THE AMPHIBIAN ULTRALIGHT VEHICLE WAS BEING FLOWN ON A SERIES OF FLT TESTS AFTER BEING ASSEMBLED. AT APRX 1615 EDT, THE PLT TOOK OFF & WAS FOLLOWED BY ANOTHER PLT IN ANOTHER ULTRALIGHT VEHICLE FOR OBSERVATION PURPOSES. NO UNDESIRABLE FLT CHARACTERISTIC WAS NOTED. AT APRX 1650 EDT, THE CHASE PLT RETURNED TO THE AIRPORT WHILE THE PLT ON THE TEST FLT REMAINED AIRBORNE. AT ABOUT 1715 EDT, A WITNESS OBSERVED THE ULTRALIGHT MANEUVERING. ACCORDING TO HIM, THE VEHICLE WAS FAIRLY HIGH, SPINNING AROUND AT A FAST RATE & DESCENDING RAPIDLY UNTIL IT LEVELED OFF AT AN ALT OF BETWEEN 400 TO 500 FT AGL. ANOTHER WITNESS SAID HE WAS WATCHING THE ULTRALIGHT & SAW IT DIP & TURN A FEW TIMES, THEN THE WINGS FOLDED UP & THE VEHICLE CRASHED. ALL COMPONENTS OF THE CRAFT WERE ACCOUNTED FOR. BOTH WINGS HAD THE SAME KIND OF DAMAGE CHARACTERISTICS, BUT THE RIGHT WING & STRUTS WERE DAMAGED TO A GREATER DEGREE. NO PREIMPACT/ MECHANICAL FAILURE OR MALFUNCTION WAS FOUND.