Project Status and Funding

 

Current Project Status

Where are we?  Well, we’ve come a long way with a lot of hard work and we’ve still got a ways to go but we’re about ready to start the fun stuff (building and flying the Phoenix prototype followed by manufacturing and selling the kit).  All new aircraft programs can be broken down into four phases, conceptual design (ideas), layout (over-all aircraft geometry is fixed), detail design (structural analysis, sizing of the structural members and systems design) and prototype construction.  The Phoenix project is in the detail design phase (although some prototype construction has already begun, see the Plug tab).  That means that the Phoenix prototype is going to look like what you see on these pages. 

Typically, the detail design and prototype construction phase overlap with the detail engineering phased to stay just ahead of construction.  So, for example, construction of the airframe can begin following completion of structural analysis even though the detail design of the landing gear mechanism is still in progress, etc. and this is how we intend to do it.  The result will be a compression of the time required to get the prototype in the air and we estimate that we can have the flying bird at Oshkosh, 2009.

We plan to set up the Flight Sciences operation in San Luis Obispo, California, for very good reasons, i.e., we’ve already acquired the facilities required to house the project, Cal Poly University is located there and there’s a wealth of aircraft know-how in the area.  This is an important consideration since a substantial percentage of the detail engineering work will be contracted out in order to get it done expeditiously.

 

 

Project Funding

As you know, at the present time, the economy is not in the best shape.  In particular, fuel costs are weighing heavily.  We’ve put considerable thought into this and, in fact, have been advised by various folks that this is not a good time to go after funding because the economy is in a down cycle.  That may be true; however, history tells us that economic down cycles are invariably followed by up cycles and the U.S. economy has proven itself to be amazingly resilient, time after time after time.  We firmly believe that the economy will recover a year or two down the road.  Therefore, thinking strategically, this is the right time to start Phoenix so that this (very fuel efficient) aircraft is ready for the market two years from now.  Will fuel prices come back down to year ago levels?  Probably not.  Will folks stop flying?  Probably not.  What will they be flying?  An aircraft that delivers equal to or better mileage than their automobiles at four times the speed (among other things).

Having said that, we’ve decided to go after the funding required to complete the job and we’ve decided to do this by inviting investors to participate in this exciting and potentially lucrative project.  As in any new aircraft program, there’s some risk involved.  There always is.  We could be off base, for example, in our thinking as to how the flying public will accept Phoenix and how much enthusiasm it will generate.  We, obviously, don’t think we are off base.  We think we’re on the money.  There’s been an enormous amount of work put in to get the airplane right and we keep a constant ear to the ground listening for market noises.  If Phoenix meets the Design Goals outlined elsewhere on this site, we firmly believe it will, literally, make its own market and return very generous profits.  All we can say is that the results to date indicate that it will meet those goals. 

So, we’ll be looking for investors/partners to help us get there.  How much time and money are we going to need?  Good question and here’s the (abbreviated) story.  We’ll need approximately $385,000 and 15 months to get from here to the flying prototype.  Applying a 30% buffer for the inevitable unknowns brings it to $500,000.  Then, the Flight Test phase will require 9 months and approximately $77,000.  Again applying a 30% buffer for the inevitable unknowns brings it to $100,000.  Consequently, the total time and funding required to go from where we are to the end of Flight Test (and the initiation of production) is 24 months and approximately $600,000. 

In addition to the funds already spent in the execution of the wind tunnel test program, engine and propeller testing, construction of the airframe plug and various other work, we’ve generated approximately $170,000 from internal company funding which we are prepared to invest at the present time.  Therefore, the amount that needs to be funded externally is $430,000.  Of this amount, we already have commitments for $300,000 from interested aircraft investors.  Thus, we need an additional $130,000 to commence work and we plan to reward our investor/partners with generous equity in the company. 

Thinking as a potential investor, the obvious question is “What’s the return on our bucks?”  Our detailed analysis shows that, depending on the estimated production rate and the retail pricing of the aircraft, the Gross Profit Margin ranges from 25% to 40%. 

We’ve prepared a Business Plan that lays out all aspects of the Phoenix project in considerable detail, including an equity offering.  We’ve also prepared a very detailed financial analysis that covers all aspects of the project costs and the investor returns.  We’d be most happy to provide these documents to those airplane folks who are interested in Phoenix and we’ll look forward to briefing you face-to-face.  Thanks for reading this far.