CONFIDENTIAL

ACS Aviation
Electric aviation and urbarn air mobility

Business plan

Prepared January 2019

Contact Information
Alexandre Zaramella
alexandre.zaramella@acs-solutions.com.br
www.acs-solutions.com.br +55 12 98141 6731
ACS Aviation 1

Executive Summary
Opportunity
Problem

The mobility industry transforms itself over time as it trys to keep up with one of the greatest human needs:
moving, changing, reaching. Even so, every day, millions of hours are wasted in the traffic of big cities worldwide.
Large scale urban air transportation has the potential to radically improve urban mobility giving people back the
time lost in their daily commutes.

Solution

Small electric aircraft with vertical takeoff and landing capability (eVTOLs), operated in a ridesharing network, can
enable rapid and reliable transportation between suburbs and cities, and ultimately, within cities.

Market

The end users of urban mobility eVTOLs are the millions of people that commute everyday in the big cities.
However it is not expected that these people would be interested in owing an eVTOL. The vision is that these
eVTOLs will be operated in a ridesharing service network very similar to what exits today for ground transportation
with automobiles. Differently from the current ground service it's not expected that the pilot would own the
aircraft. Instead urban air mobility operators are expected to emerge and operate large fleets of eVTOLs. They will
either operate on their own or integrated into a service network owned by others. Such a network is currently being
constructed by Uber, which intends to start providing air mobility services by 2023 in big cities like Los Angeles,
Dallas, Dubai, Sao Paulo, etc.

The fact that the operators don't yet exist today represents a big challenge for the business. The strategy of ACS to
counteract that consists of having a urban mobility optimized eVTOL development program, supported by a series
of MVPs (Minimum Viable Products) directed towards relevant markets that exist today. The planned MVPs and
the markets they aim to supply, are summarized in the table below.

Each MVP will help in building the fundamental technical strengths required by an eVTOL company: airframe
integration, electric propulsion systems integration, electric energy systems integration, autonomous systems
integration, certification, and product support.

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The target markets are strongly concentrated in the United States and establishing ACS' presence in the country is
part of the plan.

Competition

There is currently a lot of hype around eVTOLs. The competitive scenario includes several well funded startups like
Joby, Zee Aero, Lilium and Volocopter; traditional helicopter manufacturers like Bell; and aerospace giants moving
through new ways, like Airbus with Vahana and City Airbus, and Boeing with Aurora and Near Earth Autonomy.

Most of the competitors however, seem to be following a similar recipe: integration of a novel electric propulsion
system and a novel energy system into a novel aircraft configuration, to build a vehicle that is autonomous in many
cases, to be certified by yet to be developed regulations, aiming a market that still doesn't exist, with an unclear
business model. This is too much uncertainty combined.

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What differentiates ACS is a unique pragmatic approach, centered on a series of MVPs with few uncertainties
combined at any given time, and directed towards existing markets. More important than early revenue streams,
the MVPs will provide unparalleled learning that will directly feed into the urban mobility eVTOL development
program.

The main product, a urban mobility optimized eVTOL, will also follow a very pragmatic approach, being initially
piloted, with all-electric and hybrid-electric propulsion options, and based on a proven aircraft configuration that
can be easily prototyped.

Why Us?

Founded in 2006 and currently located in Sao Jose dos Campos / Brazil, ACS has a solid history with remarkable
achievements:

• First manned electric flight in southern hemisphere

• First Brazilian military contract for UAV development
• Co-development of several UAVs (civil and military)
• Bootstrap development of all composite light sport aircraft
• Currently finishing the development of a light trainer to be manufactured in China
• Several prototyping projects related with mobility (boats, cars, defense material, etc.)
With a very flexible structure the company is very well positioned to assume a relevant role in the emerging eVTOL
market. The team ACS is also composed of a highly skilled personnel with strong background on aircraft design and
manufactoring, with great knowlodge on electric propulsion systems.

ACS Aviation understands that the use of new, more efficient and less polluting technologies for aeronautical
purposes is the Brazilian response to the growing demand for products that have a less harmful impact on the
environment. This technology will become effective in the coming years in light and commercial
aviation, minimizing the impacts of polluting and inefficient energy sources.

Expectations
Forecast

A five years revenue forecast is presented by the table below. Each MVP constitutes a revenue stream,
additionally customer support, aftermarket sales and services, constitutes another stream. Sales forecasts are based
on current fleet size and average annual fleet growth of each MVP's market, with exception of the urban mobility
eVTOL demonstration prototypes, for which a short series of 10 units is forecast.

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Not included in the table are engineering and prototyping services, which are ACS's current main activity. This
services generate an average annual revenue of US$250.000 and this income is expected to be maintained until
2020.

The urban mobility eVTOL is expected to enter the market only in 2023, and after a short period of production
ramp up, at least 500 units are expected to be sold annually starting in 2025. This forecast is based on numbers
from Robinson R44 and can be considered very conservative. A recent Goldman Sachs market forecast included an
optmistic scenario with demand for air taxis worldwide amounting to US$70 billion annually by 2035, requiring
overall production capacity of 50,000 new aircraft a year.

Financing Needed

To make this business plan viable ACS is looking for venture capital investment. The table below summarizes the
funds required in a first investment round. For certification and production ramp up of the urban mobility eVTOL
a second round will be required in the end of 2021.

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Financial Highlights by Year

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Revenue by Year

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Opportunity
Problem & Solution
Problem Worth Solving

The mobility industry transforms itself over time by trying to keep up with one of the greatest human needs:
moving, changing, reaching. Even so, every day, millions of hours are wasted on the traffic of big cities worldwide.
Large scale urban air transportation has the potential to radically improve urban mobility giving people back the
time lost in their daily commutes.

The concept of aviation "On-demand" as an alternative transport in the face of the heavy traffic of cities: rapid
transport by airways. The proposal foresees the displacement starting from platforms that allow vertical takeoff
and landing. In the context of large cities, the use of EVTOL is the next bet of the aeronautical industry.

Validation of solution

The aviation market is undergoing a transformation. The 4 or 6-seater aircraft with combustion engines will give
way to the new harvest of electric vehicles. The general aviation market will not be headed by products with the
option of taking off and landing horizontally, in the conventional way as we see in the flight profile stages today.
Noise issues will also be addressed as well as concerns about the environment. The new vehicles will be responsible
for the transformation of flying and operating air vehicles. The autonomy of the systems will enable more people to
have access to aviation, either as users or in command. New navigation technologies will enable precise shifts
avoiding routes with unfavorable weather or collisions with other aircraft or terrain.

A small electric aircraft with vertical takeoff and landing capability (eVTOL), optimized for urban mobility, is ACS
solution to reduce traffic and improve life in the big cities. Operated in a ridesharing network the vehicle will enable
rapid and reliable transportation between suburbs and cities, ultimately, within cities.

To allow large scale operations over densely populated cities an eVTOL, when compared to a conventional
helicopter, must be disruptive in terms of: operational cost, safety, noise, emissions and user experience. Electric
propulsion is a key element to allow all these disruptions, and the technical viability of an electric VTOL is currently
guaranteed by new advances in electric motors and battery technology. Despite these recent advances the battery
still imposes severe performance limitations, and ACS intends to offer initially a hybrid-electric propulsion as an
alternative option.

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For disruption in terms of safety, and also operational cost, another very important element is a high level of vehicle
automation and autonomy, which can be enabled by the tremendous advances in UAS (Unmanned Air Systems)
technologies in the recent past. ACS intends to have autonomous capability from start, but the vehicle will be
initially piloted.

The main reference for overall vehicle specifications are a set of requirements compiled by Uber as part of its
Elevate initiative. The initiative is using Uber's unique knowledge about urban mobility to establish the
foundations of an eVTOL ridesharing network. Uber suggests that the ideal eVTOL for urban mobility should be
able to carry 4 passengers and a pilot, over a range of 60 miles, at a speed of 130 knots, making 15 decibels less noise
than a conventional helicopter of same weight. Through fast battery recharge the vehicle should also be able to
operate continuously, short range missions of 25 miles, during a period three hours.

These mission requirements are based on questionable assumptions and their combination creates a very
challenging design problem. However they are the best information available and are considered as targets for
ACS urban mobility eVTOL.

ACS product strategy consists in having the urban mobility eVTOL development program supported by a series of
MVPs (Minimum Viable Products). The MVPs are expected to enter the market much before the main product and
will help building the fundamental technical strengths required by an eVTOL company: airframe integration,
electric propulsion systems integration, electric energy systems integration, autonomous systems integration,
certification, and product support. The planned MVPs are:

• Electric and hybrid-electric helicopter kits for the experimental market. There are a few players in the
market that offer two seat piston helicopter kits for amateur builders. The intention is to establish a
partnership with one of them and develop a power conversion kit. Experimental aviation is very lightly
regulated and this is the fastest way to get an eVTOL out in the market. With a very low investment, the
MVP can teach very important practical lessons related to the integration of propulsion and energy
systems, and to diverse aspects of eVTOL operation and support.
• Power conversion STCs (Supplemental Type Certificates) for light utility piston helicopters. After
gathering some field experience with the amateur builders the plan is to develop an STC to install the
conversion kits in a certified helicopter. A good starting candidate would be the very popular Robinson
R22. The main intention with the MVP is to get practical experience in the certification of electric
propulsion and energy systems.
• Autonomous helicopter conversions for crop dusting. Experimental and certified light utility helicopters
are extensively used for crop dusting, an activity that is a very common cause of fatal accidents. The plan is
to develop an autonomous system that can be integrated into an existing experimental piston helicopter.
The autonomous system however won't be built from scratch, but through strategic partnership with a
company already established in the UAV market. The intention with the MVP is to accumulate

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ACS Aviation 9

experiences in the integration of autonomous systems in a much less regulated environment. The same
autonomous sytem developed for crop dusting have several other potential applications, like for example
cargo delivery.
• Electric propulsion and energy systmes for LSA (Light Sport Aircraft) OEMs. The same electrification kits
that will be developed for helicopters can be also integrated into fixed wing aircraft. The LSA, as the least
regulated certified aircraft category, is a perfect market for this MVP, whose intention is to expand the
field experiences with electrified aircraft. In second stage, other segments of light general aviation can also
be target with a similar approach.
• Urban mobility eVTOL prototypes for operational demonstration under experimental license. The plan is
to build a short series of prototypes of the side-by-side urban mobility eVTOL making use of existing
components. The fuselage can be adapted from a five seat composite helicopter kit. Rotors and gearboxes
can be adapted from light utility helicopters. Electric propulsion, energy and autonomous systems would
already be developed through the other MVPs. The only components that would need to be specially
designed are wing and tails. The first prototype will be a ACS investment. Additional prototypes will be
made viable through strategic partnerships with urban air mobility operators and ridesharing network
owners. The intention with the MVP is to get feedback from users and accumulate operational experience
in urban environment.

Trade Off

The ideal aircraft configuration for an urban mobility optimized eVTOL can also be a theme for endless debate.
There are several different configurations being considered by the different competitors, and a darwinian process is
expected to start as soon as they enter the market. The trade off was done considering a number of different
configurations. It is important to note that the solution is based on the aspects of reliability, dispatchability, safety,
price and time for implementation. ACS understand that not necessarily a more complex or redundancy solution is
a guarantee of been reliable. Also the certification issue has to be addressed.

ACS is currently considering two different configurations and one of them should be choose short after project go-
ahead. One of them is a quad tiltrotor with two wings in tandem and the other is a side-by-side helicopter with a
wing as lift compounding. A comparison of both configurations in many topics are presented in the figure below,
where the configuration's pictures are just for illustration and doesn't represent the product. The remained two
configurations is a result of a rigorous trade off, conducted by ACS with own resources. Both types have pros and
cons, however the side-by-side ( -100) having an advantage in terms of certification requirements due to simplicity
of its system. The main issue continue to be the electric propulsion system, which is a technological step on both
configurations as well.

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Roadmap

ACS five years product roadmap is presented by the chart below. The urban mobility eVTOL is expected to enter the
market in 2023.

Some technological barriers must still be overcome until a truly commercial concept comes into operation. The
project includes: design of battery packs, development and adaptation of power controllers for aircraft flight profile
scopes, design and manufacture of electronic interfaces between crew and system, adaptation of electric
motorization, aerodynamic and structural design for optimization of cruise flight and weight reduction
respectively, variable pitch propeller design meeting all stages of flight and creation of safety rules for electric
powered electric vehicles, study and define the basis of semi-autonomous control certification for the phase of
landing and takeoff.

Each MVP will have a dedicated business plan. Their main objective is to generate knowledge combined with early
revenue streams. However, if some of them demonstrate substantial growth potential, it can be further developed
into an independent product line.

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ACS Aviation 13

Partners & Resources

To be successful ACS will require a few strategic partnerships:

• Venture capital investment funds

• Embraer and other potential air mobility operators
• Uber and other ridesharing network owners
• Oxis Energy and other battery cells supplier
• Electric motor supplier
• Selected kit helicopter manufacuterers
• Selected UAV technology developer
• Selected helicopter crop dusting operator

Target Market
ACS vision is that urban mobility eVTOLs will be used in large ridesharing networks by urban mobility operators,
which would own large fleets of vehicles. However it's still not very clear who would most likely be these fleet
owners.

Urban air mobility is not something new. Big cities like Sao Paulo, Mexico City and New York have everyday a
considerable traffic of conventional helicopters transporting people around. However, until very recently this kind
of transportation was a private service for VIPs. Blade and Voom are two companies starting to change this reality.

With Blade one can, through a cell phone app, book a flight between central Manhattan and JFK Airport by
something around US$300. The flight takes only 5 minutes, but would take more than an hour with ground
transportation. Flight availability, however,is still very limited.

Voom is a startup created by Airbus A-Cubed, and currently owned by Airbus Helicopters. They operate today in
Sao Paulo and City of Mexico, also with an app-based service. Available routes connect the city centers with major
surrounding airports. In Sao Paulo a flight can cost as low as U$100, but are reportedly being subsided by Airbus as
part of an initiative to build demand and learn the challenges and opportunities of urban air mobility.

Uber with its Elevate initiative wants to offer the same kind of service, however in such a big scale that it cannot be
provided without eVTOL disruptions in terms of operational costs, safety, noise, emissions and user experience.

Both Blade and Voom don't have their own helicopters, and hire flight services from air taxi companies which
would normally provide only private flights. Uber also won't own eVTOLs, but traditional air taxi companies are

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not part of the ecosystem that they are building. One business model being suggested by Uber is that eVTOL OEMs
could sell flight services instead of vehicles. In fact some eVTOL OEMs, like Joby, Zee Aero and Airbus Helicopters
have declared that they are considering to act not only as flight service providers but as network owners as well.

ACS however doesn't see this OEM as operator, as a good business model. First, historical attempts weren't
successful. Second, service providers need to operate the best available vehicles and not self made ones. Third, OEMs
need to face direct competition for continuous product improvement. For this reason ACS is working with the
assumption that eVTOL fleet owners and flight service providers will emerge. What is not clear yet is if they are
more likely to emerge from startups, traditional air taxis, a new business unit of an airliner or a new division of a
large aerospace company.

One result of this uncertainty scenario is that predictions of market segmentation and size can't go much beyond
guesswork. Uber estimates are currently the best available information and they foresee a fleet of 1000 vehicles per
large city for something around 2030. According to TomTom Traffic Index there are currently more than 100 large
cities (more than 800,000 inhabitants) with morning and evening congestion peaks over 40%. This cities are spread
across all continents, with China having the largest concentration (21), followed by USA (10) and Brazil (6).

If this numbers are multiplied, the result is a potential market for 100,000 eVTOLs. Howerver while this gigantic
market, doesn't emerge, ACS intends to launch a series of MVPs directed towards relevant markets that exist today.
These markets are:

• Experimental helicopter/aircraft kits for amateur builders. Amateur-built or home-built aircraft are
constructed by persons for whom this is not a professional activity, and in some countries (USA, Brazil,
Australia, New Zealand and South Africa) these aircraft are licensed by regulators as experimental . Most
commonly, amateurs build the aircraft from assembly kits complying with the 51% rule, which requires
them to perform the majority of the fabrication and assembly. In USA the home-buitl culture is very
strong, and today there is around 4500 registered experimental helicopters. Amateur builders are
generally eager for innovations, and all the hype around eVTOLs are certainly making them wish to build
their own.
• Light utility piston helicopters. 30% of the world's civil helicopters are light utility pistons, a fleet of
around 10,400 vehicles. This fleet is heavily concentrated in USA (30%), followed by Australia (11%) and
Brazil (6%). The market is strongly dominated by the Robinson, with a market share of 80% (52% R44 and
28% R22). A large number of R22 are used for primary pilot training, an application with a strong appeal
for electrification.
• Helicopters for crop dusting. The importance of aerial crop dusting for agriculture growing productivity
demands is undisputable. Although the aerial application market is currently dominated by fixed wing
aircraft, helicopter precision spraying can deliver loads faster with much more accuracy. The down wash
from the rotor blades pushes the product deep into the canopy, and their tip vertices allow for product

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distribution to the underside of the leaves. The activity is however a very common cause of fatal accidents,
and autonomous platforms are a natural tendency. This is reinforced by the modern techniques of
precision farming, which requires very precise localize applications, that can be very well performed by
light autonomous helicopters. In the USA there are currently about 370 certified helicopters registered for
aerial applications, and probably at least a similar number of experimental helicopters are also being used
in the activity.
• Light Piston Engine Aircraft . The fleet of two seat piston engine aircraft is around 12,000 in the USA,
which most of them being used for pilot trainning. The instalation of electric propulsion system can
reduce the hour cost by three times. Even considering there will be autonomus air vehicles in the next
years, there is still need of thousands of pilots for airliners, air taxi and private owners.
• Light Sport Aircraft (LSA). The LSA category encompasses a wide variety of aircraft including gliders,
gyroplanes, powered-parachutes, weight-shift-control aircraft, balloons, and airships. These small and
simple to fly aircraft can have a maximum of two occupants and must meet certain regulation restricting
weight and performance. LSAs can be flown with a sport pilot license, which can be obtained with less
money and in less time than a traditional private pilot license. Today there's around 3,3oo registered LSAs
in USA and the category is also popular in Canada and Australia. Generally used for flight training or
leisure they are perfect candidates for electrification.

Competition
As part of a urban mobility transportation system, eVTOL competition are alternatives that eliminate commuting
needs, and ground transport alternatives with potential to reduce commuting time and city traffic.

Home office technologies and e-commerce are allowing people to avoid commuting and stay at home. However, at
least in the near future, we will still have factories, hospitals, schools, and commuting will remain very important.

Autonomous cars are expected to contribute to a significant reduction in city traffic, even more when integrated
into ridesharing networks. However, when looking into the future, autonomous cars and eVTOLs are more likely
complementary than competitor technologies. For instance, Uber the current main reference in urban mobility is
investing in the two technologies.

As an air vehicle, eVTOL major competition are conventional helicopters, as they are already used for urban
mobility. However, as already mentioned, without eVTOL disruptions in terms of operational costs, safety, noise,
emissions and user experience, large scale urban air mobility is not foreseeable.

As an urban mobility eVTOL developer, ACS is expected to face fierce competition. The competitive scenario
includes dozens of startups trying to raise investment; some already well funded startups like Joby, Zee Aero, Lilium
and Volocopter; traditional helicopter manufacturers like Bell; and aerospace giants moving through new ways, like
Airbus with Vahana and City Airbus, and Boeing with Aurora and Near Earth Autonomy.

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In general it seems that little attention is being paid to Uber suggested vehicle requirements, and each of the players
seems to be following a total different path in terms of vehicle configuration, number of occupants and general
performance characteristics. At the same time, all of them seem to be following a similar recipe: integration of a
novel electric propulsion system and a novel energy system into a novel aircraft configuration, to build a vehicle
that is autonomous in many cases, to be certified by yet to be developed regulations, aiming a market that still
doesn't exist, with an unclear business model. In ACS perspective this is too much uncertainty combined and a much
more pragmatic approach is required.

Focus on Uber requirements and use of a proven aircraft configuration are parts of ACS pragmatic approach.
However, what differentiate most the company from the rest of the competition is a unique lean startup based
approach, centered on a series of MVPs, directed towards relevant markets that exist today. Each market addressed
by the MVPs have a different competitive scenario:

• Experimental helicopter kits for amateur builders. Helicopter kits are currently offered by a few
companies, but electric or hybrid-electric propulsion are not an option for any of them. Establishing a
partnership with a selected kit manufacturer, ACS has the opportunity to be a pioneer, with the first
eVTOL in the market. To deliver a competitive flight autonomy, ACS will integrate into the product,
disruptive lithium-sulfur battery packs, available through a strategic partnership with Oxis.
• Light utility piston helicopters. The market is dominated by Robinson, which so far hasn’t give any sign
that it is planning to offer electric propulsion options. Companies offering power conversion STCs, also are
also doesn’t exist, and ACS has other opportunity to be a pioneer. Disruptive batteries will be again a key
for competitive performance.
• Helicopters for crop dusting. Small unmanned platforms for aerial crop dusting are already offered in the
market. The most popular is Yamaha R-Max, which since the 1990s is used in Japan and now is being
introduced in USA. Establishing a strategic partnership with an UAV technology company, ACS intends to
offer autonomous conversion of existing light piston helicopters, something completely new to the
market. Compared to R-Max, ACS solutions will deliver a much higher load capacity and a much bigger
autonomy, with a very competitive cost.
• Light Piston Engine Aircraft, including LSA. The first electric LSAs are about to enter the market, but
there's still no established player to supply electric propulsion and energy system technologies for the
OEMs. ACS, however, might face some competition as there other players with the same ambition. Worth
mentioning is the Czech company MGM-Compro, which besides a complete line of motors, controllers and
batteries, offers custom systems integration and installation packages.

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Execution
Marketing & Sales
ACS marketing plan will be simply based on:

• Professional website
• Strong presence in social media
• Advertisements in specialized magazines
• Presence in all major trade shows
Additionally, for the urban mobility eVTOL, a priority will be the development of strong relationships with:
ridesharing network owners, air taxi operators, urban mobility companies, airlines, large aerospace companies, etc.
The first objective will be a strategic partnership to make viable the MVP demonstration campaign. Next to that, the
establishment of alliances with potential launch customers.

It is a plus to have a facility in the USA to provide easier aproach to the certification authorities, in this case the FAA,
which is following the changes in the aeronautical industry, faster than other certification agencies. The plant in the
USA will also facilitate the aquisition of equipment and componentes for the prototypes.

Operations
Locations & Facilities

ACS will initially have operations in Sao Jose dos Campos / Brasil (SJK) and Daytona Beach / Florida (DAB).
Operations in two distant sites is certainly a challenge, but presence in USA is essential for the company success.
Some reasons for that are:

• The target markets are strongly concentrate in USA.

• With presence in USA the company will be much better positioned for the second investment round.
• A great part of the products components and raw materials are originally from USA, and logistics get much
simpler.
• Most of the potential strategic partners are also located in USA.
In Brazil, however, the company has access to cheaper engineering, and for this the presence in SJK is also very
strategic.

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In SJK ACS will be located in CEV (Centro Empresarial do Vale) an industrial condo with available office and
workshop areas. SJK facility will concentrate activities related to airframe (engineering, prototyping and parts
manufacturing) and systems engineering.

In DAB it will be located in Embry-Riddle Research Park, which is located within Embry-Ridle Aeronautical
University. As tenant in the research park the company will have the opportunity to use facilities and labs on the
university, including hangars and airport access, and employ students from a variety of academic fields. DAB
facility will concentrate activities related to product assembly, flight testing, customer support, marketing and
sales. DAB office will be also used to hire special engineering skills not available in Brazil.

Technology

In order to be competitive, an eVTOL company requires the set of fundamental technical strengths listed below.
ACS will build these strengths through the planned MVPs.

• Airframe integration. The ideal aircraft configuration for an urban mobility eVTOL is a major business
uncertainty. ACS is making a bet on the proven side-by-side configuration, but there is a risk involved. At
some point, the company might end up being be forced to pivot configuration, following the Darwinian
process expected to occur. For this reason, the ability to quickly perform airframe conception,
development, integration, rapid prototyping, and testing is essential for risk mitigation.
• Electric propulsion system integration. The components of an electric aircraft propulsion system are still
being developed and a major evolution is expected in the coming years. The ability to quickly integrate
aeronautic qualified propulsion systems, using the best available components is essential and will
guarantee a relevant competitive advantage. In this context of changes in general aviation ACS-Aviation
has positioned itself at the forefront of the development of electric systems, operating in the electric
aviation market since 2010 with the development of SORA-e, the first manned aircraft with Brazilian
electric propulsion. The system of SORA-e will be migrated into this new phase of development.
• Energy system integration. Battery technology will remain the bottleneck of electric aviation for decades.
Battery cell developers are making continuous disruptions and the ability to quickly turn a disruptive cell
into a disruptive aeronautic qualified battery pack ready for aircraft installation can be a game changing
competitive advantage, and will be a ACS priority.
• Autonomous systems integration. Even being initially piloted, ACS urban mobility eVTOL will have
autonomous capability from start. Part of the technology can be adapted from unmanned air systems, but
the requirements of a vehicle that carry passengers in urban environment can be substantially different.
To build autonomy into the product the company can’t count on third parties and autonomous systems
integration is an essential capability.

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ACS Aviation 19

• Certification. Urban mobility eVTOL aeronautic certification is a major business challenge. First, much of
the regulations applicable to eVTOLs are yet to be developed, and will evolve a lot in the coming years.
Second, propulsion technology, batteries and aircraft configuration will be in constant evolution in the
foreseeable future. The market dynamics will dictate very frequent product updates, and probably a
portfolio with multiple products. With this scenario, the ability to conduct agile certification process can
represent an important competitive advantage.
• Product support. Although there’s still some uncertainty around urban mobility eVTOL business model
it’s certain the product support will play a major role, and can become an important competitive
advantage.

Regulatory Requirements

The key point in understanding the new aviation scenario is to determine and interpret the basis of certification
considering the new systems and emerging technologies involved. The series of MVPs, as described, and their
subsequent certification will be responsible for mapping the means of compliance and openness of the field to more
complex, autonomous, and reliable systems.

ACS's vision for regulatory requirements is focused on the most recent revisions of the FAA / EASA / ANAC Part 23
for light aircraft and Part 27 for rotorcraft. The two certification pieces will form the basis of the new generation of
vertical and takeoff aerial vehicles. Also the certification of electric propulsion system should be treated as an
important milestone in the program and needs special attention. The driver and battery packs are the main
concerns combined with the full integration of the propulsion system.

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ACS Aviation 20

Milestones
Milestone Due Date Who's Responsible Details

Conceptual Design of October 28, 2018 ACS Conceptual design of

eVTOL and sub-system eVTOL with a sub-scaled
model for wind tunnel
test. Concept of the sub-
system of electric
propulsion.

eVTOL PDR March 17, 2019 ACS Preliminary Design

Review of eVTOL and
construction of test
bench of an electric
propulsion sub-system.

Certification of Electric July 16, 2019 ACS Certification of Electric

Propultion Sub-System Propulstion Sub-System
integrating batery
packages, BMS,
controller, man-machine
interface, cooling and
engines for experimental
aerial vehicles.

Series Production of Sub- December 23, 2019 ACS Initial of production of

System sub-system to equipped
small aircrafts and
helicopters

eVTOL Demonstrator June 23, 2020 ACS Demonstration of an

First Flight eVTOL concept with the
ACS designed electric
propulsion system.

Test Flight Campaign of September 26, 2020 ACS Test Flight Campaign of
eVTOL demonstrator an eVTOL. Marketing
towards the next
investment round.

eVTOL CDR May 18, 2021 ACS Critical Design Review of

the eVTOL.

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ACS Aviation 21

Company
Overview
Ownership & Structure

ACS is directed by its co-founder Alexandre Zaramela, a mechanical engineer, which owns 100% of the company.

ACS-Indústria Aeronáutica LTDA is headquartered at Rua Henrique Braulio de Melo Sobrinho, 62, Jardim Santa
Julia, São José dos Campos, São Paulo, CEP 12228-850, enrolled with CNPJ 07.923.069 / 0001-36. The company
counts on a staff of five collaborators among technicians in mechanics, electronics, designer and administrative
body. ACS has extensive experience in the design, fabrication and prototyping of aeronautical components, in
particular for the engineering of composite materials and embedded aerospace systems.

The area of the company is of 500sqm counting with park of CNC machinery, electrical and pneumatic equipment,
such as cutting table, drill, screwdriver, and workshop tooling. The ACS has a white room, air-conditioned and
filtered air destined to the manufacture and components in composite materials. The company owns the whole
apparatus for manufacturing pieces of composite materials with the most diverse methods (vacum bagging, resin
transfer molding, hand lay up).

Company history

ACS-Indústria Aeronáutica LTDA, a genuinely Brazilian company with an innovative nature. Created in 2006 by a
group of engineers with experience in the aeronautical area, the company produces from small acrobatic aircraft to
components that equip the aerospace chain concentrated in the Paraíba Valley, especially the city of São José dos
Campos, company headquarters.

ACS provides engineering services to the Brazilian aerospace chain, with the main clients being the Brazilian Army
(CTEx), Avibrás, Mectron and ITA.

In 2008 ACS-Aviation launched the ACS-100 SORA, a 100% national acrobatic two-seat aircraft design, fully built
with composite materials and conventional piston engine. In 2010, the first studies began to implement more
efficient and less polluting forms and their innovative applications in the growing light aircraft market, including
SORA itself, the company's main product. From these studies was born the design of a fully electric aircraft, SORA-
e. In 2011, the company received assistance from FINEP through the Economic Subsidy program number
03.12.0012-00, which resulted in a test bench being set up and a test campaign carried out on the ground. The
conclusion of the bench test with electric motors was carried out in October 2014. In parallel, ACS signed a

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ACS Aviation 22

partnership agreement with Itaipu-Binacional to implement the electric propulsion system in the SORA aircraft,
and SORA-e was born.

On May 18, 2015 SORA-e made the first flight in São José dos Campos, becoming the first Brazilian manned electric
aircraft. The SORA-e is equipped with two Enrax propellers of 35 Kw each and six packs of Ion Polymer batteries,
totaling 400 volts. The SORA-e has an autonomy of 45 minutes and can be extended to 1 hour and 30 minutes,
cruising speed of 190 km/h and an climb rate of 1500 ft/min with a maximum speed of 340 km/h.

Always ahead of its time, ACS has been working with unmanned vehicles (VANTs) since 2008, when it began a
process to supply vehicles of this nature to the Brazilian Army. The partnership with the Army culminated in the
development of the FS-01, a 70 kg aircraft capable of running autonomous flights of up to 300 km. Following
studies in the unmanned area ACS developed a 6 kg Hand Launched project for urban operations, called FS-02. This
project was supported by FINEP. The FS-02 is now operated by Flight Technologies. In the light aircraft segment
ACS is currently developing a Light Sport Aircraft (LSA) project for the Chinese company GGAC. The project is
called ACS-500 Loong, an aircraft developed and marketed in the Chinese market. All the tooling has already been
sent to GGAC in China and the prototype is in the final stages of manufacture. It is estimated that in-flight trials
start in mid-2018 and finalization of the certification process in China by the end of the same year.

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ACS Aviation 23

Team
Management team

The ACS team is composed of highly qualified personnel with strong experience in aircraft design and
manufacturing. Most of the team has worked with Alexandre Zaramela since the company was founded 12 years
ago. All members mentioned on the management team participated in the innovative SORA-e project.

Alexandre Zaramela, chief Engineer of eVTOL Program

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ACS Aviation 24

Co-founder and president of ACS-Aviation. Mechanical engineer graduated from UFMG with 20 years of
experience in the development of products for the aeronautical industry, with passage through Embraer and
Airbus. Specialized in Flight Testing with course by NTPS-National Test Pilot School. It has Private Pilot's licenses
for Airplane and Glider. Relevant projects: Embraer's, A350, A400M, SORA, SORA-e, Loong, FT`s, TxC.

Conrado Luiz Santiago Almeida, Project Manager

Graduated in Mechanical Engineering from ETEP of São José dos Campos. Responsible for product development
and production progress at ACS-Aviation. It was found by ACS in the year of its foundation. Specialized in
structural calculation, 3D modeling, CAD / CAM system machining, systems design. Relevant Projects: SORA,
SORA-e, Loong, TxC, FT`s.

Rafael de Sá, Senior Designer

Graduated in Product Design and Design of Light Structures with emphasis on Aeronautics by FATEC-SJC. He has
specialized in aircraft systems design and has been involved in 5 ACS-Aviation programs for the past 4 years.
Relevant Projects: SORA, SORA-e, Loong, TxC, FT Hale

Rafael Barbuglio, Production and Administrative

Graduated in Business Administration and Maintenance of Aircraft by FATEC-SJC. He works in the management
area of the ACS as well as in the elaboration of manuals of maintenance and operation of the aircraft produced by
the company. Specialized in the manufacture of structures in composite material. Relevant Projects: SORA, SORA-
e, Loong, TxC, FT Hale

Dimas Carvalho, Design Developer

With more than 40 years dedicated to aerospace engineering, aircraft design and manufacturing, sailplane and
helicopter pilot. Extensive experience with composite structures and materials.

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ACS Aviation 25

Glêvson Diniz Franco, System/Software Engineer

Mechatronics Engineer with experience in embedded aerospace systems. Participated in the SORA-e team with a
good contribution to the design of the human-machine integration system.

Marcelo Elias Guedes, Electric System Engineer

Electrical Engineer graduated from ETEP-SJC. Responsible for the integration of SORA-e systems. Specialist in
embedded systems designs for the aerospace industry.

Key planned hires

Certification specialist under Part 23 and 27 - TBD (To be defined)

Certification engineer with experience with FAA or EASA requirements under the Part 23 and desirable under the
27 in the areas of aircraft certification, flight standards, manufactoring, continued airworthines and electronic
systems.

Aerodynamicist - TBD

Aerospace engineer with strong mathematical skills and understanding of flight itself. Desirable knowledge on
aircraft performance and wind tunnel and flight tests.

Stress Engineer - TBD

Mechanical or Aerospace engineer with great knowlegde in stress analysis of aircraft components, mainly on
composite structures. Desirable design understanding of layout and sizing focused on aircraft parts.

Flight Dynamics Engineer - TBD

Mechanical or Aerospace engineer with knowledge on part 27, with solid mathematical background and
understanding of flight dynamics of fixed wing aircraft and rotorcraft. Flutter analysis experience desired.

Supplier Chain - TBD

Experience in supply chain in the aeronautical industry. Knowledge in parts purchase, contracts, supply sources,
strategies.

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ACS Aviation 26

Advisors

The team of consultants is composed of members of 4 high-quality universities, with a focus on aeronautical
competence. The ACS has a good relationship with these academies, which can be considered a bonus for the
development of the program.

Professor Luiz Carlos Sandoval Góes, graduated from ITA in 1975, Ph.D. from University Wisconsin, postdoctoral
degree from Airbus Helicopters, specialist in autonomus flight.

Professor Gil Annes da Silva, graduated from UFSCar, Phd in Aeroeslasticity, specialist in wind tunnel, ground and
flight tests.

Professor Marcus da Silva, graduated from UFMG, Master from ITA, head of the wind tunnel division at IEAv.

Professor Paulo Iscold, graduated from UFMG, PhD in aerodynamics, one of the best brazilian engineers of our
time, extensive experience with light aircrafts.

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ACS Aviation 27

Financial Plan
Forecast
Key assumptions

The market for eVTOL and its derivatives is not yet formally established, as no vehicle or sub system has been fully
homologated so far, with most competitors being experimental vehicles.

ACS studies show that, in the short term, battery densities will not be sufficient to equip aircraft with a maximum
takeoff weight above 1450 kg and obtain 1 hour and 30 minutes of operation in the air. The company's proposal is
to reach the market before the competition with a purely electric VTOL product, avoiding the use of combustion
generators in the case of a hybrid configuration, and with sufficient autonomy for instructional flights or 100 to
300 km range.

There is huge demand yet to emerge, but there are no products on the market. The Uber Elevate document forecasts
a demand for 40,000 EVTOL aircraft over the next 20 years, with autonomy and performance similar to the
vehicles proposed by ACS. ACS expects to produce and sale 1.5% of this market in the 8 years following certification.

Net Profit (or Loss) by Year

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ACS Aviation 28

Financing
Use of funds

The investment rounds follow the timeline presented. The contributions occur from the first to the fourth year,
from the first conceptual studies to the beginning of the serialized production of electric propulsion systems,
followed by the flight tests of the eVTOL demonstrator.

The value of the company in the year 2018 considers the current contracts with Brazilian companies and the
production of Loong for the Chinese market, under contract already in progress.

In addition to current contracts, ACS owns the powertrain equipment technology for light aircraft and a small
industrial park.

The cap table shows the valuation of ACS from 2018 to 2021 following the investments and the targets according to
the milestones previously detailed.

Sources of Funds

The financial plan is divide into 4 rounds in 4 years totalling US$ 6.000.000 up to the conclusion of a Critical Design
Review of the eVTOL, which will occur in May, 2021. The first round of US$ 700.000,00 to developed the sub-
system of the electric propulstion and the Preliminary Design Review of the eVTOL is from Aerotec Fund.

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ACS Aviation 29

Statements
Projected Profit and Loss

2018 2019 2020 2021 2022

Revenue $250,000 $1,680,000 $5,510,000 $11,400,000 $9,000,000

Direct Costs $125,000 $1,126,000 $3,835,000 $8,120,000 $6,580,000

Gross Margin $125,000 $554,000 $1,675,000 $3,280,000 $2,420,000

Gross Margin % 50% 33% 30% 29% 27%

Operating
Expenses

Salaries &
$630,000 $2,440,000 $2,410,000 $1,630,000 $720,000
Wages

Expenses
$20,000 $134,400 $440,800 $912,000 $720,000
(revenue)

Expenses $60,000

Amortization
of Other $0 $0 $0 $0 $0
Current Assets

Total Operating
$710,000 $2,574,400 $2,850,800 $2,542,000 $1,440,000
Expenses

Operating
($585,000) ($2,020,400) ($1,175,800) $738,000 $980,000
Income

Interest Incurred

Depreciation
and
Amortization

Income Taxes $0 $0 $0 $0 $0

Total Expenses $835,000 $3,700,400 $6,685,800 $10,662,000 $8,020,000

Net Profit ($585,000) ($2,020,400) ($1,175,800) $738,000 $980,000

Net Profit /
(234%) (120%) (21%) 6% 11%
Sales

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ACS Aviation 30

Projected Balance Sheet

2018 2019 2020 2021 2022

Cash $115,000 $94,600 $168,800 $2,256,800 $3,236,800

Accounts
$0 $0 $0 $0 $0
Receivable

Inventory

Other Current
$50,000 $300,000 $550,000 $700,000 $700,000
Assets

Total Current
$165,000 $394,600 $718,800 $2,956,800 $3,936,800
Assets

Long-Term
Assets

Accumulated
Depreciation

Total Long-Term
Assets

Total Assets $165,000 $394,600 $718,800 $2,956,800 $3,936,800

Accounts
$0 $0 $0 $0 $0
Payable

Income Taxes
$0 $0 $0 $0 $0
Payable

Sales Taxes
$0 $0 $0 $0 $0
Payable

Short-Term Debt

Prepaid Revenue

Total Current
$0 $0 $0 $0 $0
Liabilities

Long-Term Debt

Total Liabilities $0 $0 $0 $0 $0

Paid-In Capital $750,000 $3,000,000 $4,500,000 $6,000,000 $6,000,000

Retained
($585,000) ($2,605,400) ($3,781,200) ($3,043,200)
Earnings

Earnings ($585,000) ($2,020,400) ($1,175,800) $738,000 $980,000

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ACS Aviation 31

Total Owner's
$165,000 $394,600 $718,800 $2,956,800 $3,936,800
Equity

Total Liabilities
$165,000 $394,600 $718,800 $2,956,800 $3,936,800
& Equity

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ACS Aviation 32

Projected Cash Flow Statement

2018 2019 2020 2021 2022

Net Cash Flow

from Operations

Net Profit ($585,000) ($2,020,400) ($1,175,800) $738,000 $980,000

Depreciation &
$0 $0 $0 $0 $0
Amortization

Change in
Accounts $0 $0 $0 $0 $0
Receivable

Change in
Inventory

Change in
Accounts $0 $0 $0 $0 $0
Payable

Change in
Income Tax $0 $0 $0 $0 $0
Payable

Change in
Sales Tax $0 $0 $0 $0 $0
Payable

Change in
Prepaid
Revenue

Net Cash Flow

from ($585,000) ($2,020,400) ($1,175,800) $738,000 $980,000
Operations

Investing &
Financing

Assets
Purchased or ($50,000) ($250,000) ($250,000) ($150,000)
Sold

Investments
$750,000 $2,250,000 $1,500,000 $1,500,000
Received

Change in
Long-Term
Debt

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ACS Aviation 33

Change in
Short-Term
Debt

Dividends &
Distributions

Net Cash Flow

from Investing $700,000 $2,000,000 $1,250,000 $1,350,000
& Financing

Cash at
Beginning of $0 $115,000 $94,600 $168,800 $2,256,800
Period

Net Change in
$115,000 ($20,400) $74,200 $2,088,000 $980,000
Cash

Cash at End of
$115,000 $94,600 $168,800 $2,256,800 $3,236,800
Period

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