Martin Jetpack bolstered by Chinese funder

Martin Jetpack Company has posted a $24 million loss, but will continue development with financial support from its majority shareholder, China-based KuangChi Science.

Martin Jetpack chief executive James West estimated that developing a commercially viable turbine engine could take three years and cost about $50m, in addition to the $50m already invested.

KuangChi Science has provided $2m since June to keep the company going. It has just released $10m of an available $57m loan to provide months of work.

KuangChi, which is headquartered in Shenzhen and listed on the Hong Kong Stock Exchange, may convert the loan into a greater shareholding above its current 52 per cent if efforts to raise more public funding are unsuccessful.

KuangChi Science was in the news earlier this week when a Canterbury University academic’s report detailed its activities in developing space technology in New Zealand, and also described Jetpack as a ‘‘near-space’’ company.

West chuckled at the description and said space was not on Jetpack’s agenda. for another 12 Rather, its characteristics were more like a helicopter.

He said the company was working on two main areas – further refining its Series 1 fan duct engine aircraft for demonstration, and developing a new turbine engine for commercial sales.

The fan duct engine must be stripped down after 10 hours’ operation compared with other engines that could go for up to 1500 hours, West said.

The funding from KuangChi goes hand in hand with Series 2 turbine development, including a capital raising to help repay the loan.

The auditors said there was ‘‘material uncertainty’’ about the company continuing as a going concern.

‘‘The company is still a pre-revenue startup and does not have a certified commercial product,’’ West said.

The notes to the accounts reveal the company sold three Jetpacks in early 2017 to KuangChi Dream Technology Company for $1.2m at a loss of $193,040.

The annual accounts for the year ending June 30 show a write-down in assets of $17m, which included $3.1m in salaries and directors fees of $263,821.

Martin Jetpack sold its Christchurch Airport hangar for $400,000 in August. Staff numbers have also been reduced.