June 16, 2011 Retail Lunch Presentation


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AMA's President, Richard Hayden, presented to a group of investors on June 16, 2011 in Toronto.

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  • Comm panel and wireless headset
  • -Also need to discuss industry demand, how it’s different from the 220 and improvements that are being made (explained in the first few bullets)
  • Recurring long-term revenue stream from installed base Market characteristics & dimensions Revenues generated by equipment sales + installed base Line chart illustrating 2005-2010 growth of recurring revenue 2010 major contract wins
  • June 16, 2011 Retail Lunch Presentation

    1. 1. AeroMechanical Services <ul><li>Investor Presentation: June 16, 2011 </li></ul>
    2. 2. Richard Hayden PRESIDENT
    3. 3. Company Timeline COMPANY FOUNDED 1998 2003 2002 Underfloor Stowage Unit 2004 AFIRS 220
    4. 4. Company Timeline 2010 Launch of FLYHTStream and FLYHT Fuel Management System AFIRS 228 2008 2011
    5. 5. Automated Flight Information Reporting System (AFIRS TM ) “ Blue box”-proprietary & patented; voice & data- 2 way Connects to Black Box and other data sources Global satellite communications (Iridium) Relays secure information from Blue Box to server and back Data transformed into timely messages and usable information using proprietary UpTime software
    6. 6. What is AFIRS? <ul><li>“ OnStar TM ” for aviation </li></ul><ul><li>Provides timely, mission-critical and actionable information to operations, maintenance and management </li></ul><ul><li>Benefits to customers include cost reduction, improved on-time performance and compliance verification </li></ul><ul><li>AFIRS is: </li></ul><ul><ul><li>Integrated aircraft-to-user data delivery service </li></ul></ul><ul><ul><li>Global and available 24/7/365 from anywhere to anywhere </li></ul></ul><ul><ul><li>Certified by Transport Canada, FAA, EASA, CAAC (China) </li></ul></ul><ul><ul><li>Secure </li></ul></ul>
    7. 7. AFIRS 228: Key Differentiator <ul><li>Future Ready </li></ul><ul><ul><li>Air Traffic Services /Safety Services </li></ul></ul><ul><ul><li>Aircraft Communications Addressing and Reporting System (“ACARS”) over Iridium </li></ul></ul><ul><li>Timely transmission of key information </li></ul><ul><li>Remote troubleshooting of aircraft </li></ul><ul><li>Multiple modes of communication </li></ul><ul><li>First production release Q3 2011 </li></ul><ul><li>Safety services version Q2 2012 </li></ul>
    8. 8. FLYHTStream TM AFIRS TM 220 & 228 <ul><li>Satellite communications </li></ul><ul><li>Flight following </li></ul><ul><li>Real-time data </li></ul>UpTime TM Web hosted delivery system FLYHT TM Fuel Management System <ul><li>Fuel Initiative Reporting System Tracker (FIRST) </li></ul>Unique Line of Patented Products and Services
    9. 9. Business Model <ul><li>Similar to wireless service providers, but with an OUTSOURCED network </li></ul><ul><li>One-time charge for the aircraft kit ($40-$60k) </li></ul><ul><li>Service revenue (target $2k / mo / aircraft is the goal) </li></ul><ul><li>Value added services </li></ul><ul><ul><li>Fleet watch </li></ul></ul><ul><ul><li>Data streaming mode </li></ul></ul><ul><ul><li>Fuel Management/emissions compliance </li></ul></ul>
    10. 10. Market Drivers <ul><li>Operational improvements </li></ul><ul><ul><li>Tracking </li></ul></ul><ul><ul><li>Communications </li></ul></ul><ul><ul><li>Standard operating procedures compliance </li></ul></ul><ul><li>Cost savings </li></ul><ul><ul><li>Crew and staff utilization </li></ul></ul><ul><ul><li>Maintenance planning </li></ul></ul><ul><ul><li>Fuel consumption </li></ul></ul><ul><ul><li>Cost of services (voice, data) </li></ul></ul><ul><li>Regulatory compliance </li></ul><ul><ul><li>Air traffic </li></ul></ul><ul><ul><li>Accountability for aircraft location </li></ul></ul><ul><ul><li>Carbon emissions </li></ul></ul><ul><ul><li>Noise abatement </li></ul></ul>
    11. 11. Market Drivers <ul><li>Flight Safety </li></ul><ul><li>Flight irregularities trigger automatic reports </li></ul><ul><li>Data transmitted via satellite to ground personnel in real-time for immediate action </li></ul><ul><li>Emergency mode automatically streams key flight data & GPS positioning to ground </li></ul><ul><li>Emergency recipients include maintenance personnel, airline executives, Chief Pilot, air traffic control, search & rescue </li></ul><ul><li>All data received & stored in ground servers for post-event analysis </li></ul>
    12. 12. Markets <ul><li>Commercial aircraft </li></ul><ul><ul><li>Airlines </li></ul></ul><ul><ul><li>Cargo </li></ul></ul><ul><ul><li>Charter and special missions </li></ul></ul><ul><li>Business aviation </li></ul><ul><li>Leasing companies </li></ul><ul><li>Military </li></ul><ul><ul><li>Transport </li></ul></ul><ul><ul><li>Helicopters </li></ul></ul><ul><li>Manufacturers </li></ul>
    13. 13. Market Penetration <ul><li>SIGNED </li></ul><ul><li>33 operators </li></ul><ul><li>Size ranges from 2 to over 100 aircraft </li></ul><ul><li>All 6 continents </li></ul><ul><li>Profile </li></ul><ul><ul><li>Scheduled passenger </li></ul></ul><ul><ul><li>Charter / unscheduled </li></ul></ul><ul><ul><li>Special missions (UN Food in Africa, and Antarctic missions) </li></ul></ul><ul><ul><li>Military transport </li></ul></ul><ul><li>INSTALLED </li></ul><ul><li>Over 250 delivered </li></ul><ul><li>Approx. 200 reporting </li></ul><ul><li>During heavy maintenance – two year cycle </li></ul><ul><li>Aircraft Manufacturer </li></ul><ul><li>Hawker Beechcraft </li></ul>
    14. 14. High Regulatory Barriers to Entry <ul><li>Supplemental Type Certificates (“STC”) </li></ul><ul><ul><li>AFIRS 220 – 30 approved </li></ul></ul><ul><ul><li>AFIRS 228 – 15 applications </li></ul></ul><ul><li>Patents </li></ul><ul><ul><li>United States (International) </li></ul></ul><ul><ul><li>China </li></ul></ul>
    15. 15. Strategic Alliances
    16. 16. Growing the Business
    17. 17. Financial Review - Annual Results * AMA defines cash revenue for accounting purposes (“GAAP”) plus payments received for AFIRS shipments that cannot yet be recognized for accounting purposes. In $ millions except for per share amounts   2010 2009 2008 2007 Revenue (GAAP) $5.0 $5.1 $3.2 $2.0 Revenue (cash) * $6.1 $7.5 $5.3 $2.6 Net Loss (9.1) (4.5) (8.5) (6.9) Loss (before R & D) (4.3) (4.0) (7.8) (6.6) Loss/Share (basic & fully diluted) $(0.09) $(0.05) $(0.11) $(0.11) Assets $11.0 $11.8 $6.0 $6.3 Long Term Financial Liabilities $2.4 $0.3 $0.3 $0.4
    18. 18. Financial Review - Q1 2011 <ul><li>Increased Cash Revenue </li></ul><ul><li>Decreased Net Loss </li></ul>Q1 2011 Q1 2010 Cash Revenue $1,373,781 $1,267,676 Net Loss (before R&D) $702,805 $1,026,209 Net Loss $1,485,292 $2,063,614
    19. 19. Financial Position <ul><li>Completed two private placements December 2010: $6 million </li></ul><ul><li>Q1 2011 Industry Canada Strategic Aerospace Defense Initiative loan $1.96M </li></ul>
    20. 20. 2011 FLYHT Plan <ul><li>Complete development of AFIRS 228 </li></ul><ul><li>Continue to deliver AFIRS 220 </li></ul><ul><li>Enhance service and support to current customers </li></ul><ul><li>Commence installation of AFIRS 228 for a minimum of three clients </li></ul><ul><li>Target growing regions of China, South America, Africa, and the Middle East </li></ul><ul><li>Continue to expand Supplemental Type Certificates </li></ul>
    21. 21. Board of Directors <ul><li>BILL TEMPANY, CEO & Chairman , Audit Committee, 35 years of senior management experience </li></ul><ul><li>RICHARD HAYDEN , President , Successful in developing companies, products, and markets involving data-driven decision making in aviation. </li></ul><ul><li>JACK OLCOTT, Comp committee, 40 years in the aviation industry, President of NBAA for 11 years </li></ul><ul><li>CHARLES POLLARD , Governance Committee, former CEO of 2 airlines; 24 years of leadership in the civil aviation industry </li></ul><ul><li>DOUG MARLIN , Comp and Audit committee ,10 years experience as director of both TSX – V and NASDAQ listed companies </li></ul><ul><li>MIKE BROWN, Comp and Governance Chair, 30 years as a business lawyer </li></ul><ul><li>PAUL TAKALO, Audit and Governance Committee , 25 years experience of audit and company operational experience </li></ul><ul><li>JACQUES KAVAFIAN , Comp Committee, 26 years as an analyst in the aviation industry </li></ul>
    22. 22. Management <ul><li>BILL TEMPANY , CEO & Chairman, Audit Committee </li></ul><ul><li>RICHARD HAYDEN , President </li></ul><ul><li>THOMAS FRENCH , VP Finance and CFO </li></ul><ul><li>MICHAEL FANG , VP China Operations </li></ul><ul><li>MATT BRADLEY , VP Business Development </li></ul><ul><li>JEFF BRUNNER , VP Operations </li></ul><ul><li>KENT JACOBS , Technical Director, Advanced Applications </li></ul><ul><li>STEVE HARKE , Director of Product Development </li></ul>
    23. 23. Investment Highlights <ul><li>Unique line of patented products and services </li></ul><ul><li>Recurring long-term revenue stream from installed base </li></ul><ul><li>High regulatory barriers to entry </li></ul><ul><li>Strategic alliances with industry sector leaders </li></ul><ul><li>Increasing customer growth in flights, hours and aircraft types </li></ul><ul><li>AFIRS TM key industry differentiator moving to next generation </li></ul>