LAS VEGAS, July 26, 2007 (PRIME NEWSWIRE) -- AirScooter Corporation (Pink Sheets:ASCO), an innovator of new air vehicle technology, announced a modification to the engine production arrangement between its wholly-owned subsidiary, AeroTwin Motors Corporation, and Sky USA (formerly Astro Products). While initial production engines are being successfully produced from purchased and machined components from a variety of domestic and international suppliers, it has been mutually agreed the fixed price arrangement is not in the best continuing interests of the project. Startup production costs have exceeded Sky's expectations and AeroTwin desires to have greater control of timing and sources of production. The modified arrangement provides as follows:
* AeroTwin will manage production and assembly of future engines including completion of the first batch of 100 engines of which 15 have been assembled. * Sky USA has assigned the inventory of engine parts and work in process to AeroTwin. * Sky USA will continue to support the production effort by providing facilities and sophisticated machining equipment and related services as agreed and will manage production of agreed upon parts from selected international vendors. * AeroTwin expects to incur approximately $500,000 of additional costs to complete the 100 engines and pay for a larger number of minimum purchase parts available for future production. * Sky USA has agreed to provide AeroTwin a $600,000 credit to be applied to various percentages of future purchases for up to four years.
"Our focus is on rapidly completing the balance of the first 100 engines and getting them in the hands of paying customers," said Dwaine Barnes, president of AeroTwin. "Response from first production engines has been positive and we plan to leverage future engine production from proceeds of early sales. While the prior fixed price arrangement offered certain advantages, we believe the modifications allow us to control our costs, manage the source and timing of production and respond to customer requirements and changes."
The patented AeroTwin aircraft engine produces an efficient 65 hp at 4200 rpm, smooth/flat torque and quiet operation ideal for a wide range of sport vehicles. For more information on the engine visit www.aerotwinmotors.com.
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About AirScooter Corporation
AirScooter Corporation is engaged in the development and commercialization of advanced manned and unmanned air vehicles and power systems for the recreational, commercial and government markets. The Company has applied coaxial counter-rotating dual rotor systems to the AirScooter(r) personal air vehicle (PAV) and AirScooter(r) Unmanned Aerial Vehicles (UAVs). The Company's wholly owned subsidiary, AeroTwin Motors Corporation, is engaged in the manufacture and distribution of the patented AeroTwin(r) 65 HP lightweight sport aircraft engines. For more information on the company, its technologies and products please visit www.airscooter.com. For information on the AeroTwin engine visit www.aerotwinmotors.com.
The AirScooter Corporation logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2588
Safe Harbor Statement: This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, particularly those risks and uncertainties inherent in the process of developing and distributing aeronautical products and engines. Factors that may cause such a difference include risks related to our limited operating history, risks associated with completing development and production of products, the risk that our products will not meet with market acceptance, the risk of future warranty and product liability claims, the uncertainty of access to capital to sustain or grow operations, achieve profitability or continue as a going concern, the failure to secure and maintain relationships with suppliers, manufacturers and other third parties, reliance on key employees and consultants, and dependence on intellectual property. Further information on the factors and risks that could affect our business, financial condition and results of operations, are contained in our public corporate documents. These forward-looking statements are based on information and management's expectations as of the date hereof. Future results may differ materially from our current expectations. AirScooter Corporation disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated.