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ELITE AEROSPACE GROUP
Q1 2019 REPORT

CONFIDENTIAL & PRIVILEGED COMMUNICATION
ONLY FOR SHAREHOLDERS OF EAG

DO NOT DISSEMINATE OR REPRODUCE

Notification & Disclosures Concerning Forward-Looking Statements:

This document contains “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,”
“plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify
these forward-looking statements. Examples of forward-looking statements include statements relating
to our future financial condition and operating results, as well as any other statement that does not
directly relate to any historical or current fact. Forward-looking statements are based on expectations
and assumptions that we believe to be reasonable when made, but that may not prove to be accurate.
These statements are not guarantees and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict. Many factors could cause actual results to differ materially
and adversely from these forward-looking statements. Among these factors are risks related to: (1)
general conditions in the economy and our industry, including those due to regulatory changes; (2)
our reliance on our aerospace customers; (3) changing budget and appropriation levels and acquisition
priorities; (4) our dependence on U.S. government contracts; (5) our reliance on fixed-price contracts;
(6) our reliance on cost-type contracts; (7) our dependence on our subcontractors and suppliers, as
well as the availability of raw materials; (8) changes in accounting estimates; (9) changes in the
competitive landscape in our markets; (10) threats to the security of our or our customers’ information;
(11) potential adverse developments in new or pending litigation and/or government investigations;
(12) customer and aircraft concentration in our customer financing portfolio; (13) changes in our
ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund our
operations and contractual commitments; (14) realizing the anticipated benefits of mergers,
acquisitions, joint ventures/strategic alliances or divestitures; (15) the adequacy of our insurance
coverage to cover significant risk exposures; (16) potential business disruptions, including those related
to physical security threats, information technology or cyberattacks or natural disasters; (17) work
stoppages or other labor disruptions; (18) potential environmental liabilities.

Any forward-looking statement speaks only as of the date on which it is made, and we assume no
obligation to update or revise any forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 1

Email: [email protected] - Website: www.EliteAerospaceCorp.com

Welcome to this edition of The Elite Report!
The EAG Executive Management Team is
pleased to provide our stakeholders with a
comprehensive update on the recent
developments with the Elite Aerospace Group.
Below you will find an overview of the business
for Q1 of 2019. We hope you enjoy reading
about our progress, and sincerely appreciate
all your support and partnership towards
building our business together!

STRATEGIC OUTLOOK FOR THE YEAR

Industrialization, Growth, Operational Excellence

If asked to identify a theme for this year, we would codify it as “World Class.” Two very simple words that
denote so much emotion and thoughtfulness. After all, what does it mean to be a world class
organization? The answer, in our humble opinion, is that we, people, human beings alone are capable of
making a world class organization, because world class people + world class technology = a world class
organization. Does that mean that every single person within a world class organization is in fact world
class? Not always, but what we all have discovered during our journeys is that world class organizations
have a regenerative tendency, a self-healing, affirmative characteristic of sorts that enables the
organization to constantly improve and self-assess leading to a perpetuation and acceleration of strength.
Does that mean that Elite is impervious to mistakes, hiccups, constraints, and the like? Absolutely not, but
by improving our processes and focusing on Industrialization, Growth and Operational Excellence, this
will undoubtedly yield Financial Stability and ultimately create a World Class profitable enterprise.

In that spirit, the strategic vision for this year is to stabilize our operations, expand upon our
manufacturing capabilities and services, grow our customer backlog, and book as much business as
possible to occupy all our remaining capacity. As it goes in any business, one must ensure effective
utilization of all existing assets before justifying the addition of further resources. Well, with the
consolidation of facilities and fortifying EAG’s positions into certain “Franchise Programs” in the
Aerospace, Defense and Orbital Launch Industry, we are doing exactly that and can already see the
writing on the wall, so-to-speak. Specifically, we know very well based on direct customer feedback,
especially during Q1 2019 that much of our remaining capacity is spoken for, or about to clawed over
between a number of key customers. Therefore, growth is inevitable for EAG and our roadmap includes
accommodating additional growth via strategic planning, capacity management, industrialization efforts to
support new programs and also via our unique, operations-minded acquisition strategy. This next phase
on the acquisition front will require both organic efforts as well as institutional partnerships with financing
organizations prepared to sign on and accompany EAG on our path to further disrupt a $15 Trillion Dollar
Industry.

In this quarterly report, you will find a wide range of updates about EAG during the Q1 2019 timeframe
that are broken down by location along with other major areas of the business. The chief objective is to
extend even more visibility into the daily details, the specific minutia that makes our company tick, buzz
and attract the most prominent customers our industry has to offer. Let’s kick it off with our very 1st
manufacturing location in Irvine, CA!

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 2

Email: [email protected] - Website: www.EliteAerospaceCorp.com

IRVINE, CA MANUFACTURING FACILITY

Our first manufacturing location since inception of the
company has gone through many changes and
transformation. From landing our very first CNC Milling
Machine to our first Swiss-Turn Machine, the factory in
Irvine, CA has evolved so much, it’s truly electrifying
when you walk through production floor! Here’s an
overview on the developments that have taken place in
Irvine, CA this past quarter.

Irvine, CA Facility Consolidation Phase 1 – We are happy to announce
that we have successfully integrated our operations from
Halo Industries in Huntington Beach, CA into both our
Irvine, CA & Tustin, CA Factories. As for Irvine, CA here
is a brief list of what has been absorbed and integrated:

 Two 3-Axis CNC Milling Machines 4/5-Axis CNC Machines
 Three 4/5-Axis CNC Milling Machines
 One Sinker EDM (Electrical Discharge Machine)
 Two Turn-Mill Lathe Machines
 One 5-Axis CNC Milling Machine
 Five Manually Operated Machines (including a grinder, a

Bridgeport, a manual lathe, a manual chucker and a band saw
for cutting and preparing raw material). 

As noted in prior publications, our team has been working aggressively to
not only plan for this move, but also to ensure all the floors were properly
reinforced and we had the appropriate power and airlines installed in
order to support these machines. We are excited to report that all of this
work has been successfully completed on schedule, and all of the
machines noted above are up and running, fully operational and already
stacked with jobs at this time.

5-Axis Machining Center The machine tool assets

depicted here were utilized to manufacture and successfully

ship a variety of products in Q1 2019 to several customers

of EAG. For instance, this past quarter, we supported The

Marvin Group (http://marvingroup.com/) with various

defense-related precision machined components. Please

recall that Marvin supports

the Defense Industry in

multiple specialized areas for

their customers, including

Airborne Stores Carriage &

Release Equipment, Aircraft

Auxiliary Equipment, Automated Aerospace & Military Test Equipment,

Power & Thermal Management Solutions for Land & Naval Platforms and

Wheeled Light Tactical Vehicles. Another customer we serviced is

General Aerospace (https://www.general-aero.com/en). Founded in 2003

and Headquartered in Germany, General Aerospace has been a loyal

customer to EAG since 2016. EAG manufactures complex Swiss-Turn

components that are manufactured on our Tsugami’s. These components

are a part of a 3 Year Frame Contract, which EAG successfully renewed in 3-Axis Machining Center

2018. As for an update on this customer, we recently learned that

STABILUS (https://www.stabilus.com/) has signed an agreement resulting in

the acquisition of General Aerospace. STABILUS intends on consummating this acquisition as follows:

80% acquisition by April 2019 and the remaining 20% acquisition by September 2023. Here’s an

informative article published by Markets Insider that not only discusses the details regarding this

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 3

Email: [email protected] - Website: www.EliteAerospaceCorp.com

acquisition, but also provides some great background

information regarding each company, entitled, “DGAP-News:

Stabilus S.A. successfully completes acquisition of General

Aerospace:”

(https://markets.businessinsider.com/news/stocks/dgap-news-

stabilus-s-a-successfully-completes-acquisition-of-general-

aerospace-1028091364). This acquisition serves as another

great example of two prominent Aerospace companies in the

Commercial Aviation Industry realizing synergies through joining

forces, where consolidation of efforts and teaming up will

undoubtedly yield growth in overall business due to expanded

capabilities and farther reach into each other’s customer

networks. With that said, this increases the potential for EAG to

expand our footprint in the European Marketplace with the added

horsepower of STABILUS to our existing relationship with

General Aerospace. As noted in prior publications from EAG, our

objective when it comes to situations like this is to leverage our

Swiss-Turn Machining Center existing relationships with the customer and seize the

opportunity to grow into additional areas of manufacturing, as

well as engineering support with the new managing

company. The future is bright for us at Elite and we are Operations Management

proud to have General Aerospace, now a part of

STABILUS, on board as a strategic customer to EAG.

Other customers serviced during Q1 2019 include

Boeing Distribution Services, formerly known as KLX

Aerospace (https://www.boeingdistribution.com/)

pertaining to our Long-Term Agreement (LTA) for

various composite panel inserts, Meggitt Defense

Systems, Inc. (https://meggittdefense.com/), as well as

Parker Hannifin (https://www.parker.com/)

for various defense related precision machined

components, just to name a few. One of the newest

customers that we have added to our roster is Rock

West Composites, Inc. (https://www.rockwestcomposites.com/). Founded in 2009 and headquartered

in West Jordan, Utah, Rock West designs,

Quality Inspection engineers, manufactures and distributes a

variety of composite products, resins and

accessories. Specifically, the company offers

round, square, rectangular, octagonal, and

hexagonal fiber tuning products; carbon fiber

plates, sandwich panels, and carbon fiber

angles and strips; ski and trekking products;

lacrosse products; tube accessories; solid

round rods; resin systems and materials;

adhesives; abrasives and surface preparation

products; and clearance products. EAG on-

boarded Rock West in Q1 2019 and is

supporting them with a complex turn-mill,

metallic component intended for a US Navy

related program. If this prototype design of

theirs fairs well during their First Article

Inspection (FAI) test stage with their customer, then this will in-turn result in thousands of components a

year required from EAG. As always, we will utilize the success of this first manufacturing run to yield new

opportunities from Rock West and further develop ourselves into their go-to precision-machining team of

choice for all their metallic components in the future.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 4

Email: [email protected] - Website: www.EliteAerospaceCorp.com

Please enjoy this brief video clip from Connor
Owen, Manufacturing Engineer and our Supplier

Quality Engineer (SQE), as he provides a quick
overview on some of the developments in our

Irvine, CA Manufacturing Facility.

Irvine, CA Facility

Video Link: https://eliteaerospacecorp.wistia.com/medias/mqlige6o60

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 5

Email: [email protected] - Website: www.EliteAerospaceCorp.com

TUSTIN, CA MANUFACTURING FACILITY

Tustin, CA Facility “The Factory of the Future” as Zeeshawn Zia,
Co-Founder and President would call it has
officially been manifested in Tustin, CA. This
facility not only offers manufacturing solutions,
but also houses SoCal based members of Elite
Engineering Services (EES), E360
Technologies, Assembly & Integration, our
Investor Relations Department and our
recently established Inside Sales Team. Here’s
an overview on the developments that have
taken place in Tustin, CA this past quarter.

Consolidation Phase 2 – We are happy to
report that we have successfully moved the remaining machines from Halo Industries in Huntington
Beach, CA into our Tustin, CA Facility. Here’s a list of what has moved in:

 Six 3-Axis CNC Machines Machines from Hunting Beach, CA
 One Horizontal Milling Machine
 Catalogue of Custom-Machined Tooling

Plates, Fixtures and Vices
 Assembly & Integration Equipment
 Bulk Inventory including raw material,

hardware and other auxiliary equipment. 

As noted in previous reports from EAG, we have
already reinforced the floors where necessary and
now, we are working on powering up the machines to
get them fully integrated and up and running, as
depicted in the photo below.

These machines will be dedicated to support major

programs related to Airbus & OneWeb Satellites

(https://onewebsatellites.com/) Parker Hannifin

(https://www.parker.com/), Ducommun

(https://www.ducommun.com/) and The Boeing

Company (https://www.boeing.com/). The

decision to place these machines as designated

within the Tustin, CA Factory was a conscious

grouping in order to match like-kind manufacturing

technologies to their respective programs. We also

considered new work packages that have been

awarded from customers like Ducommun that will

require these types of CNC Milling modalities as

Power Upgrades Underway well. As it goes with any major move, whether it be

a residential one when moving to a new home, or

a commercial one as is in this particular case, it’s quite challenging needless to say. But with that said,

hats off to our Facilities & Production Management Teams for coming together, harmonizing a highly-

organized approach and work-flow, and ultimately getting everything accomplished on schedule. As one

can imagine, once these machines are all up and running, which is slotted for completion by end of April,

early May 2019, it will be quite a busy factory with a total of thirteen (13) different machines, running at

capacity with work packages already booked at this time.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 6

Email: [email protected] - Website: www.EliteAerospaceCorp.com

As for the machines already in operation at Tustin, CA, and output from our Assembly and Integration
Area, now dedicated to multiple customers of EAG, here’s a brief synopsis of the various customers we
have supported in Q1 2019 out of this factory. Starting with SpaceX (https://www.spacex.com/) EAG
continues to support our Vendor Purchasing Agreement (VPA) with this strategic customer. This 2-year
contract is for 95 repeat part numbers (a combination of precision machining and sub-assembly work)
that EAG has successfully manufactured in the past and, valued at approximately $1.6MM in total. Just
within the last quarter, EAG has successfully delivered precision machined components / sub-assemblies
for the last 3 rocket launches, one of which included the Crew Dragon Demo for NASA. Payload paying
customers include: IRIDIUM (FLIGHT 8) out of Vandenberg, SSL (NUSANTARA SATU) out of Cape
Canaveral and NASA CREW (DEMO 1) out of Kennedy Space Center. EAG remains in position to grow
our content within multiple future platforms and other areas of service requirements, especially in the
development of their satellite business. Furthermore, EAG has successfully delivered regular shipments
of our USB Charging Port product line via our E360 Technologies sub-division to both Dassault Falcon
Jet (DFJ) (https://www.dassaultfalcon.com/en/Pages/Home.aspx) and Bombardier
(https://www.bombardier.com/en/home.html). And, most recently, we on-boarded one of our newest
customers for this product line headquartered out of Ontario, Canada called Flying Colours Corporation
(http://www.flyingcolourscorp.com/about.html). This company has been in operation since 1989 and
provides a wide range of services for the Aviation Industry pertaining to aircraft completion, as well as
maintenance & repair related services.

As for other LTA bearing customers that we have serviced during Q1 2019, these include both

commercial aerospace work for Ducommun (https://www.ducommun.com/) and micro-satellite structural

metallic parts for Airbus OneWeb Satellites (https://www.airbus.com/space/telecommunications-

satellites/oneweb-satellites-connection-for-people-all-over-the-globe.html). Our major initiative for both of

these customers is to ready ourselves for a significant

First 3 Okuma MB-5000H’s ramp-up in production quantities to meet their escalated

rates already slotted for later this year in the summer.

These two customers have challenged EAG to really

think like mass-producers of product, and to stretch our

capabilities well beyond our typical manufacturing

modalities. Accordingly, we have now successfully

incorporated high-rate production machines and soon

will be instituting our Fastems (FMS) Pallet Changing

Technology in late May / early June 2019, which will

really kick production into high-gear. Specifically, the

first three (3) Okuma MB-5000H’s will operate 6.5 days

a week, 22.5 hours a day to support the volume for 50%

of the Spoiler’s Package to meet Boeing’s schedule at

full rate. That is 430+ parts a week that will need to be manufactured. This was calculated meticulously by

our Engineering & Manufacturing Teams, based on all the run times for each type of component.

However, as previously reported, we were notified by Ducommun of their intent to award us with full rate,

100% volume for the Spoilers Package; we are happy to announce that this agreement was effectuated

and consummated on March 29, 2019, when our Executive Management Team signed an updated LTA

for 5 years valued at a total of $55 MM. Accordingly, we are

now in need of another three (3) Okumas (now on order for

delivery in the Summer of 2019) in order to support the rest

of the volume requirements of this LTA. This is a major

milestone for EAG, and we are excited to gear up for mass

production in support of the 737 Platform!

Lastly, we are happy to announce that our two (2) additional Airbus OneWeb Cell
DMU 50 5-Axis machines are scheduled to arrive by late
April or early May 2019, which will complete the Airbus
OneWeb Satellite machining cell in our Tustin, CA factory.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 7

Email: [email protected] - Website: www.EliteAerospaceCorp.com

Please enjoy this brief video clip from Derick Baisa,
VP of Sales and Marketing, as he provides a quick

overview on some of the developments in our
Tustin, CA Manufacturing Facility

Airbus OneWeb Cell

Tustin, CA Facility

Video Link: https://eliteaerospacecorp.wistia.com/medias/0ar2va7e8d

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 8

Email: [email protected] - Website: www.EliteAerospaceCorp.com

ENGINEERING OFFICE IN BOTHELL, WA

Power Upgrades in Progress Our headquarters for Elite Engineering
Services (EES) is located in Bothell, WA.
Although much attention tends to be
focused on the tangible parts we
manufacture, it is equally important to
understand and appreciate all the hard
work that is performed on the engineering
services side of our business, which
comprises of approximately 30% of our
revenue stream. Here’s an overview on
the developments that have taken place in
Bothell, WA this past quarter.

EES – Bothell, WA EAG offers a few major areas of services
in terms of engineering work for our
customers, and these constitute the
following:

 Engineering Design Work (tools, components & systems) EES – Conference Room
 CNC and CMM Programming (machining and quality inspection)
 Product Lifecycle Management (PLM) & Software related services

Engineering Design Work: During Q1 2019, we have
successfully provided services to Janicki Industries
(https://www.janicki.com) for different engineering related
service offerings, including prototype and product design,
component modeling and stress analysis reporting. We
also provided a continuation of services to Ducommun
(https://www.ducommun.com/) for the A320 Blocker Door
SOW (Statement of Work) and for the TOW Missile Case
Project (Phase 3). Our next step is to tactically transition
these two particular projects with Ducommun into long-
term manufacturing opportunities that can be supported
out of our Tustin, CA Facility. EAG and Ducommun are actively engaged in these discussions at this time
and we will keep everyone apprised of the outcome, anticipating good news for Elite. Another customer
we have supported this past quarter with engineering design related services is Applied Composite
Structures (https://www.appliedcomposites.com/) headquartered in Lake Forest, CA. We remain excited
to grow our business with Applied Composites and further establish ourselves as their supplier of choice
for both engineering services as well as manufacturing opportunities in the near future.

CNC and CMM Programming: From single part configurations to multiple part work packages, our
engineers have worked diligently to support a variety of customers with complex programming support.
These are instances where we are asked to write machining programs specific to the machine tool assets
available by our customers. This very factor demonstrates how well versed our engineers are in many
different types of machine tool technology, approaches to manufacturing and simply the various brands
and features of the different machines that exist in the marketplace. As much as it is important to
approach the machining process as effectively as possible, it is just as imperative to approach the
inspection process as accurately as possible. Accordingly, our engineers are frequently contracted by our
customers to write programs for their CMM’s (Coordinated Measuring Machines) that are utilized to
perform quality inspections on components as a part of the manufacturing process. Some of the
customers we have supported include Pioneer Human Services (https://pioneerhumanservices.org/),
Imaginetics (https://imagineticsllc.com/) and Hinds-Bock Corporation (https://hinds-bock.com/),
demonstrating EAG’s capability to support industries outside of Aerospace, Defense and Orbital Launch.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 9

Email: [email protected] - Website: www.EliteAerospaceCorp.com

Product Lifecycle Management (PLM): As a newer

addition to our engineering services operation,

referred to as Elite Digital Enterprises (EDE), our PLM

Team has done a great job developing a significant

presence in the marketplace. In partnership with PTC

(https://www.ptc.com/en/) and their product line of

specialized engineering software related products

such as Windchill, Mathcad, Creo and Augmented

Reality (AR) Tools & Solutions, we have quickly

developed ourselves as experts in the utilization,

implementation and application of their products. This

capability to cross-support in this way has evoked

great feedback from our customers because in many

Engineering Hub – Bothell, WA cases, they would rather be supported by a fellow

Aerospace engineer and manufacturing expert than

your usual tech support that doesn’t understand the true application and intent of the software. Our tribal

knowledge and inherent understanding lend comfort and confidence and ultimately yields a level of

satisfaction that we intend to draw upon for new opportunities in other areas of the business where we

can support. Accordingly, our PLM Team has serviced an array of customers this past quarter, such as

Infinity Systems Engineering (https://www.infinity.aero/isepublic/) with Creo Software, Triumph Group

(http://www.triumphgroup.com/) for Creo Design and Simulation Software, and even Ducommun

(https://www.ducommun.com/) with a new Creo Subscription for services, which really brings this

particular customer full circle in utilizing most of the products and service offerings available at EAG.

Overall, we are seeing impressive growth in Q1 2019 and look forward to witnessing what more our team

can do in the remainder of the year. Furthermore, our Director of PLM, Stuart Weiler recently contributed

to wonderful industry article published by AdvancedManufacturing.Org entitled, “Beyond Niche:

Alternative Manufacturing for Aerospace Parts:” https://advancedmanufacturing.org/beyond-niche-

alternative-mfg-aerospace-parts/. Beyond providing an industry overview on new technologies being

deployed by industry leaders, the article briefly showcases how EAG is using new or alternative Methods

of Manufacture (MoM) to approach our customer’s ever-changing machining requirements. This is

especially in demand for highly complex components, or where high-volume manufacturing and

innovative ways to manage these types of production lines are deemed extremely value-added by the

industry. EAG is proud to be considered a trend setter in this space and looks forward to continuing with

bending the norm when it comes to innovative ways to engineer and manufacture components for our

customers.

Please enjoy this brief video clip from Wade Johnson,
General Manager of EES, where he provides a quick

overview on some recent developments in our
engineering division in Bothell, WA.

EES – Bothell, WA

Video Link: https://eliteaerospacecorp.wistia.com/medias/2li1b6ckoe

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 10

Email: [email protected] - Website: www.EliteAerospaceCorp.com

BOZEMAN, MT ENGINEERING & MANUFACTURING FACILITY

Since EAG acquired Montana Design and

Engineering (MDE) in late 2017, our teams

have integrated wonderfully which has led to

significant growth in this division of the

company. Based out of Bozeman, MT we

previously reported on how successful the

team has been on supporting multiple work

packages for various customers, like The

Boeing Company (https://www.boeing.com/),

specifically their Rotorcraft Division as well

other commercial & defense aerospace

Arial View of Upcoming Facility clients. Please recall that these packages
typically consist of custom designed,

engineered, manufactured, assembled and

kitted aluminum tooling components. Well shareholder family, our business has definitely grown; so much

so that we are happy to announce that EAG will now be offering manufacturing capabilities in Montana.

Factory Update – Below is the intended layout for our newest facility, which will be geared towards
providing both Engineering & Manufacturing solutions in Bozeman, MT:

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 11

Email: [email protected] - Website: www.EliteAerospaceCorp.com

The vision for this new factory is to harmonize Tenant Improvements Underway
our engineering team’s design capabilities with Tenant Improvements Underway
the ability to now offer light manufacturing
solutions for prototype precision machining
directly in-house from Bozeman, MT. We will
also ensure this facility has the capability of
supporting low to mid-volume production runs
for our customers, as well as general assembly
capabilities when it comes to installation of
typical hardware, such as rivets, nutplates and
helicoil inserts. Likewise, they will also have the
capability to integrate and assemble multiple
components into larger sub-structures where
applicable, much like we do in our Tustin, CA
Facility, and perform the necessary Quality
Inspections required as a part of the production
process. Presently, the new factory is
undergoing the necessary building and tenant
improvements that are required to ready the
space for our team to move in. Our team will be
able to occupy the space in mid-May 2019 and
we are excited to provide further updates accordingly.

As for customers we have supported in Q1 2019, EAG has reported in prior publications on much of the

work we have done thus far out of Montana, including multiple divisions of The Boeing Company

(https://www.boeing.com/) and Safran Aerospace (https://www.safran-group.com/). In fact, in our last

Monthly Snapshot, we reported on a

Safran Tooling Components specific tooling project that we are currently

managing for Safran in support of their

customer, Bombardier. Recall, these

metallic tools were designed to support a

multi-functional monument panel bond

fixture that accommodates twelve (12)

unique closets, galleys and lavatories for

the cabin interiors of the aircraft.

Specifically, these interior monuments are

in support of customer introductions on the

CRJ 900 aircraft for Bombardier, which are

typically used for airlines such as Delta

Connection & Delta Airline, Air Canada,

Northwest Airlines and Lufthansa. Well

since then, our Assembly and Integration

team has made some major headway (as

pictured on the left) on these deliverables,

and they have assembled some beautifully

complex, large integrated components this

work package. The quality requirements

are quite stringent for these parts and we

are very proud of our entire team’s hard work, from designing these components, to manufacturing them

to now assembling them into their intended structure to support their end use for the CRJ 900 aircraft.

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 12

Email: [email protected] - Website: www.EliteAerospaceCorp.com

Please enjoy this brief video clip from Mark
Blomstrom, Operations Manager of our Bozeman,

MT Facility, as he provides a quick overview on
some recent developments in his division and plans

for our upcoming manufacturing capabilities.

Future Bozeman, MT Facility

Video Link: https://eliteaerospacecorp.wistia.com/medias/ry2ykedrd2

15773 Gateway Circle, Tustin, CA 92780 - Office: (949) 748-1299 - Fax: (949) 272-3780 13

Email: [email protected] - Website: www.EliteAerospaceCorp.com

GOVERNANCE & FINANCIAL UPDATE:

Governance Update: As noted in our last memorandum dated 3/15/19, our EAG Shareholders voted this
past quarter on three (3) major ballot initiatives, resulting in a majority of votes supporting the following:

 Removal of two (2) members of our Company’s Board of Directors (BOD)
 The effective date for the prior merger between Elite Aviation Products and Elite Acquisition

Corp., has been corrected to April 18th, 2017, consistent with Delaware law.
 The Amended and Restated By-laws have been approved and will be the operative Company by-

laws from now until otherwise modified or amended in accordance with their terms. A copy of the
Amended and Restated By-laws has been ratified and signed off by the Company effective March
14th, 2019.

Because of your support, these initiatives have been ratified and adopted by the organization. Going
forward, the Executive Management team and the BOD does have additional ballot initiatives that we
wish to bring to the shareholder’s attention for review and voting. These initiatives were initially
highlighted in October of 2018, and pertain to two specific matters:

1. Proposed Shareholder Agreement
2. Designation of Certification of Preferred A1 Shares and Preferred A Shares

We intend on bringing these matters back to vote within the next 60 to 90 days and will re-provide details
associated with these two initiatives accordingly.

Andrew Deringer - CFO

Financial Update: In Q1 2019, EAG happily on-boarded our new
Chief Financial Officer (CFO), Mr. Andrew Deringer. Andrew, a
proud investor in Elite since 2015, brings a wealth of knowledge and
experience to the team spanning nearly two decades in the financial
sector. From his work at the Federal Reserve in bank to his pre/post
IPO work with Morgan Stanley and Raymond James, EAG is
delighted to bring on this unique and expansive skill set as we
leverage Andrew’s expertise to showcase the Elite Aerospace
Group to investors and markets capable of taking the company to
the next level of capitalization in line with our growth objectives tied
to an aggressive industrialization and merger and acquisition
strategy. To that end, the company is centering Andrew’s
involvement in three key areas:

1. Elevating the financial discipline of our current team based on best practices observed industry-
wide

2. Solidifying partnership(s) within the institutional capital market front to ensure alignment with
Elite’s growth objections

3. Establishing profitability objectives and other financial metrics paramount to the future success of
our enterprise

While the above are our highest corporate priorities, Andrew will also be supporting a myriad of other
initiatives as he assimilates into the business.

Lastly, as promised in prior publications from the organization, we are pleased to provide the following
EAG internal and unaudited Quarterly Financial Reports for your review, which are comprised of financial
figures from all divisions of the company:

 EAG Balance Sheet – Q1 2019 
 EAG Profit & Loss (P&L) Statement – Q1 2019 

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Email: [email protected] - Website: www.EliteAerospaceCorp.com

EAG SHAREHOLDER SPOTLIGHT:

Considering our level of respect and appreciation for all

those men and women who have served and continue to

serve our country, we wanted to take this opportunity to

honor one of our very own Shareholders of EAG; meet Mr.

Richard A. Graham. In 1964, Mr. Graham volunteered to fly

the F-100 fighter to Vietnam. The F-100 Super Sabre is an

American supersonic jet fighter aircraft that served the

United States Air Force (USAF) from 1954-1971. Among all

the volunteers were about fifteen pilots, Mr. Graham

included. They arrived at Da Nang in the northern part of

Vietnam near the coast. After four to five months and 100

Mr. Richard A. Graham missions later, he was transferred to Headquarters 17th Air

force in Ramstein Germany where he remained for three

years. In January of 1968, Mr. Graham was assigned to

Phan Rang, Vietnam with a planned stop to upgrade his F-100 skills at Luke AFB. During this time the

Navy had a program called the “Top Gun,” which is actually a training program and not a rank. This

program, properly called the U.S Navy Strike Fighter Tactics Instructor program, teaches fighter and strike

tactics and techniques to selected naval aviators. Senator Barry Goldwater, a Major General in the

Reserves, also wanted the Air Force to have a “Top Gun” program as well. Accordingly, the Air Force

initiated their own version of a robust dissimilar air combat training, or DACT program with dedicated

aggressor squadrons called “Red Flag” to replicate “Top Gun.” The upgrade program in the F-100 began

in late January and ended in early June, and once concluded, Mr. Richard A. Graham was inducted as

one of the very first Air Force “Top Gun” aviators! As a side note, Mr. Graham has an award hanging on

his wall, and it was not until after the famous Top Gun movie starring Tom Cruise was released in 1986,

that his children (then teenagers) understood what that award was and saw a hero in their precious eyes.

Mr. Richard A. Graham retired four years after
his tour in Vietnam. He then went into investment
business building and buying Self Storage
facilities in Colorado, Texas, Nebraska and
Wyoming. He has 3 children, a boy and two girls.
He also has 10 grandchildren, whom he loves
dearly.

In 2016, with an invitation and help of the Super

Sabre Society, Mr. Graham was once again able

to take to the skies in his beloved F-100 after 47

years. The Super Sabre Society was formed in

2006 and consists of approximately 1,400

members. This group was formed to celebrate

and preserve the legacy of the North American

Aviation F-100 fighter jet. During the hour-long

flight, he was able to taxi and take-off while

handling the controls during the entire flight. “I

was amazed how much came back to me,

especially considering how long it had been

since I had been the pilot in command of this

beautiful jet fighter” he told us with a smile on his

face. When safely airborne, the urge to do a Mr. Richard A. Graham

fighter pilot roll was so strong, he succumbed to

it. During his flight, he was able to take the plane supersonic as well. This is when the rate of travel of an

object exceeds the speed of sound. Take a look at the action and commentary from our beloved Mr.

Graham and fellow members of the Super Sabre Society in the video link below, entitled “F-100: One

More Time.” https://aopalive.aopa.org/detail/video/5583107363001/f-100:-one-more-time

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Email: [email protected] - Website: www.EliteAerospaceCorp.com

CLOSING REMARKS FROM THE EXECUTIVE TEAM:

As many of you are aware, in recent news we all have learned of the horrible tragedies that occurred
regarding two recent airline crashes with Lion Air and Ethiopian Airlines as it pertains to the 737 MAX
New Generation aircraft. First and foremost, our entire team at Elite extends our deepest condolences,
well wishes and prayers to all those affected by these catastrophes. Situations like this are never easy to
navigate and we sincerely wish all the healing and coming to terms that can only and possibly occur over
time.

With that said, please know that Elite’s team has been closely communicating with its customers
regarding this flagship program, and to date we have not seen any deviations to our current delivery
schedule, i.e., no push-outs based on potential delays. There seems to be an extremely high degree of
confidence amongst the aerospace community that airworthiness and suitability for flight will resume
shortly. Elite is a proud partner to Boeing for this program and has been a keen observer on the
development of this platform over the past several years. Boeing’s answer to the marketplace with a more
fuel-efficient and enhanced passenger accommodation offering led to the 737 Max being dubbed “the
most efficient single aisle commercial jet in the world.” With over 5,011 Max’s on backorder right now,
Elite remains confident that the 4th generation of this iconic jet – a jet that had its first flight in 1967 – will
continue to do what it set out to, which was to revolutionize the skies by resuming normal flight schedules
in short order. Here’s a link to a video statement entitled, “Boeing CEO Dennis Muilenburg addresses the
Ethiopian Airlines Flight 302 preliminary report:” http://www.boeing.com/commercial/737max/737-max-
update.page#/message in which Muilenburg provides a comprehensive update on the initial findings from
these incidences. Of course, we will continue to closely monitor the situation as it unfolds and will report
out accordingly.

As for the outlook for 2019 and beyond, we love to see industry articles that corroborate the level of
demand, reliability of production schedules and tremendous growth anticipated ahead. This lends
confidence and validation to the Executive Management Team of EAG, and we always love to share this
type of information with each of our stakeholders so everyone can see exactly why Elite was created. To
that end, the following article from Aerospace Manufacturing and Design Magazine entitled, “2019
Forecast - The global economy may be slowing, but the demand for new commercial aircraft remains
strong:” https://www.aerospacemanufacturinganddesign.com/article/2019-forecast/ provides a
comprehensive overview of the landscape ahead for the Commercial and Defense marketplace, which
bodes a very promising outlook for all of us involved. In fact, there is also a great sub-section of this
report entitled, “5 trends affecting 5-axis machining CNC control maker Heidenhain offers these thoughts”
that perfectly captures the types of engineering approaches and Methods of Manufacture (MoM) that we
already deploy and utilize on a daily basis that has led to great growth in our customer base. This is
precisely what sets us apart from the competition; and, this is what we mean by cutting-edge technology
and having the most skilled technical team available in the market. Staying ahead the tech curve is what
we will continue to do, as we remain open-minded, adaptable and ready to challenge ourselves
technologically in order to keep up with the trends of our ever-changing industry.

We hope you enjoyed all of our updates in this Quarterly Report. Please feel free to contact us with any
questions or feedback. As always, we will continue to keep you posted and appreciate all of your support
in growing our business together!

Our Very Best,

Dustin Tillman Zeeshawn Zia Lee Smith Bobby Sawhney
CEO President COO VP – Investor Relations

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Email: [email protected] - Website: www.EliteAerospaceCorp.com

EAG EXECUTIVE LEADERSHIP TEAM

Material contained herein may include predictions, estimates or other information that might
be considered forward-looking. While these forward-looking statements represent our current
judgment on what the future holds, they are subject to risks and uncertainties that could cause
actual results to differ materially. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect our opinions only as of the date of this document.
Please keep in mind that we are not obligating ourselves to revise or publicly release the results
of any revision to these forward-looking statements in light of new information or future
events. This material will attempt to present some important factors relating to our business
that may affect our predictions. Much information and information contained herein was also
obtained from sources deemed reliable but to which no independent research has been
performed to verify or discredit.

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Email: [email protected] - Website: www.EliteAerospaceCorp.com