New Horizon Aircraft Ltd. Q4 FY2026 Earnings Call

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 Chesler. Matt, please go ahead.

Thank you, Operator, and 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 random report on Form 10-K for the fiscal year ended May 31, 2026 and filed this morning with the Securities and Exchange Commission and under the company's profile on CEDAR Plus 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.

Thanks, Matt. Good morning, everyone. And 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 Cavalry 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 $78 million in cash. For those that are newer to the company, the Cavalright 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 X-7 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 Horizon Aircraft to a strongest position in history. from both an aircraft developmental perspective and a financial perspective and 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 uh 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 Horizon Aircraft. So operator, please play the video. That was awesome. Anyway, so let's continue. Over the past year, we've 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 X-7 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. So a year ago we completed a successful transition flight of our large-scale prototype. Today the program is leveraging that achievement into the production of our full-scale X-7 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 X-7 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 pounds. 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 X-7'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 X-7's operating costs at approximately $0.97 per passenger seat mile. I'll say that again, $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 $4 for comparable helicopters with the same level of utilization. So 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 is 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 x7 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 Aelia 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 X7 program, and we couldn't be better aligned. Ramf composite solutions on the fuselage construction perspective continues to advance manufacturing of the main fuselage and empennage, and North aircraft industries and experts 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. And we are proud to partner with other industry leaders such as Pratt & Whitney Canada, MT Propeller, and MHI Regional Jet. And we may 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 efforts 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 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 activities, certification requirements, quality systems, and eventual production organization. This growth will only accelerate. We expect to continue 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 re-evaluated the schedule for the full-scale demonstrator aircraft. We previously targeted completion by the end of calendar 27. 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 demonstrated aircraft we're expecting uh we expect the 2027 test program to begin with initial ground testing of course followed by a traditional flight test program at the time we will continue working with transport canada towards our 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 Cavaright 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 of 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. So, Brian, take it away.

Thanks, Brandon, and good morning, everyone. In less otherwise noted, financial figures are presented in Canadian dollars. And as Brandon was alluding to, fiscal 26 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 $78.3 million of cash on the balance sheet as compared to $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 $88 million during the year, at well over $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 $13.2 million from $3.7 million last year. and 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 $10.2 million, demonstrating the vast majority of our incremental investment continues to be directed towards advancing the aircraft development program. Cash use and operating activities totaled $16 million during the year, or about $4 million per quarter. This compares to $9 million in the prior year, or $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 you know project approvals they reimburse up to 40 percent 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.

Okay, great. Thanks, Brian. The man, the myth, the legend. Love it. As fiscal year 2027 begins, 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 Cavalry X-7 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 Calvary X7 has been designed from the beginning. There is still significant work ahead, and we don't underestimate the challenges of developing and certifying a new aircraft, but 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. So 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.

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 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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. And one moment, please, while we poll for questions. And the first question today is coming from Scott Buck from Titan Partners. Scott, your line is live.

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 slash strategic component?

Great question, Scott. So on the beta side, it's more than just a normal supplier relationship. So it does not involve any equity involvement or any investment so far from beta's perspective. but our aircraft is unique and that's going to require a lot of sort of close technical development with beta and so we can't just purchase their off-the-shelf you know COTS sort of 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 aircraft successfully, if that makes any sense.

Yeah, no, that's very helpful. And then, Brian, I'm curious, can you help frame expected quarterly cash burn through fiscal 27 and what the split looks like between, you know, prototype build versus headcount versus other certification spend? Just trying to understand what, you know, what the components look like.

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 one to two quarters, but somewhere in between where we're currently at and there. and part of that depends on the pace of bringing people in and we're actively recruiting for a number of roles um but we do expect um as i said some increases to the to the cash spend in terms of the split you know we're seeing a combination of both um additional resources human resources come on on on board as well as you know significant scale in terms of spend on the the demonstrator aircraft program so i would again directionally guide towards you know a 50 50 split people and and uh components uh but of course that that is dependent on a number of factors great that that's helpful and then 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 no i mean we've paid a lot of attention to this particular piece you know my father was in advanced pharmaceutical manufacturing for decades the entire aircraft has been built to be built if that makes sense so we've had

production in mind from the very beginning all the way from you know why doesn't our wings have taper to them you know because that's aerodynamically slightly more efficient well it's because every single rib is the same size right it's easier to easier to manufacture um and so all the partners that we choose pratt and whitney canada is a great one right the pt6 one of the most robust and bulletproof engines that exist on the on the face of the planet um has been in manufacturing for decades um and yeah and so we're taking that approach we're building an aircraft to be built ramp composite industries for example building the fuselage they can ramp up to pun intended maybe they can ramp up to you know a number of different air producing a number of different fuselages and support us through low volume and medium volume production same with north aircraft and so 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.

Perfect. Well, that's all I have, guys. I appreciate the added color. Thanks for the time.

Oh, great question, Scott. Thank you.

Thank you. The next question will be from Josh Sullivan from Jones Trading. Josh, your line is live.

Hey, good morning. Just following up on the collaboration with data, 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?

I'll let Brian finish this one off. But because we've gone with a hybrid electric architecture, so for those online, I mean, And 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. So, you know, we have leading edge vertical propulsion units, leading edge batteries and battery management systems, but 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 um a great example is um on the on the battery side you know we have high power demands uh but there's a lot of you know instead of you know requiring 400 watt hour per kilogram batteries you know we can reduce the energy density and prefer uh much more robust or select much more robust um high power dense uh batteries that are just a lot more safe and a lot more robust I would say for operational use example of the beta partnership would be again taking a bit of a difficult thing which is a flight control system and then starting in a really really good space so beta again has more than a hundred thousand 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 jump start 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, but great question, Josh.

And then just with these collaborations, how do you think about the aftermarket question, 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?

Well, I think, I mean, it's a really positive story. You see, again, I'll use beta as an example, and we're doing the same. We're developing technologies in-house that are going to be broadly useful across a number of different ecosystems. And I'll, you know, I can't say much more than that, but 2026 is an exciting space for technological innovation, especially in the aerospace community in terms of strengths and materials and electrical systems, propulsion units. And these technologies, when they're fully validated, are going to be broadly applicable across a number of different industries, especially within the aerospace industry. And we're excited to continually innovate, identify valuable products, and collaborate with companies who would like some of this technology that we've um you know and companies like beta um have developed and i think we're seeing that borne out now and then we have farmborough coming up next week just curious um you know on customer engagement you know what areas of the market and applications are you know maybe approaching you guys and any preview into what we might see from you guys at farmborough and i'll jump off after that thank you for the time no thanks josh yeah uh so really excited about farm bro okay for everyone that's uh you know not tracking hall four by the canadian pavilion uh booth 4625 uh we'll have a small um model there for everyone to take a look at but more importantly you can just come and see and and talk to the team um it's it's going to be an exciting time uh hopefully the air conditioning holds up uh in in farm borough which i'm told it's going to so um yeah so farm bro is going to be exciting uh we are meeting with a number of different suppliers and folks that are interested across uh the commercial and the defense sector so a lot of defense interest in what we're doing of course um i can't get into too much more detail about that uh but needless to say our uh docket is completely overbooked at this point um yeah yeah every day i look at it it's uh getting more and more complicated in terms of where i got to be so uh yeah but please come by uh for anyone that's interested as like i said swing by hall four the canadian just next to the canadian pavilion uh 4625 thank you and 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 Dick Ryan from Oak Ridge Financial. Dick, your line is live.

Great, thank you. Say, Brandon, you've got pretty aggressive plans to expand your employee count. You've done it so far and you 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?

So, Dick, great question. So, for those that don't know, Canada has a very robust aerospace ecosystem, right? So, we have Bombardier, Bombardier Defense, CAE, MHI, MHIRJ, MHICA. we're one of the few countries that has the ability to design build produce certify clean sheet aircraft designs and there is a lot of aerospace talent compressed into a few locations so right now we're just north of toronto as our primary location we have another location in ottawa but to your point we're looking to expand and so 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 um of aerospace engineering talent and so it has been a challenge to attract uh you know world-class talent uh to the greater toronto area we've done so successfully you can see i mean we've over tripled the team in the last year or so and 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 but yeah the future is pretty exciting we have a track record of success with expanding the team and attracting again the some of the best folks on the planet we're very very picky with whom we work so that's you know that's a bit of a challenge but that's allowed us to punch way above our weight in terms of our team size so 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 and 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 Okay, thank you.

Do you need to move, eventually, do you need to move manufacturing into the States to access, you know, the U.S. initiatives in this space, or won't that be a requirement?

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, you know, multi-billion dollar installations. You know, we're building two to three hundred of these aircraft at peak rate at very profitable margins. And 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. And 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. And of course, we're talking to people globally as well that would really like to either build this aircraft or set up MRNO maintenance repair and overhaul type of activities for us to support the global fleet.

Okay, great. So, 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?

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? And if so, where might we do it and who might we do it with? we know you know there might it might be a challenge for us to produce and sell aircraft in every region of the world so they're very and every type of aircraft using this technology that we have so they're very well may be a strong opportunity for us to partner what could be on the military side it could be on the on the commercial side of people who have a different concept in mind using the same technology. So 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.

Okay great. Thank you and congratulations on continuing to hit your milestones guys.

Thanks Doug. The next question will be from Brian Lantier from Zach Small Cap Research. Ryan, your line is live.

Great. Good morning, guys. Great job, and a lot of my questions have already been answered, but I just wanted to, you know, take a moment and, you know, step back and say, you know, 15 months ago, you're standing in a field working with your half-scale demonstrator going through your first transition flight, and to be here, I think it's important for everyone to really take a moment and say, you know, you guys really accomplished a lot in a short period of time and the questions from all your investors it speaks to how well you guys communicated with the the market um so great job on all that um i don't have a lot left to ask other than you know when we've talked a lot about flight controls in the past as being a major obstacle um sort of a i know everything is sort of working

and thinking you're advancing everything together but is there one mate is it maybe systems integration is there one major thing that's at the top of your whiteboard right now brandon yeah i think it remains uh so you kind of nailed it with systems integration i mean it you can develop each one of the federated systems together um an airplane is really about how all those systems talk to each other uh and how they they work they each have to work you know in isolation that's fine uh but they all have to work together and so one of the things we're doing right now is building a uh what's called an iron bird for those who don't know that is uh it you 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 and deconflict how it talks to each other now all these systems talk to each other how they work together and how that federated systems comes together as you know more than the sum of its parts if that makes sense um you know and 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 now the canadian air force and it was a fly-by-wire computer uh airplane right so i if i put the stick to the left the computer says air you know pilot wants to go to the left and then the computer figures out exactly how to do that if i leave the stick alone in the middle uh 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 it moves all the flight controls in order to make it you know the most stable aircraft 600 miles an hour at 250 feet off the ground uh with all sorts of turbulence and rolling through valleys and stuff and that aircraft is the most stable and safe aircraft uh the flight control system again at the at the core of every commercial aircraft uh is a very well-known thing on how to build that'll be the cornerstone of uh the systems that come together but of course we're thinking of everything right so we have instrumentation flight instrumentation structures um uh yeah and main propulsion vertical propulsion um and like i said they're they're all coming together really well to be tested very shortly uh 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 um so long answer for a short question which i tend to do uh quite often but uh anyway thanks brian uh really appreciate the uh question that's great i 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 um you know your operating costs and the advantage that you have in the market or is there something else that you know sort of jumps out at like i feel like i tell this story all the time and then people start grasping that concept yeah this is a fantastic question and thank you for that and 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 in bad weather operations.

I mean, 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. So 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. And that's going to make a very significant difference. I think the second one is the focus on economics and safety. So, I mean, this airplane flies 98% of the time, just like a normal commercial aircraft. But compared to a conventional helicopter, I mean, we're up to 75% cheaper per unit mile. So half of the helicopter fleet on the planet simply goes from one place to another. For those folks that operate those helicopters, I mean, this aircraft is literally going to save you 50 to 75% of the cost per unit mile. Like I said, just under a dollar per passenger seat mile versus four plus for a typical helicopter. And I think that is very significant. Having a safer, faster, better, and more economical machine is just, you know, inventing a better mousetrap to do a huge amount of work globally. And 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.

Great. Thanks. That's all for me.

Thank you. And we would now like to turn the call over to Matt Chesler from Investor Relations to answer questions from investors that were submitted in advance or via the webcast chat feature.

Thank you, Operator. Brandon, we're going to start out with a number of questions that are tied to timing. And if you could just answer the questions around what's the timing for certification, finding a production partner, and potential customers. And that is from Jen Folkop. Thank you.

Okay, Jen, great question. We're still targeting certification prior to 2030. We're partnered with Certification Centric 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. And of course, we brought on experts, Richard Alexander, Kevin Bruce, head of Airworthiness, who've done this before. So 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. So on the certification side, we're still on track. We want to get a certified aircraft off the line by 2030.

Here's a question that came in through Reddit, which is really more about near-term milestones. You know, you've indicated where you want to be in six to nine months. But even shorter term from that, what are you thinking about? What are you expecting over the next three months from a build perspective?

That's an awesome question. So the next several months, this is nerdy engineering stuff, by the way. We'll be through PDR season. which is a fancy term for all of the subsystems that, you know, require a lot of engineering thought, have been through their paces, right? So picture an engineer in front of the entire company pitching their system, and it's 150 PowerPoint slides down to the, you know, where each electron goes to the next point in space and time. um and and that allows us to get into uh essentially into manufacturing and then building out the the systems for ironbird testing so pdr leads into cdr um quickly thereafter and i think in the next three to six months can be pretty exciting to see full-scale structural parts arriving right so we'll have the fuselage parts of the wing parts of the empennage which is the back part the canards arriving um and it'll start actually being assembled and look like a normal aircraft uh over the next like i said three to six months which which will be really really cool um i mentioned the iron bird stuff again we can get nerdy on that too uh but that's going to be very exciting seeing everything wired together the flight control computers start talking to each other the uh you know the multiple propulsion units um 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.

And that's going to be really exciting over the next three to six months. so jack the engineer is asking about differences between the full-scale aircraft that you're building right now and the large-scale prototype you know have you discovered anything during production that wasn't apparent on the the large-scale model such as build optimization time save to build or some component fit challenges yeah so really smart question from jack the answer is not yet meaningfully like everything that we've sort of anticipated is rolling forward um kind of normally so um like i said my father was advanced pharmaceutical manufacturing

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 um but also from a manufacturing perspective to be able to anticipate certain changes. So I think we made a lot of smart choices early on that gave some flexibility to take some more practical approaches to manufacturing. So there's nothing that we've discovered so far that is going to radically redesign the aircraft. I mean, you've seen, well, in our half-scale prototype, you saw, you know, as far as the renderings went and then to what we produced uh 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 it's not going to be radically changed um will there be optimization to be done absolutely um of course we'll uh tweak the flight control systems um but from a production perspective yeah there's nothing that um that we've come across so far that uh that has led us to you know radically redesign anything so far so great question hopefully that uh that clarifies

uh the next question is uh from niffer uh uh thinking about testing um is weather going to be a consideration that you take into effect you begin in early 2027 uh sorry the question is weather going to be considered? Yeah. Are there any challenges related to weather that you're going to take into consideration when you begin testing the aircraft?

Well, that's going to be a two-fold answer. The first answer is in terms of location and where we go. So I'm lucky to have done some tests in the Air Force. And I have a couple of buddies who are elite test pilots. So 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. So 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, you know, certified for cold weather ops, all weather ops, or at least that's what the current plan is. But 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, NAMSI 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 tests. So from a location perspective, we take a very practical approach like we do with everything across the country, air story company uh we know what's ahead of us uh and we're planning in advance um now from a specific like you know 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 so i don't want an airplane that is you know usable only in sunny weather days and uh clear 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. And I think operators and customers will appreciate that.

Brandon, we're coming up close to the 9.30 timeline, but I do want to jam in some more questions. Yep, sure. I'll try to be more brief. Sorry, Matt. Okay. So do you anticipate any regular...

Kurt is asking whether you anticipate any specific regulatory headwinds well i mean if any ceo said no they'd be lying right i mean this is a new aircraft category we're specifically um under a bit of an advantage here in canada like said with a very flexible transport canada civil aviation big fish small pond uh flexible regulatory group um that is really smart um and we have the advantage of being like a VTOL 2.0 company so we're certifying now um 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 um 2117 Bravo in the U.S. has been laid out SC VTOL lays out a bunch of uh in Europe um lays out the regulatory framework um to a very high standard as well and so we knew what we were designing to um but i mean the devil's in the details we have to prove it um that is not without some risk we know what those are we've designed the aircraft to those regulations um and so we're off to a really really good start we're operating under a known regulatory framework or multiple frameworks um but there's you know like i said if any ceo said there was there was no regulatory certification risk they would be lying so we have uh we have a lot of work ahead of us uh we think we have great visibility on where we're going um yeah and folks can watch and uh see how

we do um okay great uh uh shangas uh wants to know what you're bringing to farmborough to the farmborough air show next week um he's looking forward to seeing us there nice hall four 4625 right next to the Canadian pavilion.

We'll have a nice little setup with a small demonstrator aircraft there. Like I said, 10 foot wingspan or so. But more importantly, we'll be bringing, I think, seven people over from the team. And so please come talk to us. We'd love to show you around the place. We'll have some, yeah, we'll have some technology that you can interact with to kind of really get a good feel for where we're at. So it's going to be an exciting time in Farnborough. Please come by.

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.

Okay. Yeah, well, thanks, Matt. Really appreciate it. Some great questions from a number of interested folks. Please, you know, keep watching our YouTube channel. Follow me on LinkedIn. You'll find us a pretty transparent group. and we try to really clearly communicate exactly where we're at. And 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 Calvaryte 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, and thank you all, so have a great day.

Thank you. This does conclude today's conference. You may disconnect at this time. Thank you for your participation.