Astro Aerospace today announced that it has reached an agreement to acquire eVTOL aircraft developer Horizon Aircraft. In a deal structured around Astro’s plans to be listed on the Nasdaq stock market, the U.S. company said that it will take full ownership of privately owned Horizon in exchange for five million of its common shares.
In Astro’s Securities and Exchange Commission 8-K filing, the company committed to providing Horizon with a minimum of $1.5 million as a first-year operating budget. The funds are to be supplied in two $750,000 installments within three months of the transaction being finalized, which is anticipated to occur around mid-May. Horizon has previously indicated that it may need approximately $100 million to complete type certification of the ducted fan aircraft, which it expects to have a range of just over 300 miles. It aims to get the model into service by 2025.
The 8-K filing further specifies that if Horizon produces a working 1:2 scale prototype of its planned hybrid-electric Cavorite X5 eVTOL aircraft within 12 months of the deal closing, it will receive an additional two million shares. This amount will reduce to 1.5 million shares if the task takes 18 months.
Astro’s investor deck, published earlier this year, indicated that the Nasdaq listing will result in 15 million shares on closing. In April 29 trading on the over-the-counter (OTC) market, Astro’s stock closed at $3.60, implying a projected market capitalization of $54 million. On that basis, the share-based transaction to acquire Horizon would be worth $18 million.
According to Texas-based Astro, the company will pursue the development of the five-seat Cavorite X5 in addition to its existing two-seat Elroy and Alta designs. Since 2018, when an earlier version of the Elroy first made a public flight demonstration, development work appears to have proceeded slowly.
Canada-based Horizon’s cofounder and CEO, Brandon Robinson, is to become president of Astro with a seat on its board of directors. Horizon’s chief operating officer, Jason O’Neill, will become an executive vice president of Astro.
Robinson, a former air force pilot and mechanical engineer, has an MBA degree and experience in managing aviation projects that he gained while serving in the Royal Canadian Air Force and running a previous aerospace engineering company. He formed Horizon with his father, Brian Robinson, who is its chief engineer.
According to Astro, the Horizon team has already conducted more than 200 test flights with a sub-scale model of the Cavorite X5. The design features 16 ducted fans installed in the wing and canard, which are covered by the wing surfaces during the cruise phase of flight.