New Horizon Aircraft Ltd.

Item 1A. Risk Factors

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on August 15, 2024 (the Annual Report). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Except as set forth below, as of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report filed with the SEC.

Our failure to meet Nasdaqs continued listing requirements could result in a delisting of our securities.

If we fail to satisfy Nasdaqs continued listing requirements, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our securities. Such a delisting would likely have a negative effect on the price of our shares and would impair the ability to sell or purchase our shares.

On July 19, 2024, Nasdaq notified us that for at least the last 30 consecutive business days, the bid price for the Companys Class A ordinary shares had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the Bid Price Rule).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar days, or until January 15, 2025, to regain compliance with the Bid Price Rule. If at any time before January 15, 2025, the bid price of our Class A ordinary shares closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide us with a written confirmation of compliance with the Bid Price Rule and the matter deemed closed.

If we do not regain compliance with the Bid Price Rule by  On January 150, 2025, we may be eligible for an additional 180-day compliance period. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, and would need to provide written notice of our intention to cure the bid price deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

If we do not regain compliance with the Bid Price Rule when required, Nasdaqthe Company completed 10 consecutive business days will provide written notification to us thatth our Class A ordinary shares are subject to delistclosing. At th at time, we may appeal the delisting determination to a Nasdaq hearings panelmore than $1.00 per share.

On August 28, 2024, Nasdaq notified us that the Company had failed to maintain a net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years required for continued listing under Nasdaq Listing Rule 5550(b)(3) (the Net Income Standard). The Nasdaq staff (the Staff) also notified the Company it does not meet the alternative continued listing standards under Nasdaq Listing Rule 5550(b)(2) (the Market Value of Listed Securities Standard, which requires the market value of the Companys listed securities be at least $35 million) or Nasdaq Listing Rule 5550(b)(1) (the Equity Standard, which requires the Company to maintain stockholders equity of at least $2.5 million) (the Net Income Standard, the Market Value of Listed Securities Standard, and the Equity Standard, collectively the Continued Listing Standards).

The Company submitted a plan to the Staff to regain compliance (a Compliance Plan) with the Continued Listing Standards on October 2, 2024 and is considering . On October 11, 2024, the various options available to regain cCompany received a letter from the Staff advising the Compliance withany that the Continued Listing Standards. If Staff did not accept the Companys Compliance Plan is (the Determination Letter) as written. In accepted,ordance with Nasdaq will grantListing Rule 5815(a), the Company up to 180 calendar days fromrequested a hearing before the date of Nasdaq Hearings Panel (the Notice to ePanel) to appeal the Staffs determination and providence compliance. If Nasdaq does not accept  additional information. The hearing took place on December 12, 2024, and the Companys Compliance Plan,  is currently awaiting the results of this hearing. If the Company will haves appeal is successful, the opportunity to appeal that decisCompany may be granted addition to a Nasdaq hearings panel per Nasdaqal time (up to 180 calendar days from the date of the Determination Letter) to evidence compliance with the Continued Listing Rule 5815(a).

Standards or outright continued listing on the Nasdaq.

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In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our shares to become listed again, stabilize the market price or improve the liquidity of our shares, prevent our shares from dropping below Nasdaqs minimum bid price requirement or prevent future non-compliance with Nasdaqs listing requirements.

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If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

The notices from Nasdaq have no immediate effect on the listing of our Class A ordinary shares, and our Class A ordinary shares will continue to be listed on the Nasdaq Capital Market under the symbol HOVR. We are currently evaluating our options for regaining compliance with both the Bid Price Rule and the Continued Listing Standards. While there can be no assurance that we will regain compliance with the Bid Price Rule or the Continued Listing Standards, we expect to cure these deficiencies within each respective permitted period.