SCHEDULE: CVI Investments, Heights Capital Disclose 7.1% Draganfly Stake

CVI Investments Inc. and Heights Capital Management Inc. have jointly disclosed a 7.1% beneficial ownership stake in Draganfly Inc., primarily through warrants.

Summary

• CVI Investments, Inc. and Heights Capital Management, Inc. (collectively, "Reporting Persons") have filed an Amendment No. 3 to Schedule 13G regarding their beneficial ownership in Draganfly Inc.
• The Reporting Persons beneficially own an aggregate of 1,950,579 common shares of Draganfly Inc.
• This ownership represents 7.1% of Draganfly Inc.'s common shares outstanding.
• The shares reported as beneficially owned consist of shares issuable upon the exercise of warrants.
• Warrants are subject to a blocker provision, preventing exercise if total beneficial ownership would exceed 9.99%.
• Heights Capital Management, Inc. serves as the investment manager to CVI Investments, Inc. and may exercise shared voting and dispositive power over the reported shares.
• The filing states the securities were not acquired or held for the purpose of changing or influencing control of Draganfly Inc.
• Draganfly Inc. had 25,581,802 common shares outstanding as of October 8, 2025, as indicated in its Registration Statement on Form F-10.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as a significant institutional stake can lend credibility and stability to a company, especially one in a growth sector like drone technology. The investment via warrants suggests a strategic, long-term interest.

Positives

• A significant institutional investor, CVI Investments, Inc., managed by Heights Capital Management, Inc., holds a 7.1% stake, which can be seen as a vote of confidence in Draganfly Inc.
• The investment is structured through warrants, indicating a potential long-term interest and flexibility for the investor.

Risks

• The beneficial ownership is primarily through warrants, which introduces potential dilution risk for existing shareholders if and when these warrants are exercised.
• The 9.99% blocker provision on warrant exercise limits the immediate influence of the Reporting Persons, but also means their full potential stake is not yet realized.

Future Outlook

The filing does not provide forward-looking statements or guidance from Draganfly Inc. management. It only details the current beneficial ownership of the Reporting Persons.

Industry Context

StockSavvy.ai notes that institutional investment in companies like Draganfly Inc., which operates in the drone technology sector, often signals growing confidence in the industry's future and the company's specific market position. A 7.1% stake from a sophisticated investor like CVI Investments, managed by Heights Capital, suggests a belief in Draganfly's long-term potential, especially given the investment is structured via warrants.

Comparison to Industry Standards

• This filing is a standard disclosure of beneficial ownership by an institutional investor. A 7.1% stake is a significant minority position, common for institutional investors seeking exposure to growth sectors.
• For example, similar institutional stakes are often seen in emerging technology companies like those in AI, biotech, or renewable energy, where investors such as ARK Invest or BlackRock might take positions to participate in future growth without seeking immediate control.
• The use of warrants is also a common strategy for such investors to gain exposure with flexibility.

Stakeholder Impact

• Shareholders: The disclosure of a significant institutional investor holding a 7.1% stake could be perceived positively, potentially increasing investor confidence. However, the future exercise of warrants could lead to dilution.
• Company Management: The presence of a large institutional investor may lead to increased scrutiny or engagement, though the filing explicitly states no intent to influence control.

Key Dates

Recommendation

The disclosure of a significant institutional stake by CVI Investments and Heights Capital Management is generally a positive signal, indicating institutional confidence in Draganfly Inc. However, as a Schedule 13G, it primarily reports a factual ownership position rather than new operational or financial performance data. The investment via warrants suggests a long-term view, but also implies potential future dilution. Without additional operational or financial updates, a "hold" recommendation is appropriate, acknowledging the positive signal while awaiting further fundamental developments from Draganfly Inc.

Keywords

Draganfly Inc., CVI Investments, Heights Capital Management, Schedule 13G, beneficial ownership, common shares, warrants, institutional investment, drone technology, SEC filing