Shares of New Horizon Aircraft Ltd. (NASDAQ:HOVR) plunged 19.2% Thursday following the company's announcement of a dilutive equity placement aimed at raising roughly $20 million in gross proceeds.
Under the terms of a definitive agreement with institutional investors, New Horizon agreed to sell 9,254,889 Class A Ordinary Shares. The company indicated the transaction is expected to close on or about May 8, 2026, but noted the closing remains subject to customary closing conditions.
New Horizon said it will apply the net proceeds from the offering to advance and accelerate development of its Cavorite X7 aircraft program, in addition to using funds for working capital and general corporate purposes. The company is advancing a hybrid-electric Vertical Takeoff and Landing aircraft.
The placement is being carried out pursuant to a shelf registration statement the company filed with the Securities and Exchange Commission on February 14, 2025, which was declared effective on March 25, 2025. Titan Partners, a division of American Capital Partners, has been engaged as the sole placement agent for the transaction.
Context and mechanics
The company framed the sale as an institutional placement under an already effective shelf registration, indicating the issuance is part of previously established capital-raising flexibility. The deal size and share count were provided by the company in its announcement, along with the expected timing and the adviser handling placement.
Market reaction
The equity sale announcement coincided with a near 20% decline in the company's share price on Thursday, reflecting investors' response to an offering the company described as dilutive.
Additional note
The offering remains conditional on customary closing requirements; no further details on those conditions or on the final allocation of proceeds beyond the stated uses were provided by the company in the announcement.