AeroMechanical Services Ltd.
TSX VENTURE : AMA

AeroMechanical Services Ltd.

August 09, 2006 09:44 ET

Aeromechanical Services Ltd. Announces Revised Brokered Private Placement

CALGARY, ALBERTA--(CCNMatthews - Aug. 9, 2006) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Mr. Bill Tempany, CEO of AeroMechanical Services Ltd. ("AMS" or the "Corporation") (TSX VENTURE:AMA) is pleased to announce that the Corporation has decided to terminate its previously announced non-brokered private placement (see press release dated June 29, 2006) and replace it with the proposed brokered private placement.

The terms of the proposed private placement are as follows: up to 12,500,000 units ("Units") of the Company at a price of $0.40 per Unit (the "Unit Price") for gross proceeds of up to $5,000,000 (the "Offering"). Each Unit will be comprised of one Class A common share of the Company ("Common Share") and one-half of one Common Share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder thereof to purchase one Common Share for a period of two years from the closing date of the Offering at an exercise price of $0.60 per share for the period from the closing date of the Offering to the date that is 12 months from the closing date of the Offering and thereafter at an exercise price of $0.75 per share. The Corporation has also granted MGI Securities an option (the "Agent's Option") to increase the offering by up to 3,750,000 units for additional gross proceeds of $1,500,000, all upon the same terms and conditions as set forth above and shall be exercisable prior to the closing of the Offering.

MGI Securities Inc. ("the Agent") will receive a commission of up to 7% of the gross proceeds received by AMS from sales pursuant to the Offering. MGI will also be issued, on the closing date, warrants (the "Agent's Warrants") exercisable to acquire that number of Units equal to 8% of the number of Units sold pursuant to this Offering (including Units sold on exercise of the Agent's Option). The Agent's Warrants shall be exercisable by the Agent for a period of two years from the closing, at an exercise price equal to the Unit Price, for a period of two years from the closing date.

The proceeds will be used to fund inventory, marketing, and working capital. All of the Common Shares and Warrants issued pursuant to the private placement are subject to a 4-month hold period. Closing is to occur on or about August 30, 2006. The Offer may be completed in one or more closings on one or more closing dates and in such amounts as mutually agreed upon between AMS and the Agent. Completion of the private placement is subject to the final approval of the TSX Venture Exchange.

About AeroMechanical Services Ltd.

AeroMechanical Services Ltd. provides proprietary technologies and services designed to reduce costs and improve efficiencies in the airline industry. The company has successfully commercialized three products and associated services currently marketed to airlines, manufacturers and maintenance organizations around the world. Its premier technology Automated Flight Information Reporting System (AFIRS™) and UpTime™ allows airlines to monitor and manage aircraft operations in real time, all the time, anywhere on the planet.

Certain statements contained in this News Release constitute forward-looking statements. When used in this document, the words "may", "would", "could", "will" and similar expressions, as they relate to AMS or its management are intended to identify forward-looking statements. Such statements reflect AMS's current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause AMS's actual performance or achievements to vary from those described herein. Should one or more of these factors or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. AMS does not assume any obligation to update these forward-looking statements.

AFIRS, UpTime, AeroQ and Smart Box are Trade Marks of AeroMechanical Services Ltd.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

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