flyht aerospace solutions corporate presentation

FLYHT Aerospace Solutions Ltd. TSX.V: FLY

OTCQX: FLYLF

November 2014

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Disclaimer Forward Looking Statements

This discussion includes certain statements that may be deemed “forward-looking statements” that are subject to risks and uncertainty. All statements, other than statements of historical facts included in this discussion, including, without limitation, those regarding the Company’s financial position, business strategy, projected costs, future plans, projected revenues, objectives of management for future operations, the Company’s ability to meet any repayment obligations, the use of non-GAAP financial measures, trends in the airline industry, the global financial outlook, expanding markets, research and development of next generation products and any government assistance in financing such developments, foreign exchange rate outlooks, new revenue streams and sales projections, cost increases as related to marketing, research and development (including AFIRS 228), administration expenses, and litigation matters, may be or include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on a number of reasonable assumptions regarding the Canadian, U.S., and global economic environments, local and foreign government policies/regulations and actions and assumptions made based upon discussions to date with the Company’s customers and advisers, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include production rates, timing for product deliveries and installations, Canadian, U.S., and foreign government activities, volatility of the aviation market for the Company’s products and services, factors that result in significant and prolonged disruption of air travel worldwide, U.S. military activity, market prices, foreign exchange rates, continued availability of capital and financing and general economic, market, or business conditions in the aviation industry, worldwide political stability or any effect those may have on our customer base. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.

Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. The Company cannot assure investors that actual results will be consistent with any forward-looking statements; accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are current only as of the date of this document. The Company disclaims any intentions or obligation to update or revise any forward-looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is required by law.

www.flyht.com

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AFIRS Technology

“A six pound heavy-weight that will drive a cultural change on how an airline operates and manages its data.”

Works on any

aircraft

Continuous

monitoring

Safety and

economic benefit

Enhances all

existing

technologies

Global coverage Expanding menu of

applications

Offers real-time

data transmission

Satellite based

Iridium Network

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The Solution – More Than Tracking

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Value to Customer

• Voice, Text and Email to Crew

• Faster turn-around times

• Better maintenance information

• Connected to what matters

• Asset visibility

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Value Add Applications

FLYHTStreamTM

• An emergency data streaming mode

• Can be manually activated by the flight crew, ground support or automatically triggered

by predefined emergency parameters

• FLYHTStream sends critical data such as global position, equipment status and black

box information to ground-based operations

• Patent pending service uses the Iridium satellite network

FLYHTSafe

• Real time operational safety events

FLYHTFuel

• Automatically monitors fuel consumption trends

FLYHTFollow

• Global Flight following and alerting

FLYHTHealth

• Aircraft and engine health monitoring

FLYHTMail

• Two way text messaging

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Investor Consideration

• Unparalleled, proprietary, patented and patent pending real-time data streaming technologies

• Commercial today with significant and growing base of customers

• Recognized global leader in the airline industry

• Saving customers money, time and driving efficiencies

• Scales to large multi-aircraft contracts

• Proven recurring revenue model with multi-year contracts

• Absolute customer satisfaction to date

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Capital Market Profile……cont’d

At November 13, 2014

Share Price $0.40

Market Capitalization (per TSX:V) $64 million

52 week low $0.22 - high $0.80

Shares (per TSX:V) 170.4 million

Share Structure – At September 30, 2014** Management, Directors and Officers

Fully Diluted 184 million

Institutional Ownership % Approx. 40.0%

Insider Holdings** 4.2%

2010 2011 2012 2013 Q3 2014

Revenue $4.7 $5.5 $6.5 $8.0 $4.7

R&D Expenditures $5.8 $3.3 $2.4 $2.1 $0.05

Net Loss $9.0 $6.5 $4.9 $4.1 $3.0

Financial Results Snapshot– ($millions)

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• Reported Revenue of $1.8 million

• Recurring revenue (AFIRS UpTime usage) of $927K,

an increase of 8% on the year

• R&D expenses were $0.05 million year to date due to

recovery from Sierra Nevada Corporation

• China shipments escalating

• Airbus in service evaluation completed and order placed for

35 units November delivery

Third Quarter Highlights

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MH 370

• Kuala Lumpur conference May 26-27

• The tragedy of complacency

• The track, alert, analysis approach

• Causing buying decision delays while regs developed

• Meetings in Middle East now say Feb 28, 2015 for results

• We are in the thick of the hunt for change

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Competitive Analysis

• No other product offers breadth of AFIRS

• Satcom only include Aircell, Skytrac, Latitude

• ACARS over Iridium include ICG and Avionica

• No other in-house approvals

• FLYHTStream has no competitor

• Real time FOQA has no installed competitors

• EFB connections have no installed competitors

• AFIRS is certified for all of the above

• Patents and patent pending exist on the technology

• Proven cost savings of $100K/ AC/ Year

• OEM installs help the buying decision

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Market Drivers

• Need for better communications acknowledged in FANS and CPDLC

• AF447 and MH370 disasters leading to mandates

• Airlines save money with better and more timely information

• reduce turn-around time

• reduce fuel consumption

• have the right people in the right place at the right time

• reduce repair costs by having better information to make decisions

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• Regulatory environment is a natural barrier to entry

• FLYHT holds patents on its technologies

• Obtained nearly 60 Supplemental Type Certificates (STC) for 30+

models

• Required for installation on each aircraft type

• Additional STCs are pending or in progress

• A decade of developing industry relationships

• Went through strenuous due diligence processes by customers,

partners and regulators

Massive Barriers To Entry

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Business Model

Certify and Sell

Kits

Build

Applications

Recurring

Revenue

• AFIRS™ 220

• AFIRS™ 228B

• AFIRS™ 228S

• Fuel management

• Engine trending

• Cockpit data

• Exceedence reporting

• Bill for hourly flight

usage per month

• Monthly charges for

applications

Hardware Software Usage

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Recurring Revenue Model

• Sell AFIRS with necessary engineering package to install and activate

• $35 to $60 thousand per aircraft for retrofit

• Factory install at Airbus - L3 pays FLYHT royalties

• Recurring Revenue

• 5 year renewable contracts

• Affordable voice and data connectivity to the cockpit for safety

• Average recurring revenue greater than $1,200 per month per aircraft

• Recurring revenue gross margin 80%

• 30 year asset life

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What We Are Working On

• Sales force reinforcements

• Growth through building applications

• Aircraft Situational Display

• iPad connectivity

• FLYSafe

• FLYHTStream commercialization

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FLYHTFollow

NTSB Video - Emerging Flight Data & Locator Technology

(Click on October 7, 2014, Flash Media, minute 317)

//helios/Finance-Administration/Investor Relations/Presentations/Details Presentation.pptx

http://stream.capitolconnection.org/capcon/ntsb/ntsb.htm




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FLYHTFuel

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Customer Feedback

• “FIRST is a key element to any fuel conservation initiative, it is the big “M”

within the PEMC framework – Plan, Execute, Measure, Correct. And the

system does it accurately and timely, always.

• The dash-board functionality gives the Operations Manager the right

information at the right time to make the best decisions. Now it is possible

to act, on the spot, using actual and unbiased data.

• Also, the “what-if” capacity is widely used in scenario analysis, my

company can discuss different operation scenarios and operation policies

with immediate calculation of potential savings, without the need to

perform special test flights or waiting for new flight data.

• FLYHT knowledge and flexibility to accommodate specific requirements is

remarkable and makes the AFIRS and FIRST solutions a “must have”

solution to the aviation companies engaged to be the most efficient as

possible in terms of fuel usage”

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FLYHTSafe

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Company Making Opportunities

• Airbus factory and fleet installs

• China with Satcom mandate

• SNC takes us to the military

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Airbus A320

• Wants ACARS over Iridium, Voice and IP based EFB

connections

• Limited revenue in initial installs

• We are part of the airframe, additions are achievable

• L3 wants to be part of the solution

• 25% to 40% adoption expected

• First product order was 35 units

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China Opportunity

China has mandated satellite communications for all

aircraft

• Benefits of FLYHT - Iridium relationship now

recognized and approved

• Inmarsat is the alternative satellite system, but

Iridium is more reliable and economical

• Exclusive distribution agreement with SkyBlue

Technologies (Gov’t owned)

• 40 installed to date on 7 carriers, another 20 paid

for

• Large potential is realistic but forecasting and

timing are difficult

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Sierra Nevada Corporation

• Multi billion dollar private company

• Headquarters Reno Nevada

• Large US military supplier

• Will run secure UpTime

• Will use AFIRS to generate revenue

• First 2 orders in hand

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Sierra Nevada Corporation

• Operates many aircraft for US Government

• Well connected in Turkey

• Large sales force expanding into Commercial

• Very good partner with fair revenue sharing

• Strong technical team for limited support requirements

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Annual Objectives for 2015

• China installs to 12 airlines

• 39 done to date

• Sierra Nevada ramp up

• 1 military and 1 commercial order in place (4 units)

• Expand service modules to increase revenues

• ASD and Fuel programs

• Pursue partners to accelerate growth

• Ongoing work

• Airbus growth

• 35 ordered for delivery in December

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Officers/Senior Management

Bill Tempany, Chief Executive Officer

Mr. Tempany has more than 35 years of senior management experience in hi-tech companies and more than 15 years’

experience in the public markets. He has been CEO of FLYHT since March 2003. He was founder, President and CEO

of Fintech Services Ltd., President and founder of QByte Services Ltd. (now owned by IBM), and a consultant in the

international oil and gas industry to companies such as Ziff Energy Group and Petrobras.

Matt Bradley, President

Mr. Bradley has more than two decades of experience in military and civilian aviation. He worked with Skyservice

Airlines for the last 10 years as a Captain and Check Pilot. With Skyservice, he worked extensively in the area of fuel

management, implementing a satellite communication and fuel efficiency initiative that saved the airline over 3% of the

annual fuel budget.

Nola Heale, CA, Chief Financial Officer

Ms. Heale has 30 years financial management and reporting experience on three continents in diverse industries,

including manufacturing, services and transportation logistics industries. She has held positions as chief financial

officer, board director, financial and general operations management in public and private companies. Nola is a

Canadian and a South African Chartered Accountant, an Associate of the Chartered Institute of Management

Accountants (United Kingdom) and a Chartered Global Management Accountant; she is a graduate of the Advanced

Program of Canadian Board Diversity Council and is the past president of Financial Executives International (“FEI”)

Canada, Calgary Chapter where she remains on the Board and National Chapter Leadership Council.

Derek Graham, Chief Technical Officer

Mr. Graham has more than 10 years of combined aeronautical satellite product development and management

experience, Derek brings extensive depth and leadership to the FLYHT Team. Derek has previously worked at a major

avionics manufacturer for 10 years in product line management and development responsible for a line of successful

aviation Iridium and Inmarsat communications products

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Officers/Senior Management……cont’d

Jeff Brunner, P.Eng., VP Certification Engineering and China Operations

Mr. Brunner is a professional engineer with over 18 years of experience in the aviation industry. After receiving avionics

engineering and aircraft maintenance training from Southern Alberta Institute of Technology, Mr. Brunner worked in

aircraft maintenance before completing a bachelor’s degree in mechanical engineering from the University of Calgary.

He joined FLYHT in 2005, initially serving as head of the Company’s engineering department, where he led the initiative

to have FLYHT certified by Transport Canada as a Design Approval Organization (DAO). Mr. Brunner is also a

Transport Canada delegate under FLYHT’s DAO.

Kent Jacobs, Technical Fellow

Mr. Jacobs is a professional pilot with a computer science degree who was the first employee of FLYHT. He is the

founding developer of the AFIRSTM system. What started out as a box that fit in a coat closet, the AFIRS system is now

the size of a loaf of bread, is installed on aircraft and is the center of FLYHT’s business. Kent is also the lead developer

of the Fuel and FLYHTStreamTM systems.

Graham Ingham, Director, Service and Support

Mr. Ingham has over 20 years of civil aviation experience. During the course of his career, he has flown many types of

transport category aircraft that includes the B727, B737 and A320/A330 aircraft. Additionally he has held several

Managerial positions which include Manager, Flight Training for Skyservice Airlines, Training/Check Pilot A320 and

most recently Director, Flight Operations for First Air.

Michael Fang, Vice President China Operations

Mr. Fang is an Avionics Engineer with more than 15 years of work experience in the Chinese aerospace industry. He

has worked with both the Chinese Airlines and Chinese government regulators. He holds an MBA from the Haskayne

School of Business at the University of Calgary.

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Board of Directors

Bill Tempany - President and CEO, Audit Committee

Mr. Tempany has more than 35 years of senior management experience in hi-tech companies and more than 15 years experience in

the public markets. He has been CEO of FLYHT since March 2003. He was founder, President, and CEO of Fintech Services Ltd. (now

Sylogist Ltd.), President and founder of QByte Services Ltd., and a consultant in the international oil and gas industry to companies

such as Ziff Energy Group and Petrobras.

Mike Brown - Governance Committee and Compensation Committee

Mr. Brown is a lawyer with the firm Geselbracht Brown and practices in the areas of Business Law, Real Estate Law, Wills & Estates

and Civil Litigation. Mr. Brown is currently Chair of the Board of Governors of Vancouver Island University (V.I.U.) and was a strong

leader in the logistical and legal challenges of the transition of V.I.U. from a university college to full university status. During that

process he was instrumental in the creation and implementation of a governance process for the new V.I.U. Within his community he

has also been actively involved with the United Way, the Nanaimo Dragon Boat Festival Society, Crime Stoppers, the Nanaimo Rotary

Club and the Nanaimo Chamber of Commerce. Mr. Brown is a graduate of the Faculty of Law at the University of Ottawa. He has

served on the FLYHT board of directors since March 2003.

Barry Eccleston, Governance Committee and Compensation Committee

Mr. Barry Eccleston is President of Airbus Americas, Inc. He joined Airbus from Honeywell where he served as Vice President in

different departments and global regions with responsibility for the $1.4 billion business aviation, turboprop, regional fan and military

businesses. Prior to that, he held increasingly senior positions with Rolls-Royce for 29-years, culminating as President and CEO Rolls-

Royce Canada and President and CEO of International Aero Engines, in which Rolls-Royce was a major shareholder. He is currently

President of The Wings Club, and was a member of NBAA’s Associate Member Advisory Council, and a member of the British-

American Business Association Board of Directors. He joined the FLYHT board of directors in August 2014.

John Belcher, Audit Committee

Mr. Belcher is a leading authority in aviation and air transport. Mr. Belcher was formerly Chairman and Chief Executive Officer of ARINC

Incorporated. His prior experience includes positions as President and CEO, Hughes Aircraft of Canada, Ltd.; Vice President Hughes

Aircraft Company; President and CEO, Thompson-Hickling Aviation; Senior Vice President, SPAR/PRIOR Data Sciences; Executive

Director, Transport Canada; and Director General, Supply and Services Canada. John presently serves on seven other boards

including LandMark Aviation, Signalhorn, NanoVapor, Anne Arundel Health System, World Trade Center Institute, Governor’s Work

Force Investment Board, and Cyber Reliant. He joined FLYHT’s board of directors in August 2014.

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Board of Directors……cont’d Jack Olcott

Mr. Olcott was educated as an aeronautical engineer (BSE & MSE, Princeton University; MBA, Rutgers University) and

has a certificate in leadership training from the Kennedy School of Government of Harvard University. Mr. Olcott began

his career in business aviation and was involved with creating a flight research laboratory at the Indian Institute of

Technology/Kanpur. He also obtained and managed flight mechanics contracts issued by NASA and private industry. In

the early 1970′s Mr. Olcott began a career in aviation journalism where he was Editor and Publisher of Business &

Commercial Aviation magazine and a Vice President of McGraw-Hill’s Aviation Week Group. Mr. Olcott joined the

National Business Aviation Association as President in 1992 and held that position until 2003. He is currently President

of General Aviation Company. He joined the board of directors of FLYHT in May 2008.

Paul Takalo – Audit Committee

Mr. Takalo is a Chartered Accountant who was employed with Grant Thornton from 1985 to 2005 and spent the last five

years of his time there as Audit Partner. From July to November 2005 Mr. Takalo provided consulting service. Since

November 2005 he has held the position of Vice President, Finance with Standen’s Limited. Mr. Takalo has been on the

FLYHT board of directors since May 2008.

Doug Marlin – Chairman, Audit Committee, Governance Committee and Compensation Committee

Mr. Marlin has been President of Marlin Ventures Inc., a Canadian-based consulting firm, since January 1997. He is a

Director of Zed.i Solutions Inc. as well as a Director for JDA Software Group Inc. Mr. Marlin was previously President of

JDA Software Ltd. from 1981 to 1996. He has served on the FLYHT board of directors since March 2003.

Jacques Kavafian – Governance Committee and Compensation Committee

Mr. Kavafian is an independent business man., based in Richmond Hill, ON. He is well known to the investment,

aviation and travel communities with more than 26 years of experience as an analyst on Bay Street, covering

companies in the airline, aerospace and leisure industries. He was Vice-President and Analyst with Research Capital

from August 2004 to October 2009. Mr. Kavafian joined the FLYHT board of directors in December 2010.