Welcome to Alpha Wolf Capital. I'm Tim and I want to personally thank you for stopping by. This channel is designed to help small companies, both public and private, gain exposure with potential consumers, investors, even partners. Take for example today's guest, Glenn Lynch, CEO of Volatus Aerospace, ticker symbol TAKOF. Volatus Aerospace is a leader in innovative global aerial solutions for intelligence and cargo with deep technological and subject matter expertise and over a hundred years worth of combined institutional knowledge in aviation.
Volatus provides meaningful aerial solutions for end users across various industries using both piloted and remotely piloted aircraft systems, RPAS, or drones. They are committed to enhancing operational efficiency, safety, and sustainability through innovative real-world aerial solutions. This is an impact company and I'm going to let Glenn tell you more about that in just a moment. This is not to be taken as investment advice. I am not a certified financial planner. This is for education and entertainment purposes only. I encourage everyone to do their own due diligence.
Hey everybody, Tim from Alpha Wolf Capital coming at you with a long overdue interview. And probably one of the reasons that happens is because Glenn and I get to talking and, well, it's Sunday. We started this at 8. It's now 10:00 a.m. And my friend, you know, look, Glenn, I love talking to you, man. You're one of my favorite CEOs. We have a very interesting conversation every time. Glenn Lynch from Volatus Aerospace, ticker symbol TAKOF, takeoff. Glenn, thanks for coming in on a Sunday to give us an update of what's happening at Volatus.
It's my pleasure, Tim. Thanks for having me and I love the conversation. So that's why they last for so long. I always get as much out as I give.
It's amazing. I mean, so look, for those that don't know who Volatus is and what the differentiator is, would you mind giving just a brief rundown of what the company does?
So we sell ourselves as an innovative aerial intelligence and logistics company. And we don't use the word drones, although we're viewed as a drone company largely because we still have 21 piloted aircraft and helicopters alongside of about 90 plus drones, for example. We have about 180 full-time employees. We operate in four countries on three continents. We started in Canada, but we have operations now across the United States, the United Kingdom, and we're in Norway, which serves the European Union through the European Economic Zone. And we basically have three verticals to our business. One of them is our services where it's basically call it drones as a service or data as a service. It's kind of the same thing. We have drones, which is our solution provider in the United States based out of Syracuse, New York, in Canada out of Toronto, and in the UK out of Hamworth which is southwest of London.
And then we have our training, the Volatus Academy, which is, well, we do some pilot training. The primary training activity there is tactical training for public safety and defense organizations, payload-related training, and we're both a geomatics company and a thermographic training and certifying agency as well. So that's the company in a nutshell and what makes us, I would say, a little bit different is that we very much focus on how we deploy technologies to solve today's problems in sustainable ways so that the business is long-term recurring revenues, that sort of thing. That's not to say that we don't do R&D. R&D is part of our DNA. We do have an engineering department. We own a fair amount of IP on our balance sheet, but frankly, it's a means to an end rather than an end in itself. We're more interested in customer stickiness, solving real problems, and generating revenue in the process.
And that's something I was hoping you were going to highlight because that is exactly what you do. When you've had clients that have come to you with unusual problems and, as opposed to who they were using prior or tried, you actually solved their problems, right?
Well, we concentrate. I mean, the beautiful thing about my job is I get to take the credit for a whole bunch of things I don't do. We've got a pretty spectacular team. I'm super proud of the team that we've got. But we have a lot of diverse skills. So 50% of growth roughly comes out of organic sales activity. We have a large sales team. We have a dedicated in-house marketing team. But the other 50% is through mergers and acquisitions. So we've done, last summer we finished a merger with a company called Drone Delivery Canada and that was our 19th acquisition. So we've accumulated a lot of talent, a lot of IP, and a lot of capability.
When you've done these acquisitions, Glenn, and we talked about this before, you use the stock as currency, right? A lot of times.
Yeah, we did. It became more difficult in recent years just because of the status of the market. But as a rule of thumb, we've tried to make sure that because we're retaining leadership for the most part, we've tried to make sure that leaders were incentivized, right? They become my partners. If you look at our C-suite for example, our chief operating officer is actually one of the founding partners of Drone Delivery Canada. So our C-suite is literally populated with founders, right? And that's been enormously powerful for us. Plus, even when I think of equity holders in the company, I'm a large shareholder. I'm one of the original founders. But the reality is we've taken a strategy to make sure that all of our employees, we have an employee stock option program with restricted stock units as well. And those are issued not to me. As a matter of fact, I deliberately abstain from participation in that program, but we make sure that the equity makes it into the hands of our employees. Every full-time employee has the opportunity for equity. And I believe right now almost every employee we have is a shareholder, which aligns the interests of our employees with the interests of our stakeholders.
I love that. I think that every company should do that. I really do. I mean, one of the things that I focus on in our ability to bridge the gap between the haves and the have-nots is by, I mean, at one time, you know, some of the high-tech companies gave all of their employees stock options, right? Gave all of their employees a piece of the company so that when the company did well you had janitors that, you know, wound up being millionaires because they had shares of a company. And that's, I think every company should do that with their employees, right? And I love that about you. I love a lot of things about Glenn Lynch. I mean, you're a pilot, right? You're a certified pilot. You've been...
You don't look a day over 50.
Whoa. Whoa. I've been around for a minute.
Anyways, no. I mean, look, this is the kind of thing that I love to hear and this is why Volatus, you know, look, I have, how long have we known each other now? It's been a while. It's a few years for sure. Yeah, right. And from the first time I met you, I mean, I just had a feeling Glenn knew what he was doing. It has been definitely a difficult time, right? But I do believe you're on, are you excited about where you're at right now?
I have to be honest with you. I think that the way I describe our position today is, you know, it's where opportunity meets preparedness. We've been working our tails off as a company, as a team, trying to build something in a space that means a lot to me. And we're literally right now in the right place at the right time.
All right. And as a matter of fact, I've got the chart up right now. I do need to change something on it though because the green lines because of my green screen are not coming up green. But we'll do this, maybe yellow. There we go. Okay, it's had a very nice run. You had about a 300% move recently, right? Is that a justified move in your opinion?
I believe it is. I think the company has been, even if we just take a comps perspective and we look at our own performance compared to our comparables, you know, we've had revenue growth. We have real recurring revenue. We have improving bottom line performance. We're very, very close to profitability right now. I think in our most recent quarter we were, you know, under $300,000 negative EBITDA drain, adjusted EBITDA drain. So we're getting very close, making progress on that.
And the other thing is that the industry at large has had huge visibility. Unfortunately, we've got, you know, drones playing a big part in multiple theaters of war that are happening around the world, which shines a spotlight on the technology. It also drives a lot more innovation in an industry that was driven by innovation to start with. And then we have the changing geopolitical situation which has basically put a lot of emphasis right now on the development of domestic drone industries in the United States and Canada and other nations around the world. That all creates opportunity. And if I'm honest, President Trump and Prime Minister Carney speaking about drones regularly has increased the intensity of that spotlight. But the budgets are there. Our pipeline is more exciting than I've seen not just in my life at Volatus, but probably in my professional adult life. I've been a business leader for almost 38 years now. And it's right place, right time, and again with a team that's prepared. So I kind of like to think that we're just getting started.
If you were to describe the economic environment over the last five years, particularly in terms of getting financing.
Yeah. So small cap companies, you know, markets around the world, particularly in our market in Canada, small cap investors, they went away. There was no interest in backing small cap companies. No matter how hard you performed, it was very, very difficult to raise capital. And of course, as your market cap slides and, you know, the market declines and then you get kind of stuck in the mud for a little while. Your market cap is, I mean, we were hovering in probably around the $60 million range for quite some time. And the challenge with that is you're really only able to raise a limited amount of capital. And it costs the same money for investors or for banks to raise, you know, three million as it does 300 million. So it became almost impossible to raise capital. That's changed of late. Volatus is, you know, we were, I would say, working capital impaired for the best part of about 18 months where it was extremely difficult. I'm fortunate that we've got an extraordinary CFO that works tirelessly to bridge relationships and communicate effectively with the capital markets community.
But as a result of that, we kind of broke through. We did a series of raises, and again, a series because our market cap was low. You can't go out and raise 30 million when you've got a 60 million market cap. Now our market cap has climbed up nicely. We've raised a significant amount of capital for us. We're now well positioned. Our burn rate is low and our cash reserves are fairly high. Our balance sheet is strong. That's another thing that's helped and that's all helped over the last few months, which is part of what's helped with our stock price. I think investors that were concerned about our runway look at it now and go, 'Okay, that's not a problem anymore.' So, right place, right time with some dry powder, we're in good shape. But there's an awful lot of companies, here's the other thing. There's a lot of companies that haven't broken out of that stuck-in-the-mud phase and that's creating other opportunities for us. While I'm sorry to see good companies with good technology struggling, it also makes consolidation more affordable. So with improving stock prices, some capital reserves and the price of acquisitions coming down, it creates an opportunity for kind of the next wave of consolidation and growth. And I think we're going to see some consolidation, right?
Oh, for sure. Look at one of our peers, somebody I'm quite close to and fond of, they're performing extraordinarily. I mean, I was supposed to interview Eric last week and of course the news started hitting the wire and he got a little busy. He's gone from south of $400 million market cap to well north of a billion. And honestly, they've started to strategically deploy capital. They've started rolling up strategic acquisitions. It's definitely a company I'd keep an eye on. It's a company I do keep an eye on. He's doing a good job. Eric is a former capital markets guy. This is his game. He understands that game, right?
Absolutely. Yeah. They're doing some interesting things. I think we're seeing a lot of things that are starting to do well. The geopolitical drive in the United States for America First is unleashing companies like Unusual Machines. You know, developing US-based manufacturing to feed the US ecosystem. And again, we've got a lot of the same sorts of things happening in our markets in Canada and the UK.
Well, you're a Canadian company, Glenn. We're still friends, right?
100%. You know, good friends, I like to think. Yeah. I actually, look, I've told you before, our former prime minister suggested that Donald Trump should be nominated for the Order of Canada. And you know what? The current circumstances, change is hard.
What is the Order of Canada? What is that for our viewers?
That's kind of the highest honor you can have in Canada. And the reason that's been said is not because he's necessarily popular or that his actions are popular, but what it's done is it's driven a real sense of patriotism with Canadians. It brought us together in a way that America has been experiencing for its entire life, but Canada really hadn't. Canada right now is, you know, the concept of Canada Strong is really the America First equivalent. And it's fun to see that we're developing better trade within our country. Instead of having 13 economies, we're working towards a single economy. And I don't see it as combating the enemy. I believe that the current economic turbulence, good things come from change, but change is hard.
And I'm glad I'm not the guy driving the change. And I can't say I agree with everything, but I do believe right now that this change has been good for Volatus Aerospace. And I think we very much focus on respecting America First and our American activities run out of Syracuse, New York by our American managing director. But in Canada it's the same thing, looking in Canada and saying, you know, exactly as the current US administration wants to see more manufacturing in the United States, Canada's taking exactly the same perspective and saying, hey, to be able to support our economy properly we need more economic and security independence. That doesn't make us a bad partner for the United States. I think it'll make us a better partner in the end. It's just in the meantime there's an enormous amount of turbulence and frustration and upset.
A lot of noise. A lot of noise.
Well, people are being, unfortunately people are paying a price and hopefully that price is an investment in the future. And I think that's, as a business, it's my job to make sure that's the way it's handled for us. The opportunities in the United States are strong. The opportunities in Canada are probably stronger than I've seen. And the opportunities in other parts of the world where they're literally finding themselves. We've got Southeast Asian nations that have said, 'Hey, you know, things with the United States can change quickly. Things with China can change quickly. We have to balance these macro relationships, but one of the things that we can do to help ourselves is help ourselves develop more of a domestic ecosystem.' And that's creating huge opportunities.
And of course, you know, America, if I look at America, America wants to build more at home, but they don't want to pay the cost of what it's going to take to onshore that manufacturing. Well, our industry is the solution. And when I say that, I'm talking about automation and robotics, right? I'm in the drone space, but it's part of the greater automation and robotics industry. So, we're going to need more automated factories. That exists in the drone industry, but it doesn't exist in the United States on a large scale. We're going to need to really put together the industrial demand with the technology know-how. And I think, you know, you said something earlier in our conversation that I think is very important for businesses like ours in our space. The tier ones that we've known in the past, the General Dynamics and Lockheed Martins and L3Harrises and so on. They're still the Goliaths, right? They're the 800-pound gorillas. But the truth is, they're going to get a smaller piece to some degree of this pie and a bigger piece of it is going to go to where the innovation actually exists, which are basically in the smaller industries. And our industry, our drone industry is literally populated by capable technology service providers that are up to the challenge.
And I think it's probably one of the most exciting times. So, back to that stock chart. Do I think it's justified? I do. And I think, you know, while I would have loved to see it stay at its peak, that's not realistic. It shot up there pretty fast. But you can see it's found some support in an area that I think is a new bottom level. I still think there's a lot of gas left in the tank right now. We just have to continue to execute.
You actually are in a, I mean, look, this is what you've got. You had a long-term trend which was from the upper left to the lower right, right? You have broken that long-term trend and that's a very powerful thing when that happens, right? Because it means something of equal or greater force took out that long-term trend and that's the most dominant trend. So now you've got the stock which has broken out and it's in consolidation mode. You can see that because it's narrowing down in a pie shape and it's at a level of support. So if you look at fundamentally what do we have going on out there in the world in the drone and robotic space, I would say fundamentally things are in your favor, right? So...
I think there's one other thing if I can interrupt for a second, Tim. If you scroll that out and show that high left-hand corner, scroll it out far enough that you can see where it was way up, there's an important thing to note. Remember I said Volatus is an acquisitive company. So Volatus went public and our ticker symbol was FLT. So what you're looking at right now is not the original Volatus Aerospace. We did a merger with Drone Delivery Canada in August of last year. So that's the beginning of the new chart because it was effectively a reverse merger. So the name Drone Delivery Canada changed but the FLT, the current company as you know it is the consolidation of what used to be Volatus Aerospace with Drone Delivery Canada. As a matter of fact, the original Drone Delivery Canada was Drone Delivery Canada Corp. If you look at our ticker now, it's Drone Delivery Inc., formerly Volatus Aerospace Corp. It's now Volatus Aerospace Inc. So really our stock chart begins in August of last year. Before that it was a different public company that's no longer publicly traded.
And that really shows you how significant bringing these companies together actually was because what happened is Drone Delivery Canada was a technology company. They're probably operating one of the most advanced remote operations centers and they've been routinely flying drones beyond visual line of sight, literally a couple of thousand miles away. They've been doing that for years, but they had a small commercial footprint because they were focused on a limited segment and really a technology company. Volatus came in with commercial muscle. We're an industrial commercial company that had some technology. Bring the two together, it unleashes it. So now when we do large-scale oil and gas or power utility contracts, we can operate them from a central operations control center and we have nationwide approvals in Canada. We're working very hard on expanding the same type of approvals into the United States. You know, the Drone Dominance Initiative in the United States right now is going to accelerate the regulatory environment there. That'll allow us to do a lot of what we're doing in Canada. Canada's regulatory environment evolved a little bit more quickly, but the US has now made a big priority on it. So, you know what that means, right? The Formula 1 car just hit the gas pedal to the floor. And all of these things are exciting because we exist literally in four countries including Canada and the United States.
You had an interesting story that hit the press not too long ago. Elm trees. Is it elm trees?
Oh, well, there's two that have to do with forestry. One of them was Dutch elm disease. Yeah. So, it's an award-winning program. A fellow by the name of Matthew Johnson is one of our founding partners and he's a dedicated educator. He was rated one of the top agricultural drone professionals in the world a number of years ago. I think top seven. But actually his primary passion is education. So he developed a program. It's a university-style program that's run in high schools. We've done one in Canada. We've run one in Florida. And the one in Canada, for example, trained students on drones, how to assemble them, how to operate them, get licensed, and then how to collect data sets using drones, and then use those data sets to inform an algorithm. And what they focused on in Canada was Dutch elm disease. So, right now, Dutch elm disease is horrible, right? It destroys forests. And the solution for it is oftentimes cut down the forest and replant versus now with this algorithm, municipalities, public works departments can actually have us come in, fly over an urban area and do early detection. So now we prune the trees or prune the forest rather than tearing the forest down.
We did a similar project, by the way, SEIR, it's called the SEIR program which stands for Science Experiential Aerial Research. We did the same thing in Florida using the chemical properties of paper, tin, and plastics and near-infrared imaging to fly along the beaches in Florida and identify where the garbage was accumulating so that instead of having to go out and send crews to clean up the entire beach, they would be able to go and focus on the areas where the garbage actually accumulates. And that was all done by high school students.
That's awesome. I mean, yeah, pretty exciting. Yeah, there's some very cool programs that you have going on there at Volatus. And then you showed me something, this was last week, but you showed me something that I was really blown away with, was the helicopter that's like 1,000 pounds.
Yep. Yeah. We relaunched it. So, it's a 1,000-pound helicopter that basically will carry call it pretty close to 400 pounds. It's called 350 lbs to be a little bit conservative. And it'll carry it for 125 miles. So it's, right now that has some real potential. More difficult to operate in the United States right now, although that'll catch up. We have approvals to fly it in Canada right now. And places like Africa for doing...
I think I gave you a... Could you pull that thing up real quick? Can you show that?
Yeah, it'll take me a second just to pull it up here, but I can do that for sure. Funny enough, I had it open when we were talking and I closed it. But, yeah. So, it's a pretty exciting, it's definitely a pretty exciting platform. This is not the sexiest picture because it's in the middle of the winter, but nonetheless, it'll show everybody what the unit looks like. So, this is one of the original products of Drone Delivery Canada. That aircraft is, that's not a mockup. That's actually flying there. It's flying over our test site, that one might be actually flying out in Alberta. We have a facility in Ontario as well. But to give you an idea, that drone when it's sitting on the ground is 7 feet tall. So, it's a very, very substantial platform.
We see it as being a useful platform for doing things like reforestation, aerial seeding. It can do cargo delivery to remote areas. I mean, it's still a large helicopter. So it's got some regulatory limitations on where it can function. But if you imagine, one of the big challenges Canada has right now is wildfires. We're burning, you know, literally millions of acres of forest. And the reforestation over the years has been focused on where we cut the forestry industry and allowing a lot of Mother Nature to clean out forest with wildfires and then allow them to reforest themselves. The problem is right now with global warming and climate change, the fires have become more intense. So they're not just burning the forest, they're incinerating the seed base. So reforestation on that scale is virtually impossible without the use of...
Technology. So doing large-scale aerial seeding is something that we've started focusing on now. Most recently, we announced a partnership with a company in Toronto called Key Reforestation and we've got some exciting things that we hope are going to happen in that space. But quite capable because I want you to imagine now the substantial size of Hopper and a distribution system that's attached to this that's flying over areas that otherwise would be dangerous to fly with a single-engine helicopter. Remember, forestry once it burns, that terrain is very harsh. You've got trees that have burned but haven't fallen. You've got very difficult circumstances to be able to get in there and do things manually. So doing it from the air, that makes sense. But again, you know, you're flying single-engine aircraft over harsh territories or you're driving a lot of cost with more expensive two-engine machines. With a drone, what's at risk only is an air vehicle, which is still important, but it's not endangering any human life and it's reducing the cost dramatically for large-scale. It's basically technology solutions for large-scale problems, right?
Glenn, you know, let's touch on a couple of things. Let's talk touch on the cap table. Let's talk about that for Matt. How many shares outstanding fully diluted?
Little over six, 600 million.
Okay, which is a big number, right? But you and I talked before we hopped on. And what I like about you, Glenn, is you're very strategic. You wouldn't uplist to the NASDAQ just to uplist to the NASDAQ because you recognize that isn't going to solve all the problems, right? As a matter of fact, it could create more problems if it's done at the wrong time.
100%. You want to go there, but you're going to go there when the time is right.
You've got that right. From our perspective, right, the investors have been more favorable on US big board exchanges than they have been in Canada. Where we are now suits our purposes. It's been able to capitalize our company properly. And of course, the bigger challenge is, you know, we get people asking us all the time, well, why aren't you consolidating 10 for one? You'd have a $5 stock, would be exciting for NASDAQ. Well, that's okay. If the company moves to a big board, it needs to do it at the right time and for the right reason. I mean, I think a lot of CEOs that probably enjoy the capital market space more than I do, do it because it's exciting. It has big opportunities and it's, you know, it's good for your ego. I run a NASDAQ-listed company. In my case, my interest is running a company. We didn't take it public. I've never sold a single share. I'm one of the biggest shareholders. So, my mission was to have access to capital, be able to use our shares as currency in acquisitions, and basically be in a situation where it was good for the company. It was a tool.
At some point, it will likely make sense to do that. It could be sooner. It could be later. There's no way to, first of all, if I did have a plan, I wouldn't be able to talk about it. But secondly, I can tell you that right now we're in a very good place. So, I think the most important thing for us to do is to make sure that we're well aligned so that if and when the time comes, we're able to move quickly. There are benefits to doing cross-listings under a multi-jurisdictional disclosure system, but the reality is listing on NASDAQ or New York too soon drives an enormous amount of expense, right? The compliance costs in the US, the DNO insurance is very expensive. And I think right now we're not in a situation that we need to do it yet. We just simply need to be prepared to do it at the right time.
Same is true with consolidating shares. People have said to me, 600 million shares, that's crazy. And my next question is, well, why is it crazy? It's serving us well. When the stock jumped up there recently and we jumped up 300% this year, that was with that kind of a shareholder base. And does it limit certain institutions from us? It has in the past, although I have to tell you even that seems to be changing. Institutions that are interested in our space are looking at our company. So that's the big key differentiator right there is the space itself, right? Space is hot. And you know, this is what I try to tell people all the time. When you look at it, it's not just markets, it's also the specific industries that can be in a slump, right?
