All holders still waiting for the FAA approval but some good news on the AEM money making side of the business. New radio product with orders in 24 but no details on revenue expectations.

AEM announced a new modern panel-mount radio for special-role and multi-mission platforms in Kelowna, British Columbia, on November 8 with the U.S. Forest Service and aerial firefighting operators in mind.

The company also announced that it had secured Canadian based Yellowhead Helicopters as its official launch customer, who is committing to updating its entire fleet to the MTP136D starting in early 2024.

“This new radio helps to modernize tactical aerial firefighting communications with the industry’s most technologically advanced and up-to-date panel-mount solution,” Mr Weller said.

The MTP136D boasts a robust design to ensure the highest performance in lengthy and demanding firefighting environments. It’s easily integrated for tactical systems, platform upgrades, and is a plug-and- play replacement for existing legacy radios.

The highly successful launch of the MTP136D is part of AEM’s continued investment in a growing suite of avionics and audio products into the Special Missions Aviation sector and builds on the continued strong performance of its contract manufacturing business.

SMS Group Update - Further Material Progress to Pivotal STC

Highlights:

 ~ SMS received the Statement of Conformity Certification from the FAA.

As part of the previously announced requirements to achieve STC approval, SMS has now received the Statement of Conformity Certification from the FAA after completing the CVM™ kit installation in Victorville, CA on a Delta B737-800 aircraft. This is a major milestone achieved on the well defined path toward the first STC approval. The next and final milestone is the submission of the combined laboratory test data from Sandia and Delta Engineering to the FAA. Although the FAA could request additional data from the laboratory reports, we are expecting these would have minimal impact to the overall certification timing.

What a #@$tshow! Rick Deurloo (the only aerospace experienced board member) resigns after protesting the use of his name and signature by the board without his agreement.

He backs the EGM resolutions and slams the board in an open letter to shareholders copied to the ASX and Drake. Backs their board appointments.

Company goes in to a trading halt pending an announcement which is a purchase order from Delta (the airline that SMN have been working with all along) for 4 sensor sets with some undisclosed cash payment deemed not material. Touted as a milestone for the company and projecting Aft pressure bulkhead FAA approval in H1 23. Convenient pre EGM /AGM announcement to try and satisfy shareholders. This whole debacle has been one big sorry mess. I hope that Drake get over the line, clean house and the company can get some stability to make progress. More CR to come.

Disc: held in SM and RL both at a loss

I know a bit about Structural Monitoring and the problems of breaking in to the aerospace market.

They have exactly the same issues I had at QHL. Huge barrier to entry, been at it for best part of 20 years, burns cash type business. Getting certified is a mega challenge, especially when your product is looking for defects, not something an aero company wants anyone to know about. Boeing has been spanked heavily by the FAA due to the 737Max, do you think they want anyone poking into their parts to report they were incorrectly made or they fail sooner than originally expected.

Good to have a couple of positive announcements with definite dates. Expecting FAA approval for 737 Aft pressure bulkhead application by late April and new bank finance arranged. Disc: Held

An update on the Company’s APB Certification Program and compression testing.

Delta Airlines continues to support SMS throughout this certification program, this effort is expected to result in a significant commercial revenue generation for the Company moving forward.

“This is another confirmation of the real-world performance of the Company’s ground breaking, patented Comparative Vacuum Monitoring (CVMTM) technology and provides a basis to support future applications.

The APB Certification Program continues to remain on track for Q2 approval by the Federal Aviation Administration (FAA). “Recent supportive testing has been successfully concluded at a Boeing laboratory, further solidifying the confidence in CVMTM technology. “The Compliance Report is currently being written and is expected to be completed before the end of February. “The next major program milestone is scheduled for early March, an APB installation on another Delta aircraft. “This installation will be supervised by Boeing to finalize changes to the Service Bulletin. “Invitations to observe this installation have been extended to the FAA as well as another major airline operator. “We then expect FAA Approval of Deliverables by 15 April 2023 and the Service Bulletin Release from the FAA by 21 April 2023.”

Canadian based subsidiary, Anodyne Electronics Manufacturing Corp (“AEM”), is pleased to announce that new banking and credit facilities have now been secured with the Royal Bank of Canada (RBC). The agreed facilities will ensure that AEM has suitable financing options in place to meet the ongoing growth objectives of the Company. 

Not many of my holdings with good news but SMN actually made money this quarter ($766K) thanks to record sales from AEM.

FAA approval did not happen in April now likely June/July?

Highlights

March 2023 Appendix 4C and Quarterly Update

• Wholly owned subsidiary Anodyne Electronics Manufacturing Corp. (AEM) recorded an exceptional financial performance for the reporting period with gross revenue for the March quarter of $5.86million versus $5.36million the previous quarter up 9% and 35% higher than the March quarter the year prior

• AEM recorded the highest March sales figures in the Company’s history and is on track to achieve the highest annual sales in its history as a company

• Gross revenue for the year to date is $16.27million versus $11.05million in the year prior up 47%

• Forward orders for the June quarter are currently sitting at $4.81million indicating solid continued

growth in the months ahead

• Normalised EBITDA for the year to date is $2.67million versus $2.03million up 32% on the year to date prior

• AEM recorded positive operating cashflow for the quarter of $1.67million ($1.05million for the Group)

• AEM received approval from the Japanese Civil Aviation Bureau (JCAB) following the development of its Safety Management System (SMS) which formalizes the acceptance of the delivery and installation of repairs products into the Japanese market

A short test that will take 3-5 weeks is proposed to satisfy what should be the last of the concerns for Boeing’s certification team before submitting to the FAA for approval,” Mr Lynch-Staunton said. That test is currently scheduled to start at the beginning of May.

SMS expects to provide a further update on the expected timing of FAA approval following the completion of this short test period.

SP had been pushed lower on concerns about further delays to the APB FAA certification with HC rumours about 3 more AMOCs (Alternative Methods Of Compliance ) being required. An update today from the executive chairman pushed the SP back up 23%.

Latest installation observed by 3 US airlines, Thorough evaluation allowing quicker and cheaper acceptance of future applications. Possible future use in Airbus craft and use in Boeing design and manufacture. Meetings in Japan with ANA, JAL, Subaru and KHI. Left right to the end was the acknowledgment of the additional testing required and suitably loose statement about profitability. “potential for profitable growth “. Volatility likely to remain until the certification is confirmed.

“Last week our team supervised the 23rd installation of the sensor kit on a Delta aircraft – the third “commercial” installation of this kind.

“Delta remains committed to complete the installation program over their entire fleet of 71 737’s for which this application is suitable. Engineers from United, American and Southwest attended this installation – which provides us with a solid indication that we can expect further commercial sales once the certification has been confirmed.

“The final tests requested by Boeing are now almost complete and we expect the certification package to be submitted soon.

“One of the benefits of this very detailed scrutiny, and testing of the sensors under a wide range of often unlikely scenarios, is that we will be able to demonstrate that our solution for crack detection is thoroughly evaluated such that the edge conditions are evaluated allowing faster acceptance of future applications as well as being substantially more efficient in terms of cost and time savings.

“We are also currently in the process of confirming the details of our commercial agreement with Delta for their support for our sales campaign to these and other customers for the APB application.

“I am pleased to report that Airbus has confirmed during recent presentations of our CVM technology in Tokyo that the technology is ready for commercial deployment.

“We are also in discussion with Boeing regarding opportunities to expand the set of 737 applications, with a view to having sufficient operational data in place to consider the possibility of this technology being included in future narrow body aircraft design and manufacture.

Anodyne Electrical Manufacturing’s (AEM) approval by the Japanese Civil Aviation Bureau (JCAB) following the successful development of its Safety Management System (SMS).

While in Japan, our group also held dedicated meetings at the JAL and ANA facilities where the CVM technology was introduced in detail and demonstrations were completed.

“Overall, the technology was well received, and the parties are actively engaged in following along with the certification process and learning more about potential applications for their operated airframes.

“Meetings were also held at with KHI and Subaru to introduce the Company’s CVM technology and to discuss ongoing and future projects for AEM’s special mission communication products.

“I am pleased to report that interest levels were also high at these organizations for both civil and military platforms.

“All meetings were well supported by AEM’s partner in Japan, Aero Facility.

“Whilst in Japan, AEM also signed a Memorandum Of Understanding (MOU) with Aero Facility, extending the existing agreement to provide support for CVM-related activities in Japan.

While I appreciate the ongoing frustration from shareholders regarding the commissioning of additional testing by the FAA as we move towards certification, this is a necessary part of the comprehensive certification process and once complete will pave the way for further, streamlined application processes.

“Thank you once again for your ongoing support (and patience.) I remain very confident in the near-term potential for profitable growth which will drive significant value for all shareholders.”

Held in SM and RL