Draganfly Forms a Dedicated U.S. Defense Subsidiary With Former Acting Navy Secretary Thomas Modly as Chairman

Draganfly Inc. (NASDAQ: DPRO), a developer of drone solutions and unmanned systems, announced on October 12, 2026 the establishment of Draganfly Defense USA, Inc., a dedicated subsidiary for the U.S. defense and national security markets. Thomas B. Modly, the 33rd Under Secretary and former Acting Secretary of the U.S. Navy, will serve as the subsidiary’s Chairman.

What Draganfly Defense USA Is Built to Do

According to the company, the new structure is designed to support the security, regulatory and compliance requirements that come with serving U.S. defense customers. Specifically, it will provide a framework for defense-specific governance, cybersecurity, data protection, export control and operating procedures, including the separation of controlled technologies and sensitive information where required.

The subsidiary’s planned scope covers unmanned aerial systems, autonomy software, counter-UAS technologies, AI and machine vision, sensing and secure communications, and U.S. manufacturing and supply chain development. It will also handle integration, training and sustainment, along with current and future U.S. defense programs. At the same time, Draganfly expects the unit to draw on the company’s broader engineering, manufacturing and software resources across North America.

Leadership Drawn From the Navy and Marine Corps

Modly has served on Draganfly’s Board of Directors since 2024. In line with regulatory requirements, he will give up that board seat to take on the Chairman role at the subsidiary, where he will focus on its growth, development and governance. CEO and Chairman Cameron Chell will serve as a director of Draganfly Defense USA.

Day-to-day operations will be led by Brigadier General AJ Pasagian, USMC (Ret’d), whom Draganfly appointed President of Draganfly Defense USA in August. “Establishing Draganfly Defense USA creates a dedicated structure to serve the unique requirements of the U.S. defense market,” said Modly. Pasagian added that success in defense “requires much more than delivering an aircraft,” pointing to trusted technology, secure supply chains and domestic capability.

A Year of Defense Expansion and Funding

The subsidiary follows several defense steps this year. In May, Draganfly agreed to acquire Skip Dynamix’s fixed-wing technology, a line of low-cost, mass-producible long-range drones. In addition, its second-quarter results noted that Draganfly and F4 Defense International were selected to develop an integrated, multi-layered counter-UAS system. Then, on September 11, the company won a five-year Government of Canada contract covering an initial 100 tactical ISR drone systems, with options for up to 4,900 more.

On the funding side, Draganfly announced a $10 million strategic investment on September 28 from Unusual Machines and a U.S. investment fund, priced at $5.35 per share. For the second quarter, the company reported revenue of $2.66 million, up 26.0% year over year, with product sales up 34.6%. It also posted a comprehensive loss of $11.8 million, which included a one-time share-based compensation grant of $3.7 million. Draganfly ended June with a cash balance of $131.9 million.

Strategic Investment Summary

• New Subsidiary: Draganfly Inc. (NASDAQ: DPRO) formed Draganfly Defense USA, Inc. to focus on the U.S. defense and national security markets.
• Chairman Appointment: Former Acting Secretary of the Navy Thomas Modly will chair the subsidiary and step off the parent company’s board.
• Operating Leadership: Brigadier General AJ Pasagian, USMC (Ret’d), appointed in August, leads U.S. defense operations.
• Compliance Focus: The structure is designed to support defense governance, cybersecurity, export control and protection of controlled technologies.
• Recent Wins: Draganfly secured a five-year Canadian Armed Forces contract with options for up to 4,900 additional systems.
• Balance Sheet: The company reported a cash balance of $131.9 million at June 30, 2026, and added a $10 million strategic investment in September.

Find out more about the latest corporate developments and financial reports at the Draganfly investor portal.