Business Overview

New Horizon Aircraft Ltd., doing business as Horizon Aircraft, is an advanced aerospace engineering company and developer of the world's first hybrid-electric Vertical Take-Off and Landing (eVTOL) aircraft that can fly most of its mission exactly like a normal aircraft. Founded in 2013 and headquartered in Lindsay, Ontario, the company has made significant strides in advancing its proprietary Cavorite X7 eVTOL prototype and positioning itself as a leader in the rapidly growing regional air mobility (RAM) market.

Company History

Horizon Aircraft's journey to its current position is a tale of strategic pivots and corporate transformations. The company's roots can be traced back to March 11, 2022, when it was incorporated as Pono Capital Three, Inc., a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination. On October 14, 2022, the company redomiciled in the Cayman Islands, and on February 14, 2023, it consummated an initial public offering.

A significant turning point came on January 12, 2024, when Pono Capital Three, Inc. completed a merger with Robinson Aircraft Ltd., a company focused on the development of a hybrid-electric vertical takeoff and landing (eVTOL) prototype aircraft. This merger resulted in the company changing its name to New Horizon Aircraft Ltd., with the business of Robinson Aircraft becoming the focus of the combined entity. Through this transaction, New Horizon Aircraft acquired Robinson's eVTOL technology and aircraft development program, including the innovative Cavorite X7 concept.

Product and Technology

The Cavorite X7 is designed to provide a cost-effective and energy-efficient alternative to traditional helicopters, with the ability to take-off and land vertically like a helicopter, while flying at speeds up to twice as fast and operating with up to 75% lower direct operating costs. Horizon Aircraft believes this unique capability will enable the Cavorite X7 to fulfill a variety of applications, including medevac services, firefighting, disaster relief, remote medical services, military operations, air cargo, business travel, and air-taxi services.

Key Personnel

To support the continued development and certification of the Cavorite X7, Horizon Aircraft has bolstered its world-class engineering team with several key hires, including Chief Technology Officer Tom Brassington from Lilium, and Senior Vice President of Business Development Phil Kelly, a former Harrier Jump Jet pilot and Head of Aircraft Development for the UK Royal Navy and Royal Marines.

Financials

Horizon Aircraft's financial position has been strengthened through a series of strategic investments and warrant exercises. In December 2024, the company received an $8.4 million strategic investment, and between December 2024 and January 2025, the company received an additional $2.7 million from the exercise of 2.5 million warrants. These capital infusions have provided the company with the resources necessary to accelerate its development timelines and work towards the certification and commercialization of the Cavorite X7.

As a pre-revenue organization in the research and development and flight-testing phase, Horizon Aircraft has not yet generated any revenue. The company's financial metrics for the fiscal year ended May 31, 2024, show an annual net loss of $8.16 million and negative operating cash flow of $3.31 million. The annual free cash flow for the same period was negative $3.52 million.

However, the most recent quarter ending November 30, 2024, saw a significant improvement in the company's financial position. Horizon Aircraft reported a net income of $19.66 million for the quarter, primarily due to a $21.4 million gain from the termination of the Forward Purchase Agreement and changes in the fair value of warrants. This positive result represents a substantial turnaround from previous periods.

The company's operating expenses have been primarily comprised of research and development costs related to aircraft engineering, software development, prototype manufacturing, and data analysis, as well as general and administrative expenses for legal, accounting, investor relations, and other corporate activities. For the six months ended November 30, 2024, Horizon reported total operating expenses of $5.98 million, with $724,000 in research and development expenses and $5.25 million in general and administrative expenses.

Liquidity and Going Concern

As of November 30, 2024, Horizon Aircraft had $887,000 in cash and cash equivalents on its balance sheet. The company's liquidity position is relatively strong, with a current ratio and quick ratio of 2.76, indicating its ability to cover short-term obligations. The debt-to-equity ratio stands at -0.02 as of May 31, 2024, suggesting low levels of debt compared to equity.

Despite these positive indicators, the company faces substantial doubt around its ability to meet the going concern assumption beyond the next 12 months without raising additional capital. This is primarily due to its pre-revenue status and ongoing research and development expenses. Horizon Aircraft's success is heavily dependent on the continued development of the RAM market, which remains largely untapped, as well as the company's ability to navigate the complex and lengthy aircraft certification process with Transport Canada and the Federal Aviation Administration.

Market Competition

Horizon Aircraft faces competition from traditional helicopters, ground-based mobility solutions, and other eVTOL developers, some of which may have access to greater financial resources and more established relationships within the aerospace industry. The company's ability to gain market share and realize its anticipated sales will be critical in the years ahead.

Outlook and Potential

Despite these challenges, Horizon Aircraft has made significant progress in advancing its eVTOL technology and positioning itself as a leader in the emerging RAM market. The company's unique hybrid-electric design, combined with its focus on cost-effectiveness and energy efficiency, has the potential to disrupt the aviation industry and provide a more sustainable and accessible alternative to traditional air transportation solutions.

Horizon's business model is focused on the dual-use potential of its eVTOL aircraft, with plans to serve both civilian and military applications. This strategy may help reduce risks associated with the aircraft certification process, as military applications typically require less stringent regulatory approval compared to civilian operations. However, the company still faces significant challenges in achieving the necessary certifications from Transport Canada and the Federal Aviation Administration for commercial use.

As Horizon Aircraft continues to navigate the development and certification process, investors will be closely watching the company's ability to execute on its ambitious plans, secure additional funding, and solidify its position in the competitive eVTOL landscape. The company's success could have far-reaching implications for the future of regional air mobility and the broader aerospace industry.