New Horizon Aircraft(HOVR) - 2023 Q1 - Quarterly Report

Part I. Financial Information Item 1. Condensed Financial Statements Unaudited condensed financial statements reflect the impact of the February 2023 IPO and interest income from the Trust Account Condensed Balance Sheets | Metric | March 31, 2023 (Unaudited) | December 31, 2022 | | :----------------------------------- | :--------------------------- | :------------------ | | Cash | $521,599 | $88,277 | | Total current assets | $779,626 | $89,649 | | Marketable Securities held in Trust Account | $118,491,047 | $0 | | Total Assets | $119,270,673 | $458,451 | | Total current liabilities | $129,032 | $442,138 | | Deferred underwriting fee payable | $3,450,000 | $0 | | Total Liabilities | $3,579,032 | $442,138 | | Class A ordinary shares subject to possible redemption | $118,404,683 | $0 | | Total Shareholders' Equity (Deficit) | $(2,713,042) | $16,313 | Condensed Statements of Operations | Metric | Three months ended March 31, 2023 | Period from March 11, 2022 (inception) Through March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :---------------------------------------------------------------- | | Operating and formation costs | $130,269 | $338 | | Loss from operations | $(130,269) | $(338) | | Interest income on investments held in Trust Account | $629,683 | $0 | | Net income (loss) | $499,414 | $(338) | | Basic and diluted net income per share, Class A ordinary shares | $0.05 | $0 | Condensed Statements of Changes in Stockholders' Equity (Deficit) | Metric | Balance January 1, 2023 | Balance at March 31, 2023 | | :--------------------------------------- | :---------------------- | :------------------------ | | Total Shareholders' Equity (Deficit) | $16,313 | $(2,713,042) | | Issuance of Placement Units | N/A | $5,653,750 | | Accretion redemption value of Class A ordinary shares | N/A | $(12,201,276) | | Net income | N/A | $499,414 | Condensed Statements of Cash Flows | Metric | Three Months Ended March 31, 2023 | Period From March 11, 2022 (inception) Through March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :---------------------------------------------------------------- | | Net income (loss) | $499,414 | $(338) | | Interest and dividend income on investments held in Trust Account | $(629,683) | $0 | | Net cash used in operating activities | $(314,255) | $0 | | Investment of cash in Trust Account | $(117,875,000) | $0 | | Net cash used in investing activities | $(117,875,000) | $0 | | Proceeds from sale of Placement Units | $5,653,750 | $0 | | Proceeds from sale of Units, net of underwriting discount paid | $113,735,000 | $0 | | Net cash provided by financing activities | $118,622,577 | $0 | | Net Change in Cash | $433,322 | $0 | | Cash - End of period | $521,599 | $0 | Notes to Unaudited Condensed Financial Statements Note 1. Description of Organization, Business Operations and Going Concern - Pono Capital Three, Inc. is a blank check company (SPAC) incorporated on March 11, 2022, for the purpose of a business combination[21] - The company consummated its Initial Public Offering (IPO) on February 14, 2023, generating gross proceeds of $115,000,000 from 11,500,000 units[23] - Following the IPO, $117,875,000 was placed in a Trust Account, to be invested in U.S. government treasury obligations or money market funds[25] - The company has until February 14, 2024 (or up to August 14, 2024, with extensions) to consummate a Business Combination[38] - Management has determined that the mandatory liquidation, should a Business Combination not occur, raises substantial doubt about the Company's ability to continue as a going concern[38] Note 2. Summary of Significant Accounting Policies - The unaudited condensed financial statements are presented in conformity with GAAP and SEC rules for interim financial reporting[42] - The Company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[43][46] - Investments held in the Trust Account, primarily U.S. Treasury securities, are classified as trading securities and presented at fair value[50] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to their redemption value ($10.25 per share) at each reporting period[56] - Warrants are accounted for as equity-classified instruments, initially measured at fair value, with no subsequent changes in fair value recognized as long as they remain equity-classified[69][100] Note 3. Initial Public Offering - The IPO was consummated on February 14, 2023, following the registration statement becoming effective on February 9, 2023[71] - 11,500,000 units were issued, including the full exercise of the underwriter's over-allotment option, generating gross proceeds of $115,000,000[71] - Each unit consisted of one Class A ordinary share and one redeemable warrant[71] Note 4. Private Placement - Simultaneously with the IPO, the Sponsor (Mehana Capital LLC) purchased 565,375 Placement Units at $10.00 per unit in a private placement[73] - This private placement generated gross proceeds of $5,653,750, which were added to the net proceeds in the Trust Account[73] Note 5. Related Party Transactions - The Sponsor holds 4,935,622 Class B ordinary shares (Founder Shares)[74] - A $300,000 promissory note from the Sponsor to cover IPO expenses was repaid on February 15, 2023[76] - The company pays Mehana Capital LLC (Sponsor) $10,000 per month for administrative support services[78] - The Sponsor or affiliates may provide up to $1,500,000 in working capital loans for transaction costs, convertible into units[79] Note 6. Commitments and Contingencies - Holders of Founder Shares, Placement Units, and other securities are entitled to registration rights[80] - Underwriting fees include a $1,265,000 cash discount paid and $3,450,000 in deferred underwriting commissions payable upon completion of a Business Combination[84] - 103,500 Class A ordinary shares (Representative Shares) were issued to underwriters, valued at $132,480, subject to lock-up and waiver of redemption rights[85][87] - EF Hutton has a right of first refusal for future equity, convertible, and debt offerings for 12 months post-Business Combination[88] Note 7. Shareholders' Equity (Deficit) - As of March 31, 2023, there were 12,168,875 Class A ordinary shares issued and outstanding, including 11,500,000 subject to possible redemption[91] - As of March 31, 2023, there were 4,935,622 Class B ordinary shares issued and outstanding[92] - As of March 31, 2023, there were 11,500,000 Public Warrants and 565,375 Placement Warrants outstanding, each exercisable for one Class A ordinary share at $11.50[93] - Public Warrants are callable for redemption at $0.01 if the Class A ordinary share price equals or exceeds $18.00 for 20 trading days within a 30-trading day period[95][97] Note 8. Fair Value Measurements | Description | Amount at Fair Value (March 31, 2023) | Level 1 | | :-------------------------------- | :------------------------------------ | :------ | | Investments held in Trust Account: U.S. Treasury Securities | $118,491,047 | $118,491,047 | Note 9. Subsequent Events - The company did not identify any subsequent events requiring adjustment or disclosure up to the date the financial statements were issued[102] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Pono Capital Three, Inc.'s financial condition, IPO impact, and going concern risk as a blank check company Overview - Pono Capital Three, Inc. is a blank check company formed to enter into a business combination[105] - The company has not selected a business combination target and has not commenced operations or generated revenues to date[105][106] Results of Operations | Metric | Three months ended March 31, 2023 | Period from March 11, 2022 (inception) Through March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :---------------------------------------------------------------- | | Net income (loss) | $499,414 | $(338) | | Unrealized gain on investments held in Trust Account | $629,683 | $0 | | Formation and operating costs | $130,269 | $338 | Liquidity, Capital Resources and Going Concern | Metric | Three months ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(314,255) | | Net cash used in investing activities | $(117,875,000) | | Net cash provided by financing activities | $118,622,577 | - Following the IPO, $117,875,000 from net proceeds was placed in a trust account[115] - Management has determined that the mandatory liquidation, should a Business Combination not occur by February 14, 2024, raises substantial doubt about the Company's ability to continue as a going concern[119] Off-Balance Sheet Arrangements - The company had no off-balance sheet arrangements as of March 31, 2023, and December 31, 2022[120] Contractual Obligations - Holders of Founder Shares, Placement Units, and other securities are entitled to registration rights[121] - A $300,000 promissory note from the Sponsor was repaid on February 15, 2023[122] - Deferred underwriting commissions of $3,450,000 are payable to underwriters upon completion of a Business Combination[125] Critical Accounting Policies - Derivative financial instruments (warrants) are equity-classified, initially measured at fair value, with no subsequent fair value changes recognized[127] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value[128] - Net income per share calculation does not consider the effect of warrants due to their exercise being contingent on future events[129] Recent Accounting Standards - Management believes no recently issued, but not yet effective, accounting standards would have a material effect on the company's unaudited condensed financial statements[130] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces minimal market or interest rate risk due to Trust Account investments in short-term U.S. government securities - As of March 31, 2023, the company was not subject to any material market or interest rate risk[131] - Net proceeds in the Trust Account are invested in short-term U.S. government treasury bills or money market funds, limiting exposure to interest rate risk[131] Item 4. Controls and Procedures CEO and CFO concluded disclosure controls were effective as of March 31, 2023, with no material changes in internal control Evaluation of Disclosure Controls and Procedures - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[133] Changes in Internal Control Over Financial Reporting - There was no material change in internal control over financial reporting during the period from March 11, 2022 (inception) through December 31, 2022[134] Part II. Other Information Item 1. Legal Proceedings No legal proceedings were reported as of the filing date - No legal proceedings were reported[136] Item 1A. Risk Factors Geopolitical conditions and regulatory changes pose risks to the company's business combination efforts - Geopolitical conditions, including the Russia-Ukraine conflict and related sanctions, may materially and adversely affect the company's search for a Business Combination and the operations of a target business[138][139] - Changes in laws or regulations, such as proposed SEC rules relating to SPACs, may increase the costs and time needed to negotiate and complete an initial business combination[140][141] Item 2. Unregistered Sale of Equity Securities and Use of Proceeds Details on unregistered Founder Share sales, IPO and private placement proceeds, and Trust Account deposits are provided - 4,935,622 Founder Shares were issued to Mehana Capital LLC (Sponsor) in unregistered sales[142] - The Initial Public Offering on February 14, 2023, generated gross proceeds of $115,000,000 from 11,500,000 units[143] - A private placement concurrently with the IPO generated gross proceeds of $5,653,750 from 565,375 units[144] - A total of $117,875,000 was deposited into a trust account for the benefit of public shareholders[145] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported[148] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not Applicable[149] Item 5. Other Information No other information was reported in this section - No other information was reported[150] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including officer certifications and Inline XBRL documents - Exhibits include certifications of Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (101.INS, 101.CAL, 101.SCH, 101.DEF, 101.LAB, 101.PRE, 104)[152]