The liquidators of Manta5, the failed Hamilton hydrofoiling aquabike maker, are facing millions in warranty claims - more than tripling the potential amount owed so far to around $3.4 million, with the final total still being established.
The first liquidator’s report, in May last year, found more than $1m owing to creditors including contract manufacturers in China and Mexico, Crown agency Callaghan Innovation (now facing its own extinction-level event), which had extended a $409,000 loan, BNZ ($250,000) and Inland Revenue ($97,000 in PAYE and GST plus $27,000 from a small business loan).
In the liquidators’ second report - for the six months to November 30, 2024 and released this week - it says: “The liquidators estimate there are $2.4 million warranty claims made by distributors. The total value of warranty claims is unknown due to insufficient information received”.
Manta5 signed various distributors to get its aquabikes into sports equipment stores and other retailers in the United States, Europe and Middle East.
The second report says intellectual property and equipment were sold during the administration period, but does not give buyers the amount realised, but the firm moved from administration to liquidation with $391,000 in funds on hand.
Most of those funds have now been dispersed. Staff have been paid the $61,000 they were owed in wages and annual leave. The amount owing to secured creditor BNZ has been chipped down to $96,330 and all bar $1507 of the outstanding tax has been paid, along with $44,000 in administrators’ fees.
Callaghan’s $409,000 loan and IRD’s $27,000 small business loan were unsecured and remain in full in the deficit column. The total deficit is still recorded as “unknown”.
The business was placed in voluntary administration on April 16 last year. BDO advertised the firm for urgent sale.
In a letter to shareholders the same day, the firm said it had tried and failed to raise fresh capital after encountering “supply chain challenges”.
Staff numbers and promotional spending had been cut: “Yet these measures were insufficient to mitigate our financial strain,” the letter added.
Manta5 Limited Partnership and associated entity Bright Spark Innovations GP Limited were placed into liquidation by a special resolution of creditors, just over a month later on May 21, 2024.
The liquidators - Paul Manning and Jessica Kellow, both of BDO - said in their first report that company directors: “Have advised the development and production of the hydrofoil bikes consumed available investment funds provided to the business. Sales reduced substantially in the prior year, due to production delays and warranty claims”.
One of the quirks of Manta5′s Hydrofoiler XE-1 was that you couldn’t stop for a breather.
On choppy seas, you had to keep pedalling or the bike would tip over (as Hayden Reeves told the Herald in 2021 after becoming the first person to pedal a Manta5 across Cook Strait). This was perhaps a metaphor for the company as a whole.
In 2021, chief executive Mark Robotham said the firm - which raised somewhere north of $18m in capital over its 10-year lifetime - had just closed “a $2m top-up round”.
It had sold more than 400 units of its $12,990 Hydrofoiler XE-1 aquabikes, generating some $5m in revenue, but faced ongoing supply chain issues related to the pandemic.
Large orders from hire operators could not be filled - or at least, not for months.
A plan to raise a further $6m, then list on the ASX within 12 to 18 months, never eventuated.
Manta5 was founded by Guy Howard-Willis (who could not be immediately reached for comment) and his son Luke, who together founded the sports and fitness gear retailer Torpedo7 and daily deal site 1-Day, then sold the businesses to The Warehouse Group for a total $65m in deals across 2013 and 2016.
The father and son owned a majority of shares in Manta5′s parent entity Bright Spark, founded in 2013, with its first aquabikes going onsale in 2019.
Minority investors included the Furniss family, which made its fortune selling blueberry agritech company BBC Technologies to Norway’s Tomra for $67m in 2018, and Glenn Miller, who made his money as a Hamilton Pak’nSave franchisee.
The Warehouse Group sold Torpedo7 for $1 in February last year.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.