KuangChi and Martin Aircraft will also embark on a joint venture, taking a 51 percent and 49 percent stake respectively in HKCo, which will be responsible for distribution, sales and development activities on behalf of Martin Aircraft in China and Hong Kong once the jetpack has been fully commercialised. Should KuangChi sell its stake, and Martin Aircraft buy it via a share issue, the Chinese investor's stake in the jetpack company will rise to 55 percent.
The funds raised will be used to help make the jetpack a commercial venture in 2016, and cover ongoing costs in the interim. Martin Aircraft expects to make its first jetpack delivery in the second quarter of 2016. It has a letter of intent from the US Department of Homeland Security for the provision of jetpacks and says it is negotiating another letter of intent with an undisclosed business which is in the "renewable crude oil production" sector.
KuangChi, which is Shenzhen-based and incorporated in Bermuda, was developed last August after technology business New Horizon Wireless recapitalised Hong Kong-listed paper and packaging company Climax International, and changed the business to focus on "novel near-space technology", according to the supplementary prospectus.
Last November it signed a memorandum of understanding with Airways Corporation of New Zealand and Shanghai Pengxin Group Company, to "work together to test launch near space flying apparatus in New Zealand" was witnessed by China President Xi Jinping and Prime Minister John Key, the document said.
Martin Aircraft's first IPO documents in October detailed a failed joint venture in China with the 27th Research Institute of China Electronic Technology Corporation to manufacture and sell jetpacks in China, Hong Kong and Macau, to be called the Haiying Sino-New Zealand Special Aircraft Manufacture Company. No 27 paid US$460,000 to set up the joint venture, but then backed out in 2013 and demanded repayment, which based on legal advice.
Martin Jetpack refused.
The New Zealand firm has received government funding to develop its prototypes and in September raised $6.5 million in an oversubscribed pre-IPO private placement, selling shares at 30 cents apiece to a mix of sophisticated and high net worth investors, taking its share register to 125, it said in a statement at the time.
The offer was $1.5 million more than the original $5 million Martin Aircraft sought, of which $1 million came from an Asia-based venture fund. The investors were largely Australian, with several from the US, New Zealand, and Asia.
The jetpack can fly for 30 minutes with a 30 kilometre range at speeds of up to 74 km/hour, compared to its nearest competitor, with only 30 seconds of flight. Martin Aircraft wants to target the light helicopter market with its jetpack, dividing potential customers between government, for surveillance and remote operations uses; first responder, for emergency, security and rescue uses; and recreational, tourism and flight school uses. It also plans to develop the Martin Skyhook, a robotic jetpack for use in conflict and search and rescue operations.
The updated offer has been extended until Feb. 13, with a special meeting for existing Martin Aircraft shareholders to approve the KuangChi investment held by Feb 16. Martin Aircraft expects to debut on the ASX on Feb. 23.
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