July 2006 Update

Innodyn continues to move forward with testing and limited production of our turbine engine. In early July, we shipped an additional production engine for installation and field-testing. The engine is a Model 205TE and is being installed on a new RV-8T. Initial results on flight performance should be available in September-October. Data collection continues on the next engine in our test cell. Results thus far indicate shaft HP and SFC numbers in the ranges initially projected.

The joint UAV project with the University of Kansas is moving to the next stage. Innodyn will provide a turbine engine to them for ground testing in early August. Flight-testing is still expected in 2007. We look forward to the roll out of this project and the valuable independent data it will provide on our turbine. Periodic updates will be posted throughout 2006-07 on this important effort.

Innodyn is in the final stages of securing a significant equity investment that will provide the long-term capital needed to launch the Company into full production for the aviation market and continue product development for entry into power generation, marine, and U.S. Government markets in 2007. We expect this funding effort to be completed by September-October 2006. In conjunction with this funding effort, Innodyn, LLC is converting our corporate structure to a standard “C” corporation to better utilize the capital and position Innodyn, Inc. for accelerated growth.

Innodyn will be visiting 2006 AirVenture OshKosh but will not have an exhibitor booth for the show. Company representatives will be attending the show to further develop strategic industry partnerships and provide information to the marketplace. We will be attending July 27th–29th for individual meetings and will have product information available at our corporate partner’s booth, Turbine Cubs of Wyoming.

As always, we appreciate your interest and patience as we continue our testing, product development, and corporate restructuring efforts. We will update the website as we reach milestones in each of these efforts.

(posted: 07/20/06)