Defense Tech Firm With GPS-Denied Drone Breakthrough Starts New Partnership

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1. Disclosure for the quote from the Stewart Thomson article published on February 12, 2026:

1. For the quoted article (published on February 12, 2026), the Sparc AI Inc. has paid Street Smart, an affiliate of Streetwise Reports, US$3,500.
2. Author Certification and Compensation: Stewart Thomson was retained and compensated as an independent contractor by Street Smart for writing this article. Mr. Thomson is a retired Canadian financial advisor who has passed the Canadian Securities Course as well as additional technical analysis courses that were mandated by his former employer and approved by Ontario regulatory bodies. For the past 15 years, he has been editing and writing numerous financial newsletters that have a strong focus on charts.  The recommendations and opinions expressed in this content reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.

2. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Sparc AI Inc. (SPAI:CSE; SPAIF:OTCQB; 5OVO:Frankfurt) announced a strategic alliance with Rate Manufacturing, a U.S.-based defense manufacturer, to incorporate SPARC AI's Overwatch platform into Rate's Model-F multi-mission drone systems and future platforms, SPARC AI said in a May 20 release.

The partnership, unveiled during SOF (Special Operations Forces) Week in Tampa, Florida, aims to merge Rate Manufacturing's scalable drone production capabilities with SPARC AI's advanced software designed to ensure precise positioning and targeting even when GPS signals are compromised.

Rate Manufacturing has developed the Model-F drone system, which is noted for its modular design, reliability, and scalability in production. SPARC AI's Overwatch platform enhances these drones by utilizing onboard inertial sensors and artificial intelligence to minimize drift and maintain accuracy without depending on external signals or additional equipment.

"SPARC AI's Overwatch fits that mission directly. It puts GPS-denied positioning and targeting in the hands of every operator without adding hardware, weight, or training time, which is how we keep capability scaling alongside production," Rate Manufacturing Chief Executive Officer Jamie Waller said.

Matt McCrann, U.S. CEO of SPARC AI, highlighted the importance of effective operation in contested environments, noting, "We are actively solving for what we see as the next bottleneck — effectiveness in contested environments. Knowing where you are and what you're targeting when GPS cannot be relied upon."

He added that Rate Manufacturing's innovative systems are designed for mass production, and SPARC AI's role is to ensure these systems remain functional even when traditional positioning systems fail. The software-only approach by SPARC AI stabilizes existing sensors to provide reliable positioning and targeting without the need for additional hardware.

This partnership reflects a broader industry trend towards systems that are not only mass-producible but also capable of operating effectively under electronic warfare conditions. Initial efforts of this collaboration will focus on integration, joint demonstrations, and pilot programs with U.S. and allied defense customers, with plans to expand into full production and broader deployment as opportunities develop.

This initiative supports key U.S. Department of War priorities, such as the Drone Dominance Program, which calls for deployable systems capable of functioning in contested and electromagnetically degraded environments. The integration of Model-F with the Overwatch capability aims to meet these requirements by combining scalable hardware with a resilient, software-defined positioning and targeting layer.

Expanding US Presence

SPARC AI noted McCrann's recent appointment was aimed at bolstering the company's expansion efforts in North America. McCrann's role will focus on establishing SPARC AI's operational presence in the region and enhancing engagement with U.S. defense, federal, and allied government customers. This strategic appointment is part of the company's broader plan to scale operations within the U.S. defense market, responding to the increasing demand for resilient navigation and targeting capabilities in contested environments.

McCrann brings a wealth of experience to his new role, having previously served as the CEO of DroneShield's U.S. subsidiary, the company noted. During his tenure at DroneShield, he successfully established and expanded the company's operations in the U.S., achieving significant revenue growth and expanding its reach across federal customers. In his new capacity at SPARC AI, McCrann will be responsible for building the company's U.S. team, developing its operating infrastructure, advancing field evaluations and pilot programs, aligning with procurement pathways, and forging strategic partnerships with defense primes and system integrators. These initiatives are aimed at facilitating the deployment of SPARC AI's Overwatch platform across various domains including air, land, and maritime.

"Matt's appointment represents a significant step forward in SPARC AI's strategy to expand its U.S. presence, strengthen customer proximity, and accelerate commercial outcomes in the world's largest defense market," Sparc AI CEO Anoosh Manzoori said.

SPARC AI emphasized that its Overwatch platform is specifically designed to provide robust positioning and targeting capabilities in environments where GPS is contested or denied. The company also noted a growing demand for software-enabled position assurance infrastructure, which is becoming increasingly vital across U.S. and allied defense programs as autonomous and integrated systems continue to proliferate across various operational domains.

Analyst: Replacing GPS Dependency

On the day of the news, Chen Lin of What is Chen Buying? What is Chen Selling? noted that the company "got the first U.S. partnership! I believe it is the first with many and bigger contracts to come.The stock has been a bright spot in a terrible market."

¹In a detailed analysis dated February 12, Stewart Thomson evaluated SPARC AI's Overwatch platform, which is tailored for scenarios where GPS may be compromised or unavailable. Thomson's report outlined that the Overwatch platform is designed for integration into drones and robotic systems used in defense, emergency response, and security sectors. The platform is engineered to handle tasks such as geolocation, surveillance, tracking, targeting, and autonomous navigation.

Thomson pointed out the vulnerabilities of traditional navigation and targeting systems, such as susceptibility to jamming, spoofing, and other signal disruptions. In his review, he emphasized, "SPARC AI Inc. replaces GPS dependency," and praised the company for its innovative use of proprietary algorithms and telemetry-based mathematical models to ascertain location data.

Notably, the Overwatch platform functions purely through software, eliminating the need for additional hardware like sensors or radar systems. Thomson lauded the technology as a "true zero-signature solution" and described it as "covert, resilient, and drone-agnostic," which provides operators with enhanced real-time situational awareness.

At the time of Thomson's analysis, SPARC AI's shares were priced at CA$1.18. He set a target price of CA$1.60 and gave the stock a "Speculative Buy" rating, with a potential to rise to CA$2.00. Subsequently, the stock value surged to CA$5.75.

In a separate note on April 23, Chen Lin, in his newsletter "What is Chen Buying? What is Chen Selling?" reported that SPARC AI had performed exceptionally well in the U.S. market under the ticker SPAIF, with its value tripling in just the past week. Lin mentioned, "I put in an alert last Thursday, telling everyone to buy as the free share started trading. It was trading at 2+ CAD. Today it hit 7.5!" He also noted some recent profit-taking, which brought the stock back down to the 5+ range. Lin disclosed plans to meet with the company's management in New York the following day to discuss further developments.

The Catalyst: A 'Golden Age of Private Capital'

During a presentation at the SOF Week convention on Wednesday, Emil Michael, the Pentagon's Under Secretary of War for Research and Engineering, discussed the significant impact of private investment on the development and production of small unmanned systems, according to a report in The Washington Times on May 20 by Ben Wolfgang.

These systems are crucial for the Pentagon's Drone Dominance Initiative. Michael highlighted that a substantial influx of private capital is transforming the U.S. drone industry, which in turn facilitates new opportunities for the military to procure the advanced drones necessary to maintain a competitive edge over rivals like China.

Michael characterized the current period as a "golden age of private capital," noting its unprecedented scale. He emphasized the Department of Defense's role in this dynamic market, stating, "It's never been this big before, so our responsibility as a department is to make sure the ones who should win [Pentagon contracts] do win.” This statement underscores the strategic importance of effectively leveraging this surge in private investment to enhance the United States' drone capabilities.

On May 19, Bloomberg reported that the United States Department of Defense has expressed interest in testing various Ukrainian defense products, including drones and electronic warfare systems, according to a May 19 report by Katherina Popilnichenko of United24Media.

This initiative is part of an evaluation process to determine the suitability of these items for potential military procurement. The U.S. is keen to leverage the drone expertise that Ukraine has developed during its ongoing conflict with Russia, which began with a full-scale invasion over four years ago.

Ukraine's use of innovative technology and tactics has enabled its forces to carry out deep strikes within Russian territory and effectively challenge the larger Russian military's advances. These strategic operations have not only hindered the progress of Moscow's forces but have also targeted oil facilities, striking a blow to the financial underpinnings of the Kremlin's war efforts.

During discussions with the U.S., Ukrainian officials emphasized that their defense products have been rigorously tested in combat conditions, Popilnichenko wrote. Despite this, the U.S. is looking to conduct its own evaluations domestically before proceeding with any procurement decisions. Additionally, the U.S. is interested in gaining access to critical technologies and possibly intellectual property rights, which would enable them to replicate the Ukrainian equipment.

Earlier in the month, the U.S. forwarded a draft letter of intent to Kyiv, signaling its intention to test Ukrainian military products and outlining the possibility of future contracts should the systems meet their criteria. However, the letter did not provide specific details regarding the scope or scale of the potential agreements, nor did it confirm a definitive deal, according to the report.

Ownership and Share Information²

Sparc AI Inc. has a market cap of CA$170.18 million and 25.78 million shares outstanding. The company's 52-week range is CA$0.20-CA$7.50.

Management and Insiders own 48% of shares. The remaining shares are Retail.