New Horizon Aircraft Reports Mixed Financial Results, Raises Capital, and Faces Going Concern Doubt

New Horizon Aircraft Ltd. reported significant financial developments in its 10-Q filing for the quarter ending August 31, 2024. The company, which focuses on developing sustainable air mobility solutions, particularly a hybrid-electric vertical takeoff and landing (eVTOL) aircraft, experienced a notable increase in total current assets, rising to $5.999 million from $4.664 million as of May 31, 2024. Cash and cash equivalents also saw a substantial increase, reaching $3.822 million compared to $1.816 million in the previous quarter.

However, the company faced challenges with profitability, reporting a net loss of $2.911 million for Q3 2024, a significant increase from a net loss of $416,000 in Q3 2023. Operating expenses surged to $2.705 million, up from $380,000 in the same period last year, driven primarily by increased general and administrative costs, which rose to $2.408 million from $235,000. Research and development expenses also increased to $297,000 from $145,000 year-over-year.

Total liabilities increased to $28.370 million as of August 31, 2024, up from $22.877 million in the previous quarter, while total shareholders’ equity decreased to $(22.133 million) from $(17.933 million). The company’s cumulative losses from operations reached $17.6 million as of the end of the reporting period.

Strategically, New Horizon Aircraft completed a registered securities offering on August 21, 2024, raising $3.947 million, which contributed to a net cash increase of $2.006 million for the quarter. The company issued 2.8 million Class A ordinary shares, 3 million Pre-Funded Warrants, and 5.8 million warrants as part of this offering. Additionally, the company has been actively pursuing funding through various channels, including government grants and convertible debt instruments.

Despite these efforts, New Horizon Aircraft faces substantial doubt regarding its ability to continue as a going concern beyond the next 12 months without raising additional capital. The company is currently in the research and development phase, with no revenues generated to date, and anticipates significant investment needs for final engineering designs, prototyping, and certification processes.

The company’s Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "HOVR." However, as of July 19, 2024, the shares closed below the minimum bid price requirement for continued listing, prompting the company to submit a compliance plan to regain adherence to Nasdaq's standards.