HOVR

Business Context and Reporting Period

Company: New Horizon Aircraft Ltd. (formerly Pono Capital Three, Inc.)
Filing Date: January 12, 2024 (Report Date: January 19, 2024)
Event: Completion of Business Combination with Robinson Aircraft, Ltd. d/b/a Horizon Aircraft.
Corporate Actions: Pono redomesticated from Cayman Islands to British Columbia; Merger Sub amalgamated with Horizon; Company renamed to New Horizon Aircraft Ltd.
Trading Status: Common stock (HOVR) and warrants (HOVRW) began trading on Nasdaq Capital Market on January 16, 2024.

Key Financial Metrics and Capital Structure

Transaction Consideration: Approximately $99 million in total consideration for the Business Combination.
Redemptions: 9,852,558 Pono shares redeemed for approximately $104.5 million ($10.61 per share) from the Trust Account.
Trust Account Balance: Approximately $17.45 million remaining immediately prior to Closing.
PIPE Financing: Issued 200,000 shares for net proceeds of $2.0 million.
Underwriting Fees: Issued 103,500 shares to EF Hutton LLC in partial satisfaction of deferred commissions.
Forward Purchase Agreement: Approximately $16.8 million paid to Meteora Capital LLC from Trust Account and PIPE proceeds.
Share Issuance: 9,419,084 Class A ordinary shares issued to Horizon shareholders (including 282,573 in escrow for price adjustments).
Options Assumed: 585,230 options to purchase Class A ordinary shares assumed from Horizon.

Material Changes and Ownership Structure

Post-Closing Ownership (Approximate):

• Horizon Former Shareholders: 51.05%
• Sponsor and Affiliates (Mehana Capital): 33.00%
• Public Stockholders: 9.71%
• PIPE Investor: 5.03%
• EF Hutton: 1.22%

Lock-Up Agreements: Entered into with Sponsor and certain Horizon shareholders. Restrictions last for six months or until the stock price exceeds $12.00 for 20 of 30 trading days (post-150 days), whichever is earlier. Waivers granted for approximately 1.69 million shares held by a non-affiliate.
Fiscal Year Change: Fiscal year end changed from December 31 to May 31 to align with Horizon's reporting cycle. Next fiscal year end is May 31, 2024.

Guidance, Risks, and Management Commentary

Management Commentary: The filing focuses on the structural completion of the SPAC merger rather than operational performance. The company is an emerging growth company.
Key Risks:

• Need to raise additional capital to execute business plans.
• Lack of useful financial information for accurate future capital expenditure and revenue estimates.
• Risks associated with developing, certifying, and manufacturing the Cavorite X7 eVTOL aircraft.
• Regulatory changes and competitive landscape in the aviation market.

Forward-Looking Statements: The filing contains projections regarding the Cavorite X7 eVTOL, market size, and production targets. Actual results may differ materially due to risks outlined in the Proxy Statement/Prospectus.

Investor Verification Checklist

• Cash Position: Verify the exact cash balance remaining after the $16.8 million payment to Meteora and transaction expenses, as the filing states the Trust Account balance was ~$17.45 million prior to these outflows.
• Escrow Shares: Confirm the conditions for releasing the 282,573 shares held in escrow for purchase price adjustments.
• Debt Obligations: Review the Proxy Statement/Prospectus for details on the convertible note converted by Brian Robinson and any other assumed liabilities.
• Equity Dilution: Assess the impact of the 2023 Equity Incentive Plan, which reserves 10% of post-combination shares for issuance.
• Operational Milestones: Verify the current status of the Cavorite X7 eVTOL certification and testing, as this is a primary risk factor.