Overview

New Horizon Aircraft Ltd. (the “Company”, “Horizon”, “we,” “us” or “our”) is an aerospace company based in Lindsay, Ontario, Canada. Horizon was previously a blank check company called Pono Capital Three, Inc. that was formed in 2022 for the purpose of merging with an existing business.

Business Combination

On January 12, 2024, Horizon completed a merger with Robinson Aircraft Ltd. (“Robinson”), a British Columbia company that had been developing a hybrid-electric vertical takeoff and landing (eVTOL) aircraft called the Cavorite X7. Through this merger, Horizon acquired Robinson’s business and technology.

Organization and Nature of Business

Horizon’s objective is to advance sustainable air mobility by designing and developing a cost-effective and energy-efficient eVTOL aircraft for use in future regional air mobility (RAM) networks. The company plans to sell these aircraft to various customers, including air operators, lessors, individual consumers, and military clients. Horizon also intends to manufacture the aircraft and license its patented technologies to other Original Equipment Manufacturers (OEMs).

Key Factors Affecting Operating Results

The key factors that will impact Horizon’s operating results include:

1. Development of the Regional Air Mobility Market: The success of Horizon’s business depends on the continued growth and adoption of RAM technologies. If the market does not develop as expected, it would significantly impact the company’s ability to generate revenue.

2. Competition: Horizon faces competition from traditional helicopters, ground-based mobility solutions, and other eVTOL developers. The company’s ability to gain market share will depend on the competitiveness of its aircraft design and technology.

3. Government Certification: Horizon’s Cavorite X7 aircraft will require type certification from regulatory bodies like Transport Canada and the FAA before it can be used for commercial operations. Obtaining these certifications is a complex and lengthy process, and there is no guarantee that the company will be successful.

4. Dual Use Business Model: Horizon plans to sell its aircraft for both civilian and military applications. The military market does not require the same level of certification, which helps mitigate the risks associated with the civilian certification process.

5. Going Concern and Liquidity: As a pre-revenue organization in the research and development phase, Horizon has incurred significant losses and negative cash flows. The company’s ability to continue as a going concern beyond the next 12 months is dependent on its ability to raise additional capital.

Results of Operations

Horizon has not yet generated any revenue, as it is still in the design, development, and testing phase of its eVTOL aircraft. The company’s operating expenses have increased significantly, from $380,000 in the quarter ended August 31, 2023, to $2.7 million in the quarter ended August 31, 2024. This increase was primarily driven by higher research and development costs, as well as increased general and administrative expenses related to the company’s growth efforts.

Horizon’s cash flows used in operating activities also increased, from $405,000 in the quarter ended August 31, 2023, to $1.5 million in the quarter ended August 31, 2024. This was due to the higher operating costs.

In the quarter ended August 31, 2024, Horizon raised $3.5 million through a registered securities offering, which included the issuance of Class A ordinary shares, pre-funded warrants, and warrants. This provided the company with additional liquidity to fund its operations.

Outlook

Horizon believes it has sufficient cash to fulfill its business plan for at least the next 12 months. However, the company will require additional financing to achieve its long-term objectives and continue the development and certification of its eVTOL aircraft. Horizon’s ability to raise the necessary capital and execute on its business plan will be critical to its future success.