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. 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?

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.

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 standby deployment in various areas in wildfire, which is obviously topical today.

We have several other platforms that will enter production over the next few months. 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 that an adaptable, scalable manufacturing capability is actually a national sovereignty capability. What I really mean with that is, if I think about what the commander of the army actually said to me at a trade event over the last year, he said, the objective is to flood the Canadian Army with drones.

In other words, to get the tools into the hands of our warfighters and then sustain them. At the push of a button to be able to move from, let's say, a hypothetical 10,000 drones a year to 10,000 drones a month.

That's obviously building capacity and capability ahead of conflict. Doing that presents an interesting challenge, not just for developing the system, but also putting the proper financial structure in place to finance that through government investment.

The reason being, you could say, well, if you use 10% of the capacity to support the military, you can sell that capacity to other organizations around the world, NATO partners or commercial interests. The problem is, what do you do when the military says we need to 10x that production today?

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.

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 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.

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. Right now that's an evolving landscape with the government.

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?

Most certainly. Actually a couple of the platforms.

The Condor has the ability to carry up to 180 kg, 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 CASEVAC because it allows us to reduce force depletion while we're moving wounded soldiers from the front line to somewhere into a safer territory.

It's also for front-line supply. It's for remote community delivery.

That's not just for the Condor. Recently we announced our partnership with Singular Aircraft in Spain with the Flyox.

While we've presented that aircraft because of it was originally purpose-built as a water bomber, but the aircraft right now is flying in Africa for dropping larger payloads. The aircraft can be reconfigured to remove the fire suppressant and water bladders and replace it with cargo and hydraulic doors that allow you to deliver the cargo into remote areas, whether that be for disaster recovery, emergency management, or actually just critical medical supply deliveries and those sorts of things.

We also have some other platforms right now that we're using on programs which we haven't announced for lifting heavy loads onto the top of wind turbines. That's another one.

Then one more that I would say doesn't get quite enough attention by me is the recent approval or pre-validated declaration of our Canary, which is the aircraft that's doing cargo deliveries in and out of the Edmonton Airport. Recently, we achieved the first pre-validated declaration for a complete remotely piloted aircraft system.

What was particularly unique with that is that our aircraft had its own onboard detect-and-avoid system, which means it wasn't dependent on ground-based radar for the avoidance of uncooperative aircraft traffic. We've made a lot of progress in that area.

Ultimately, 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.

A question just kind of to delve a little bit deeper in those recent announcements about K-H and Singular. 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?

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. The problem was the regulatory environment and the maturity of the technologies was not there.

Singular Aircraft is a company that I've been following very, very closely with their technologies. The idea now is that Canada provides almost the perfect operating theater to introduce those aircraft into manufacturing, higher-volume manufacturing, and support of a country that has a growing problem that we all recognize, that being wildfires.

The problem with wildfires, if I think about where we were earlier this year, there's a point where we had more than a 1,000 wildfires burning and only 300 aircraft in the air. Mathematically, we're defeated before we start.

Now, during a recent tour where we had the Minister of Defense-- many people listening may have seen the LinkedIn post where we had Minister McGuinty and General Mostad in our facility-- and partway through the visit, Minister McGuinty actually stopped me and said, "Glen, tell me how you can use autonomous aircraft to address the growing problem with wildfires." 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.

There's a couple of things. What we've introduced and what we're proposing to the governments right now is not to replace the current water bomber fleet or to in any way do anything but reinforce the brave wildfire fighters that are out there fighting the fight every day to protect Canada.

Realistically, there's no way that 300 assets can compete with 100 100 wildfires-- or 1,000 wildfires. Basically, our proposal is to say we need better information.

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 on where and when you can operate the water bombers. For example, night operations.

Whereas the technologies that we've introduced, they allow us to provide consistent and persistent surveillance and intelligence over the wide areas that are considered high risk, identify an ignition, monitor that while we dispatch a larger remotely operated or remote-piloted, autonomous water bomber, which is the Flyox, to go and deliver a 1,500 L load of fire suppressant or water right on that early ignition phase. Hopefully, again, getting to it early means that we can reduce the number of fires that ultimately have to be fought, to speak.

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. The concept is persistent engagement 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, and then deploy the technologies quickly that can address the fires while they're small and in an early stage before they have the opportunity to grow.

I think one of the big questions a couple of people have said is why didn't we just step out there and announce that? A lot of it is just being careful also as to how much we announce.

There's that balance between what we say publicly in terms of keeping our investors informed and, ultimately, the same information that makes it to our investors makes it to every one of our potential competitors as well. There's a balancing act there.

The key point that's most important is that this has been received very well not just on 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.

Right. Thanks, Glen.

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?

Supply chain, I mentioned it earlier. Supply chain in North America is underdeveloped.

We have a very high demand on the supply chain given the conflicts that are happening in other parts of the world, the geopolitical tensions that are there, and also all of the trade uncertainties creates imbalance all over the place. That being said, I would say at this point our confidence level is extremely high that we'll continue to deliver those on time.

I think we've overcome the problem with that supply chain issue. Now it's just continuing to deliver.

Realistically, the best sign is if it was anything other than a supply chain problem, it probably would have given us contract problems. The entire ecosystem is aware of the supply chain challenges that exist.

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.

Great. For the next question, the May presentation showed a revenue guidance of $50.6 million for 2026.

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 covered a lot of that stuff, but Abby, go ahead, why don't you--

I can take that, Glenn, yeah. The $56 million presented in May was a planning target that included assumptions around both organic growth and M&A contribution.

Some of the anticipated M&A activities have not occurred within the timeframe assumed in that plan. 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. We continue to evaluate the right M&A opportunities that are very strategic for the company on both commercial and the defense segment.

I'm just going to add a couple of things there. I think something that's important is that Volatus does not make it a practice to issue guidance.

We often times refer to the consensus of our analysts. Obviously, analysts dig very deep.

The problem with a company issuing guidance is often times a lot of these program revenues are out of our control on timing, right? I'll just use an example that I think is extremely important.

We expected the legislation for the Defense 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. It was a matter of workload and timing.

We are expecting that to happen in late September, October are the current expectations. Realistically, if you look at that, it means that a major activity for procurement was delayed by three full months.

That's something that's completely out of our control. That's just an illustration of what can happen in that time frame.

Again, defense procurement, it's tough for anybody to say how quickly this will happen because there's massive amounts of energy being put into this, but at the same time it's unprecedented, right? They're driving a monster machine like it's a Ferrari or certainly trying to.

I will say, I'm a big supporter right now. People ask me regularly, is this actually going to happen?

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.

I'm totally convinced that it is happening. It's just not translating, people can't see that in the form of contracts.

If you think about it, I think it was less than six or eight weeks ago that the defense drone initiative was announced and the supplier arrangement submissions end today. Right, 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. There's a lot of things that can impact timing, but ultimately the key point here is if we try to measure quarter-on-quarter, it gets very difficult to pin it down that closely.

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 and there's no question that there's a government shift right now towards defense and national security and, basically, industrial development.

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 and to actively engage to be at the front of the line as these orders come forward.

The analysts are digging deep into this and I'd take the time to make sure that you're, as an investor, staying on top of the analyst reports that are coming out.

Thanks, both. Just to pull on that supply chain question a little bit further, Glen, we missed revenues in both Q1 and 2.

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?

In total, that was, if I remember right, Abby, that was about a $10 million order that stretched out in that period. I would say it's a fair question.

There's a lot of work not just being done by Volatus, but being done by the Department of National Defence, as well as by industry at large to solve these problems in Canada and throughout the allied nations. 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've 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'm able to talk about is during Farnborough two weeks ago, we made an announcement of a partnership with Concordia University in the Volt-AGE program, where they're actually addressing not just the energy issues in general, but also the requirements for Canada specifically, which include the environmental considerations.

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 making ourselves more visible, making ourselves more closely connected to the existing suppliers that are out there.

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.

Great. Thank you.

We're almost nearing time, this will be our last question. Today's article in 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?

That's 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 team on it.

I wasn't on that briefing directly, but we did have a couple members of our team on that. That is definitely involving partnerships because Volatus, Volatus has guidance systems now, for example.

Our A-Cognitex AI, if you consider the combination of our our seeker tracker with our assured navigation module, it forms the foundation for a guidance system. The reality is we need partner activities and there are Canadian there are sovereign Canadian companies that specialize in propulsion systems and the energetics that are required, basically, the the the kinetic devices, the warhead portion of the of the drones.

We're in the middle of that. The guidance systems, the air vehicles, those are the things that we contribute.

Volatus is actively working on partnerships to to allow us to bring those technologies together. It's not our intention to build energetics.

It's not our intention to build rocket motors, for example. Those partnerships have the potential to to already exist within Canada.

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.

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 the 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 2.

Great. Thanks, Glen.

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 [email protected]. We thank you for your time, thank you for your questions, and have a great day.

Thank you. Bye-bye.