SparrowHawks to be made in China

r.coplen

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GBA News
January 15, 2011 FOR FURTHER INFORMATION
Hank Parry/Media;
Al Waddill/Investor Information
Groen Brothers Aviation, Inc.
801/973-0177

GROEN BROTHERS AVIATION ENTERS COOPERATIVE JOINT VENTURE
AGREEMENT FOR PRODUCTION IN CHINA OF LIGHT GYROPLANES

Salt Lake City, Utah – January 15, 2011 – Groen Brothers Aviation, Inc. (“GBA”) (stock
symbol “GNBA”), announced that its wholly owned subsidiary, Groen Brothers Aviation
International, LLC ("Groen LLC"), formed to participate in the joint venture, has entered into an
agreement with Guangzhou Suntrans Aviation Science and Technology Co., Ltd. (“Suntrans”) to
form a Cooperative Joint Venture (“CJV”). The CJV will be named Foshan Suntrans-Groen
Aviation Co., Ltd. (“FSG Aviation”).

The CJV will be a limited liability company formed under the laws of the Peoples Republic of
China whose purpose is to produce in China for sales worldwide, light gyroplanes based upon
GBA’s SparrowHawk design. The agreement generally provides for FSGA to assemble,
manufacture, sell, and provide related services for GBA’s SparrowHawk Gyroplane Program,
including the most advanced version of the SparrowHawk aircraft developed to date, the
SparrowHawk III. It is expected that FSG Aviation will reintroduce the SparrowHawk III Kit into
the US and world markets, followed over the next few years by a fully assembled light gyroplane
using technology transferred by GBA to the CJV.

The agreement for the CJV will come into force upon the approval of the appropriate Chinese
regulatory authorities for which the parties are in the process of preparing the necessary papers.
The total amount of registered capital of the Joint Venture will be Chinese Renminbi
("RMB") 100 Million (approximately US$14.7 million). Under the terms of the agreement,
Suntrans will contribute RMB 75 million (approximately US$11 million) to the Joint Venture in
cash and hold 75% of the shares in FSG Aviation; in return for its contribution of the SparrowHawk
Program and transfer of certain advanced gyroplane technology, Groen LLC will hold 25% of the
shares valued at RMB 25 million (approximately US$3.67 million).
GBA considers the formation of this Joint Venture particularly of value because the Chinese
government has announced that it has begun a program to open to the public, Chinese airspace
below 3,000 meters. “An aircraft that’s easy and safe to fly, highly maneuverable and needing only
a very short runway, which is essentially what the SparrowHawk Gyroplane is, ought to be very
popular in China, as the country opens up to a new generation of private pilots,” said GBA’s Vice
President of Business Development, Al Waddill, “especially since demand for personal aircraft
should be far beyond the capability of China’s current general aviation infrastructure.”

About Groen Brothers Aviation, Inc.
Groen Brothers Aviation, Inc. has been developing gyroplane technology since 1986 and is
recognized as the world’s leading authority on sustained autorotative flight. Powered by a Rolls-
Royce gas turbine engine, GBA developed the world’s first commercially viable modern gyroplane -
the first “autogiro” to utilize a jet engine - the Hawk 4 Gyroplane. The Hawk 4 was used
extensively for security aerial patrol missions during the 2002 Winter Olympics in Salt Lake City.

GBA announced in October 2005 that DARPA, an arm of the United States Department of
Defense, awarded a contract to GBA to form and lead a team to design a proof of concept high
speed, long range, vertical takeoff and landing (VTOL) aircraft designed for use in Combat Search
and Rescue roles. This modern rotorcraft, named by DARPA as the “Heliplane,” is designed to
exploit GBA’s gyrodyne technology; offering the VTOL capability of a helicopter, the fast forward
flight of an airplane, and the safety, simplicity and reliability of a GBA gyroplane. GBA completed
Phase I of the Heliplane contract and also participated as a subcontractor to Georgia Institute of
Technology for tip-jet noise reduction work for Phase IB, which was also successful. To date
DARPA has not announced funding for Phase II and the future involvement of the Company in the
DARPA contract is unknown. The Heliplane could be the next generation rotor wing aircraft,
meeting economy and performance goals not considered achievable by any other type of VTOL
aircraft.

Further information about the Company, its products, and individual members of the GBA
Team is available on the Company's web site at: www.groenbros.com.

Safe Harbor Statement/Forward-Looking Information Disclaimer

Certain statements in this news release by Groen Brothers Aviation 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. 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 but not limited to,
the Company’s ability to fund ongoing operations and to complete its obligations under the government contract
and its other ongoing commitments. Future results and trends depend on a variety of factors, including the
Company's successful execution of internal performance plans and agreements; product development and
performance; risks associated with regulatory certifications of the Company's commercial aircraft by U.S. and
foreign governments; government bid and funding availability uncertainty; other regulatory uncertainties;
performance issues with key suppliers and subcontractors; governmental export and import policies; and the
ability to adequately finance operations including meeting its debt obligations, fund manufacturing and delivery of
products.
 

Mike484

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It will be great to see the Sparrowhawk back in production. Maybe they will also offer the RAF mod too.
 

gyro john

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why cant we makem here...cessna sales arent what was expected. people wont support foreigh made aircraft
 

Russ Hobbs

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Good news for someone who has one and was worried about parts availability.
 

scottessex

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There is enough people here out of work, (in the US) I think you could find someone willing to work here. Problem is all our products are made overseas, and this funds the China military machine. They hold our gov debt. They Will take over the US. Because WE have made their military stronger and their manufacturing stronger, and their economy stronger.
just because we want cheap ****. Get ready to hand over the US to the ChiComs.
When it comes right down to it, if you have a mortgage on your house, and the gov sold the debt to the Chinese....if they recall the loan.. They own your house and property, pretty soon they own more property in the U.S. than Americans do, easy take over..

Sorry didn't mean to go off on a rant, But I am not excited by the news.
I would be much more excited if they were to built in Michigan or Ohio, etc.
 

GyroDoug

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why cant we makem here...cessna sales arent what was expected. people wont support foreigh made aircraft
Gyro John,

Because our typical Gyro enthusiasts isn't willing to pay $200,000 for a cabin class Gyro with a converted car engine powering it. No one is willing to go to the expense to get them certified and if they did, and had to pay American labor costs to assemble them and it had to be liable to the American Judicial system they would probably cost about $200,000 a piece.

While there are some general aviation types and some people with money who get into gyros, many of our ranks struggle with the thought of spending $30,000 on a gyroplane. And until there is a modern design gyroplane with a good safety record available for sale as a finished LSA Aircraft, we are going to have a hard time attracting big numbers of people who are willing to spend $100,000 to $200,000 on a gyroplane. And without a proven list of potential customers ready to buy their product (at that pricerange), no one wants to go to the expense of developing that aircraft. It's a vicious circle.
 

barnstorm2

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Want aircraft made in the US?


Kill the lawyers.

L-I-A-B-I-L-I-T-Y.

.
 

bmoore2156

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Want aircraft made in the US?


Kill the lawyers.

L-I-A-B-I-L-I-T-Y.

.
Why couldn't you just go with a L.L.C. ? If you set it up right, they could sue, but if you made sure your company had no value, they would be out of luck.
 

scottessex

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Why do you think Rotax north American Hq is based in the Bahamas?
Yep the US Lawyers cant get to them.
We need looser pays in frivolous lawsuits.
We need to dump the restrictive corporate tax burdens.
 

PW_Plack

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why cant we makem here...cessna sales arent what was expected. people wont support foreigh made aircraft
A few early orders were cancelled after the announcement they'd be built in China, but Cessna has still sold three times as many SkyCatchers as the second-place LSA manufacturer (Flight Design) has sold CTs, so sales aren't the problem. The issue is the inability of the partner in China to build them right, which has delayed deliveries.

There's more to this than reducing costs to produce SparrowHawks. GBA at one time was reportedly asking $2 million for the program. These guys are putting in $11 million for a deal sweetened with "certain advanced gyroplane technology."

Rough translation: GBA has sold the Chinese not only the SparrowHawk program, but part of the larger dream.
 

RayPierce

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Why do you think Rotax north American Hq is based in the Bahamas?
Yep the US Lawyers cant get to them.
We need looser pays in frivolous lawsuits.
We need to dump the restrictive corporate tax burdens.
Scott
You are aware that one northern state just increased it's income tax by 67% aren't you? I want to say it was Michigan.
I heard the neighboring states are licking their chops in anticipation of those industries and jobs moving from Michigan to them.
Anyways ....I don't know about where you all come from but when you're bleeding badly you don't stem the flow by cutting yourself again.
Or....I'm missing something.
 

Chuck Roberg

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I want to say it was Michigan.
Actually it's the great state I live in, Illinois. (note the sarcasm as I typed this).

I heard on the radio Wisconsin is already wooing companies to move from the Chicago area to the Milwaukee area.
 

gyro john

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were all in trouble, we must buy american and we cant afford it. but when we shop TRY TO FIND AN AMERICAN PRODUCT? how will our economy inprove if we dont have the choice to buy american. the politicians sold us out.........
 

gyro john

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really, go into a store IE: Macys I went with my wife to buy me a shirt 90% of the shirts were made in china. so probably 90% of our gnp goes to china we are in trouble and getting deeper in dept every day. enough about that lets get back to motors and rotors.... Thanks I feel better
 

WHUBBS

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A few days ago i went shopping for a floor model band saw, went to 4 tool stores, in a 50 mile radius, and none of the stores have an American made band saw, ended up purchasing a 12 inch, at Sears, made in China. the only small saber saw i could find made in America was a DEWALT, but they did not have a floor model saw. I traveled a lot of miles, trying to buy American, and give up. The Sears China saw will be delivered to my house in the morning as they did not have one in stock, except for the floor display, and they will not sell that one.
 

bmoore2156

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I would worry about all the materials being up to par. I have seen china bearings fall apart after just a few hours of use. The chinamen are sneaky as well. Your lifting devices in the workplace such as shackles are suppose to be all made in the USA according to OSHA regs. (And I am sure most if not all states)
There is a place in china called U.S.A. and they stamp all the shackles they make there as such. Sneaky fellas they are.
Brad
 

Heron

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Couple of words
Financial operation. That is what GBA is after . . .
Pitty that Made in USA is no longer the best tag out there. I miss those times!
A friend wanted a folding knife (canivete) and asked me to find one of the old ones Made in USA, after I gave him the prices he settled for a chinese copy.
We love gyros, some people need gyros, but the grey suits only love and need money!
The cost of living in the US today, makes impossible for a brazilian to go there and try to save some mula to invest in Brazil, that is no longer possible. Maybe they found a way to stop the immigrant inflow.
The exchange kills any project . . .
Heron
 

Doug Riley

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One of the more effective ways to resist the "China syndrome" is to boycott Walmart. I do.

And, no, I wouldn't buy a gyro made in Red China, either, on general principle. The concept of "mandatory technology transfer" is particularly disturbing.
 
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