AEROSCRAFT: DELIVERING GAME-CHANGING INNOVATION FOR GLOBAL CARGO LOGISTICS Mr. Igor Pasternak Aeros CEO Igor.Pasternak@aeroscraft.com 1 AEROSCRAFT Aeros has pioneered the design, development and assembly of high technology airships that offer the prospect of revolutionizing parts of the global cargo and logistics market The Aeroscraft is designed to carry up to 250 tons of cargo, features a cargo hold with cubic footage exceeding 40 times that of a 747-8 Freighter, cruises at speeds of over 100 mph, operates at altitudes of up to 12,000 feet and achieve vertical take-off and landing at max payload 2 TRANSFORMING GLOBAL LOGISTICS AEROSCRAFT IS A UNIQUE VEHICLE WHICH WILL PROVIDE AN UNPRECEDENTED STRATEGIC ADVANTAGE Game Changing Logistics Solutions The Aeroscraft Prototype New vertical global transportation system without restrictions Delivery of cargo to any point on the globe The ability to move greater weights and higher volumes – 250 tons and one million cubic feet Vertical take-off and landing (“VTOL”) capabilities reduces infrastructure dependency (airports, etc.) Provides access to remote and austere locations that other transport carriers cannot provide The Aeroscraft will rapidly become a meaningful player in the $6 TRILLION global logistics market* Airlifts standard ISO containers 3 *IATA Annual Review 2013 THE AEROSCRAFT IN ACTION 4 Source: H2 History Channel DISTRIBUTION LOGISTIC: NEW DIMENSIONAL WORLD Yesterday’s Logistics 21st Century Logistics Orders Predictable Variable Order Cycle Time Distribution Weekly Daily or hourly Strategic Broader base patterns driven Customer by Customer Reactive, rigid ServiceChanging Economic Responsive, flexible Replenishment Real-time Geography Scheduled Logistics: Corridor Hub and Spoke ContinuedSupply-driven GlobalizationDemand-driven Distribution Model (push) (pull) Impact of eCommerce Stable, consistent Demand More cyclical Fundamental Trends in Logistics Shipment Type Bulk Smaller lots Destinations GROWTHConcentrated More dispersion Warehouse Reconfiguration Continual, rulesbased Weekly or monthly Aeroscraft Network Logistics: Flexible Routing Constant shifts in logistics operations in the economy require new freight distribution and network strategy 5 SIMPLIFYING THE LOGISTICS SUPPLY CHAIN Point-to-point single mode transportation network, taking the “chain” out of supply chain Reduces loss factor of perishables and consumer goods due to delivery delays Able to transport large equipment in an efficient, cost effective manner with no infrastructure 6 A UNIQUE POSITION IN THE TRANSPORT LANDSCAPE Speed (mph) 500 Geographically Restricted and Dependent Upon Extensive Infrastructure Dependent Upon Extensive Infrastructure 100 65 60 40 $0.03 $0.04 $0.15 $0.20 $0.40 $0.90 Cost per Ton-mile Aeroscraft will offer an innovative transport solution without infrastructure or geographical restrictions 7 REDUCED OPERATING & SUSTAINING COSTS Compared to conventional airplanes, the Aeroscraft does not burn fuel to create lifting power – only to propel itself forward Diesel-powered generators produce electricity to drive electric motors (propellers) Reduced fuel consumption compared to other modes of air transportation Approximately 68% less carbon emissions per ton-mile than a Boeing 747 Creates less noise pollution — Take-off for an Aeroscraft is approximately 60-65 decibels, versus 130-150 decibels for a Boeing 747 Payload Ton-Mile/Gallon of Fuel Payload Ton-mile per Gallon of Fuel 600 483 500 400 334 300 200 100 7 8 23 42 51 73 747-8 66T Aeroscraft Truck 250T Aeroscraft 0 C-5 Aircraft C-17 Aircraft Rail Large Containership 8 AEROSCRAFT - UNIQUE ATTRIBUTES VTOL and Infrastructure Independence Cargo Bay Cargo Handling System Capable of VTOL operations at full payload, rendering various infrastructure unnecessary The Aeroscraft’s weight payload and the dimensions of the cargo bay will lead the way to transport oversize or low density cargo via air No ground loading or unloading equipment required at departure or landing points ISO Containers will be shipped via Aeroscraft and avoid port and terminal bottlenecks Speed Cruising speed of approximately 115 mph Range Up to 3,100 nautical miles for the ML866; 5,100 nautical miles for the ML868 Fuel Energy requirements and costs are approximately a third of traditional aircraft costs Maintenance Maintenance of the vehicle will be easier and less expensive than traditional aircraft No “pressurization cycles” leads to a longer useful life 9 CARGO BAY SIZE THE AEROSCRAFT’S OUTSIZED CARGO BAY CREATES MANY PREVIOUSLY UNFATHOMABLE OPPORTUNITIES IN THE OVERSIZE AND CONVENTIONAL CARGO MARKET The largest cargo aircrafts remain size-limited, leading to the necessary disassembly of large equipment shipments; in some cases, this even prevents firms from producing larger and better equipment due to the lack of economical, swift transport options The Aeroscraft will offer a barge-like payload with aircraft range, helicopter speed and VTOL capability ML866: 66-ton Payload ML868: 250-ton Payload Lockheed C5 Galaxy 10 AEROSCRAFT MARKET SEGMENTS ABILITY TO HANDLE SEVERAL TYPES OF PROJECTS THAT ARE CURRENTLY UNACHIEVABLE OR UNECONOMICAL VIA EXISTING AIR CARGO OPERATIONS Market Segment Economical Effect Type of Operations Illustrated Case Logistics Pipeline Cost of carrier fleet Cost of inventory in pipeline inventory reduction ISO containers Redaction modes or single mode Manufacturing process Automotive assembly parts On-time delivery Cost of a flexible infrastructure adjustable flexible routes Increasing demand ISO containers Redaction modes or single mode Consumer goods: small packages Large shipments West China online sales Distribution Network Reduction on direct operating cost Increasing volume (low density) ISO containers Redaction modes or single mode General cargo Transportation Footwear Flowers Size and weight Lack of receiving, connecting and nodes infrastructure Reduction of product complexity, off-service time and increasing performance Redaction modes or single mode Project cargo Wind turbine Large equipment Next generation satellites “Antonov 124 “ Transportation Enabler Oil/Gas exploration tower relocation Mining operation Redistributed manufacturing Electronics products Delivery Limitations Limited Time Logistic Operations Manufacturing Infrastructure development cost Time to start Reduction of risk factor Redaction modes or single mode Integration of product in transition production process ISO containers Redaction modes or single mode 11 TRANSFORMING GLOBAL LOGISTICS Today Truck Ship Helicopter Aeroscraft Future Airplane Global Transportation and Logistics Market $6.4 Trillion* Several Limitations Including: Aeroscraft New Global Transportation and Logistics Market The Aeroscraft Solution Infrastructure independence will substantially Infrastructure limitations prohibit delivery either increase the size of the market indefinitely or until time consuming and expensive Multimodal logistics too costly and time intensive Inability to transport certain oversized cargo results in partial manufactured products and assembly at final destination Ability to bypass multimodal logistics through direct delivery Oversized cargo bay allows transport of products previously not transportable 12 *IATA Annual Review 2013 AEROSCRAFT & OPERATIONAL PARTNERS AEROSCRAFT CORP. WILL BUILD AEROSCRAFTS AND OPERATE THEM ON FLEET ACCESS LEASES INITIAL FLEET: 4 OF ML866 (66-TON) AND 18 OF ML868 (250-TON) Aeros Aeronautical Systems, Inc. Aeros Cargo Airline LLC Aeros Logistics LLC Aeros Aeronautical Systems, Inc. – manufacturer of Aeroscrafts Aeros Cargo Airline LLC – provider of crew, maintenance and insurance Aeros Logistics LLC – charter operations and other logistics services 13