Terra Drone Establishes New Subsidiary 'Terra Defense Europe' in Estonia as European Defense Business Hub

Terra Drone Corporation (Headquarters: Shibuya-ku, Tokyo; CEO: Toru Tokuheavy; hereinafter 'Terra Drone') announces the establishment of a new subsidiary, 'Terra Defense Europe,' in the Republic of Estonia, serving as its strategic hub for defense operations in Europe.

Terra Defense Europe will be responsible for the sales, maintenance, logistics management, and local partner coordination of unmanned aerial vehicles (UAVs) and related systems for defense applications. Terra Drone positions this subsidiary as the core of its European defense operations, advancing business development, supply, and the establishment of maintenance and operational support systems within Europe for defense assets such as the intercept drones 'Terra A1,' 'Terra A2,' and 'Terra C1,' developed in collaboration with Ukrainian companies.

Background

Since announcing its entry into the defense equipment market in March 2026, Terra Drone has been expanding its product portfolio and building its business foundation in the counter-drone defense sector, focusing on the intercept drone 'Terra A1' and the fixed-wing intercept drone 'Terra A2.'

Currently, Europe is advancing initiatives to strengthen defense capabilities and expand its domestic defense industry base in response to changing security environments. The EU has established the 'SAFE' initiative, providing up to €150 billion in financing to promote joint procurement and enhance defense industry production capacity. The 'EDIP' program is also underway, aiming to expand production capacity and ensure stable supply for the defense industry. Under these frameworks, having a domestic industrial base within Europe and collaborating with local partners is becoming increasingly important.

At the same time, deploying defense-purpose UAVs and related systems internationally requires establishing systems that comply with the regulations and security requirements of each country and region. The international transfer of advanced defense equipment involves review and coordination processes under each country’s export control regimes, which can take considerable time before actual deployment. Given this environment, Terra Drone has determined that, in addition to direct supply from Japan, it is essential to establish a business base within Europe—closer to demand centers—to comprehensively manage business development, supply, maintenance, operational support, and logistics for defense UAV assets.

The Republic of Estonia holds a geographically and strategically important position in Europe, particularly for business collaboration in the defense and technology sectors. Terra Drone positions Estonia as a key hub for its European defense operations and will advance defense business expansion across Europe and other regions.

Strategic Significance of Terra Defense Europe

### Building a Foundation for Participation in European Defense Programs and Joint Procurement, and Initiating Partnership Discussions with Indra

Europe is actively pursuing initiatives to strengthen defense capabilities, enable joint procurement, and nurture its domestic defense industry. Establishing a locally rooted business structure and collaborating with European companies and institutions is now critical for securing future business opportunities.

Terra Defense Europe aims to serve as a hub for business development, local partner collaboration, and customer engagement in the European defense market, increasing the possibility of participating in European defense-related programs such as the European Defence Fund (EDF) and the European Defence Industry Programme (EDIP). These programs emphasize consortium formation centered on European companies, R&D, strengthening mass production and supply capabilities, and cooperation with Ukrainian companies. Local incorporation and collaboration with European defense prime contractors are therefore essential.

#### Initiating Partnership Discussions with Defense Prime Indra

In this context, the Terra Drone Group has begun exploring partnership opportunities with Indra, a Spanish defense prime contractor with strong presence in radar, air defense and surveillance systems, electronic warfare (EW), and command and control (C4ISR) domains.

Going forward, the company aims to develop C-UAS (Counter-Unmanned Aircraft Systems) solutions capable of meeting the requirements of European defense programs and joint procurement by integrating Unifly’s unmanned aircraft traffic management system (UTM), attack and reconnaissance drones developed in collaboration with Ukrainian companies, and Indra’s defense system integration capabilities.

### Strengthening Revenue Base Including Post-Sales Maintenance and Operational Support

For defense-purpose UAV systems, continuous customer support—including maintenance, operational support, and logistics management after deployment—is as crucial as product supply.

### European Expansion of Business Collaboration with Ukrainian Companies

Terra Drone has been building its business foundation in defense-purpose UAV systems through collaboration with Ukrainian defense technology companies. Terra Defense Europe will serve as the base for expanding this collaboration into Europe, leveraging the development capabilities and business infrastructure cultivated locally by Ukrainian companies and Terra Drone’s global network to expand defense operations from a European base.

Overview of the New Company

- (1) Name: Terra Defense Europe - (2) Location: Tallinn, Republic of Estonia - (3) Representative: CEO Toru Tokuheavy - (4) Business Activities: Sales, maintenance, logistics management, and local partner collaboration for defense-purpose UAVs and related systems

Future Outlook

Through the newly established Terra Defense Europe, Terra Drone will strengthen its operational framework for defense business in Europe and establish supply, maintenance, and logistics systems for defense-purpose UAVs and related systems.

Furthermore, as Europe advances initiatives to strengthen defense capabilities and expand its domestic defense industry base, establishing a locally rooted business structure is considered strategically vital for future defense business expansion. Terra Drone will promote the provision of defense-purpose unmanned assets adapted to regional security environments, starting from Europe, contributing to the protection of human lives and critical infrastructure.

Moving forward, Terra Drone will continue to leverage its expertise in drone development and operations, air traffic management systems, and global business expansion to create new business opportunities in the defense sector and achieve long-term corporate value enhancement.

Company Policy on Defense Business Expansion

Terra Drone has publicly disclosed its policies regarding defense business expansion. For details, please refer to the following link:

Reference: https://terra-drone.net/26065

Future Outlook (Impact on Financial Performance)

While this initiative is expected to contribute to long-term corporate value enhancement, its impact on the consolidated financial results for the fiscal year ending January 2027 is expected to be minimal at this stage. The company will promptly announce any material developments in the future.

Inquiries Regarding This Business

Business Website: https://terra-defense.com/ Contact Form: https://terra-defense.com/ja/contact-ja/ Terra Drone Corporation, Defense Division, UAV Department, Contact: Morita Email: defense@terra-drone.co.jp TEL: 080-4329-7881

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