CybAero’s financial difficulties, which were compounded by problems linked to delayed exports and revenue gains from China, became clear in June when the company issued a liquidity warning. Its board chairman, Michael Auerbach, informed shareholders and the market that CybAero was facing a liquidity crisis, adding that “capital for current operations would be consumed by the end of June”.
CybAero’s dire financial situation was negatively affected by problems associated with fulfilling a large order to Chinese customer AVIC Supply and Marketing Huabei. The disruption in the delivery seriously impacted CybAero’s revenue intake and significantly reduced its working capital for day-to-day expenses, including salaries.
Sweden’s Inspectorate of Strategic Products, or ISP, which is responsible for issuing export licenses for defense- and security-related sales to foreign countries, halted delivery of a CybAero demonstration helicopter system to AVIC. This decision was reversed by the ISP following an appeal by CybAero. The ISP’s refusal to initially authorize CybAero’s unmanned helo-drone system export to China was taken on the grounds of foreign and security policy. The agency initially questioned the intended use of CybAero’s unmanned aircraft system as well as the risk that embedded technologies could be diverted to military actors in China that were outside the realm of CybAero’s agreement with AVIC.