statements and related matters. Please contact Thomas Jones, Staff
Attorney at (202)
551-3602 or Sherry Haywood, Staff Attorney at (202) 551-3345 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
cc: Rebecca G. DiStefano, Esq.