AeroMechanical Services Ltd.

AeroMechanical Services Ltd.

December 02, 2011 16:32 ET

AeroMechanical Services Ltd. Named as a Defendant in an Action Brought by Sierra Nevada Corporation

CALGARY, ALBERTA--(Marketwire - Dec. 2, 2011) - AeroMechanical Services Ltd. (TSX VENTURE:AMA) ("AMA" or the "Company"), announced today it has learned that it has been named as a Defendant in an action brought by Sierra Nevada Corporation ("SNC") in the state of Utah seeking damages for the non-payment of invoices totaling approximately $2,042,000 along with interest and costs. The claims are in breach of contract, debt and unjust enrichment. AMA had previously commenced arbitration proceedings against SNC in Alberta. AMA will be contesting the jurisdiction of the Utah court and will be asserting that Alberta is the convenient forum for the determination of both disputes. Pursuant to a press release dated November 18, 2011, AMA had previously announced that it had filed an application with the Court of Queen's Bench of Alberta against SNC seeking the appointment of an arbitrator as a result of the absence of progress regarding the outstanding accounts payable. AMA has claimed damages in the amount of $1,329,976 (US) and $2,650,000 (CDN).

The Company and SNC were working together on the development of the Automated Flight Information Reporting System ("AFIRS™") 228. Late in 2010, AMA's management recognized the progress on the AFIRS 228 was not on track, delayed and over budget and moved development in-house. Since then, the Company has been attempting to resolve the issue with SNC. To date, there has been no satisfactory resolution found and in order to make progress, AMA terminated the License and Manufacturing Agreement that was executed on December 29, 2008 for material breach and has asked the Court of Queen's Bench of Alberta to appoint an arbitrator to resolve the outstanding issues. The Court as appointed an arbitrator, and the appointment may be contested by SNC.

About AeroMechanical Services

AeroMechanical Services Ltd., under the brand name FLYHT™, provides proprietary technological products and services designed to reduce costs and improve efficiencies in the airline industry. The company has patented and commercialized three products and associated services currently marketed to airlines, manufacturers and maintenance organizations around the world. Its premier technology, AFIRS™ UpTime™, allows airlines to monitor and manage aircraft operations anywhere, anytime, in real time. If an aircraft encounters an emergency, AMA's triggered data streaming mode, FLYHTStream™, automatically streams vital data, normally secured in the black box, to designated sites on the ground in real time. The company has been publicly traded on the TSX Venture Exchange since 2003 under the trading symbol AMA.

AFIRS, UpTime, FLYHT, FLYHTStream and aeroQ are trademarks of AeroMechanical Services Ltd.

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