New Horizon Aircraft faces Nasdaq delisting risk

New Horizon Aircraft Ltd., an aircraft manufacturing company, is currently facing the possibility of delisting from the Nasdaq Stock Market LLC due to its failure to meet the net income and other continued listing standards. The company, which has its shares and warrants traded under the symbols HOVR and HOVRW respectively, was notified on August 28, 2024, that it did not satisfy the Net Income Standard of $500,000 in the most recently completed fiscal year.

Additionally, New Horizon Aircraft does not currently meet the Market Value of Listed Securities Standard, which requires a minimum market value of $35 million, or the Equity Standard that necessitates maintaining stockholders’ equity of at least $2.5 million.

The company has until October 14, 2024, to submit a Compliance Plan to Nasdaq to regain compliance with these listing standards. If accepted, Nasdaq may grant up to 180 calendar days from the notice date to demonstrate compliance. Should Nasdaq reject the Compliance Plan, the company may appeal the decision to a Hearings Panel. It's important to note that the notice received has no immediate impact on the listing or trading of the company’s Class A ordinary shares.

New Horizon Aircraft, previously known as Pono Capital Three, Inc., is optimistic about addressing the deficiency within the allotted timeframe. However, it is important to mention that there is no assurance the company will regain compliance with the continued listing standards.

In other recent news, Horizon Aircraft has been making significant strides in its operations. The aerospace engineering firm has appointed Tom Brassington, a veteran from eVTOL developer Lilium, as its new Chief Technology Officer. Brassington's expertise is anticipated to enhance Horizon Aircraft's engineering capabilities, particularly in the development of its seven-seat hybrid electric eVTOL, the Cavorite X7.

In the financial realm, Horizon Aircraft has set terms for a public offering expected to yield approximately $2.9 million. The offering includes 2.8 million Class A ordinary shares, warrants, and pre-funded warrants to purchase additional shares, with EF Hutton LLC serving as the sole book-running manager.

However, the company is also facing potential delisting from Nasdaq due to non-compliance with the minimum bid price requirement and has until January 15, 2025, to rectify this.

Turning to product development, the company has reported significant progress in its eVTOL prototype testing. The Cavorite X7 eVTOL design is on track for completion and testing by 2026. These are the recent developments concerning Horizon Aircraft.

InvestingPro Insights

In light of New Horizon Aircraft Ltd.'s current challenges with Nasdaq's listing standards, a closer look at the company's financial health and market performance through InvestingPro data and tips can provide a clearer picture for investors. With a market capitalization of just $19.5 million, New Horizon Aircraft falls significantly short of the Nasdaq's Market Value of Listed Securities Standard. The company's price volatility is reflected in the recent 10% decline over the last week, yet it's worth noting the stock's strong return of 48.51% over the past month.

InvestingPro Tips indicate that while New Horizon Aircraft holds more cash than debt, a critical factor for financial stability, it also suffers from weak gross profit margins and has not been profitable over the last twelve months. The company's valuation implies a poor free cash flow yield, which could be a concern for growth-oriented investors. However, it's reassuring that the company's liquid assets exceed its short-term obligations, providing some buffer for operational needs.

For those considering an investment in New Horizon Aircraft, it's essential to weigh these insights carefully. There are 11 additional InvestingPro Tips available for the company, offering more in-depth analysis for informed decision-making. To explore these further, investors can visit the InvestingPro platform.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.