Elroy Air, Inc., a leading U.S.-based technology developer of autonomous heavy-cargo drones for defence, rapid response and commercial logistics, and Columbus Circle Capital Corp II, a special purpose acquisition company led by the management team of Inflection Point Asset Management (Inflection Point) and Cohen & Company, Inc., which will be renamed Inflection Point Acquisition Corp VII, announced today that they have entered into a definitive business combination agreement (BCA) whereby Elroy Air will become a publicly traded company.

The proposed transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions, including regulatory and shareholder approval. The transaction values Elroy Air at $800 million pre-money, and has more than $165 million in committed PIPE capital, which is expected to fully fund commercial scale production of the Chaparral with U.S. manufacturing partner Kratos Defence & Security Solutions. $65 million of the more than $165 million PIPE is funding in connection with the execution of the BCA. Post-transaction, Elroy Air is expected to have an enterprise value of approximately $1.0 billion.

Elroy Air is redefining autonomous heavy-cargo transport with Chaparral — an advanced vertical takeoff and landing (VTOL) drone designed to carry 500+ pounds of cargo. The aircraft was engineered with a hybrid-electric powertrain to deliver the reliability of electric propulsion but with extended range of up to 450 miles and with no charging infrastructure required. Designed for maximum operational flexibility, Chaparral features multi-mission pods that enable rapid reconfiguration across diverse payload types and customer needs, unlocking a significant global total addressable market spanning defence, commercial logistics, and rapid response.

Key highlights include:

– A demand pipeline exceeding 1,400 aircraft and over $5 billion in potential revenue opportunity from leading logistics and aviation companies, including Bristow Group, Barq Group, SLI, and FedEx.

– 6+ years of active defence programs with the U.S. Army, U.S. Marine Corps, and U.S. Air Force.

– A manufacturing partnership with Kratos Defence & Security Solutions as the exclusive U.S. manufacturer of the Chaparral, with first production aircraft planned for late 2026.

– A $200M joint venture initial agreement signed with Barq Group to establish an international manufacturing facility in Abu Dhabi serving the MENA region. Elroy Air and Barq Group plan to begin initial flight operations in the UAE in 2027 using U.S.-built aircraft followed by the start of local production in Abu Dhabi in 2028.

– The only OEM with a purpose-built, heavy-payload uncrewed cargo drone selected for the U.S. Department of Transportation's eVTOL Integration Pilot Program (eIPP), established under the Unleashing American Drone Dominance Executive Order. USDOT's announcement specifically calls for the start of operations in 2026.

– Completed testing by Japan's Ground Self-Defence Force (JGSDF) in which the Chaparral passed all 22 test items for inter-island logistics capabilities.

– Backed by premier defence and venture investors, including Lockheed Martin Ventures, Shield Capital, Marlinspike Partners, Snowpoint Ventures, DiamondStream Partners, and Catapult Ventures.

"As a public company with access to significant capital, Elroy Air will be ideally positioned to meet the rising demand for Chaparral, our heavy-cargo drone," said Elroy Air Chief Executive Officer Andrew Clare, PhD. "Autonomous flight is the next great logistics revolution — and Elroy Air intends to lead it. The U.S. has made drone dominance a national strategic priority, and that priority is only meaningful if American industry can actually deliver. This transaction ensures we can by rapidly scaling production for U.S. and allied forces and commercial markets alike. I'm excited to partner with Inflection Point, a firm with a track record of successfully scaling high-impact technology companies in order to satisfy significant market demand."

Inflection Point's prior and pending transactions in the national security and Aerospace & Defence sectors include Intuitive Machines, USA Rare Earth, Merlin Labs and Quantum Space.

"Elroy Air is emerging at the intersection of two massive secular shifts: the modernisation of defence technology and the automation of global supply chains," said Michael Blitzer, Chief Investment Officer of Inflection Point. "Through a combination of proprietary autonomous aviation technology and recurring software licensing revenue streams, Elroy has established a highly defensible flywheel across defence and commercial markets. The company's multi-billion dollar demand pipeline and strategic partnerships with Bristow and Barq underscore the urgency of the market opportunity and Elroy's growing strategic importance within the industry."

Transaction Overview

The business combination is expected to deliver gross proceeds of at least $165 million from the committed PIPE, with up to $230 million additional proceeds depending on redemptions. Elroy Air currently intends to use these proceeds to accelerate its technology and platform development, ramp its ability to deliver its systems to customers, enable strategic acquisitions, and ensure top technical talent across areas, including software and hybrid-electric systems, continue joining Elroy Air.

The Boards of Directors of both Elroy Air and CMII have unanimously approved the proposed transaction. The deal is expected to close in late 2026, subject to customary closing conditions, including approval by CMII's shareholders and regulatory review. Upon closing, the combined company will use the Elroy Air name and expects to be listed on the Nasdaq under the ticker symbol "ELRY."

Advisors

Barclays is acting as exclusive financial advisor and exclusive capital markets advisor to Elroy Air. Barclays is acting as Lead Placement Agent on the PIPE, with Cantor and Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC, also acting as Placement Agents. Cantor and Cohen & Company Capital Markets are serving as financial and capital markets advisors to CMII. DLA Piper LLP (US) is serving as legal advisor to Elroy Air. White & Case LLP is serving as counsel to CMII and Inflection Point. Kirkland and Ellis LLP is serving as legal advisor to the Placement Agents.