Coverage Launched on Ontario-Based Drone Services Co.
Research Report

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Disclosures for Maxim Group, Volatus Aerospace Inc., December 10, 2025

I, Matthew Galinko, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report. The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities. Maxim Group makes a market in Volatus Aerospace Inc. Maxim Group received compensation for investment banking services from Volatus Aerospace Inc. in the past 12 months. Maxim Group expects to receive or intends to seek compensation for investment banking services from Volatus Aerospace Inc. in the next 3 months. FLT.V: The relevant index for Volatus Aerospace Inc. is the Russell 2000. Valuation Methods FLT.V: We use EV/revenue to value Volatus Aerospace Inc. Price Target and Investment Risks FLT.V: Excluding general market and other economic risks, risks specifically related to Volatus Aerospace Inc. include: (1) material adoption of drone technology and services, (2) cash burn, (3) competition, including against larger companies, (4) government spending cycles, (5) foreign exchange, (6) tariffs, (7) commoditization of some products and services over time.

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Volatus Aerospace Inc. (FLT:TSX.V; TAKOF:OTCQX; ABB:FSE) garnered research coverage by Maxim Group Analyst Matthew Galinko, who initiated coverage of it with a Buy rating and a CA$1.25 per share (CA$1.25/share) price target, he wrote in a December 10 research note.

"We believe that among the public drone companies, few have Volatus' scale and breadth of offerings, and we view the company's wide net and operating scale as a significant positive," Galinko wrote.

112% Upside Implied

Volatus has a "compelling valuation," Galinko noted. The drone company trades at an enterprise value:2027 estimated revenue multiple of 4.9x versus the peer average of 7.1x. Maxim's target price is based on 10x its estimate of Volatus' 2027 revenue of CA$76 million (CA$76M). This is higher than the peer average "due to the company's large commercial operations and pipeline, diversified revenue model, potentially captive domestic market and optionality in defense," the analyst wrote.

Compared to Maxim's CA$1.25/share target, Volatus was trading at about CA$0.59/share at the time of Galinko's report. The difference between these two prices implies a potential return of 112%.

What Sets it Apart

Volatus provides integrated piloted and remotely piloted aircraft systems (drones) and end-to-end aerial solutions in the areas of intelligence, surveillance, and cargo for various commercial industries, like agriculture, construction, energy, and public safety, and for the defense market, Galinko explained. Current customers are primarily in Canada, the U.S., the United Kingdom, and Norway. Management expects to exit 2025 with about CA$20M in annual recurring revenue generated from drone services.

"The company's blend of commercial aviation, long-range drone missions, and dedicated cargo services creates a highly diversified revenue stream," the analyst wrote.

Galinko highlighted that Volatus differentiates itself in several ways. It is a prolific drone operator, having completed about 5,000 flights in 2024. Through its merger with Drone Delivery Canada, it has beyond-visual-line-of-sight (BVLOS) approvals. Volatus has a proprietary Operations Control Center (OCC) in Ontario, Canada, that functions as a centralized air traffic control hub. There, the company uses its patented FLYTE management software to execute and monitor complex BVLOS drone operations. With this system, Volatus may operate multiple drones at the same time, in different geographic locations, all from one place.

Volatus holds Part 137, or Dispensing Chemicals and Agricultural Products with Unmanned Aerial System, authorization from the Federal Aviation Administration in the U.S. and multiple Transport Canada's Special Flight Operations Certificates, among others, "giving it one of the strongest footprints in North America," wrote Galinko. Also, the company is focused on Arctic-hardened drones, applicable to the Canadian market and a strong selling point for various operations in other locales with harsh climates.

Focused on Growth

With dual-use platforms and services, Volatus can scale in the near term with respect to commercial operations, for which demand is surging, particularly for services like inspection and surveillance of critical infrastructure, wrote Galinko.

The defense market provides Volatus a meaningful opportunity for long-term growth. Canada is expected to increase its defense spending to 5% of gross domestic product by 2035 and aims to strengthen its domestic supply chain. Volatus is headquartered in Ontario. It plans to establish a 200,000-square-foot Innovation and Manufacturing Hub at the Montreal–Mirabel International Airport in Quebec for serial production of proprietary and partner-licensed drone platforms.

"Drones and robotics have emerged as a critical element of military doctrine in recent years, and national security-driven interest in domestic suppliers puts Volatus in a strong position to be a key vendor," noted Galinko.

He cited this statistic: The global drone market is forecasted to grow at a 25.8% compound annual growth rate between 2022 and 2028, reaching $35.5 billion (US$35.5B) from US$8.8B.

"This growth suggests substantial opportunities for differentiated market participants," the analyst added. "Advances in drone technology, combined with growing interest and solidifying regulatory frameworks, create opportunities for innovative drone companies to grow greenfield businesses."

Strong Financial Position

Galinko reported that Volatus is well funded to pursue its growth initiatives, having about CA$40M in cash after its November CA$25M net equity raise.

Maxim believes Volatus has sufficient capital to fund operations through to break-even status because its revenue is growing and its adjusted EBITDA losses are declining. The company should reach EBITDA break-even status, according to management, when it achieves a quarterly run rate of CA$13–14M, by 2027, in Maxim's estimation.

Versus Volatus' actual full-year 2024 (FY24) revenue of CA$27.1M, Maxim forecasts CA$37.9M in revenue for FY25, CA$48M for FY26, and CA$76M for FY27.

President / CEO is a Pilot

Galinko listed and provided bios for all members of Volatus' senior management. President, Chief Executive Officer (CEO) and Director Glen Lynch has 35-plus years of aviation experience, including business aircraft operations, maintenance, support services, and aerospace manufacturing. Prior to Volatus, he was the president/CEO of GAL Aerospace Corp. for eight-plus years. Lynch has Canadian and U.S. airline transport pilot licenses.

Ownership and Share Structure

Insiders own 21.3% of Volatus. Institutions hold 8.1%.

The company has 630 million shares outstanding. Its market cap is CA$374.1M. Its 52-week range is CA$0.12–0.96/share.