Ill winds for indoor iFLY
THE operator of the iFLY indoor skydiving facility at Surfers Paradise has crashed back to Earth after losing a dispute with the US-based trailblazer of vertical wind tunnel (VWT) technology.
ASX-listed Indoor Skydive Australia Group (ISAG) had been at loggerheads with Texas-based SkyVenture International, a subsidiary of iFLY Holdings, since last year.
IFLY claimed ISAG was in breach of its licensing agreement when it announced plans to develop an indoor skydiving facility in Malaysia.
The US company claimed its agreement with ISAG restricted it from competing with or assisting others in competing with SkyVenture.
In the US, a jointly-appointed arbitrator sided in the dispute with SkyVenture and ordered the Australian company to pay $US3.789 million ($5.35 million).
THE listed operator of the iFLY indoor skydiving facility at Surfers Paradise has seen its profit plummet to Earth after losing a dispute with the USbased trailblazer of vertical wind tunnel (VWT) technology.
ASX-listed Indoor Skydive Australia Group (ISAG) had been at loggerheads with Texas-based SkyVenture International, a subsidiary of iFLY Holdings, since last year.
IFLY claimed ISAG was in breach of its licensing agreement when it announced plans to develop an indoor skydiving facility in Malaysia in partnership with that country’s largest mall – 1 Utama – under the AirRider brand.
The US company claimed its agreement with ISAG restricted it from competing with or assisting others in competing with SkyVenture.
The company had given ISAG permission in 2012 to operate vertical wind tunnels in Penrith, Perth, and the Gold Coast, that were based on its technology and designs.
It said if the breaches of the agreement were not corrected, it reserved the right to terminate ISAG’s licences for the operation of the VWTs in Australia, including the Gold Coast.
In the US, a jointly appointed arbitrator sided in the dispute with SkyVenture and ordered the Australian company to pay SkyVenture $US3.789 million ($5.35 million).
ISAG in a statement filed to the ASX confirmed that all intellectual property it possessed regarding the installation and use of VWT technology remained the exclusive property of SkyVenture.
“ISAG further confirm their commitment to SkyVenture as their worldwide exclusive supplier of wind tunnel equipment now and on a continuing basis,” the statement reads.
“ISAG will end the use of the AirRider brand, cease any activities as a franchisor or licensor of wind tunnel technology to third parties and return to its original role as an owner-operator of iFLY branded wind tunnels.”
As part of the agreement, SkyVenture has agreed to continue to license ISAG’s Australian operations and loan the funds for the settlement payment.
It loses the AirRider brand and any economic benefit from the Malaysian operation.
In addition, Simon Ward, the international president of iFLY, will join the board, which also features Shark
Tank star Steve Baxter, as a non-executive director.
The dispute with SkyVenture has been a disaster for ISAG, blowing out its loss in FY18 to $10.14 million from $891,000 in the previous year.
That was despite revenue rising from $12.3 million to $14.27 million.
The legal costs alone amounted to $2.5 million, while ISAG agreed to repay SkyVenture’s investment in the Gold Coast and Perth facilities to the tune of $2 million.
Mr Ward’s initial director’s notice earlier this week showed he is a director of IFLY Australia Pty Ltd, which has 2.5 million shares in ISAG, worth a combined $15,000.
Shares closed yesterday up 1¢ at 6¢.