New Horizon Aircraft Ltd. (NASDAQ:HOVR), an emerging player in the aircraft manufacturing industry with a market capitalization of $24.82 million, has entered into an amendment with key investors, as disclosed in a recent 8-K filing with the Securities and Exchange Commission. According to InvestingPro analysis, the company's stock has shown significant volatility, trading between $0.24 and $6.00 over the past 52 weeks, while maintaining a strong liquidity position with a current ratio of 4.05. The amendment, dated January 10, 2025, modifies the subscription agreements from a financing round that closed on December 19, 2024.
The British Columbia-based company had previously issued 4,166,667 Class A ordinary shares and 4,500 Series A preferred shares as part of a financing agreement with investors including Canso Investment Counsel Ltd. and GRIP Investments Limited. InvestingPro data reveals that while the company holds more cash than debt on its balance sheet, it currently maintains a WEAK financial health score of 1.56, suggesting potential challenges ahead. Subscribers to InvestingPro can access 13 additional key insights about HOVR's financial position. The Series A preferred shares, priced at $1,000 each, are convertible into common shares at a ratio of one to 2,222.222222.
The key change outlined in the amendment is the introduction of an Exchange Cap, which prevents the conversion of Series A preferred shares into common shares that would exceed the number allowed under Nasdaq Listing Rule 5635 and other applicable rules of the Nasdaq Stock Market, unless shareholder approval is obtained. Despite recent regulatory adjustments, the stock has demonstrated remarkable resilience, posting an 87.38% return over the past six months, though trading at $1.01 as of the latest close.
The company has committed to securing the necessary shareholder approval within 60 days from January 10, 2025, or a later date if mutually agreed upon in writing. If the initial shareholder meeting fails to result in approval, New Horizon is mandated to continue seeking approval at subsequent meetings.
Additionally, the amendment includes antitakeover provisions, requiring the investor's consent prior to the company engaging in certain change of control transactions.
This strategic move aims to align the company's financing activities with the regulatory requirements of the Nasdaq Stock Market, where its securities are traded under the symbols HOVR for Class A ordinary shares and HOVRW for warrants. Each whole warrant is exercisable for one Class A ordinary share at an exercise price of $11.50 per share.
The information for this article is based on a press release statement.
In other recent news, Horizon Aircraft Ltd. anticipates a gain of approximately $20-25 million from the termination of its forward purchase agreement (FPA) with Meteora Capital Partners (WA:CPAP), LP. This development follows the company's potential delisting from the Nasdaq due to failure to meet the net income standard, market value of listed securities, and stockholders' equity. Horizon Aircraft has requested a hearing with the Nasdaq Hearings Panel to appeal this decision. Meanwhile, EF Hutton initiated coverage on Horizon Aircraft with a Buy rating, emphasizing the company's potential for revenue generation and its current financial position. The company has also amended its warrant terms and appointed Tom Brassington, a veteran from eVTOL developer Lilium, as its new Chief Technology Officer. In a bid to raise capital, Horizon Aircraft has set the terms for a public offering expected to yield approximately $2.9 million. In the realm of product development, the company has reported substantial 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 with Horizon Aircraft.
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