Horizon Aircraft sets terms for $2.9 million public offering

TORONTO - New Horizon Aircraft (NASDAQ: HOVR), an aerospace engineering company specializing in the development of hybrid eVTOL aircraft, has announced the pricing of its public offering. The offering includes 2.8 million Class A ordinary shares and warrants, alongside pre-funded warrants to purchase up to 3 million Class A ordinary shares, with accompanying warrants. Each share and warrant pair, as well as each pre-funded warrant and accompanying warrant, are offered at a public price of $0.50.

The warrants have an exercise price of $0.75 per share, are exercisable immediately, and will expire five years from the date of issuance. The pre-funded warrants are exercisable at $0.00001 per share and can be exercised any time after their issue date until fully exercised. The gross proceeds from the offering are expected to be approximately $2.9 million, assuming no exercise of the warrants, and could reach up to $7.25 million if the warrants are fully exercised for cash.

The offering is scheduled to close on August 21, 2024, subject to the satisfaction of customary closing conditions. EF Hutton LLC is serving as the sole book-running manager for the offering, with Nelson Mullins Riley & Scarborough LLP and Sichenzia Ross Ference Carmel LLP providing legal counsel to Horizon Aircraft and EF Hutton, respectively.

Horizon Aircraft, which is working on what is claimed to be one of the world’s first hybrid eVTOLs, aims to complete testing and certification of its Cavorite X7 eVTOL swiftly and thereafter penetrate the market to serve a wide range of early use cases.

The offering is being made pursuant to a registration statement on Form S-1, declared effective by the SEC on August 19, 2024. A final prospectus relating to the offering will be filed with the SEC and made available on their website.

The company's forward-looking statements indicate plans for the use of proceeds and development goals for their aircraft. However, these statements are subject to a number of risks and uncertainties that could cause actual results to differ materially.

This article is based on a press release statement and provides a factual summary of Horizon Aircraft's public offering without any endorsement of the claims.

In other recent news, New Horizon Aircraft is facing potential delisting from Nasdaq due to non-compliance with the minimum bid price requirement. The aerospace manufacturer has been given until January 15, 2025, to meet the criterion of a share price closing at $1.00 or higher for at least ten consecutive business days. If the company fails to meet this requirement, it may be granted an additional 180 days to comply, contingent upon meeting all other initial listing standards.

In the midst of these developments, New Horizon Aircraft has reported significant progress in its eVTOL prototype testing. The company's large-scale prototype is nearing full transition to forward flight, with a key achievement being the validation of a patent-pending yaw control system. This system is crucial to Horizon's patented HOVR Wing technology, which aims to enhance passenger comfort and pilot control.

The company has also begun production of full-scale propulsion units, an important step towards constructing the full-scale prototype aircraft. The Cavorite X7 eVTOL design, expected to outperform all-electric competitors in speed and cargo capacity, is on track for completion and testing by 2026. In line with these advancements, Horizon Aircraft will be participating in the upcoming EF Hutton Annual Global Investor Conference and The International Aerospace Innovation Forum.

InvestingPro Insights

As New Horizon Aircraft (NASDAQ: HOVR) embarks on its public offering, potential investors are weighing the company's financial health and market performance. According to InvestingPro data, the company's market capitalization stands at a modest $14.94 million. The financial metrics reflect a challenging environment for the company, with a negative adjusted P/E ratio of -2.5 for the last twelve months as of Q4 2024, indicating that the company is not currently profitable.

On the brighter side, one of the InvestingPro Tips suggests that Horizon Aircraft holds more cash than debt on its balance sheet, which could provide some financial flexibility in its operations and development plans. However, the same set of tips also highlights a rapid cash burn and weak gross profit margins, factors that investors should consider when evaluating the company's long-term viability. Notably, the stock has experienced significant price volatility, with a striking return of 39.47% over the last month, yet a dramatic year-to-date price total return of -90.14%.

The company's ambitious goals to innovate in the aerospace sector with its hybrid eVTOL aircraft are certainly noteworthy. Still, the financial metrics and InvestingPro Tips reflect a company facing substantial headwinds. For those interested in a more comprehensive analysis, InvestingPro offers additional tips on the company's performance and prospects.

For a deeper dive into Horizon Aircraft's financial details and to access the full list of 14 InvestingPro Tips, visit InvestingPro's dedicated page at https://www.investing.com/pro/HOVR.

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