Groen Brothers Aviation Receives Three Year $50 Million Equity Financing
Commitment
SALT LAKE CITY, May 3, 2001 (BUSINESS WIRE) -- Groen Brothers Aviation Inc. (OTC
BB: GNBA) Thursday announced that it has received a binding commitment from an
institutional investor to provide up to $50 million in equity financing.
Groen Brothers Aviation (GBA) is the developer and manufacturer of the Hawk 4
Gyroplane. The Hawk 4 is a four passenger, near vertical take-off and landing
aircraft that is powered by a Rolls-Royce model 250 gas turbine engine. The Hawk
4 is a new alternative to helicopters with many advantages, not the least of
which are safety and low operating cost.
Over the next three years, Groen Brothers Aviation Inc. (GBA) will have the
right to obtain as much as $50 million through the issuance of common stock to
the institutional investor in a series of periodic draw-downs. The timing,
dollar amount, and minimum price per share of each draw-down, are at the sole
discretion of GBA, subject to certain contractual provisions which include
volume and price limitations.
This commitment is subject to the effectiveness of a registration statement to
be filed with the Securities and Exchange Commission covering the resale of the
shares covered by the equity line and certain related warrants.
"The advantage of this type of financing is that we can sell our shares during
periods of strength in the market price of our stock, thereby enabling the
company to minimize dilution while raising capital," said David Groen, president
and chief executive officer of Groen Brothers Aviation Inc.
"Over the next three years we expect to sell our shares at ever increasing
prices, to meet our financial needs."
Groen continued, "The process of developing a new, FAA Type Certified aircraft
and bringing it into the market place, is a large puzzle with many complex
pieces necessary to complete the picture. The final piece for us is sufficient
funding. We believe that this funding package is that final piece.
"We already have in place the other necessary pieces to this puzzle: design,
engineering, drafting and modeling; manufacturing, manufacturing engineering and
tooling design; quality assurance and product support; sales, marketing and
public relations; and a highly competent and experienced administrative and
management staff.
"Our production tooling is already built and paid for. Our aircraft is
performing marvelously and routinely. It impresses everyone who sees it fly. In
short, we have the right team, at the right place and at the right time, with
the right product. And now, the right funding," said Groen.
Groen Brothers Aviation is developing modern gyroplanes for the commercial
world. In the last 10 years, GBA has flown several models of its gyroplane line
including proof of concept aircraft, technology demonstrators, and production
prototypes. Each month the company performs a flight demonstration of its Hawk 4
Gyroplane at either its Arizona facility near Phoenix or at a national venue.
These flight demonstrations are attended by GBA shareholders, the public, and
prospective customers. Most recently the company's Hawk Gyroplane flew at the
Hiller Aviation Museum in California and at the EAA "Sun 'n Fun" air show in
Florida.
GBA is well into the process of FAA Type Certification of the Hawk 4 Gyroplane
and has a nationwide dealership network that has brought to the company cash
deposits on more than 140 aircraft.
GBA is fully reporting and publicly traded on the OTC Bulletin Board, stock
symbol (GNBA). For additional information, access GBA's Web page at:
www.gbagyros.com or you can e-mail sales@gbagyros.com or write to: Groen
Brothers Aviation Inc. 2640 W. California Ave., Suite A, Salt Lake City, UT
84104-4593.
Safe Harbor Statement/Forward-Looking Information Disclaimer
Certain statements in this news release are forward-looking within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.
These include statements relating to the amount of money that may be drawn under
the financing agreements and the number of shares of common stock that the
company may issue under the equity line financing.
Such statements are subject to substantial risks and uncertainties, including
(i) the risk that low dollar trading volume in the company's stock during the
three year draw-down period will affect the size of individual and aggregate
draw-downs; (ii) the risk that a drop in the price of the company's common stock
and its need for additional financing might compel it to engage in highly
dilutive draw-downs; (iii) the risk that the company is unable to meet
particular conditions for draw-downs, including, without limitation, the
registration of the stock to be sold in a draw-down and shareholder approval for
certain levels of dilution.
Actual results, events or performance could differ materially from any future
performance suggested above.
Factors that might cause such a difference include, but are not limited to,
market conditions and the availability of separate third-party financing that
could impact the company's ability to control any dilutive impact, and its
ability to remain in compliance with the terms of the equity financing line, as
well as other risk factors described in its filings with the SEC.
The company undertakes no obligation to publicly update these forward-looking
statements to reflect events or circumstances that occur after the date hereof
or to reflect any change in its expectations with regard to these statements or
the occurrence of subsequent events.
Forward-looking information is subject to risk and uncertainty. Certain
statements in this press release may contain "forward-looking" information that
involves risk and uncertainty, including projections for deliveries, sales, and
other trend projections.
Actual future results and trends may differ materially depending on a variety of
factors, including the company's successful execution of internal performance
plans; product performance; risks associated with regulatory certifications of
the company's commercial aircraft by United States and foreign governments;
other regulatory uncertainties; collective bargaining labor disputes;
performance issues with key suppliers and subcontractors; governmental export
and import policies; and the ability to adequately finance operations to the
date of FAA certification and manufacturing.
CONTACT: Groen Brothers Aviation Inc., Salt Lake City
GBA Marketing, 801/973-0177
www.gbagyros.com
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KEYWORD: UTAH ARIZONA CALIFORNIA FLORIDA
INDUSTRY KEYWORD: AEROSPACE/DEFENSE
AIRLINES
TRANSPORTATION
STOCK SYMBOLS: [(gnba)] |
