Funding, Lack of Investors Temporarily Grounds Carter Aviation

Sept. 2, 2014
Carter Aviation Technologies in Wichita Falls has made the impossible possible, but now it needs investors and aerospace manufacturers to buy licensing agreements to get the company off the ground.

Sept. 01--Carter Aviation Technologies in Wichita Falls has made the impossible possible, but now it needs investors and aerospace manufacturers to buy licensing agreements to get the company off the ground.

Owner Jay Carter said he has traveled out of country to visit with aerospace companies interested in the technology, a slowed-rotor aircraft that reduces drag. But a lull in activity due to finances has posed some challenges in demonstrating the capabilities of the four-person personal air vehicle.

"Our plan has been to license the technology to aerospace companies worldwide," he said Friday. "That's still our game plan."

One company had purchased a licensing agreement for the aircraft but eventually pulled out. Carter said AAI Corp., an aerospace and defense development and manufacturing company in Maryland, licensed the technology and committed money to the venture.

He said AAI was "excited" when the Wichita Falls Economic Development Corporation agreed in 2009 to put up money for the project, too.

Even with the commitments from AAI and the WFEDC, Carter said he and AAI knew that wouldn't be enough to develop the technology and prototype. Local investors would be needed.

AAI put up all of the money it had committed, he said, and the WFEDC had contributed most of the funds it had promised based on performance milestones. Carter said they met seven of the eight milestones.

"But the big hiccup was we were not able to get local investors," he said. "So this really hurt us and our ability to ramp up and get the prototype flying as soon as we would have liked."

Because of delays and funding issues, AAI wasn't willing to provide additional money to the project, Carter said.

He explained that aerospace companies want to show the military operational prototypes to get military contracts.

"We fell short. They didn't get the military contracts they expected to get," he said. "As a result, they shut down."

Carter is looking to sell his technology to companies again, mostly outside the United States.

He isn't disclosing which countries he's visited but said the aerospace companies are big in the industry.

One thing that will help is a possible 24-month extension on paying back the roughly $3.3 million to the WFEDC.

Carter Aviation and the WFEDC recently agreed to terms of the $3.3 million payback, but the board and the Wichita Falls City Council must approve it.

The initial repayment schedule began in April when a $117,187.50 payment was due. Carter has not been able to make that payment.

Should the extension pass the WFEDC board and the City Council, a new repayment schedule would begin in April 2016.

In return for the extension, Carter Aviation would give 20 percent of all licensing sales to the development corporation.

Kevin Pearson, senior vice president of economic development for the Wichita Falls Chamber of Commerce & Industry, said the WFEDC has given the aviation research and development company $468,750 loans for each of the seven milestones met. As part of the new agreement, the individual loans would be combined into one.

"It will make life a whole lot easier for everybody involved," he said.

Carter said the extension would help lure in investors or companies to purchase licenses because funds would go toward the project, not to pay off notes.

Follow John Ingle on Twitter @inglejohn1973.

Copyright 2014 - Times Record News, Wichita Falls, Texas