Detailed narrative
X7 Full-Scale Build Progress
The company is building the full-scale Cavorite X7 demonstrator in-house, covering forward and vertical propulsion, flight controls, electrical systems, avionics, landing gear and structures. Vertical propulsion is under in-house testing, the main propulsion system and iron bird are in-house, and wing and fuselage structures are expected within several months.
A major engineering review of the flight controls went well. Target is completion around end of CY Q1 2027 followed by ground runs, taxi and CTOL-first flight testing; two prototypes initially, with initial flights piloted though the aircraft is fly-by-wire.
R&D Ramp and Cost Structure
R&D was C$7.4M vs C$2.7M, with engineering within R&D at ~C$5.3M vs C$0.3M, reflecting prototype manufacturing, flight software and analysis. G&A fell to C$1.7M from C$3.2M on lower stock-based compensation. Management expects a similar R&D/G&A mix going forward⏳. Headcount rose from 30 a year ago to 65+ (85+ FTEs including contractors). Reported figures are in Canadian dollars.
Liquidity and Financing
Operating cash use was C$7.2M (vs C$2.4M), investing C$0.7M (equipment and tooling), and financing C$0.6M via ATM at an average C$2.81 (US$2.04). Cash exceeded $70M. Management says it will be patient with the ATM despite the recent share-price decline, and sees financing influenced by non-dilutive funding, defense and manufacturing partners and customer deposits looking out to 2028-2029.
Partnerships and Supplier Ecosystem
BETA Technologies supplies flight control computers and customized fly-by-wire software; Marshall Aerospace completed the flight dynamics and control model; BETA's actuation supplier also cited positively. Great Lakes Helicopter LOI covers MRO, pilot training and possible additional aircraft purchases. Management is selective about international MRO/training partners and expects some production in different regions.
A production partner is being discussed but the prototype rollout is independent of it.
Customer Demand and LOIs
A July non-binding LOI with Australia's V-Star PowerLift covers up to 100 aircraft (~$600M). Total signed LOIs cover up to 200 X7s including options (>$1B indicated value), plus an LOI to lease 5 aircraft. Management expects conversion interest to firm after the aircraft flies and completes a portion of flight testing. Cited economics: 60%-75% cheaper to operate per unit mile than a traditional helicopter.
Certification, All-Weather and Defense
Transport Canada work continues toward certification basis and means of compliance; goal is first certified aircraft in early 2030. IFR and flight-into-known-icing are targeted; wind-tunnel tests of University of Toronto ice-protection samples began in July under the $10.4M INSAT project.
No defense procurement program announced; military certification framework seen as potentially quicker. Non-dilutive pools such as the C$350M-class sustainable aviation initiative are being pursued, and a prior US grant was won for the X5.