Volatus Aerospace Inc.

Glen, I think I've signed in through your account and I'm afraid if I leave, it may kick you out.

So good morning, everyone, and welcome to the Volatus Aerospace Earnings Call. My name is Christina Davis, the VP of Corporate Affairs and Strategy, and I'm today's moderator. Before we get started, just a reminder that we welcome your questions and we'll be having a Q&A session at the end of the presentation. You're welcome to submit your questions at any time during the webinar by clicking on the Q&A box at the bottom of the screen and typing in your questions. and if we're unable to answer your questions today we'll be happy to connect with you after the program. This presentation will be recorded and made available on our investor website within 24 hours. I'd also like to take a moment to point out that certain information set forth in this presentation contains forward-looking information, including future-oriented financial information and financial outlook and actual results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described in the presentation, in the press release, and in our MD&A filed with Canadian regulators. This presentation also contains non-IFRS measures which are also outlined in the presentation. There is a full disclosure on page two of this presentation, which you're seeing now, which we encourage you to read and can be found on Volatus' investor website at investor.volatisaerospace.com. The company considers the earnings call part of its routine disclosure to educate investors on information contained in the quarterly results and related MD&A. If you have any questions, please feel free to contact the Volatus Aerospace IR team at InvestorRelations at VolatusAerospace.com. So now that's done. It's an honor to introduce Glen Lynch. CEO, and Abhi Singhvi, CFO of Volatus Aerospace. I'll let you both take it away.

Thanks, Christina. Good morning, everyone, and thank you for joining us for Volatus Aerospace Q2 2026 Business Update and Earnings Call. We've got a lot to cover this morning, but we'll keep the presentation focused. Abhi will begin with the financial results for the quarter, including revenue margins, our cost structure, and the balance sheet. And then I'll take you through the operating and strategic developments across the business, particularly focused on Mirabel, defense, autonomy, and the programs we're pursuing for the balance of the year. We recognize that the financial results do not yet reflect the level of growth we are building the company to deliver. So an important part of today's discussion will be connecting the investments we've made to the opportunities they're intended to support. We'll finish by opening the call for questions. And with that, I'll turn it over to Abhi.

Thanks, Glen. Let me take everyone to the financial performance of the quarter. Revenue was $8.4 million, up 49.5% sequentially from Q1. We are pleased with the sequential recovery, but we also recognize that the result was below where we want the business to be at this stage of its development. One important factor was $2.6 million of contracted defense revenue that was not delivered in the quarter due to the continuous supply chain impact around batteries and is now expected to be completed in the second half of this year. The important distinction is that it was a timing issue on a signed business rather than any cancellation or loss of demand. Gross margin was 29% for the quarter. The quarter-over-quarter moments reflect the timing and mix of the project-based deliveries. including a greater contribution from defense related programs. Given the project based nature of our business, we believe the six months and training performance provides a better view of the underlying economics than any individual quarter, which we will discuss in the upcoming slide in detail. We ended June with strong balance sheet, giving us substantially greater financial flexibility. This flexibility allows us to support production, inventory requirements, continue investing in our proprietary technology platforms and pursue larger programs where we have the ability to carry working capital through a multi-year delivery cycle in an important competitive consideration. The next slide highlights basically the overall chart on a quarterly basis. This chart gives us the best context for the quarter as well. Revenue increased almost 50% sequentially from 5.6 million to 8.4 million, but was also down 20% over Q2 of last year, and we don't want to minimize that. The largest single factor was the $2.6 million of contracted defense revenue that moved into the second half. As I mentioned, it's a signed business, not a cancellation or lost customer. And we currently expect, and right now we are on time and on schedule on the delivery in the upcoming months. The other thing I would like to point out is the revenue mix. Services and training represented 57% of Q2 revenue, while product and equipment represented 43%. We continue to want both sides of the business. Services provide continuity and stronger recurring economics. Products, defense systems, and technology gives us access to much larger program opportunities. Our challenge now is getting those last programs to convert quickly enough that the revenue begins to catch up with the capability we have built now. That's what the second half of this year is all about. Let me spend a minute on the margin. Gross margin was 29.3% in the quarter compared to 35% in Q1 and 32% in the second quarter of last year. The primary driver of the moment was delivery mix and certain impact of the increasing fuel prices. Importantly, we did not see material deterioration in pricing or underlying cost economics. The movement was predominantly a function of what was delivered within the quarter. That's why I think the first half yearly number provides a better indication of the underlying margin profile. For the six months, gross margin was 31.6% compared to 31.9% in the same period of last year. Essentially stable year over year. So while the quarterly margin moved by 260 basis points, the first half of the year, margin movement was only 30 basis points. A long-term objective remains to have a gross margin of between 35% and 40% range. We see three principal drivers towards this range. One, greater scale and operating leverage across our defense program. Second is a contribution from higher proprietary platform and Program Revenue as commercialization progresses. And lastly, is a continued growth in the services and training business. The revenue mix on the right supports that strategy. Services and training represented 56% for the first half of the year. Product represented 44%. That's within the 55% to 60% services mix we have been working towards. That matters because services generally provides greater revenue continuity and stronger margins, while the equipment and defense side of the business gives us access to substantially larger program opportunities. Over time, we believe the combination of these two is more important than either one of them independently. So the takeaway on the margin is the quarter was affected by mix and program timing. First-half margins remain essentially stable year over year. As defense program move from early stage deliveries into production scale, as proprietary technology contributes more revenue for us, and as services revenue grows, we believe there's a path back towards a 35 to 40% margin objective. The important point is that the investment we are making in defense are intended to create that scale and operating leverage. Let me spend more time on here because we recognize that this is probably one of the most important questions for shareholders today. Adjusted EBITDA loss was 4.35 million in the quarter compared to approximately 0.3 million a year ago. That's an increase and we are not dismissing it. The central issue is timing. Over the past 12 months, we are deliberately building capacity ahead of the revenue. The largest increase was personnel, particularly engineering, defense, and technical talent. We have invested in Vicotex AI and other proprietary technology platforms. We have opened up Mirabel. We have expanded the system, compliance, and infrastructure required to compete for larger defense programs. We have materially increased our engagement with Canadian, NATO, and allied procurement organizations. Much of that spending has to occur before a defense award production program. We cannot build the engineering organization after we are expected to deliver. We cannot begin the security clearances, quality and manufacturing processes after customers require them. And we cannot establish sovereign production capacity after the procurement starts. So there is a timing gap between the investment and the revenue. The responsibility on management now is to close that gap. A number of that initial build-out cost are behind us and much of the organizational capacity we need now are in place. So the second half is increasing about those utilization, conversion and operating leverage rather than simply continuing to add infrastructure. Let me close the financial section with balance sheet because this gives us the capacity to execute on the strategy we have just described. We ended up June with 59.2 million in cash, approximately 64 million in working capital, and total assets of almost 119 million, with shareholders' equity of approximately 87 million. The result is the strongest balance sheet in the company's history, and importantly, a substantially stronger financial foundation from which we execute. But the important point isn't simply about the capital we have, it's about what that capital allows us to do. Our priorities are discipline, support manufacturing capacity as demand scales, continuing the development and commercialization of our defense and autonomous systems, maintain strategic flexibility and provide the working capital capacity required to pursue larger government and commercial programs. And the last point is particularly important. For larger multi-year programs, financial capacity can itself be a part of a qualification process. Customer need confidence not only in our technology and manufacturing capability, but also in our ability to support inventory, production, and working capital across the long-term delivery cycles. Our financial position today materially strengthens our ability to compete on those opportunities. And that connects directly to the investment profile I discussed on the previous slide. We have built the people, technology, and manufacturing capability required for the next stage of the development of our business. And we now have the financial capacity to support that infrastructure as we scale revenue against it. The balance sheet gives us the ability to execute the strategy from a position of strength. Thank you for watching. and selective investment that can generate meaningful returns. And as we move forward, investors should expect increasing cost discipline around the relationship between incremental investment and identified revenue opportunities. With this, I will head back to plan.

Thanks, Abhi. The reason I wanted to start my portion here is that this slide helps connect the financial investments you've just seen with what we've actually built. Over the first half, we opened Mirabel. We launched our vCortex AI autonomy suite. We secured a new NATO-aligned training business. We expanded our engagement with Ukraine and allied defense partners. and we strengthened the balance sheet sufficiently to pursue much larger programs. Those capabilities and developments haven't yet translated into the level of revenue that we ultimately expect from them, but the capability is now substantially in place. So we're moving from a period that was heavily weighted towards building the foundation into one that's increasingly focused on converting that foundation into contracts, production and revenue. Mirabelle is perhaps the clearest example of the investment we've made ahead of the market. We now have 53,000 square feet of dedicated manufacturing and systems integration capacity, but the key point isn't the building. It's what the facility qualifies us to compete for. We're already producing our docking stations there. We're actually shipping. For reference, I think we took possession of the facility on February 26. So I'm quite pleased with the progress that's happening there. We're preparing additional aircraft and systems for production. And Mirabel gives us a Canadian manufacturing base where we can integrate both our own technologies and the licensed technologies that we've been announcing from international partners. We're also progressing the federal security and defense facility approval processes for both Mirabel and our operations control center. This is particularly important to understand because the increasing sensitivity of defense program require not only the technology, but the secure facilities, controlled processes, and the ability to operate within government security frameworks. That's precisely why we've invested ahead of revenue. As Canada shifts towards sovereign defense production, domestic manufacturing capability increases. Thank you for joining us today. The opportunity is to combine technologies we're already developing or integrating that includes our long endurance intelligence aircraft, rapid response autonomous aircraft, our operations control center, and our sovereign Canadian manufacturing all into one national operating system. So rather than being a completely separate R&D initiative, it uses many of the same capabilities that we're investing in for defense. and the case of wildfire, the objective is simple. We want to see the fire sooner, we want to understand them better and we want to respond faster. We're engaging actively with government on what that capability could look like. For investors, the important point is that the infrastructure we're building for defense has potential applications across all major national resilience programs as well. Thank you for joining us. and then the autonomous aircraft can potentially provide rapid response including operation during periods at night and reduce visibility where conventional assets may be constrained. We're not proposing to replace Canada's existing wildfire aviation infrastructure. We're proposing an autonomous layer that can make the overall system more persistent and more responsive. and importantly we're trying or rather not trying to invent every component ourselves. We're working with leading international technology partners, integrating our own proven systems around our own operations, our autonomy and our Canadian manufacturing capability. That partner and integrate model is going to be increasingly important across both our wildfire and defense strategies. This is the proprietary technology layer underneath that strategy. vCortex is becoming the common autonomy and intelligence architecture across multiple platforms. Skydra gives us a proprietary counter UAS software product and platform and our first recurring software model. Condor addresses heavy lift and the vSeries gives us long endurance aircraft that can increasingly be manufactured and integrated at Mirabel. The distinction we're trying to create is important. We don't want Volatus to simply be a reseller of someone else's drone. But equally, we don't believe we need to invent every airframe sensor or propulsion system ourselves. The model is to own the high value intellectual property where it differentiates us, and most particularly around autonomy, guidance, integration and operations, and then combine best of breed technology from strong partners. Thank you for joining us today. Thank you so much for joining us. and the reasons pretty straightforward. The scale of the opportunity developing in defense is materially different from what existed even 12 months ago. We've been investing in the people, the technology, the manufacturing capability, security infrastructure and the relationships required to participate in that market as it develops. Canada has now moved from beyond simply announcing a defense industrial strategy Thank you for joining us. Thank you very much. Thank you very much. The Defence Investment Agency and the broader defence ecosystem has increased dramatically. Over the past year, we've deliberately built and continue to strengthen a dedicated defence team spanning military engagement, business development, engineering, autonomy, manufacturing and strategic partnerships. That matters because we're not simply monitoring these activities as they develop, we're actively participating. were engaging in the qualification processes, participating in industry briefings and technical sessions, responding to emerging military requirements, developing Canadian and international partnerships around specific capability gaps. And we're aligning our own technology, manufacturing and operating capabilities to the actual programs that are beginning to move through the system. So when we talk about the various initiatives in the next couple of minutes and the allied opportunities, these aren't simply examples of markets we might enter. These are initiatives where our team is already engaging today. that's an important distinction because it means the investment we're making in defense is not simply on a view that government spending will eventually increase it's based on direct engagement with the military Direct participation in the emerging procurement mechanisms and a growing understanding of where specific requirements are heading. Our objective is to be positioned at every stage from military engagement to qualification through prototyping and testing to production, integration and operational support. And that's the environment in which the specific programs that I'm about to discuss are now emerging. Thank you very much. Thank you for joining us. I think most people have heard about it by now. It's another significant opportunity. The Canadian Army is pursuing requirements across reconnaissance and surveillance, target acquisition, strike, drop-capable systems, and Arctic operations. That potential or the potential volumes for these programs are meaningful. and the procurement activity is already beginning. There's also a separate light UAS competition that's already underway to rapidly equip the Army with tactical ISR capabilities. And then there's the Canadian Deep Precision Strike. The near-term requirement is expected to emphasize speed, acquiring or partnering around mature allied technologies that can be fielded quickly and the longer-term strategy is to increase sovereign Canadian content and many more. Counter UAS and Interceptor programs are following the same model. Our contributions can include the seeker tracker technology, the assured navigation, autonomy, and guidance and systems integration, while our partners contribute other elements of the system. Build with Ukraine is another example. Canada is actively supporting the transfer of battle-proven Ukrainian technologies into Canadian production. Mirabel gives us the infrastructure to participate in that strategy, and this opportunity extends well beyond Canada. We recently advanced through phase two process for US SOCOM's modular kinetic lethal drone program and submitted a full prototype proposal. No award has been made and the decision remains pending, but advancing to that stage demonstrates that the capabilities we're building are relevant not only in Canada, but with allied customers as well. So the strategy is becoming particularly clear. build the critical IP where we can differentiate, partner with proven Canadian and allied technologies where that accelerates deployment, and use Mirabel as the sovereign manufacturing and integration platform that brings those capabilities together. The important point is that the investments we've made are increasingly aligned with the procurement activity that's now moving from strategy into acquisition. So when I bring all of this together, our focus for the balance of the year is execution. We have contracted defense revenue scheduled for delivery. We have new Canadian procurement pathways opening. We have a larger NATO and allied opportunities in development. And we have Mirabel is now operational. Thank you for joining us. Thank you for joining us. The business is entering a period where capability and capacity we've built can increasingly translate into scale. The first half was an important investment period for Volatus. We strengthened the balance sheet. Thank you very much. We believe that we've positioned Volatus to participate in that opportunity from a position of real capability, not simply an aspiration. So our focus now is converting that position into larger programs, revenue growth and improved leverage. With that, I really appreciate your patience and Abby and I'd be happy to take any questions.

Thanks Glen and Abby. So we've got a lot of great questions rolling in. We have about 20 minutes. So maybe I'll just kick off and share some of these with you both Glen and Abby and whichever one of you wants to jump in. So the first one about Mirabel, could you remind us what its annual capacity potential is and how you envision scaling up production growth in 2027 and beyond?

So the factory has been designed right now. Our best estimate at the moment is about $250 million worth of revenue. Some of that depends on the business mix that goes through the facility. So currently we've started the production of our docking system, which really has as much of a commercial impact as it does in defense, for example. We have a couple of units that have been shipped out to Western Canada right now for deployment in standby deployment in various areas and wildfire, which is obviously topical today. And we have several other platforms that will enter production over the next few months. But that represents probably about 35 to 40% of the footprint in that facility. Right now, the challenge that we're working through with the Canadian military is the acknowledgement and many more. Thank you very much. Thank you very much. and many more. and that's the interesting challenge. That's the one that we're working our way through with government agencies at the moment because you can't simply postpone everybody's order when the military says we need it. So we need the government to invest in the capacity and in things like holding supply chain components as a strategic reserve because the supply chain in Canada and for that matter around Canada All of the allied nations is underdeveloped when it comes particularly to the small, attritable drones. Those are the problems that we're solving inside of that facility. So a lot of its capacity depends on whether we're dedicating more floor space to the larger systems or to the smaller, attritable, I would say lower value, but high volume systems. And right now that's an evolving landscape with the government.

So changing topics just slightly, but are you seeing signs of interest in cargo delivery? You mentioned the potential for commercial use of the Condor this year. Could that be cargo?

So most certainly. Actually, a couple of the platforms. So the Condor has the ability to carry up to 180 kilograms. So it's an interesting platform. Again, a lot of what we're seeing is if you look at the defense side, it's not just potentially delivering cargo, but it has the potential application for things like CASAVAC because it allows us to reduce force depletement while we're moving cargo. Moving Wounded Soldiers from the Frontline to Somewhere into Safer Territory It's also for frontline supply. It's for remote community delivery. But that's not just for the Condor. Recently, we announced our partnership with Singular Aircraft in Spain with the Flyox. And while we've presented that aircraft because it was originally purpose-built as a water bomber, but the aircraft right now is flying in Africa for dropping larger payloads. So there's Thank you very much for joining us. Thank you very much. Thank you very much. for the avoidance of uncooperative aircraft traffic. So we've made a lot of progress in that area. And ultimately, I mean, again, I'm speaking an awful lot about defense, but we have a lot of programs going on right now to develop that capability, particularly in areas like Northern Canada, where it's becoming possible under the new regulatory environment and with the new technologies that are coming online now.

So a question just kind of to delve a little bit deeper in those recent announcements about KH and Singular. So the question is, could you please connect the dots for us as to the strategic relationship between these two announcements and your overall strategy with respect to wildfire support, response to civil emergencies, as well as supply of equipment and materials using the Singular aircraft platform?

So I've touched a little bit on the capabilities of converting the aircraft for cargo delivery, but let's talk about the various places. I'm going to be frank. The wildfire capabilities that we've introduced have been something that we've been interested in introducing since 2022. Thank you for joining us. A country that has a growing problem that we all recognize, that being wildfires. So the problem with wildfires, if I think about where we were earlier this year, there's a point where we had more than a thousand wildfires burning and only 300 aircraft in the air. So mathematically, we're defeated before we start. Thank you very much. Tell me how you can use autonomous aircraft to address the growing problem with wildfires. And that sparked a real acceleration through this process because, of course, we'd lined up a lot of the components, but really there was clearly a political interest and a national requirement to introduce those services. So there's a couple of things. Thank you very much. Thank you for joining us. We need to be able to identify the high-risk areas. We need to be able to identify ignition more quickly and address it immediately so that we can potentially reduce the number of fires that we actually have to employ the wildfire fighters and the heavy water bombers on. Secondly, there's a lot of limitations to protect the pilots and the people that are working. and many more. Thank you very much. The second thing is, though, we have the ability to continue to fight the fires around the clock because the remotely piloted technologies aren't limited by daytime operations. So the concept is persistence will engage with satellite information to know where the high risk areas are, then move to the persistent surveillance drones that allow us to track that, identify the problem sooner and monitor that. Thank you so much for joining us. and ultimately the same information that makes it to our investors makes it to every one of our potential competitors as well. So there's a balancing act there. The key point that's most important is that this has been received very well, not just in the federal level, but on a provincial level. Now, whether we can convert that into large orders or not, that remains to be seen, but I will say we're seeing real engagement in the proposals.

Great. Thanks, Glenn. Another question, can you provide more color on the $2.6 million defense contract that shifted out of Q2 and your confidence around delivery in the second half?

So, you know, supply chain, I mentioned it earlier, supply chain in North America is underdeveloped. Thank you very much. So now it's just continuing to deliver. I mean, realistically, the best sign is if it was anything other than a supply chain problem, it probably would have given us contract problems, but the entire ecosystem is aware of the supply chain challenges that exist. So confidence level for delivery in Q3, and it could trail into Q4 possibly, but I would say the confidence level right now is very high.

For the next question, the main presentation showed a revenue guidance of $50.6 million for 2026. So how should we now be thinking about the rest of the year? Could you provide some details about the main assumptions, contract wins, M&A, and what's already in the backlog?

I think we've covered a lot of that stuff, but Abby, go ahead, Abby, why don't you take that one?

Some of the anticipated M&A activities have not occurred within the time frame assumed in the plan. So you shouldn't simply take 50.6 and subtract $14 million for the second half of the year. On the organic side, however, we continue to expect a stronger second half compared to Q1, including the deliveries of 2.6 million, which has been reflected as deferred revenue on the balance sheet. And we continue to evaluate the right M&A opportunities that are very strategic for the company on the both commercial and the defense segment.

Thank you so much for joining us. We expected the legislation for the Defence Investment Agency to spin out as its own ministry to happen in June. I think everybody expected that to happen, including the government. They simply didn't get it done by then. And it was a matter of workload and timing. We are expecting that to happen in June. are the current expectations. But realistically, if you look at that, it means that a major activity for procurement was delayed by three full months. So that's something that's completely out of our control. And that's just an illustration of what can happen in that timeframe. And again, defense procurement is, Ben Ruszkowski, Greg Colacitti, and I will say you know I'm a big supporter right now I truly people people ask me regularly is this actually going to happen and I am actually witnessing it virtually from the inside right now we're spending enough time engaged with government and defense to see this happening so I'm totally convinced that it is happening it's just not translating people can't see that in the form of contracts but if you think about it you know I think it was less than 6 or 8 weeks ago that the Defense Drone Initiative was announced and the supplier arrangement Submissions, and Today. That's extraordinary speed. They've committed to issuing the list at the beginning of September and having the first two RFPs drop immediately after that. So there's a lot of things that can impact timing. But ultimately, the key point here is if we're measuring, if we try to measure quarter on quarter, it gets very difficult to pin it down that closely. But if we're looking at what actually is happening, The demand signals are extremely strong and the procurement mechanisms are moving with it. I'm extremely confident that we're going to continue to see strong revenue growth through the defense sectors. There's no question that there's a government shift right now towards defense. and national security and basically industrial development. But at the end of the day, what we're talking about right now is more timing. I think it's more important right now to see what's being done to prepare people and to actively engage to be at the front of the line as these orders come forward. But the analysts are digging deeper to this and I would take the time to make sure that you're, as an investor, staying on top of the analyst reports that are coming out.

Thanks. Thanks both. Just to pull on that supply chain question a little bit further, Glen. So we missed revenues in both Q1 and Q2. What is being done to diversify the supply chain specifically? If we can't fulfill a smaller order, how are we going to be trusted to do anything more?

So in total, that was, if I remember right, Abby, that was about a $10 million order that stretched out in that period. So I would say, you know, it's a fair question. There's a lot of work not just being done by Volatus, but being done by the... The Department of National Defense, as well as by industry at large to solve these problems in Canada and throughout the allied nations. So there's investment that's going from BDC. We met with BDC in our offices earlier. I guess it would have been the end of last week, a week ago. and they started identifying to us new companies that are developing that capability the other thing that we've made very clear is where the critical supplies are and quite frankly we can boil those down right now to two items when you're talking about small drones it's batteries and motors those are the two things that cause the biggest problem because they're more expensive to build domestically and quite frankly, there was a dependency that was built on Southeast Asia for those components. Those things are happening right now. I think the clearest one that I can give that I'm able to talk about is during Farnborough two weeks ago, we made an announcement of a partnership with Concordia University and the Voltage program where they're actually addressing not just the battery, the battery Energy Issues in general, but also the requirements for Canada specifically, which include the environmental considerations. So we're actively engaging in the supply chain development as well because we see that as a critical part of our future. In the meantime, it's a matter of diversifying to every, you know, making ourselves more visible, making ourselves more closely connected to the existing suppliers that are out there and I think those that are following us in social media can see that we're actually spending a lot of time out in the field meeting with our customers. What we don't advertise quite as much is that we're also visiting our partners.

Thank you. So we're almost nearing time. So this will be our last question. So today's article on Canada's deep precision strike capabilities implies that within two years, Canada should be able to have sovereign manufacturing capabilities. What is Volatus' involvement in this opportunity?

So this is a very new opportunity. As a matter of fact, The Canadian government briefing was literally within the last two, maybe three weeks. I can't remember exactly. We had a team on it. I wasn't on that briefing directly, but we did have a couple of members of our team on that. That is definitely involving partnerships because Volatus, I mean, Volatus has guidance systems now, for example. Our vCortex AI, if you consider the combination of our seeker tracker with our assured navigation module, it forms the foundation for a guidance system. Thank you for joining us. and the energetics that are required, basically the kinetic devices, the warhead portion of the drones. We're in the middle of that. So the guidance systems, the air vehicles, those are the things that we contribute and Volatus is actively working on partnerships to allow us to bring those technologies together. It's not our intention to build drones. Energetics. It's not our intention to build rocket motors, for example. Those partnerships have the potential to already exist within Canada. So I think you'll see them develop quickly. A key point on that deep strike is that initially to meet the objectives of the government, they're talking about having capability in place by June of 27. So that's going to happen pretty quickly. That will not happen with sovereign capability alone. Not enough time to develop that. That's going to happen through some of the strategic partnerships we're working on with partners outside of Canada, but ultimately be developed more in Canada as a sovereign capability from that point as phase two.

Thanks, Glenn. So we're delighted that everyone was able to join us today for our earnings call. Just a quick reminder that the presentation recording will be available on our investor site within 24 hours at investor.volatusaerospace.com. If you have any additional questions, questions that we didn't get to today, please reach out to us at InvestorRelations at VolatusAerospace.com. We thank you for your time. Thank you for your questions and have a great day.

Thank you. Thanks, everybody.