Pono Capital Three, Inc. (NasdaqGM:PTHR) entered into a definitive agreement to acquire Horizon Aircraft, Inc. on August 15, 2023. Pursuant to the Business Combination Agreement, it is intended that the Target Company will amalgamate with Pono Three Merger Sub, Inc., a wholly owned subsidiary of Pono, with the resulting combined company continuing as a wholly owned subsidiary of Pono. Stockholders of the Target Company will receive shares of common stock of Pono (the ?Business Combination?). In connection with the Business Combination, it is expected that Pono will redomesticate as a British Columbia company (the ?Redomestication?) and change its name to ?Horizon Aircraft Ltd.? or such other name as may be determined by the Target Company. The transaction values Horizon Aircraft at $96 million, which is expected to result in a combined pro forma equity value of approximately $216 million before expenses, assuming no redemptions in the Business Combination. As consideration for the Amalgamation, the holders of Horizon common shares collectively will be entitled to receive from Pono, in the aggregate, a number of Pono Class A ordinary shares equal to (the ? Exchange Consideration ?) the quotient derived from dividing (a) the difference of (i) Ninety-six Million Dollars ($96,000,000) minus (ii) the Closing Net Indebtedness, by (b) the Redemption Price (as defined below), with each Horizon shareholder receiving, for each Horizon share held, a number of Pono Class A ordinary shares equal to such shareholder?s pro rata portion of the Exchange Consideration. A Forward Purchase Agreement with Meteora Capital will be utilized in this transaction. The cash proceeds raised in the transaction, after any redemptions and payment of transaction expenses, are anticipated to be used for the further development of the Cavorite X7, Horizon Aircraft?s flagship hybrid electric eVTOL, and for general company operating purposes.

The closing of the Business Combination and related transactions are subject to approval by Pono stockholders and Horizon Aircraft?s shareholders, and are also subject to other customary closing conditions. It is currently expected that the transaction will close in the fourth quarter of 2023 or the first quarter of 2024, assuming such closing conditions are met. The boards of directors of Horizon Aircraft and Pono have unanimously approved the Business Combination Agreement and the proposed transactions.

Nelson Mullins Riley & Scarborough LLP is serving as U.S. legal counsel and Fang and Associates is serving as Canadian legal counsel to Pono in the transaction. Dorsey & Whitney LLP is serving as U.S. legal counsel and Gowling WLG (Canada) LLP is serving as Canadian legal counsel to Horizon Aircraft in the transaction.