Elroy Air, the California company behind the Chaparral autonomous cargo drone, earned $2.4 million in revenue last year. The blank-cheque company merging with it values Elroy at $800 million, according to a merger filing made public on 8 October.
The registration statement, filed with the SEC by Inflection Point Acquisition Corp. VII, is the first public look at Elroy’s books since the deal was announced in June. It describes a company still living mostly on development contracts.
What the books show
Revenue fell 40% in 2025, from $4.1 million, after a contract with Leidos ended. The first half of 2026 was better: $4.5 million, of which $3.7 million came from a single contract with Japan’s Itochu Aviation.
Elroy lost $13.6 million from operations in 2025. Its net loss was $155.6 million, but $133.6 million of that was a paper charge for the rising value of an obligation to issue its own preferred shares.
Its auditor, Grant Thornton, says there is substantial doubt that Elroy can continue as a going concern. The filing ties that to Elroy’s need for outside money and to noteholders who can demand repayment if the merger fails. Elroy had $65.1 million in cash at 30 June, up from $2.2 million at the end of 2025, after selling $66.6 million of convertible notes and warrants.
How the price was set
The SPAC’s board relied on Elroy’s own forecasts: $6 million of revenue this year and $30 million in 2027. The 2027 figure assumes four to six Chaparral sales at $3.5 million each. The filing says no binding contract to deliver any aircraft existed when the forecasts were made.
Newbridge, the adviser that prepared the valuation analysis, took twelve listed companies and averaged their multiples of 2027 revenue. They included Joby Aviation at 36.5 times and Archer Aviation at 27.5 times. Applied to Elroy’s $30 million, the 32-times average gave an equity value of about $958 million.
The pipeline Elroy cites is 1,410 aircraft. Letters of intent account for 1,150 of them, memoranda of understanding 160 and master purchase agreements 100. The filing calls these “generally non-binding”.
The contract it does have
In August the US Army awarded Elroy an SBIR Phase III contract worth up to $46.1 million with options. About $5.1 million was funded at the start, the filing says. Kratos is to build the Chaparral in a dedicated part of its Sacramento plant, which had not yet been handed over at 30 June.
Andrew Clare, a former chief technology officer of the self-driving company Nuro, has run Elroy since December 2024 and stays on as chief executive. The deal assumes $175 million from PIPE investors and up to $233 million from the SPAC’s trust, before $42 million of transaction costs.
The filing leaves the date of the shareholder vote blank. Either side can walk away if the deal has not closed by 26 June 2027.
