Eder has updated the Standoff website with a progress report and a whole host of exciting new screenshots! Their news update goes into more specifics than I could, but suffice it to say Episode 3 is coming along smoothly! They've also added Cougar's profile to their characters section.
Episode 3 is coming along - the missions are progressing nicely, we have implemented about 60% of the voiceovers, and both versions of the intro cutscene are done, except for the music... but that's because Michael's been busy working on the music for the video cutscenes, which is almost done! The fiction is not progressing because Quarto is doing other stuff, but he says the fiction will be done in a day or two when its turn arrives.