AN INTEGRATED FULL SOLUTIONS PROVIDER

I

NVESTOR

P

RESENTATION

O

CTOBER

2015

A

N

I

NTEGRATED

F

ULL

S

OLUTIONS

P

ROVIDER

TO HELP WORLDWIDE CLIENTS ADOPT DRONE

TECHNOLOGY INTO THEIR OPERATIONS

A

N

O

VERVIEW

2

Goal to become a US$100m company serving the fast growing UAV market

which is forecast to grow to $82.1bn between 2015 and 2025 (The AUVSI

Economic Report 2013)

AIM quoted international aerospace company focused on the rapidly

emerging Unmanned Aerial Vehicle (‘UAV’) sector

Rapidly building a vertically integrated UAV offering, covering all aspects of

the value chain including software, hardware and services

Extensive network of employees and consultants across offices worldwide

New highly experienced Management Team brought in to take advantage of

consolidation opportunity to become a leading integrated player worldwide

Looking to undertake a number of corporate transactions to fully capitalise on

significant growth opportunities, particularly in the commercial space

K

EY

D

ATA

Market

AIM

EPIC

AERO

Share Price

8p

Shares in Issue

84.3 million

Market Cap

£6.74 million

3

28.72

7.62

6.96

6.01

5.93

4.47

Major Shareholders

Russell Peck - 28.72%

Jonathan Adams - 7.62%

Graham Peck - 6.96%

Robert Salluzzo - 6.01%

The trustees for the time being of the REB Living Trust - 5.93%

The trustees for the time being of The Focusplay Retirement

Benefit Scheme - 4.47%

N

EW

T

EAM

Tony Dunleavy

CEO

Gerard Dempsey

FD & COO

Paul Ryan

Director, Strategy

Bill Bauer

Sales & Marketing Director

A

B

O

U

T

international accountant experienced in a variety of industries at senior management & board level, accumulating over 30 years of Corporate Finance, Business Development, Financial & General Management experience both in a management and advisory capacity

Experienced (30 Years+) senior PWC/AA finance & operations professional with a successful track record across commercial, corporate treasury and investment banking environments with leading global MNC’s

20+ years in the telecoms and ICT sectors, at board level, significant global experience, qualified solicitor, prior experience in ICT start-ups, known for strategic yet practical approach, including in challenging and complex commercial, political and geographic environments

Experienced B2B sales and marketing leader with 20+ years’ experience in the IT and telecom sectors.

Committed team builder, has consistently delivered business results. In his most recent sales role led a cross-functional team

responsible for more than 200 global accounts with HQs across 8 countries

K

EY

EXP

ER

IE

N

C

E

 Director, Corporate Finance: PJ Carroll PLC

 General Manager, Finance: TSB Bank

 Advisor: Milestone Aviation ($2b buy out by GE)

 CFO: Creganna Medical Devices

($2b IPO due)

 Restructuring advisor: Rabobank  Various CFO/Board advisory roles

 Start ups & Turnarounds

 VP Logistics Services & Finance Director: Sandvik Mining  CFO: Media Technology start up  Finance Director: Microsoft

Ireland

 Head of Finance: Guinness  Head of Corporate Treasury and

Structured Financing: Diageo  Senior Corporate Treasury : Pfizer  Investment banking risk

management : SchrodersAustralia

 Strategy Director: Vodafone Ireland& Vodafone Ghana  Public Affairs: Vodafone Group

from Brussels

 Significant M&Aexperience

 Previously Board Member of $1bn+ entities and AIM board experience

 Significant strategic

accomplishments inc. fibre roll out in Ireland and Ghana turnaround

 Director of Market Development:

Alcatel

 VP Operations & Integration: SBC

Europe

 Region Head: Vodafone Global Enterprise

 Many years’ experience driving complex deals with large business customers

 Board Member of SBC operating units in France, Switzerland, Norway

K

EY

SK

IL

LS

 Stakeholder Management

 Deal Making & Team Building

 Results orientated

 Commercially focused

 Change management

 Strategic thinker

 Creating partnerships

 Significant external credibility

 Team builder

 People development and motivation

 Communications

N

EW

M

ANAGEMENT

S

TRUCTURE

5

Convert to a vertical rather than geographical structure, enhancing accountability.

Central functions such as Sales & Marketing, Operations, Technology and Finance

will serve all the verticals.

CEO

Tony Dunleavy

Sales & Marketing Director

Bill Bauer

FD / COO

Gerard Dempsey

Head of Inspection Services

Russell Peck-US

P Bonner/G Nel-Eur/RoW

Head of Military and

Government

David McDonald – Europe

Cliff Hudson – US/ETV

Head of Education &

Training

Bob Salluzzo

Head of ISR and Consulting

Graham Peck

Director and Strategic

Advisor

Paul Ryan

CTO/UAVs

TBA

Operations

TBA-USA

T

HE

O

PPORTUNITY

– C

URRENT

M

ARKET LIMITATIONS

6

What does a police force or a farmer do with a drone?

What drone best suits the objective?

Who does the training, the maintenance, the financing?

How does it integrate with existing management systems or command & control?

Often, clients don’t know how best to use drone technology:

T

HE

S

OLUTION

– A

GRICULTURE

E

XAMPLE

• UAV detects area needing

fertiliser

• Tells UGV to go and spray it

• Sends full reporting solution

back to farmer

T

HE

S

TRATEGY

Intends to do this by leveraging:

• Established alliances with manufacturers, users and other key industry professionals

• Proven sector knowledge & reputation in the industry – original team have 400+ years flying

experience & excellent contacts

In line with this the Company is currently strengthening:

• Software & integration capabilities

• Hardware & IP capabilities

• Military ‘inside-track’

• On the ground operators & sales teams

• Management team

8

Strat Aero’s vision is to become a $100m player in the

B

USINESS

M

ODEL

$90m Sales Pipeline shows Strat Aero’s best opportunities lie in:

9

Combining the utility of UAVs with Client reporting software.

This will move from Survey to Wind, to Cell, to Power, and

beyond

Superior offering to existing competitors via USI Sandstorm

Security and other forces need to make best use of UAV

technology

A new ‘learning discipline’

Leveraging the know how and contacts of the founders

Inspection Services

Military Training

ISR/Large Co. Solutions

Training & Education

Consultancy and Related

Services

R

EVENUE

P

IPELINE

– P

ER

D

IVISION

10

Gross Pipeline Revenue

SALES PIPELINE - $90M WITH 95 PROSPECTS

Sector

Rev $mill

Inspection Services

10.9

Military, State

24.9

ISR, Security

41.6

Training, Education

9.2

Consultancy etc

2.4

TOTAL

89.0

C

OMMERCIAL

O

PPORTUNITY

: W

IND

• Windspect is a revolutionary wind turbine blade

inspection

solution

-

collaboration

with

AirFusion, a leader in airborne sensor data fusion

software and analytics technology

• Combines Strat Aero's expertise in the provision

of UAV solutions with AirFusion's innovative

software and analytics

• Offers superior assessment capabilities and

significant cost savings to wind farm operators

• Strat Aero also offering its own version, using

own DDM (Digital Data Management) software,

which can offer a full inspections management

solution across many verticals - this would be

perfect, for example, to somebody wanting a full

maintenance & inspections solution for a large

rail network

W

IND

S

PECT

– L

EADS

S

UMMARY

12

Main Clients & Turbines by Interest

Level

42 LEADS FOR A SALES POTENTIAL OF $10.6M

Interest Level

Turbines

Rev $mill

($500 each)

Main Clients

1

4,200

2.1

BP, EDP

2

2,008

1.0

Infigen,

Nordex

3

8,650

4.3

Next Era,

Invenergy

4

1,750

0.9

Virgin, Exelon

5

4,600

2.3

EON, GE

TOTAL

21,208

10.6

W

IND

S

PECT

– G

LOBAL

P

OTENTIAL

13

Source: Drones for Wind Turbine Inspection, Navigant Research, Q3 2015

C

OMMERCIAL

O

PPORTUNITY

: M

OBILE

C

ELL

T

OWERS

• There are 825,000 cell towers worldwide. Strat Aero

now has connections into a significant portion of

these

• Identified a trial partner (500 cell towers UK &

Ireland) to develop a compelling industry offering,

commencing October 2015

• Identified the significant IP needed to develop to

give Strat Aero a significant edge in this future

marketplace (University collaborations in Ireland, the

UK and the US)

• At a reasonable £500 per tower inspection charge, a

10% market share would be worth £41m a year in

revenue

• Due to sector needs, expect mobile cell towers to be

a relatively early adopter of drone technology – Strat

Aero will be pursuing this as a priority sector

C

OMMERCIAL

O

PPORTUNITY

: F

LOOD

D

EFENCES

• Acquisition of Geocurve, opens a major opportunity in international flood defences

• Geocurve specialises in the provision of UAV operated topographical surveys and inspection

services

• Geocurve has already developed a model over 3 years using a combination of UAVs, water

vehicles and engineering knowhow & manpower, to map flood defences for the entire

Norfolk Broads national park

• The UK EA are currently spending £1.1 billion per annum on flood defences and the

capability developed is now capable of being nationally rolled out far more efficiently with

the latest UAV and sensor technology (to put this into perspective, we could do in a couple

of weeks what traditional methods take years to achieve, and our results are far beyond

what is traditionally produced)

• This would easily save the UK exchequer over £100m per annum, we are currently

developing proposals to use political channels etc. to best overcome traditional methods as

employed by the EA

• An international opportunity, nobody else has this capability and all countries need better

solutions. Our ultimate opportunity here could well be £50m per annum

15

G

EOCURVE

• Geocurve is a privately owned company, which

specialises in the provision of UAV operated

topographical surveys and inspection services

• Holds the first known authority from the Civil Aviation

Authority to fly drones in congested urban areas

• Blue chip customer base including the UK’s

Environment Agency, EDF Energy, Carillion, and the

RSPB

• Geocurve brings a unique 3-D Modelling UAV based

mapping solution and highly experienced team of

specialist surveyors and UAV operators

• The combination of Geocurve and Strat Aero provides

multiple cross-selling and expansion opportunities –

intention

to

roll

out

Geocurve’s

capabilities

internationally – two initial countries currently being

explored

UAV A

IRWAYS

L

IMITED

(UAVA

IR

)

• Joint Venture Agreement with UAV UAVAir on 7 October 2015

• Objective to establish Remotely Piloted Aircraft & Systems (RPAS) training

centres and deliver RPAS training courses in territories overseas – initially

targeting two countries

• UAVAir as a UK CAA Approved National Qualifying Entity (NQE),

specialises in the provision of UAV training, including qualifying future

UAV pilots

•

UAVAir brings together a unique combination of airline pilots and professional drone

operators, working together to deliver the best commercial UAV course available to

candidates aiming to further their professional careers

• UAVAir is the first operator to receive CAA permission to film within

Central London – underpins UAVAir’s comprehensive mastery of the most

complex safety cases and success in integrating fundamental principles

from aviation into the UAV community

• Combines Strat Aero’s long-form training courses being developed with a

leading USA University with UAVAir’s shorter NQE and Pilot Conversion

Courses to create a comprehensive portfolio of RPAS training with

common standards and methodologies

• Gives Strat Aero ability both to provide full training solutions worldwide

and to more quickly develop various international opportunities, for

which discussions are already underway, based upon British plc credibility

and aviation background of founders

F

ULL

S

ERVICES

B

USINESS

M

ODEL AND

F

IT OF

A

CQUISITIONS

Hardware

• Drone/UAV manufacturers

• US Acquisition

Training

• Partnerships with educational establishments

• UAVAir Joint Venture

Data Collection

• Wind & Windspect (US)

• Geocurve

Data Analysis &

Reporting

• Data management tools & reporting systems)

• Windspect license agreements (Air Fusion)

• Geocurve Data Analysis Centres

• University Collaboration programs

18

Commercial Markets

Hardware

•

Training

• Sand Storm via USI

Data Collection

• US Acquisition

Data Analysis &

Reporting

• US Acquisition

• SA DDM

Military Markets

*Acquisitions are in grey

US Acquisitions

P

EER

G

ROUP

–

VALUED AT

10

X

R

EVENUE

The commercial drones market is expected to be worth +$4 billion by 2021 and

grow at a rate of 109% CAGR until 2020*

19

Makes some of the most popular consumer drones in the world in May 2015 the

Chinese drone-maker raised $75 million at around $8 billion valuation, $1 billion in

sales, a nearly 10x growth from its $130 million revenue in 2013, approximately 8 x

revenue

$5m revenue in 2013, raised about $64 million in April 2015. approximately 10 x revenue

Raised $11.7 million in Series A funding in 2013 from backers including Andreessen

Horowitz and Google Ventures and an additional $25 million in July 2014. Expected revenue

2014 of $4m, approximately 10 x revenue

End of 2013, Skycatch had 10 clients buying units at $100,000 apiece. The company closed

a $13 million funding round in May 2014, 10 x revenue

An information delivery company that uses drones and cloud-based software to collect,

process and analyse aerial data, raised $10 million in a Series B financing led by New York

City-based investor Millennium Technology Value Partners, bringing the total invested to

date to $11 million, revenue undisclosed, stated to have 50 customers (April 2015)

DJI

3D Robotics

Airware

Skycatch

PrecisionHawk

*Source: RnRMarketResearch.com June 2015

Yuneec $60m Intel (Aug 15)

Ehang $42m (Aug 15)

A

N ATTRACTIVE INVESTMENT FOR VENTURE CAPITAL

20

Source:

https://www.cbinsights.com/blog/drone-startups-venture-capital/

I

NVESTMENT

S

UMMARY

21

Rapidly

building a

vertically

integrated UAV

offering,

covering all

aspects of the

value chain

including

software,

hardware and

services

Excellent

market

opportunity

-UAV market

which is

forecast to

grow to

$82.1bn

between 2015

and 2025 (The

AUVSI

Economic

Report 2013)

Highly

experienced

Management

Team brought

in to take

advantage of

consolidation

opportunity to

become a

leading

integrated

player

worldwide

Defined growth

strategy

including

growth both

organically and

through

acquisition

Goal to become

a US$100m

company

serving the fast

growing UAV

sector

C

ONTACTS

_{www.strat-aero.com}

C

ONTACTS

TONY D

| CEO

S

A

PLC

M: +353 862 546 828

E: [email protected]

S

G

| N

SP A

C

F

LLP

T: +44 20 3463 2260

A

G

| B

B

S

T: +44 20 7382 8315

F

B

& C

H

| PR & IR

S

B

P

T: +44 20 7236 1177