"New Horizon Aircraft" Q4 2026 Earnings Call - Management Slips Demonstrator Timeline to Prioritize Certification Readiness

Conference Operator: Ladies and gentlemen, thank you for standing by. Welcome to the New Horizon Aircraft fiscal fourth quarter 2026 earnings conference call. All participants are present in a listen-only mode. Following management’s prepared remarks, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded and will be available for replay on the company’s website at www.horizonaircraft.com later today. I would now like to turn the call over to Matt Chessler. Matt, please go ahead.

Matt Chessler, Investor Relations, New Horizon Aircraft: Thank you, operator. Good morning, everyone. Joining me on the call today are Horizon Aircraft’s CEO, Brandon Robinson, and the company’s CFO, Brian Merker. I’d like to remind you that we will be making forward-looking statements during today’s call. All statements involve risks and uncertainties that may cause actual results to differ materially. For more information about these risks and uncertainties, please refer to the Risk Factors section of our annual report on Form 10-K for the fiscal year ended May 31st, 2026, and filed this morning with the Securities and Exchange Commission, and under the company’s profile on SEDAR+ in Canada. Any forward-looking statements we make are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. Now, I’d like to turn the call over to our CEO, Brandon Robinson, for his prepared remarks.

Brandon, please go ahead.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Thanks, Matt. Good morning, everyone. Thank you for joining us for Horizon’s fourth quarter and fiscal 2026 year-end call. Fiscal 2026 was truly a transformational year. After completing a full-scale transition flight on our prototype last May, we spent this past year advancing the Cavorite X7 from technology validation to full-scale aircraft construction. We also expanded our engineering and leadership teams, assembled an outstanding group of aerospace development partners, and significantly strengthened our balance sheet that has now more than CAD 78 million in cash. For those that are newer to the company, the Cavorite X7 is our seven-person hybrid VTOL aircraft built around our patented fan and wing technology. Unlike other concepts in the advanced air mobility space, the X7 is expected to fly about 98% of its mission just like a normal aircraft on traditional wing-borne flight.

This unique concept elegantly combines the vertical flexibility of a helicopter with the speed, range, payload, safety and utility, and operating economics of a conventional aircraft. This past year’s accomplishment have led New Horizon Aircraft to its strongest position in history from both an aircraft developmental perspective and a financial perspective. We have entered our next fiscal year with focus strictly on execution, assembling the aircraft, advancing certification activities, and preparing for flight testing of our full-scale aircraft demonstrator. Before I review our accomplishments during fiscal year 2026 in more detail and discuss our priorities for the year ahead, we would like to share a short and exciting video that should get you stoked about the progress we’re making here at New Horizon Aircraft. Operator, please play the video. That was awesome. Anyway, let’s continue.

Over the past year, we have made remarkable progress across nearly every aspect of the business. We strengthened our financial position, expanded our technical capabilities, and added world-class development partners, and continue to mature the X7 towards full-scale assembly. I’d now like to walk through the progress we made during the last year and why we believe Horizon is very well-positioned to achieve our important milestones ahead. A year ago, we completed the successful transition flight of our large-scale prototype. Today, the program is leveraging that achievement into the production of our full-scale X7 aircraft. Significant structural and component work, notably in respect of our aerostructure flight controls, flight dynamics, and test systems, has shifted into the hands of our specialized aerospace manufacturing partners and our team has grown. Our certification pathway has become more defined, and our balance sheet is substantially stronger.

The target performance of the X7 helps explain why we believe this effort is worth pursuing. The aircraft is designed for a maximum speed of approximately 250 miles per hour, a range of approximately 500 miles and a useful load of approximately 1,500 lbs. The aircraft will be capable of vertical flight, short takeoff and landing, and conventional takeoff and landings, as well as flight in all weather conditions, giving operators significant flexibility with which to match the aircraft to each mission. The X7’s hybrid electric architecture is another defining advantage. Fuel carried on board has far greater energy density than today’s all-electric aerospace architectures by a factor of almost 50.

By pairing a proven turbine engine with batteries and distributed electrical lift, the X7 is designed to recharge its battery system in flight after landing and does not require any ground charging infrastructure whatsoever, and could even be used as a remote power station in certain circumstances. Importantly, the aircraft also comes with compelling economics. An independent third-party analysis calculated the X7’s operating cost at approximately CAD 0.97 per passenger seat mile. I’ll say that again. CAD 0.97 per passenger seat mile based on a 500-hour flight envelope per year, or utilization per year, I should say. This is compared with operating costs of over CAD 4 for comparable helicopters with the same level of utilization.

Based on this analysis, our expectation is the X-7 could deliver operating costs of up to 75% lower per unit distance, as compared with a helicopter of a similar capacity, while also offering substantially greater speed, range, and safety. Importantly, our ambition is not to become an airline or operating an air taxi service. It’s to become a leading manufacturer of a world-class aircraft. This allows us to continue to be extremely capital efficient and to maximize shareholder value, something we’re laser focused on. The progress and sophistication of the full-scale X-7 prototype program is increasingly visible, and we have announced several significant engineering partnerships over the past year. These organizations bring expert experience to the development and certification process of specific components while we remain responsible for the overall aircraft architecture, system integration, and program execution.

For example, BETA Technologies’ advanced flight control computers will be used on the X-7. This is really exciting. BETA’s fly-by-wire platform was designed specifically for modern VTOL aircraft and incorporates safety-critical software, system redundancy, and flexible architecture intended to support reliable aircraft operations. I think they have over 100,000 miles on the ALIA aircraft right now already. In any case, flight controls sit at the heart of every aircraft handling stability, performance, and certification aspect. We believe BETA’s leading VTOL-specific experience, engineering talent, and operational philosophy will fit with the long-term requirements of the X-7 program, and we couldn’t be better aligned. RAMPF Composite Solutions on the fuselage construction perspective continues to advance manufacturing of the main fuselage and empennage, North Aircraft Industries, an expert in wing design and testing technologies, progresses with our patented wing architecture.

Marshall Aerospace has completed flight dynamics and control models for the X-7, allowing our team to predict and optimize how the X-7 should respond to the control inputs before even beginning flight testing. We are proud to partner with other industry leaders such as Pratt & Whitney Canada, MT-Propeller, and MHI Regional Jet. We remain committed to expanding our world-class partner ecosystem as we advance our aircraft program. As for certification, our team is focused strictly on creating a certified aircraft that places operational utility at the forefront. We’re using elevated standards for design reviews, system requirements, safety assessments, and other certification considerations into the current prototype phase earlier than many programs do. This requires additional effort before the first flight, but it also produces a more robust aircraft and a far more efficient path through subsequent testing and certification.

Our objective has never been, and will not be, to target the shortest possible route to a flying prototype. Every engineering decision we make is aimed at delivering an aircraft that operators can fly safely, that regulators can certify, and that customers can rely on for decades. That philosophy influences how we selectively allocate capital, how we sequence development, and ultimately, how we measure success. It is also really exciting to see the broader advanced air mobility industry evolving. Regulators, operators, lessors, and even investors are placing greater emphasis on certification readiness, technical execution, capital discipline, and practical aircraft economics. We have built Horizon Aircraft around those priorities from the beginning, and we believe that positioning is becoming increasingly relevant as the industry matures. One of the clearest examples of this philosophy is how we approach all-weather capability.

The X-7 is designed for instrument flight rule operations, just like almost all normal commercial aircraft. We also intend to pursue certification for flight into known icing, something that is very unique and made possible as a result of its patented fan-in-wing architecture alongside its hybrid electric power core. This should enable the X-7 to operate in all weather conditions encountered by regional operators, as well as enabling emergency medical cargo delivery, and defense missions across the globe. All-weather capability is not a marketing feature. For an operator, an aircraft that can fly in almost any weather condition is critical to underpinning safe and profitable operations. Something that we’re, again, laser-focused on. Our internal team has also grown alongside the technical team and now numbers over 55 people. We have added experienced engineering and program leaders, including most recently Richard Alexander as our Chief of Certified Programs.

His role is especially important as we strengthen the connection between the development activity, certification requirements, quality systems, and eventual production organization. This growth will only accelerate. We expect to continually aggressively hiring across our engineering, certification, quality, manufacturing, and program management platforms. Based on our current plan, we are anticipating staffing more than 100 employees by the end of next year and double that by the same time in 2028. As a part of our year-end planning process, we reevaluated the schedule for the full-scale demonstrator aircraft. We previously targeted completion by the end of calendar 2027. We’re now expecting completion within approximately nine months, placing the milestone by the spring of 2027. This represents an approximately one-quarter shift from our prior expectations, which I’m sure the people online here can respect is a very minor slip.

As I mentioned earlier, we are not optimizing for the fastest prototype assembly. We’re optimizing for the most certifiable aircraft. By increasing the sophistication of the platform during this phase, we are investing in a much more streamlined overall certification process. Following the completion of the demonstrator aircraft, we expect the 2027 test program to begin with initial ground testing, of course, followed by a traditional flight test program. At the same time, I should say, we will continue working with Transport Canada towards our type certification by 2030. We are encouraged not only by the engineering progress but also by growing commercial engagement. We are in discussions with several potential buyers and operators that have expressed interest being amongst the first to add the Cavorite X7 to their fleet.

Those conversations span regional transportation, emergency services, defense, logistics, and other special missions. We remain disciplined about how and when we formalize commercial commitments, and the level of interest reinforces our views that operators are looking for a vertical lift aircraft with superior range, safety, and economics, and we’re very encouraged by that. Fiscal 2026 marked a major transition for the Horizon Aircraft team from validating the core concept to building a world-class organization, a supplier base, engineering capabilities, financial depth, and the certification discipline required to deliver a full-scale aircraft. There is substantial work ahead, but we enter Fiscal 2027 with the team, the plan, and the financial depth to execute. Now I’d like to pass the call over to our CFO, Brian Merker, to discuss the financial results, our capital position in more detail. Brian, take it away.

Brian Merker, Chief Financial Officer, New Horizon Aircraft: Thanks, Brandon, and good morning, everyone. Unless otherwise noted, financial figures are presented in Canadian dollars. As Brandon was alluding to, fiscal 2026 was a transformative year for Horizon, not only from an engineering standpoint but from a financial perspective as well. We did conclude the year with CAD 78.3 million of cash on the balance sheet as compared to CAD 7.5 million a year ago. This represents the strongest balance sheet in the company’s history and provides us the financial resources that span beyond the completion of the full-scale demonstrator aircraft and well into certification and manufacturing efforts. This liquidity reflects disciplined access to capital throughout the year.

You may have seen we recently completed two registered direct offerings with the same two investors that collectively generated gross proceeds of USD 45 million, all on favorable terms, while our at the market program and non-dilutive funding through government grants provided additional capital. All told, financing activities generated more than CAD 88 million during the year at well over CAD 2 per share. We approach fundraising patiently and opportunistically. The objective is not simply to maximize cash at any particular time. It’s to maintain sufficient liquidity, preserve strategic flexibility, and raise capital when market conditions are advantageous. That’s exactly what we’ve done this year and are now well-positioned to execute on our aircraft development program. From an operating expense perspective, our spending increased as our aircraft development program transitioned from technology validation to the demonstrator aircraft assembly.

Research and development costs increased to CAD 13.2 million from CAD 3.7 million last year. This reflects investments in engineering talent, flight software, prototypes, equipment and materials, testing preparation, and data analysis. Meanwhile, G&A costs remained relatively stable at CAD 10.2 million, demonstrating the vast majority of our incremental investment continues to be directed towards advancing the aircraft development program. Cash used in operating activities totaled CAD 16 million during the year, or about CAD 4 million per quarter. This compares to CAD 9 million in the prior year or CAD 3 million per quarter. As we look ahead to fiscal year 2027, we expect another step up in investment as we receive major aircraft components, expand our engineering organization, continue systems integration, and prepare for ground and flight testing. Notably, we believe our current cash position provides more than 24 months of liquidity while contemplating this increased investment in aircraft development.

We also intend to passionately pursue non-dilutive sources of capital where appropriate, including government funding programs like INSAT, of which we’ve already received project approvals. They reimburse up to 40% of eligible project costs. Additionally, there’s meaningful opportunities with the enhanced Canadian government defense spending obligations. Capital efficiency is built into our model. As Brandon indicated, Horizon intends to be a pure play aircraft OEM, not an aircraft operator. We don’t plan on funding large operating fleets, building a passenger network, or developing broad charging infrastructure. Focusing on building and selling our aircraft allows our capital and management attention to remain centered on designing, certifying, and manufacturing the aircraft. We believe Horizon enters fiscal 2027 with one of the strongest balance sheets in the sector, providing us with the flexibility to remain focused on disciplined execution. Brandon, back to you.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Okay, great. Thanks, Brian. The man, the myth, the legend. Love it. As fiscal year 2027 begins, New Horizon Aircraft is a much stronger and much more capable company than it was a year ago. We have a differentiated hybrid electric VTOL architecture, a validated technical foundation, a rapidly growing team, and a substantially stronger balance sheet, as well as a network of experienced aerospace partners supporting our aircraft development program. Our immediate priority is clear. Complete a full-scale Cavorite X7 demonstrator aircraft by spring of 2027 and begin ground and flight testing program. Every major work stream, structures, propulsion, flight controls, flight dynamics, instrumentation, systems integration, certification, and manufacturing readiness is being advanced with that singular objective in mind. The broader industry is moving in a direction that favors our practical and our unique approach.

Operators, regulators, governments, and strategic partners are increasingly focused on real-world utility, dispatch reliability, certification readiness, operating economics, and mission flexibility. Those are the foundational pillars, and have always been, on which the Cavorite X7 has been designed from the beginning. There is still significant work ahead, we don’t underestimate the challenges of developing and certifying a new aircraft. Our focus isn’t on reaching the next milestone the fastest. It’s on responsibly reaching every milestone on our way to developing a truly revolutionary new aircraft. We look forward to updating you as the full-scale aircraft continues to come together and we achieve the next set of technical, commercial, and certification milestones. That concludes our prepared remarks, and we get into the fun stuff with Q&A soon. I’ll now pass the call back to our operator to begin the Q&A session.

Conference Operator: Thank you. At this time, we will be conducting a question and answer session. If you’d like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question today is coming from Scott Buck from Titan Partners. Scott, your line is live.

Scott Buck, Analyst, Titan Partners: Hi, good morning, guys. Thanks for taking my questions. I guess first on the BETA Technologies partnership announced last week, is this a straightforward supplier relationship, or does it include some sort of co-development or exclusivity or any other kind of equity/strategic component?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Great question, Scott Buck. On the BETA Technologies side, it’s more than just a normal supplier relationship, okay? It does not involve any equity involvement or any investment so far from BETA Technologies’ perspective. Our aircraft is unique, and that’s going to require a lot of close technical development with BETA Technologies. We can’t just purchase their off-the-shelf COTS flight control system and then plug it into our aircraft. It’s much more of a close technical development relationship that goes back and forth that helps integrate that system into our aircraft successfully, if that makes any sense.

Scott Buck, Analyst, Titan Partners: Yeah. No, that’s very helpful. Brian Merker, I’m curious, can you help frame expected quarterly cash burn through fiscal 2027 and what the split looks like between prototype build versus headcount versus other certification spend. Just trying to understand what the components look like.

Brian Merker, Chief Financial Officer, New Horizon Aircraft: We do expect our cash usage to increase, as I mentioned. I would directionally suggest it’s not going to be 2x what you’ve seen in our last 1 to 2 quarters, but somewhere in between where we’re currently at and there. Part of that depends on the pace of bringing people in, and we’re actively recruiting for a number of roles. We do expect, as I said, some increases to the cash spend. In terms of the split, we’re seeing a combination of both additional resources, human resources come on board as well as significant scale in terms of spend on the demonstrator aircraft program. I would, again, directionally guide towards a 50/50 split people and components. Of course, that is dependent on a number of factors.

Scott Buck, Analyst, Titan Partners: Great. That’s helpful. Last one for me, guys. I’m curious, the partners you have on the prototype, do they have the capacity to scale with you into low rate production, or will production tooling require a different supplier base?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: No, we’ve paid a lot of attention to this particular piece. My father was in advanced pharmaceutical manufacturing for decades. The entire aircraft has been built to be built, if that makes sense. We’ve had production in mind from the very beginning, all the way from why doesn’t our wings have taper to them? Because that’s aerodynamically slightly more efficient. Well, it’s because every single rib is the same size, right? It’s easier to manufacture. All the partners that we choose, Pratt & Whitney Canada is a great one, right? The PT6, one of the most robust and bulletproof engines that exists on the face of the planet, has been in manufacturing for decades. We’re taking that approach. We’re building an aircraft to be built.

RAMPF Composite Solutions, for example, building the fuselage, they can ramp up to producing a number of different fuselages and support us through low volume and medium volume production. Same with North Aircraft. Yeah, the answer is yes. We’re thinking about that, and many of the decisions that we’re making are aligned specifically with that. Again, not producing a one-off prototype that can fly, but producing a machine that can be certified, that can be produced in the volumes that make sense economically.

Scott Buck, Analyst, Titan Partners: Perfect. Well, that’s all I have, guys. I appreciate the added color. Thanks for the time.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Great question, Scott. Thank you.

Conference Operator: Thank you. The next question will be from Josh Sullivan from JonesTrading. Josh, your line is live.

Josh Sullivan, Analyst, JonesTrading: Hey, good morning. Just following up on the collaboration with Beta. How are you guys thinking of your make versus buy thoughts generally across the aircraft, and what other areas are maybe potential for additional collaborations at this point?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: I’ll let Brian finish this one off. Because we’ve gone with a hybrid electric architecture, for those online, again, it is a really well-understood, really robust, unique power core for the airplane. Unlike most of the folks that are in this industry who have all electric architectures, ours is hybrid electric. That allows us to not be so critical on many of the main systems. We have leading-edge vertical propulsion units, leading-edge batteries, and battery management systems. We don’t have to take everything in-house and design it to the 99.9th percentile, razor-edge, aerospace-grade type of innovative system because we can choose more robust architectures and things that are commercially available for our system because we’re not so pushed to the edge of the engineering envelope in order to make the aircraft work.

A great example is on the battery side, we have high power demands. Instead of requiring 400 watt hour per kilogram batteries, we can reduce the energy density and prefer much more robust or select much more robust, high power dense batteries that are just a lot more safe and a lot more robust, I would say, for operational use. An example of the Beta partnership would be, again, taking a bit of a difficult thing, which is a flight control system, starting in a really, really good space. Beta, again, has more than 100,000 hours flying ALIA on their flight control system. It is designed to the highest DAL standards, and we’re starting in a really, really good space already, so kind of getting a jumpstart there.

Eventually, we’ll bring a few more things in-house, but for now, again, we’re not pushed to the edge on that stuff, so we have a little more flexibility is all I’ll say. Great question, Josh.

Josh Sullivan, Analyst, JonesTrading: Got it. Just with these collaborations, how do you think about the aftermarket question or the long tail here on supporting the aircraft and with these various collaborations? How do we think about how that’s going to all work together?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Well, I think it’s a really positive story. You see, again, I’ll use Beta as an example.

We’re doing the same. We’re developing technologies in-house that are going to be broadly useful across a number of different ecosystems. I can’t say much more than that. 2026 is an exciting space for technological innovation, especially in the aerospace community in terms of strengths of materials and electrical systems, propulsion units. These technologies, when they’re fully validated, are going to be broadly applicable across a number of different industries, especially within the aerospace industry. We’re excited to continually innovate, identify valuable products, and collaborate with companies who would like some of this technology that we’ve, and companies like Beta, have developed. I think we’re seeing that borne out now.

Josh Sullivan, Analyst, JonesTrading: Got it. We have Farnborough coming up next week. Just curious, on customer engagement, what areas of the market and applications are maybe approaching you guys, any preview into what we might see from you guys at Farnborough? I’ll jump off after that. Thank you for the time.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: No, thanks, Josh. Yep. We’re really excited about Farnborough. Okay. For everyone that’s not tracking Hall 4 by the Canadian Pavilion booth 4625, we’ll have a small model there for everyone to take a look at. More importantly, you can just come and see and talk to the team. It’s going to be an exciting time. Hopefully, the air conditioning holds up in Farnborough, which I’m told it’s going to. Farnborough’s going to be exciting. We are meeting with a number of different suppliers and folks that are interested across the commercial and the defense sector. A lot of defense interest in what we’re doing, of course. I can’t get into too much more detail about that. Needless to say, our docket is completely overbooked at this point. Yeah.

Every day I look at it’s getting more and more complicated in terms of where I got to be. Please come by. For anyone that’s interested, like I said, swing by Hall 4, just next to the Canadian Pavilion, 4625.

Conference Operator: Thank you. As a reminder, it will be star one on your phone at any time if you wish to ask a question from the phone lines. The next question is coming from Richard Ryan from Oak Ridge Financial. Dick, your line is live.

Richard Ryan, Analyst, Oak Ridge Financial: Great. Thank you. Say, Brandon, you’ve got pretty aggressive plans to expand your employee count. You’ve done it so far, and you’ve talked about doubling it again over a period of time, and mentioned engineering and certification. Where does that talent pool exist? I mean, is the reach beyond Canada? How do you compete with the others in the air mobility space to go after this talent pool?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Dick, great question. For those that don’t know, Canada has a very robust aerospace ecosystem, right? We have Bombardier Defense, CAE, MHI RJ, MHICA. We’re one of the few countries that has the ability to design, build, produce, certify clean sheet aircraft designs. There is a lot of aerospace talent compressed into a few locations. Right now we’re just north of Toronto as our primary location. We have another location in Ottawa. To your point, we’re looking to expand. Just to be frank, we’re in the short strokes of looking at various locations to expand into. It’d be silly if we weren’t looking into the Kitchener-Waterloo area, into the Montreal-Quebec area, where there’s these loci of aerospace engineering talent. It has been a challenge to attract world-class talent to the Greater Toronto Area. We’ve done so successfully.

You can see, we’ve over tripled the team in the last year or so. To continue that rate of expansion, we’re of course looking into other locations. We’re going to stay north of the border for now. Yeah, the future’s pretty exciting. We have a track record of success with expanding the team and attracting, again, some of the best folks on the planet. We’re very, very picky with whom we work, that’s a bit of a challenge. That’s allowed us to punch way above our weight in terms of our team size. We’re going to continue to expand. We’re looking actively at a number of different locations, and it’s an exciting place where we’re currently located. It’s very exciting to look into some of these other places, again, that have a lot of aerospace talent in a small geographical region.

Richard Ryan, Analyst, Oak Ridge Financial: Okay.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Great question.

Richard Ryan, Analyst, Oak Ridge Financial: Thank you. Eventually, do you need to move manufacturing into the U.S. to access the U.S. initiatives in this space, or won’t that be a requirement?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: We don’t. I mean, unlike some of the other companies in this space, we’re not saying we’re going to build thousands of these aircraft per year requiring multi-billion dollar installations. We’re building 200 to 300 of these aircraft at peak rate at very profitable margins. We can do that within southern Ontario and/or Quebec as well. We’ll probably travel south of the border for flight testing. That just makes sense. Of course, we’re talking to a bunch of different communities. State of Ohio is amazing, and further south, from a production capacity perspective once we eventually expand. Of course, we’re talking to people globally as well that would really like to either build this aircraft or set up MRO, maintenance, repair, and overhaul type of activities for us to support the global fleet.

Richard Ryan, Analyst, Oak Ridge Financial: Okay, great. Brian, one for you. Pre-commercialization, I think there’s an opportunity or potential opportunity for licensing revenues or some other sorts of monetization efforts before actual building of the aircraft. Can you talk about how that might look and the kind of timing of such opportunities, if they exist?

Brian Merker, Chief Financial Officer, New Horizon Aircraft: Thanks, Dick. I think this licensing revenue opportunity is certainly the highest probability short to medium term path to revenue-generating activities. One of the big questions for us is the if question, do we want to go down this path? If so, where might we do it, and who might we do it with? We know it might be a challenge for us to produce and sell aircraft in every region of the world, and every type of aircraft using this technology that we have. There very well may be a strong opportunity for us to partner. It could be on the military side, it could be on the commercial side of people who have a different concept in mind using the same technology. I do believe that’s a strong opportunity for us.

If I think ahead to 2027, 2028, that’s where I think those conversations will be had.

Richard Ryan, Analyst, Oak Ridge Financial: Okay, great. Thank you, and congratulations on continuing to hit your milestones, guys.

Brian Merker, Chief Financial Officer, New Horizon Aircraft: Thanks, Dick.

Conference Operator: Thank you. The next question.

Richard Ryan, Analyst, Oak Ridge Financial: Thank you.

Conference Operator: The next question will be from Brian Lanter from Zacks Small-Cap Research. Brian, your line is live.

Brian Lanter, Analyst, Zacks Small-Cap Research: Great. Good morning, guys. Great job, a lot of my questions have already been answered, but I just wanted to take a moment and step back and say, 15 months ago, you were standing in a field working with your half-scale demonstrator, going through your first transition flight. To be here, I think it’s important for everyone to really take a moment and say, you guys really accomplished a lot in a short period of time. The questions from all your investors speaks to how well you guys communicated with the market. Great job on all that. I don’t have a lot left to ask other than we’ve talked a lot about flight controls in the past as being a major obstacle. I know everything is sort of working in sync and you’re advancing everything together, is there one maybe systems integration?

Is there one major thing that’s at the top of your whiteboard right now, Brandon?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Yeah. You kind of nailed it with systems integration. You can develop each one of the federated systems together. An airplane is really about how all those systems talk to each other, and how they work. They each have to work in isolation, that’s fine, but they all have to work together. One of the things we’re doing right now is building what’s called an iron bird. For those who don’t know, it’s all the systems wired together, all the control systems, the flight control computers, everything wired together, and we understand and we stress test it and deconflict how it talks to each other, how all these systems talk to each other, how they work together, and how that federated systems comes together as more than the sum of its parts, if that makes sense. There are some cornerstones to that.

Flight control systems is a major one, and I flew the F-18 for the better part of 20 years in the Air Force, the Canadian Air Force, and it was a fly-by-wire computer airplane, right? If I put the stick to the left, the computer says, "Pilot wants to go to the left," the computer figures out exactly how to do that. If I leave the stick alone in the middle, the computer says, "Pilot does not want to go left or right. It wants to stay very stable," or he wants to stay, or she wants to stay very stable, and it moves all the flight controls in order to make it the most stable aircraft.

600 miles an hour at 250 feet off the ground, with all sorts of turbulence and rolling through valleys and stuff, that aircraft is the most stable and safe aircraft. The flight control system, again, at the core of every commercial aircraft, is a very well-known thing on how to build. That’ll be the cornerstone of the systems that come together. Of course, we’re thinking of everything, right? We have instrumentation, flight instrumentation, structures, yeah, main propulsion, vertical propulsion. Like I said, they’re all coming together really well to be tested very shortly in our iron bird and then transported into the main aircraft, which I’ll remind everyone, the structure is coming together. In the next several months, we’ll be receiving parts and we’ll be putting together the full-scale aircraft, which is incredibly exciting.

Long answer for a short question, which I tend to do quite often. Anyway, thanks, Brian. Really appreciate the question.

Brian Lanter, Analyst, Zacks Small-Cap Research: That’s great. I guess, is there one particular thing that when you’re talking to investors you feel like maybe they’re missing in the story? Do you feel like it’s your operating costs and the advantage that you have in the market, or is there something else that sort of jumps out at like, "I feel like I tell this story all the time, and then people still aren’t grasping that concept?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Yeah. This is a fantastic question, and thank you for that. There is one thing that drives me absolutely crazy about this space. It’s the operational utility of the aircraft, so being able to fly in all weather and bad weather operations. I have buddies, ex-Air Force buddies, that are flying commercial operations for helicopter operators, and they cannot fly in bad weather. They just can’t. Most helicopters avoid clouds like the plague. They can’t fly in bad weather. They can’t fly in cold weather, or at least it’s challenging, and especially not in instrument flight rules conditions where there could be icing in clouds.

The ability to fly this airplane all year round in all sorts of bad weather conditions, just like every other commercial aircraft on the planet, is I think very underappreciated by a lot of the retail investors and a lot of the institutional investors. That’s going to make a very significant difference. I think the second one is the focus on economics and safety. This airplane flies 98% of the time just like a normal commercial aircraft, but compared to a conventional helicopter, we’re up to 75% cheaper per unit mile. Half the helicopter fleet on the planet simply goes from one place to another. For those folks that operate those helicopters, this aircraft is literally going to save you 50%-75% of the cost per unit mile. Like I said, just under CAD 1 per passenger seat mile versus CAD 4+ for a typical helicopter.

I think that is very significant. Having a safer, faster, better, and more economical machine is just inventing a better mousetrap to do a huge amount of work globally. I think that’s appreciated by some folks, but that’s really going to sink in over the next 12 months when people start realizing, again, how much good work we can do globally and, again, the economics, the safety, and the operational utility combined into a pretty special airplane.

Brian Lanter, Analyst, Zacks Small-Cap Research: That’s great. Thanks. That’s all for me.

Conference Operator: Thank you. We would now like to turn the call over to Matt Chessler from investor relations to answer questions from investors that were submitted in advance or via the webcast chat feature.

Matt Chessler, Investor Relations, New Horizon Aircraft: Thank you, operator. Brandon, we’re going to start out with a number of questions that are tied to timing. If you could just answer the questions around what’s the timing for certification, finding a production partner, and potential customers? That is from Jen Falkofske. Thank you.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Okay, Jen, great question. We’re still targeting certification prior to 2030, right? We’re partnered with Cert Center Canada, which is a leading certification agency here. We have the advantage of certifying north of the border, which again, we’re kind of a big fish in a much smaller pond up here. We’ve had several meetings with Transport Canada. Of course, we’ve brought on experts, Richard Alexander, Kevin Bruce, Head of Airworthiness, who’ve done this before. We’ve been there. We have folks that have done that previously, and we’re partnered with some of the best folks on the planet to come up with and execute the plan for certification. On the certification side, we’re still on track. We want to get a certified aircraft off the line by 2030.

It’s an awesome question. The next several months, this is nerdy engineering stuff by the way, will be through PDR season, which is a fancy term for all of the subsystems that require a lot of engineering thought have been through their paces, right? Picture an engineer in front of the entire company pitching their system, and it’s 150 PowerPoint slides down to where each electron goes to the next point in space and time. That allows us to get essentially into manufacturing and then building out the systems for iron bird testing. PDR leads into CDR quickly thereafter. I think in the next three to six months, it’s going to be pretty exciting to see full-scale structural parts arriving, right?

Matt Chessler, Investor Relations, New Horizon Aircraft: Here’s a question that came in through Reddit, which is really more about near-term milestones. You’ve indicated where you want to be in six to nine months. Even shorter term from that, what are you thinking about? What are you expecting over the next three months from a build perspective?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: We’ll have the fuselage, parts of the wing, parts of the empennage, which is the back part, the canards arriving, and it’ll start actually being assembled and look like a normal aircraft over the next, like I said, three to six months, which will be really, really cool. I mentioned the iron bird stuff. Again, we can get nerdy on that, too. That’s going to be very exciting seeing everything wired together, the flight control computers start talking to each other, the multiple propulsion units and the brains that talk to them, so the electronic control units working all together in a sort of a master construct will be incredibly exciting. We have the space set aside. We have a lot of material rolling into the main hangar right now. That’s going to be really exciting over the next three to six months.

Matt Chessler, Investor Relations, New Horizon Aircraft: Jack, the engineer, is asking about differences between the full-scale aircraft that you’re building right now and the large-scale prototype. Have you discovered anything during production that wasn’t apparent on the large-scale model, such as build optimization, time saved to build, or some component fit challenges?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Yeah, really smart question from Jack. The answer is not yet meaningfully. Everything that we’ve sort of anticipated is rolling forward kind of normally. Like I said, my father was in advanced pharmaceutical manufacturing. It gave him a mind, not only from a pilot’s perspective, again, he’s been flying and building airplanes since he was 14 years old, but also from a manufacturing perspective, to be able to anticipate certain changes. I think we made a lot of smart choices early on that gave us some flexibility to take some more practical approaches to manufacturing. There’s nothing that we’ve discovered so far that is going to radically redesign the aircraft. Well, in our half-scale prototype, you saw as far as the renderings went, and then to what we produced, they look the same.

The aircraft on our website right now is the OML that’s being produced. That’s the outer mold line that the aircraft will look like that. We’re pretty proud of it. It’s not going to be radically changed. Will there be optimization to be done? Absolutely. Of course, we’ll tweak the flight control systems. From a production perspective, yeah, there’s nothing that we’ve come across so far that has led us to radically redesign anything so far. Great question. Hopefully, that clarifies.

Matt Chessler, Investor Relations, New Horizon Aircraft: The next question is from Niffer. Thinking about testing, is weather going to be a consideration that you take into effect you begin in early 2027?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Sorry, the question is weather going to be a consideration?

Matt Chessler, Investor Relations, New Horizon Aircraft: Yeah. Are there any challenges related to weather that you’re going to take into consideration when you begin testing the aircraft?

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Well, that’s going to be a two-fold answer. The first answer is in terms of location and where we go. I’m lucky to have done some tests in the Air Force, and I have a couple of buddies who are elite test pilots. One of them just flew Virgin Galactic to space, right? He’s the Unity. He’s on our board of directors. Dr. John Maris is also an elite test pilot in North America. As far as test programs are concerned, we understand the limitations of cold weather testing in Canada. We will beat this airplane up, don’t get me wrong, and we’ll make sure that it’s certified for cold weather ops, all-weather ops, or at least that’s what the current plan is.

To get enough test data initially early on in the program, it makes sense, I’m not committing to any individual location, but it makes sense to look south of the border, to where the weather is a little nicer year-round. I did a lot of flying in El Centro, California, where there’s 355 days of clear blue sky weather down there. Ohio has the National Advanced Air Mobility Center of Excellence, NAAMCE, in Springfield, Ohio, that’s set up for test flying. In Montreal, Quebec. In Canada, there’s another center of excellence in Canada for advanced air mobility test. From a location perspective, we take a very practical approach, like we do with everything across the company. We know what’s ahead of us, and we’re planning in advance.

Now, from a specific, like how to beat this airplane up and to know that it’s going to work in icing and hopefully flight into known icing and in clouds, we have a complete plan for that as well. I don’t want an airplane that is usable only in sunny weather days and clear of clouds. We want a commercially viable aircraft that is tough as nails and has all the safety components that you expect out of a normal commercial aircraft. I think operators and customers will appreciate that.

Matt Chessler, Investor Relations, New Horizon Aircraft: Brandon, we’re coming up close to the 9:30 timeline, but I do want to jam in some more questions.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Yep, sure. I’ll try to be more brief. Sorry, Matt.

Matt Chessler, Investor Relations, New Horizon Aircraft: Okay. Kurt is asking whether you anticipate any specific regulatory headwinds.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Well, if any CEO said no, they’d be lying, right? This is a new aircraft category. We’re specifically under a bit of an advantage here in Canada, like I said, with a very flexible Transport Canada Civil Aviation, big fish, small pond, flexible regulatory group that is really smart. We have the advantage of being like a VTOL 2.0 company. We’re certifying now, and we’ve designed the aircraft, again, a little bit later than some of the initial entrants, where we knew the rules to which we were certifying for. 21.17 Bravo in the U.S. has been laid out. SC VTOL lays out the regulatory framework to a very high standard as well. We knew what we were designing to. The devil’s in the details. We have to prove it. That is not without some risk.

We know what those are, we’ve designed the aircraft to those regulations. We’re off to a really, really good start. We’re operating under a known regulatory framework or multiple frameworks. Like I said, if any CEO said there was no regulatory certification risk, they would be lying. We have a lot of work ahead of us. We think we have great visibility on where we’re going. Yeah. Folks can watch and see how we do.

Matt Chessler, Investor Relations, New Horizon Aircraft: Okay, great. Shangas wants to know what you’re bringing to Farnborough, to the Farnborough Airshow next week. He’s looking forward to seeing us there.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Nice. Hall 4, 4625, right next to the Canadian Pavilion. We’ll have a nice little setup with a small demonstrator aircraft there, like you said, 10-foot wingspan or so. More importantly, we’ll be bringing, I think, seven people over from the team. Please come talk to us. We’d love to show you around the place. We’ll have some technology that you can interact with to kind of really get a good feel for where we’re at. It’s going to be an exciting time in Farnborough. Please come by.

Matt Chessler, Investor Relations, New Horizon Aircraft: Brandon, why don’t we call it a wrap with 9:30 approaching? I’d like to turn it back to you for some concluding remarks.

Brandon Robinson, Chief Executive Officer, New Horizon Aircraft: Okay. Yeah. Well, thanks, Matt. Really appreciate it. Some great questions from a number of interested folks. Please keep watching our YouTube channel, follow me on LinkedIn. You will find us a pretty transparent group, we try to really clearly communicate exactly where we are at. I think Horizon Aircraft has never been in a better position, right? We have the capital, the engineering talent, the industry partnerships, and the technical foundation to really execute the next phase of the Cavorite X7 program. While significant work remains ahead, of course, the opportunity to redefine regional flight has never been clear, and we look forward to updating shareholders in the quarters ahead as we continue turning this vision into a certifiable aircraft. As always, really, really appreciate your interest and support. Thank you all. Have a great day.

Conference Operator: Thank you. This does conclude today’s conference. You may disconnect at this time. Thank you for your participation.