October 5, 2017

As you all can imagine from my first message, the past 48 hours have been pretty all-consuming. We have completed the first phase of our restructure and are now developing the specific needs and processes to move forward.

Company update:

Tuesday afternoon October 3, 2017, we had to lay-off 22 full-time employees out of 49 total.

At present, our focus is on fulfilling all current orders, primarily in the avionics portion of the business. We also have three complete Turbine Evolution kits on hand and they are certainly for sale! These kits will be sold to new customers only with their explicit understanding that as we work through our current situation to deliver all outstanding orders, we will be working just as hard to restructure successfully for the long term. The longer term plan, at this time, is just less certain.

Up until recently, I believed the improvements we have achieved in both the product and the marketing were enough to keep us going. However, several recent incidents out of our control created a bit of a crisis for our company. These include the market for aircraft insurance and delays in deliveries of some redesigned high value-added components. This caused me to question our ability to sustain the sales volume necessary to support us for the long-term with recent staff size.

In addition, we had two customers late in the kit manufacturing process withdraw from their purchase for personal reasons after their kits were almost complete. This put us in the unfortunate position that we had to change our short-term direction immediately to ensure we are able to fulfill all of our commitments to our valued customers whose airframe kits have been fully completed and delivered but whose avionics panels and engine firewall forward packages are still in production.

Rather than expend all our resources hoping sales will come in time, we decided the best course of action was to “right-size” our workforce to what is needed to complete the work we already have until I can secure adequate investment to move forward. As you might imagine, I have been and am continuing to work with a number of investors to re-capitalize the business. To that end, any of you that might know someone who is seriously interested in discussing this opportunity with me please let me know.

Our management team:

I have re-assumed the role of President/CEO, Randy Akacich will remain CFO through this transition, and Tom Pecharich has agreed to take over as General Manager of our retained staff since the work remaining is mostly in our avionics department. Kevin Eldredge has gracefully resigned as President but more importantly has agreed to help where he can to make sure our current customers get what they need to complete their projects and assist me in structuring a successful path forward.

Tasks ahead:

One of our biggest tasks will be supporting the current fleet with parts and technical support. The good news is that the business has no bank debt and all assets have been secured and are available as needed. However, the short term issue I see is responding timely to the needs of our existing customers currently flying. At this point, there will be no one to accept direct phone calls and any messages left will be logged and sorted to be returned as quickly as possible.

I ask that if you all email your questions and needs first to [email protected] with as much description as possible, we will let you know the email was received and do our best to support you and give you guidance.

In sum:

I sincerely apologize for the anxiety and inconvenience this may cause but rest assured I am doing all I can to figure out the best plan for the company going forward. The Evolution and the capabilities of the knowledge developed over the past 35 years continue to have great potential in the General Aviation market as well as other applications suitable for the Evolution platform.

I will keep all of you regularly updated as we transition through the company’s short-term difficulties and we strive for the ultimate goal of transitioning to a company adequately financed to achieve greater market applications (and profitability) than just general aviation.

Thank you for your patience and continuing to believe in the Evolution and our company,

Bob Wolstenholme  President/CEO