flyht october 2017 investor presentation

October 2017

Tom Schmutz, CEO

FLYHT Aerospace Solutions Ltd.

TSX.V: FLY

OTCQX: FLYLF

2TSX.V: FLY

OTCQX: FLYLF Oct 2017

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

Disclaimer

http://www.flyht.com/

3TSX.V: FLY


• Canadian Public Company (~$50M Market Cap)

• Calgary, Alberta

• TSX Venture: FLY

• OTCQX: FLYLF

• Leading provider of real-time data streaming technology that enhances the efficiency and

safety of aircraft

• Saves aircraft operators money

• Helps streamline their operations

• Proactively enhances safety, which help to prevent accidents and save lives

• FLYHT technology

• Airborne - Automated Flight Information Reporting System (AFIRSTM)

• Ground Server - UpTimeTM Cloud Service Platform

• FLYHT is a rapidly growing, “company to watch” in the aviation technology space

Who is FLYHT?

4TSX.V: FLY


• Enhanced management & BOD with industry veterans

• Factory option on Airbus A320, A330 and Bombardier CRJ

• Other platforms in process

• Over 1,800 shipments and growing rapidly

• Over 70 Airline customers…and growing

• Major success in China, fastest growing market

• Cultivated a significant sales backlog (> $25M)

• Supplemental Type Certificates (> 70 STC)

• Barrier to Entry

• Right to install

• Most extensive Satcom catalogue in world

• Qualified on 95% of commercial aircraft types

FLYHT Overview

Automated Flight Information

Reporting System - AFIRSTM

5TSX.V: FLY


• Grow overall and monthly recurring revenue by at least 25%

(1H17 revenues +16%)

• Continue success in China – secure a major services deal

• Win new contracts in South East Asia, Europe and the Middle East

• Secure business with a new OEM position

• Remain EBITDA Positive

• Grow public value through strategic business initiatives

2017 FLYHT Plan

6TSX.V: FLY


• Civil Aviation Administration of China (CAAC) legislated standards for state of the art aircraft communications

• Chinese SATCOM Voice Regulation

• Between Airline Operations Center (AOC) and Aircraft

• Within 4 minutes, while in Chinese airspace

• Deadline is December, 2017; but provisioning will proceed over the next several years

• FLYHT provides outstanding solution for China through its AFIRS product

Industry Drivers - China

7TSX.V: FLY


• International Civil Aviation Organization (ICAO – United Nations Body)

• Adopted new amendments to Annex 6 (Operation of Aircraft)

• Takes effect between now and 2021

• Amendment 39

• Applicable November 1, 2018

• Normal Aircraft Tracking – 15 minute interval

• Amendment 40

• Newly manufactured aircraft from January 1, 2021

• Autonomous Distress Tracking (ADT)

• 1 minute interval tracks

• Distress circumstances

• Timely Access to Flight Recorder Data

• Flight recorder data recovered and made available in a timely manner.

• FLY has active R&D program and trials with Boeing and Inmarsat targeting the above two

amendments

Industry Drivers – Global

8TSX.V: FLY


• 2016 revenue record $14.3 million

• 2016 EBITDA positive at $2.5 million

• 1H17 revenue of $7.1 million; +16% vs. 1H16

• Booked USD $10.5 million in sales 1H17

• Q217 Voice and Data Services revenue up 14% over Q216

• Q217 Parts revenue up 31% over Q216

• Payment of $5.6 million in matured debentures in 2016

• Very little resulting debt (~$1.6M, SADI, low coupon, long term)

• Received Western Economic Diversification Canada WINN repayable contribution for

$2.35M - 0% coupon loan

• AS9100 Quality System externally certified

• Strong pipeline of major opportunities

Recent Successes

9TSX.V: FLY


• Multiple revenue streams

• Initial hardware sales with gross margin of 40-60%

• Robust SAAS recurring revenue gross margins of 70-85%

• Licensing arrangement with OEM of close to 100% margin

• A la carte collection of SAAS products

• Five-year customer contracts

• Simple pricing, per aircraft per month with bundled airtime

• 100% retention

• Greater than 2.7 million flight hours and 1.8 million flights using AFIRS

• Certified on 95% of all aircraft used for commercial air transport

• Agreements in place with two global OEMs

• Major growth of sales in China – 23 airline customers

• Signed 4 new airlines in 2017; 8 airlines in 2016

• Launched real-time data services in China! Three users

• Significant remaining opportunity in sales funnel

Investment Highlights

10TSX.V: FLY


AFIRSTM – More Than Just Tracking

11TSX.V: FLY


Iridium SATCOM

Enhanced Global

Flight Tracking

Aircraft Health

Monitoring FDR Streaming Fuel Management

FLYHTVoice

FLYHTMail

ACARS over Iridium

FLYHTLog

FLYHTASDFLYHTHealth FLYHTStream FLYHTFuel

AFIRS & UpTime Core Products

Where FLYHT

Competes

Unique, Value-Added

Services FLYHT Upsells

• Saves aircraft operators money

• Streamlines their operations

• Enhances operational safety

• “Bread and Butter”

Products

12TSX.V: FLY


• Timely access to Flight Data Recorder (FDR) Information

• Leading the industry with real-time FDR (black box) streaming technology

• Technology raises the standard of tracking and automated alerting

• Customizable triggers for streaming, frequency of flight following reports

and selectable data that is streamed to the ground

Patented, Real-time Data Streaming

13TSX.V: FLY


FLYHTASD – Aircraft Situational Display

14TSX.V: FLY


AFIRS alerted an airline customer to a high engine vibration• Customer was able to take the aircraft out of service to diagnose and fix the issue

• The replacement cost for the engine: $5.2 million

• The repair cost based on AFIRS-driven data: $780 thousand

• Savings: Over $4 Million

FLYHT created geo-fencing in its software to alert an airline customer when

the aircraft entered or exited specific boundaries• Kept all parties advised, in real time, on the progress of each flight

• Improved customer satisfaction

• Reduced costs for the airline associated with poor communication and logistical support issues

FLYHT provided data to satisfy a customer’s lease agreement• The customer had a requirement to conduct 10% of takeoffs at reduced thrust

• Using AFIRS, the customer was able to monitor the parameters of operations and create real-time reports

• Savings of hundreds of thousands of dollars in lease penalties

Example Customer Success Stories

15TSX.V: FLY


AFIRS - Competitive Advantages

Feature FLYHTOther Satcom

OEM

Tracking

Solutions

QAR/Health

Monitoring

Global Voice Coms X X X

FANS/Safety Services X X

ACARS over Iridium X X

QAR X X X

Aircraft Health Monitoring

(Trends & exceedances - engine/airframe)X X X

ICAO: Global Flight Tracking X X

Autonomous Distress Tracking X

Live Black Box Streaming X

Real-time Systems Diagnostics X

TSO C-159A (Voice & Data) X

STCs Supporting 95% of Air Transport Aircraft X

16TSX.V: FLY


Annual Revenues

$6,469,806

$8,000,364

$6,882,028

$10,457,125

$14,331,191

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

2012 2013 2014 2015 2016

Strong Revenue Growth!

2016 Revenue: +37% increase over 2015

2015 Revenue: +52% increase over 2014

17TSX.V: FLY


30.5%

27.4%

40.6%

1.5%

Voice and data services (SAAS)

AFIRS sales

Parts (and License Fees)

Services

2016 Revenue by Source

Total 2016 Revenue:

$14,331,191

18TSX.V: FLY


EBITDA

-$4,204,166

-$2,914,987 -$3,321,959 -$3,156,430

$2,503,610

-$5,000,000

-$4,000,000

-$3,000,000

-$2,000,000

-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

2012 2013 2014 2015 2016

*Paid back $5.6M in matured debentures in 2016

19TSX.V: FLY


Gross Margins: All Revenue Sources

57.2%

59.2%

62.9%

69.3%68.4%

50%

55%

60%

65%

70%

75%

2012 2013 2014 2015 2016

20TSX.V: FLY


Sales Order Backlog > $25M, Growing

**Contracted hardware backlog plus 60 month value of contracted,

undelivered services – does not include license fees

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

Sep-16 Oct-16 Nov-16Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17

CAD

Backlog for AFIRS units and Subscription Services, Only

$26,216,452

21TSX.V: FLY


Revenues Based on Location

• Over 1,800 shipped and/or

installed units, all channels

• 1.8 million flights and 2.7 million

hours of in-service use on units

providing SaaS subscription voice

and data services

22TSX.V: FLY


Leadership

David Perez

VP Sales & Marketing

Derek Graham

Chief Technical Officer

Thomas R. Schmutz

CEO

Paul Takalo

Interim CFO

Matieu Plamondon

VP Operations & Customer

Fulfillment

23TSX.V: FLY


• Barry Eccleston, President of Airbus Americas, Inc.

• John Belcher, former Chairman and CEO of ARINC

• Mark Rosenker, former Chairman of the National Transportation Safety Board

• Jack Olcott, former President of the National Business Aviation Association

• Canadian Board Members: Bill Tempany, Mike Brown, Jacques Kavafian, Doug

Marlin, Paul Takalo

Industry-Connected Board Members

24TSX.V: FLY


Capital Market Profile Share Price – As of October 2, 2017 (all dollar figures are in Canadian dollars)

Share Price $2.47

Market Capitalization $50.2 million

52-week low $1.70 - high $3.00

Share Structure - As of August 31, 2017 * using post-consolidation (July 17, 2017)

amounts

Shares 21,038,617

Diluted (assuming all instruments converted/exercised) 23,868,870

Diluted (assuming only instruments of value converted/exercised)21,763,941

Warrants Outstanding (weighted avg. exercise price ($2.49))1,716,000

Stock Options Outstanding (weighted avg. exercise price ($2.49))1,124,253

Insider Holdings (Directors and Officers) 4.7%

Debt (Low-interest, government debt) $1.8 million

Thank You

www.flyht.com

[email protected]

http://www.flyht.com/

flyht october 2017 investor presentation

Investor Relations