Our detailed plan minimizes risk as well as the total cost and time to reach the goal of profitable production.

• Focus on final product requirements at all times
• Limit technical and financial risk by using proactive and objective measures.
• Set and achieve milestones before proceeding.
• Modern design tools and manufacturing methods…exceptional employees.

Aeromaster intends to follow a plan that provides the right balance of aggressive yet cautious development. This effort includes a series of models and prototypes to aid in development of the finished product. The development effort is divided into two phases followed by production in phase three. The first phase is the "shoestring phase" where overhead is kept to an absolute minimum. A relatively small initial capitalization is required. During this period, principal members of the corporation from multiple disciplines work as a development team. Limited advertising allows for distribution of promotional materials but the main focus will be technical development with minimal distractions. This method yields the most rapid and efficient product development. The goal is demonstration of a fully functional, full-scale prototype.

In the second phase, development of production tooling and the final product is completed. In order to meet our goals, the company must be operating in world class fashion to complete phase two. This includes operating with established quality and process control procedures consistent with ISO9001. This phase requires significantly more capitalization.

Ideally, strategic partnerships will have been formed prior to phase two with one or more contract composite part vendors. These vendors, who typically manufacture aerospace composites for major companies for a fee, will be persuaded to invest a portion of the tooling costs in exchange for a pre-negotiated long-term purchase agreement or corporate stock. The benefits of this arrangement are treble. First, the tooling investment by suppliers reduces capital outlays of cash. Second, the use of existing manufacturing resources allows more rapid ramp-up to production by eliminating the challenge of finding and/or training qualified fabricators. Third, overhead can be reduced at our facility due to reduced employee costs, less G&A burden, and less space required. This further allows us to focus on customer service and the big picture by avoiding the burden of a large fabrication staff.

Ultimately the goal is to produce a kit that will allow builders to produce a high quality, high performance, and well-behaved roadable aircraft with a minimum of cost and time invested. If we back up from this point, the development plan becomes clear.

In order to provide the highest quality product, the use of pre-impregnated (prepreg) composite materials is required. Prepregs require heat to cure and must come from a mold that retains its shape and surface through multiple heat cure cycles. These are rather expensive tools. The tools will actually pay for themselves, however, in the savings of labor realized using prepregs instead of the inferior wet layup process. Well designed, accurate tooling also aids tremendously in the ease and resulting quality of the assembly process. For example, molded-in features make airframe parts self-aligning. All of this leads to a high degree of product satisfaction. This is our primary objective.

These tools, however, cannot be built without extensive testing and development to prove that the aerodynamic and structural designs as well as the assembly processes are optimal. This requires the production of prototypes. Additionally, models of various forms can be used to establish and verify design parameters.

The first model to be completed is a sub-scale aerodynamic test vehicle. This model will allow for accurate prediction of the complex three-dimensional aerodynamics not well predicted by computer analysis. This is particularly important to verify the handling qualities in driving configuration where separated flow from the folded wings (which varies with degree of crosswind) dominates the aerodynamic response.

The next model to be completed is the three-dimensional CAD model. This effort is well underway as evidenced by the accompanying pictures. An entire aircraft is designed and built in the computer database resolving everything from the most basic considerations of packaging and sizing to the most advanced mechanical design and aerodynamic shaping. This model provides the necessary information to build all prototypes and is ultimately refined to exactly reflect every detail of the final product. Although this computer prototyping is considered revolutionary at old-school companies like Boeing (the 777 was the first commercial jetliner designed and produced this way), it is standard practice for a state-of-the-art company like Aeromaster. This model has already been imported into a computational fluid dynamic (CFD) analysis program for aerodynamic performance and stability verification. Also, structural design and flutter resistance of this model will be verified through finite element analysis (FEA).

The first prototype is a Ground Test Vehicle (GTV) comprising an engine, propeller drive system, wheel drive system, suspension, and provisions for passenger and ballast loading to simulate real vehicle conditions. This vehicle will validate the mechanical design of many components to be used for the flight prototype. The simple box fuselage will have representative stiffness characteristics and folded wings identical to the production vehicle to allow tailoring and verification of ground handling. Landing gear retraction and load capabilities will be verified. Finally, this prototype will provide a platform to perform continuous endurance testing of the propeller and ground drive components in parallel with the remaining aircraft development. GTV construction does not require any significant composite tooling so all structural fabrication can be accomplished with modest facilities. Significant metal fabrication is required for the powerplant, drive, and suspension systems. Fabrication of these components will be accomplished either by investment partners or by vendors in exchange for cash.

The second prototype to be developed is a wing folding test rig. This effort will progress somewhat in parallel with GTV development. Developing the wing folding systems and wing structures on a test rig allows for all mechanisms and structures to be individually tested before required changes negatively impact flight vehicle development. All components will be flight configuration and most will be transferred to the flight vehicle without modification. Tests will include loads verification of the wing structures and operation of the folding mechanisms. For this prototype, significant composite tooling and metallic fabrication tasks will be contracted for cash or equity as above. Most composite tools will be used in-house to produce final parts. Some parts will be built to print by vendors. Upon completion of wing rig tests, all aspects of the complete vehicle will have been proven except those comprising a basic airplane.

Development of the third prototype will be initiated late in the rig testing schedule. This will be a full-scale flying prototype of nearly full capabilities. Only non-critical features will be eliminated to expedite development of this "proof-of-concept" (POC) vehicle. Completion will be timed to insure confidence in all design parameters from previous prototypes. A fuselage master (or "plug") will be commissioned based on CAD modeling. This master will be of a high quality construction with a high degree of accuracy. Prototype ("soft") fuselage molds will be procured which will allow low cost wet lay-up of prototype parts. Wing and tail molds constructed by the most suitable low cost, temporary method will be purchased to allow wet lay-up skins to be rapidly constructed. All highly stressed components such as wing spars will be constructed from production tooling, as shortcuts would not accurately reflect the end product. Sub-component testing of these critical structures prior to assembly will insure safety. Overall, the POC will represent an invaluable learning experience where such things as assembly details and procedures will be verified. In fact, development of the assembly manuals will progress concurrently with POC construction. The POC construction will also identify areas where improvements can be incorporated in the production tooling.

Phase two of the development effort begins with POC flight testing. Flying qualities will be investigated through an extensive flight test program and improvements will be made as required through part and/or tooling modifications. The remaining mechanical systems will be validated such as flight controls. The POC will also represent the first opportunity to present the product to the public. Initial press release articles will feature photos and flight test reports of this aircraft. It will be displayed and demonstrated at fly-ins. Demonstration rides can be given to prospective customers and deposits can be taken on future orders.

Phase two also includes transition to production. Systems, processes and procedures necessary for profitable, quality production must be put in place. We will establish a quality system consistent with ISO 9001. An MRP system must be in place and functional. Planning, purchasing, sales, marketing and customer service functions must be formalized. Completion of the assembly manuals will also represent a significant effort during phase two. Most importantly, "hard" tooling must be constructed which will allow production style/quality parts to be manufactured. Ideally, the fuselage plug previously built will remain unchanged and a set of high quality, high temperature capable tools can be immediately constructed. High quality wing and tail tools will also be constructed. Preliminary sub-assemblies can be constructed as desired from these tools to verify that the highest degree of customer satisfaction will result from the production parts. Note that the cost of phase two transition is delayed until the POC is operationally demonstrated and deposits are in hand.

The culmination of phase two is construction of a forth prototype. This will be the first aircraft built from the production tooling. It will be built in accordance with all production manufacturing procedures and standards. It is also imperative that we build this airplane just as our builders will, using and following our assembly manuals, videotaping our progress, so that we may provide the best possible builder support. This is the only way to ensure customer satisfaction and that we are ultimately delivering a quality product. Additionally, this aircraft will undergo a final series of flight tests and structural tests to verify that the product we are delivering is free of defects or shortcomings. The company will retain this aircraft as a demonstrator example of a production aircraft and will paint and equip it to impress.

A fifth prototype will be constructed, as above, as a static test article. This aircraft will not be fitted with powerplant, interior, etc. Ultimately, every component of this aircraft (or additional subassemblies as required) will be tested to destruction to verify all structural capabilities. Testing will be completed on each segment as soon as tooling and construction methods are finalized, this will allow for earlier delivery of parts as detailed below.

As phase two progresses, delivery of segmented kits begins. The fuselage tools will be completed first along with the associated segments of the manuals. Builders can begin assembling their fuselages while fabrication of the production prototype continues. This is considered low risk as fuselage configuration and structure will have been well proven by POC flight tests and assembly of the production prototype fuselage. It is expected that, by this time, adequate orders will have been secured to be operating with a significant backlog. Composite parts will be constructed in house or by partners (depending on arrangements) using the production tools described above. Production of machined and sheet metal parts will be accomplished by partners or contracted to other vendors. All parts will be thoroughly inspected, carefully packed, and shipped from the factory direct to the builders. We will be absolutely sure of the quality of delivered parts and follow the techniques described in the section on liability and safety. Construction manuals and videos will be reproduced by third party vendors and shipped along with kits. A customer service department, led by a co-founder familiar with every aspect of vehicle construction and the associated manuals, will provide expert support. Builders can continue with integration of landing gear, propulsion, and various systems, as these will also be well proven through GTV and POC testing. Additional kit parts will be shipped to builders as soon as adequate testing is completed and the necessary tools and manuals are available.

Phase three is marked by delivery of the last parts for segmented kits and initial delivery of full kits. This will not occur until flight test of the production prototype and static tests of prototype five have been completed. Additional shifts/partners will be added and additional tools will be constructed as required to meet production requirements.

Progress toward the stated milestones will continue regardless of financing during phase one. The development of the various models and pre-production prototypes can be adequately funded with limited investment by the principles. Only the schedule is affected by availability of capital. Each milestone will be reached as fast as resources allow. Investment required to transition to phase two is considered assured by the sales backlog that will be generated by demonstration of the POC.