New Horizon Aircraft Ltd. (HOVR) Earnings Call Transcript & Summary

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Okay. Thank you. Okay. This is a tap #3 folks. Thanks for sticking around. I really appreciate it. Okay. So we just talked about medevac. And of course, if you have a helicopter capability that can move things twice as fast in a very, very efficient manner, luxury business travel and moving folks around the planet in a much more efficient manner is, of course, going to be a natural extension of that. Alongside really interesting missions like disaster relief. So imagine a hurricane goes through in wipes at all sorts of infrastructure, and there's no power whatsoever. Helicopter is very expensive, very slow to deploy, and there's not enough of them. And so they do great work, but we can deploy these aircraft twice as fast. We don't need any infrastructure whatsoever. And guess what, we can even provide our own power and potentially as a hybrid electric power system able to power a communications node or power some sort of make shift medical facilities that are saving lives on ground right away, something that we think this aircraft is going to be absolutely fantastic about doing. And we will move forward through a couple of these slides quickly and into our financial position. So we are in a very strong financial position. We recently raised a very significant amount of money in a very responsible manner, and we have north of $70 million on the books right now. That's good for at least 24 months plus even with a significant ramp rate. We moved up to kind of 60-plus people at this point. We want to double over the next 12 to 18 months. And I will foot stomp again, this is enough money to produce a full-scale prototype that will be rolling out of the hanger shortly for flight testing. I think that's going to catch the market a surprise. And there are only a handful of companies in this space that have a full-scale prototype that is undergoing testing. So I think that's going to be very significant. Where are we in certification? So in order to sell these aircraft, they need to be fully commercially certified in order to do that. we have partnered with the best folks on the planet. So we have certification centered Canada, the CEO and founder of that company, [ Dr. John Maris ] is on our Board, essentially a group of the most professional certification folks on the planet, brought into a private company that's helping us plan and execute a certification plan. We've spoken with Transport Canada. The agency in Canada that certifies these aircraft. They're really excited to have started the certification process with us. And for the most part, our aircraft flies around 98% of the time just like a normal airplane that they're used to. Not a complicated multicopter system, not a crazy tilt wing or a tilt rotor mechanism. It -- for the most part, it is just simply in commercial aircraft, fixed-wing aircraft for 98% of the time, and that really helped us on the certification side. We're really proud that this aircraft is built tough. So the Canadian aircraft is going to be flying in very harsh conditions. And it's -- again, it's being built for a flight into known icing for flight and cold weather, bad weather, again, with an internal combustion engine on board as part of its hybrid power system, the aircraft is going to be built very tough for the real world. I spent a lot of time in the military deploying to very harsh locations, and I appreciate the value of an aircraft that can operate under many different type of conditions. A lot of partners you seen announced more to come. We partnered with pretty significant folks at Pratt & Whitney Canada, again, one of the most robust engines on the planet powers this aircraft. BETA Technologies, BETA on the New York Stock Exchange, Kyle Clark, an incredible human and leading a very operational company. They've flown over 100,000 miles on their [ Alia ] aircraft. [indiscernible] that's -- and a company that's producing a ton of really, really useful technology. So we've partnered with them from a flight controls perspective. MHIRJ, I mean not a lot of people know in Canada, there's a very robust aerospace program that's essentially, Canada's ability to design, build, produce, test and certify clean sheet aircraft designs, Bombardier, MHI. These are the companies that make it happen. So a really robust ecosystem in Canada that is helping us make this dream come true. Like I said, and we'll have a full-scale aircraft very shortly. So there's 5 phases on this slide, but it's the other, like I said, 60-plus people behind the scenes right now and growing rapidly that are really making things happen. I've already been over my career. My background, I flew jets in the Air Force for 20 years, a mechanical engineering degree, business degree. But it's really the technical geniuses that are to the and the financial genes that are making it all happen. My father, you can basically think of him as kind of a giver. You give them some bubble gum and paper clip and he's going to come up with something pretty clever. He's behind a lot of the technological innovation and very common sense as well from an aviator that's been flying and cursing and fixing airplanes for the last 60 years. And so pretty proud of the team that we're building. We only hire the best. We have an elite team that is punching way above its weight right now, which is absolutely fantastic. And that's coming up to the end. So what we've done, we've built an aircraft. We're building an aircraft that has the same capabilities of a helicopter. But it's twice as fast, 75% cheaper to operate per unit mile and is much safer and quieter. So if you think the world can use a helicopter that is safer, cheaper and faster, it's one step closer to a really, really cool future where our kids get to take advantage of some of these new technologies and really open up a ton of potential for future growth. And that's what the advanced air mobility industry is seeing right now, and that's a lot of the incredible growth that you're seeing across the entire industry. in this space. So I really appreciate you folks hanging in there. Sorry for the technical issues. Again, we're working with the 1980 system here, but we're making it work. So really appreciate everyone that stuck through it.

Switching over to the Q&A. Okay, let's start from the top. It's 2033, X7 is being produced and flying what is next? Okay. So great question. The X7 is a technology platform, and it can be scaled. We did -- we've done -- and this is on public record. We've done scaling studies, the X7 can be scaled up to an x9 size. Again, on the record, that is about a 12,500 pound machine, 9 place with full military kit type of thing. That would most likely be [ 2 engine ]. So yes, it is a technology platform that absolutely can be scaled. And next question, is it possible to go bigger with 2 Pratt engines. I think I've answered that one already. The first deliveries is a question. When are we going to start handing this airplane out to some of our coveted initial folks? Our plan is still to hand out the aircraft to be fully certified to producing these aircraft in the 2030 time frame. So our unit orders is the next question, so how many aircraft are we going to produce. We will ramp up in traditional aerospace manufacturing in a scheme that makes sense. And so eventually, in a few years, we'll be producing 200 to 300 of these aircraft, we're not promising that we're producing thousands of these aircraft. And that's actually what's driving a lot of really interesting, early interest to try to get some of those early production slots. So in a lot of very advanced discussions with folks that want to get in early to secure those initial slots because again, we're not saying we're going to roll out 1,000 in the first year. And so if the aircraft does what we say it's going to do, we're confident that it will. Those initial production slots are going to be quite coveted. We've got a financial questions about margin and EBITDA. I mean it's -- these are all standard things. Gross margin in the 40% range, you want to net out at least 25 -- sorry, 15%. And those are -- that's a standard sort of financial process for an aerospace manufacturing company. How long is the process for [indiscernible] certification. That's not a simple thing. And -- but we're taking it seriously and it's been baked into the DNA of the design from the very, very beginning. And flight in denouncing is flow military fighter jets for 20 years. And I've been in serious icing conditions. It is not fun on the commercial side. It is not easy to certify an aircraft for flight into known icing. But we have experts at it. 3C is actually so Certification Center Canada. Again, Dr. John [indiscernible] on our Board. They are experts at doing that. Transport candidate is experts at certifying that. And again, as a traditional aircraft, we fly around 98% of the mission, like a normal aircraft. And so we can use normal electrothermal type of anti-icing and de-icing stuff. We have bleeder on board through the combustion engine that allows us, again, hot air to de-ice and providing enough electricity through the hybrid system for anti-icing systems. And so this has been baked into the design process from the very beginning. What can shareholders expect throughout the end of the year as far as new partnerships and X7 developments. Well, I can't tell you anything ahead of time. But of course, I mean we're about to change gears here, right? We're about to roll out a brand-new aircraft out of the hanger and join the big boys in this field. So lots of upside potential, lots of growth potential. And I think it's going to catch the market by surprise. Like I have 30 seconds left. Is it possible to onboard generator supply electrical mini grid? Absolutely 100%, it is possible, which is really cool. Fly aircraft to remote location, set up remote medical station, power station via aircraft generator on board, really, really cool to be able to do stuff like that. On the defense side, the question for what is possible. a ton of things are possible with this type of, again, a helicopter that essentially travels twice as quickly. Intelligence surveillance reconnaissance, infill [indiscernible] and on the special forces side. Just moving things around between ships and dropping sound of voice for the Navy, in a really cool stuff that is available. I'm going to keep talking until the moderators turn me off. We're one of the most important technical milestones between now and completion of the full-scale demonstrator. Well, I mean we're building it right now. So I mean, we're -- we've already proven the propulsion and the main propulsion units work and they work fantastically. We're putting -- the iron bird is coming together really well. So all the communications protocols between all the different systems are being tested. And the main piece of lot structure and wing structure and canard structure is all coming into the hanger shortly to be able to put together the airplane and install everything. So a lot of really cool milestones to be able to talk about going forward. System integration challenges is a question that is so complicated that I probably will skip that. But I'd say, well, that's standard, right? We have multiple systems on the aircraft. We have aerospace professionals that have been through clean sheet aircraft designs. And we're working through a standard systems integration process that you would expect, keeping everything as simple as possible in testing it. I'm told to wrap it up. I feel like in a couple of extra minutes here, but fair enough. How much visibility do you have into the total capital required a lot of visibility, right? So I mean, we've observed and talked to a lot of the mature companies in this space. We've seen companies that have built very, very quickly and are spending a lot on a monthly basis. We're taking a fiscally conservative approach. But we have a very strong financial model in terms of how this is going to roll out. And our #1 priority, and I'll say this is our shareholders. So we want to be very respectful and we have been very respectful of any sort of dilutive offerings, and we're going to continue to raise money in a very, very capital responsible way for our shareholders. And that's the, I guess, the end of all of the questions. Thanks, folks so much for attending. For those of you who stuck through. I really appreciate it. And I'll turn it back over to the host.

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