A Letter to Shareholders from Heinrich Loechteken

28 September 2022

Structural Monitoring Systems CDI Holders,

It has recently come to my attention that on 20 September the Chairman of SMN, Mr. Ross Love has stated publicly that “The directors proposed by Drake do not provide skills needed by the Company and their nomination does not provide any specific benefit to shareholders”.

I have asked Drake for permission to use this website to offer my response to Mr. Love’s statement.

My background has primarily been in managing aircraft portfolios within the Airline operating leasing sector. I have held Chief Financial Officer, Chief Operating Officer, Chief Investment Officer and CEO roles over the last 22 years for some of the largest leasing companies in the world with over 1,000 aircraft in their fleet (e.g. AerCap and ILFC). Based upon the little-known or shared background details of Mr. Love, I ask him to please provide more details of his industry experience.

I am holding currently over 1.6M shares of SMN. I am a very large shareholder and have been patiently waiting to see the CVM™ sensor technology become commercialized. Therefore, as a large shareholder I have been very concerned (as have many) about the recent activities at the Board level, more specifically since October of 2021.

I have never worked with or been associated with Mr. Anthony Faillace, Andrew Roberto or anyone at Drake management. I did however reach out to them earlier this year since they are the major shareholder of SMN to learn more about the issues which were being publicly announced. I also reached out to Mr. Steve Foreman, the then SMN Investor Relations representative of the company, during the same time to discuss the same issues.

I would like to take this opportunity to introduce myself to you and to provide a clear explanation of the relevant industry experience I have gained throughout my 30 + years in the airline industry, and why I have accepted the nominee request from Drake Management and why I believe I am qualified to represent all shareholders.


I have worked in several executive roles within the aircraft leasing industry which spans across Aircraft and Engine Investment and Leasing, Airline Marketing, Credit Risk Management, Technical, Finance, Treasury, Legal, Accounting and Tax. Aircraft and Engine Investments are assessed by Airline Fleet Planning and Technical divisions, and they are very closely related – a leasing company will not invest into aircraft it does not understand from a technical capabilities’ perspective.

In my role as Chief Investment Officer for various leasing companies I have purchased aircraft from airlines, leasing companies and from OEMs (Airbus and Boeing), well over 50 Bln USD worth in aircraft. These decisions are never stand-alone – they are a result of detailed discussions between operating lessors and airline fleet planning departments to assess the demand of the aircraft ordered, or purchased, and agree upon their technical capabilities. I have led technical teams at operating lessors with up to 50 engineers responsible for all technical aspects in aircraft purchases/orders, sales, leases, conversions from passenger to freighter aircraft, and evaluating aircraft scrap values to determine their disposition at the end of their useful life.

I was the CFO and Chief Investment Officer of AerCap (now the largest aircraft leasing company in the world) and oversaw the preparation for the AerCap IPO in 2008. I lead the team responsible for the acquisition of Aero Turbine (one of the largest part-out companies worldwide at the time) and served on the Aero Turbine board for 6 years. Aero Turbine dealt with parting out aircraft and selling the aircraft and engine parts back to MROs and airlines.

I joined ILFC in 2010 as their Chief Investment Officer (the largest leasing company in the world back then). ILFC was owned by AIG and was mandated by the US government to sell this business unit. I was hired specifically to help prepare ILFC for a sale or IPO (which happened in 2014).

I have worked with Mitsubishi Corporation and Cheung Kong to set up their combined aircraft leasing activities and helped Mitsubishi Corporation to sell their wholly owned aircraft leasing company MCAP to Cheung Kong, which subsequently became ACMK Aviation.

Over the last 4 years I have held the CEO position in JLPS Ireland Limited, an aircraft asset manager with over 100 aircraft under management.

Prior Relationships:

Through my career I have come to know Mr. Rick Deurloo and Mr. Rich Poutier for many years, therefore I already have a good working relationship and understanding of key people associated with the Board and the future Business Development success of the company.

Why I want to serve on the SMN Board:

- I am a large shareholder of the company

- I have previous board experience, and worldwide industry contacts

- I have more airline industry/commercial aircraft experience than everyone else on the board combined, except for Rick Deurloo.

Ever since being introduced to the technology in 2018 by Rich Poutier, I have been intrigued by his level of experience and enthusiasm about the potential this technology has for the airline industry. As such I am already extremely invested to see it succeed and believe that my industry background and contacts throughout the world can help Rich and his team to expedite the introduction of the technology to the industry, As a large shareholder I do not believe someone else could better represent my interests than myself.

I have worked with many OEM and airline C-suite executives to assist them with future fleet planning. During a period of my career when I was employed by Aer Cap as their CFO/CIO, I provided oversight of Aero Turbine, a subsidiary of AerCap which purchased and sold engine parts. This operation had approximately 180 employees and gave me an opportunity to understand the challenges of growing a small company and then, at the direction of the board, position it for an eventual sale / IPO. I served again on the Aero Turbine board for 3 years after the acquisition of Aero Turbine while I was at ILFC.

I have also served as the Chairman of the board of AerVenture, a Joint Venture Company between AerCap and a Kuwaiti investor owning 70 Airbus aircraft.

I currently serve on the board of Bleriot Aviation, a Joint Venture between JLPS Ireland and Airbus Industries. Bleriot Aviation is an operating lessor with about USD 1 bln of capital available to buy Airbus aircraft form airlines for future sell down to Japanese Investors.

For all the above reasons, I would like the opportunity to share my experiences with the board and management to take SMS into the next phases of growth and success.


As stated above, I am a large shareholder and I am very interested in helping the company achieve its next phases of success, and giving the opportunity to join the SMN board and to share my 30+ years of experiences to the board and management would be an honor, I will bring value to the board and company by providing guidance through the important growth phase of the company , ultimately creating and building value FOR ALL OF US SHAREHOLDERS.

I look forward to your support.


Heinrich Loechteken