New Horizon Aircraft Ltd. (NASDAQ:HOVR), a manufacturer in the aircraft industry, is currently at risk of being delisted from the Nasdaq Stock Market. The company, previously known as Pono Capital Three, Inc., was notified on August 28, 2024, by the Nasdaq that it failed to meet the net income standard required for continued listing.
The specific rule in question, Nasdaq Listing Rule 5550(b)(3), requires a net income from continuing operations of at least $500,000 in the most recently completed fiscal year. New Horizon also does not meet alternative listing standards related to the market value of listed securities and stockholders' equity.
On October 11, 2024, the company received communication from Nasdaq's Listing Qualifications Department indicating a refusal to accept New Horizon's compliance plan. In response, New Horizon has requested a hearing with the Nasdaq Hearings Panel to appeal this decision. The hearing request will postpone any delisting actions until the process concludes, allowing the company's shares and public warrants to remain listed during this period.
New Horizon intends to present a comprehensive plan to regain compliance with the listing standards at the upcoming hearing. While the outcome is uncertain, the company expresses confidence in its strategy to address the compliance issues.
The potential delisting could have significant repercussions for New Horizon, impacting its ability to raise capital and affecting its overall financial condition and business operations. The company's Annual Report filed on August 15, 2024, outlines the risks associated with non-compliance, including the diversion of resources and attention from its core business.
In other recent news, Horizon Aircraft has seen a flurry of activity. EF Hutton initiated coverage on the aviation technology company with a Buy rating and a price target of $2.00, highlighting the company's potential for revenue generation and its ability to avoid significant shareholder dilution due to its current financial position. The firm also noted Horizon Aircraft's promising results in sub-scale testing, suggesting potential revenue from military applications.
The company has also made significant amendments to its warrant terms and has taken steps to address potential delisting from the Nasdaq due to non-compliance with net income, market value of listed securities, equity, and minimum bid price standards. Horizon Aircraft has until October 14, 2024, to submit a Compliance Plan.
In personnel news, Horizon Aircraft has appointed Tom Brassington, a veteran from eVTOL developer Lilium, as its new Chief Technology Officer. On the financial front, the company has set terms for a public offering expected to yield approximately $2.9 million, with EF Hutton LLC serving as the sole book-running manager.
In the realm of product development, Horizon Aircraft 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.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for New Horizon Aircraft Ltd. (NASDAQ:HOVR), aligning with the company's struggle to meet Nasdaq listing requirements. The company's market capitalization stands at a modest $7.96 million, reflecting its current financial difficulties.
InvestingPro Tips indicate that HOVR is "quickly burning through cash" and "not profitable over the last twelve months," which directly relates to the company's failure to meet Nasdaq's net income standard. The stock's performance has been particularly poor, with InvestingPro data showing a staggering year-to-date price total return of -95.97% as of the most recent data.
Despite these challenges, an InvestingPro Tip notes that HOVR "holds more cash than debt on its balance sheet," which could be a positive factor in its plan to regain compliance. However, investors should be aware that the stock "generally trades with high price volatility," adding to the uncertainty surrounding its future.
For a more comprehensive analysis, InvestingPro offers 14 additional tips for HOVR, providing deeper insights into the company's financial health and market performance.
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