SALT LAKE CITY, UT -- (Marketwire) -- 12/14/12 -- Groen Brothers Aviation, Inc. (GBA Inc.) (PINKSHEETS: GNBA) announced today that it has transferred substantially all of its assets to its subsidiary Groen Brothers Aviation Global, Inc. ("GBA Global"), while simultaneously substantially all of its creditors exchanged debt obligations owed by GBA Inc. in the approximate aggregate amount of $186 million for approximately 87% of the aggregate outstanding equity in GBA Global. GBA Inc.'s intent to undertake this transaction was previously announced on Form 8-K filed on May 2, 2012 and Form 14C filed on May 22, 2012 with the Securities and Exchange Commission describing the transaction.
As anticipated, the recapitalization will result in the elimination of substantially all of GBA Inc.'s debt obligations which, prior to the exchange, was approximately $186 million in the aggregate. Immediately prior to the transaction, GBA Inc. transferred all of its assets -- notably all of its technologies, know-how, and associated patents -- into its newly-formed wholly-held subsidiary GBA Global, which was formed specifically for this transaction. GBA Inc. holds approximately 4% of the outstanding equity interests in GBA Global immediately following the exchange, with management holding the approximately 9% balance.
As a result of this transaction, GBA Global becomes the operating company engaged in the exploitation of gyroplane and gyrodyne technology developed by GBA Inc., unconstrained by the debt burden that limited GBA Inc.'s ability to do so. GBA Global will do business as Groen Brothers Aviation, thus retaining the 'good-will' value of the Groen name in the aerospace industry, which it has been a member of for more than 26 years. It is anticipated that GBA Global may also form additional subsidiary companies and joint venture companies ("JV") wherein GBA developed technologies will be utilized and significant additional funding may be raised in those companies to complete the commercialization of GBA Global's Civil and Military technologies, both manned and unmanned. The first of such companies is a civil joint venture, announced on Form 8-K filed on July 26, 2012, which anticipates developing an Aviation Industrial Park and aircraft manufacturing facility under an agreement with Wuhai, Inner Mongolia Autonomous Region, P.R. China, with the GBA Global JV as anchor tenant.
GBA Inc. itself will become a "non-operating" entity that, as of the date of the transaction, will derive its revenue and value from its interest in GBA Global, enabling GBA's common shareholders to retain a stake in the continued development of GBA technology. Both GBA Inc. and GBA Global will share the same facilities in Salt Lake City, UT as their respective headquarters. GBA Global is, however, taking on GBA Inc.'s website www.groenbros.com, while GBA Inc. has a new website www.groenbros-public.com, where information related to its Public Company status and stock symbol "GNBA" may be found. As a private company, GBA Global's shares will not be quoted on any stock exchange.
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