The determination of the existence of a control deficiency related to these matters, which has been classified as a material weakness in the Company’s
internal controls over financial reporting, and the need to assess possible non-compliance with all non-financial covenants commenced when the
Company’s senior management became aware that certain pledged and leased helicopter engines were not matched to specific pledged or leased
helicopter airframes or returned to such airframes within specified periods, as is required under certain of the secured financing and helicopter lease
agreements. The removal and replacement of engines and components from helicopters is part of the Company’s normal ongoing maintenance
activities; however, since certain of those helicopter engines and airframes are pledged to lenders or leased from lessors, the removal of a pledged or
leased engine from a pledged or leased airframe can create issues of non-compliance with certain of the secured financing and helicopter lease
agreements. All issues related to this matter were cured prior to December31,2018 for all but nine helicopter engines (relating to three agreements)
where the pledged or leased engines were not returned to the pledged or leased airframes within specified periods due to delays with certain of the
Company’s maintenance service providers. The Company has obtained waivers of such non-compliance under the applicable agreements related to
such helicopter engines. The issues detected, which have all been cured or waived, involve a small subset of the approximately 385 helicopter engines
that are subject to the Company’s secured financings or helicopter leases.
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