Arcanus Aerial Systems Signs Five-Year Production Agreement with FeralX Systems Inc. and Secures C$1 Million Strategic Investment Commitment

Under a Five-Year Canadian Manufacturing Agreement FeralX has agreed  to Produce for the Arcanus' Unmanned Aerial Systems Programs; Arcanus has made a Strategic Equity Investment into FeralX's

TORONTO, June 5, 2026 /CNW/ - Arcanus Aerial Systems Inc. ("Arcanus"), a Canadian defence technology company specializing in advanced unmanned aerial systems, counter-UAS, and integrated battlefield solutions for NATO and allied markets has agreed with FeralX Systems Inc. ("FeralX" or the "Company"), a Canadian pre-listing defence technology company, to a five-year production and commercialization agreement. In conjunction with the agreement, Arcanus has committed to a strategic equity investment in FeralX of C$1 million, subject to closing.

Arcanus will work with FeralX as its Canadian-based contract manufacturer for several of the Arcanus' unmanned aerial system platforms. The investment made by Arcanus in intended to align the two companies commercially and financially.

FIVE-YEAR PRODUCTION AGREEMENT -- EFFECTIVE IMMEDIATELY

Under the production agreement, dated May 12, 2026 and effective immediately, FeralX has been appointed as a non-exclusive contract manufacturer for Arcanus, with the right to manufacture, assemble, test, and deliver components and assemblies for Arcanus' unmanned aerial systems and directly derivative platforms in accordance with approved purchase orders.

All manufacturing under the agreement will take place in Canada. FeralX's existing production facility, which is just outside Toronto, is able to support Arcanus's initial deliveries of interceptor drones. The companies will worm together to establish production facilities for the  larger drone platforms which are to be produced at a new, dedicated facility as volumes scale.

Key features of the production agreement include:

• Five-year term, with mutual options to extend, providing multi-production capacity tied to purchase orders issued by Arcanus.
• Domestic Canadian production, with mutual optionality to expand or reallocate capacity as combined volumes grow.
• Reciprocal cross-selling, with each party able to introduce the other's products into its own programs where appropriate.

The agreement is non-exclusive. It does not guarantee any minimum production volume..

C$1 MILLION STRATEGIC EQUITY INVESTMENT

In conjunction with the production agreement, Arcanus has committed to a strategic equity investment in FeralX of C$1 million. Upon closing, Arcanus will invest in FeralX's capital structure as a strategic shareholder while remaining a commercial partner under the production agreement.

The investment is intended to provide FeralX with working capital to support production scale-up and to strengthen the Company's capitalization to the benefit of Arcanus as customer.

ARCANUS PROGRAMS

The partnership pairs Arcanus' growing order book with FeralX's Canadian manufacturing capacity: Arcanus brings a contracted and pipeline order base with signed purchase orders, signed letters of intent, and conditional opportunities across multiple allied markets. FeralX brings the experience and capacity to build against it.

STRATEGIC RATIONALE -- CANADIAN DEFENCE INDUSTRIAL CAPACITY AT A CRITICAL MOMENT

These transactions land at a structural inflection point for Canadian defence. Canada's Defence Industrial Strategy commits more than C$500 billion over the coming decade and targets awarding 70% of defence acquisitions to Canadian firms, while NATO members move toward 5% of GDP by 2035 -- a generational shift toward sovereign, domestically produced capacity. Procurement cycles are compressing, and demand for Canadian-made unmanned and integrated systems is outpacing available domestic manufacturing capacity. By pairing Arcanus' unmanned aerial systems platforms with FeralX's Canadian manufacturing capacity and complementary defence systems portfolio, the partnership delivers a combined offering built for this moment -- sovereign, Canadian-made, NATO-aligned, and built to scale.

MANAGEMENT COMMENTARY

Sandi Banerjee, President & Chief Operating Officer of Arcanus Aerial Systems Inc., commented: "Sovereign, allied manufacturing capacity has become one of the most strategically valuable assets in defence. FeralX gives us a highly aligned Canadian manufacturing partner capable of supporting accelerated production as procurement demand expands across allied markets. We expect this relationship to evolve well beyond a conventional manufacturing agreement over time."

Rob MacIntyre, President of FeralX Systems Inc., commented: "We are excited to be working alongside Arcanus, a fast-growing Canadian unmanned systems company with an aligned vision for sovereign, NATO-compliant production. The five-year agreement gives FeralX multi-year revenue visibility tied to Arcanus' purchase orders, and the strategic investment strengthens our balance sheet. This is the kind of long-horizon, Canadian-on-Canadian defence relationship the sector needs, and we intend to execute on it with discipline."

About Arcanus Aerial Systems Inc.

Arcanus Aerial Systems Inc. is a Canadian-controlled, sovereign-supply-chain defence drone platform headquartered in Toronto. Through a curated portfolio of Technology Partnership Agreements -- now augmented by the Beyond Vision licence -- Arcanus delivers battle-validated UAV solutions to NATO, Five Eyes and allied end users, and is positioned as a full defence-stack aggregator with announced or signed access to UGVs, ammunition, precision munitions and explosives.

About FeralX Systems Inc.

FeralX Systems Inc. is a Canadian pre-listing defence technology company focused on the augmented warfighter, small arms and individually deployable unmanned systems engineered to enhance the individual operator. FeralX produces a Canadian small-arms portfolio and a line of man-portable unmanned systems built around the operator's load-out, including its Muskrat unmanned ground vehicle and, under contract manufacturing agreements, unmanned aerial systems. FeralX operates Canadian production capacity at a facility outside Toronto.

Forward-Looking Statements

This press release contains forward-looking statements regarding FeralX Systems Inc., the five-year production agreement and strategic equity investment commitment with Arcanus Aerial Systems Inc., expected revenues, production volumes, scale-up and facility expansion plans, and FeralX's anticipated public listing. Forward-looking statements are subject to risks and uncertainties, including execution risk, the closing of Arcanus' financing and of the investment, defence procurement timing, regulatory approvals, export-control conditions, supply chain factors, and capital markets conditions. References to Arcanus' order book, pipeline, and customer engagements reflect information disclosed by Arcanus and have not been independently verified by FeralX. Actual results may differ materially. FeralX undertakes no obligation to update forward-looking statements except as required by applicable law.

SOURCE Arcanus Aerial Systems Inc.

Investor & Media Contact: Arcanus Aerial Systems Inc., [email protected]