Pono Capital Two Inc

We are first mailing these materials to our stockholders on or about January 24, 2024.

As discussed in the enclosed Proxy Statement, the purpose of the Special Meeting is to consider and vote upon the following proposals:

(i) Proposal 1 — A proposal to amend (the “Extension Amendment”) the Company’s Third Amended and Restated Certificate of Incorporation (as amended, the “Charter”), to extend the date by which PTWO has to consummate a business combination from February 9, 2024 to November 9, 2024 (the “Extended Date”);

(ii) Proposal 2 — A proposal to direct the chairperson of the special meeting to adjourn the Special Meeting to a later date or dates (the “Adjournment”), if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the foregoing proposal.

Each of the Extension Amendment proposal and the Adjournment proposal are more fully described in the accompanying Proxy Statement.

The purpose of the Extension Amendment is to allow the Company more time to complete the SBC Business Combination (as defined below). Our Charter provides that the Company has until February 9, 2024 (or such later date as described below, the “Termination Date”) to complete an initial business combination. If the Extension Amendment is approved, the Termination Date will be extended to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account. On January 11, 2024, the Company entered into a non-redemption agreement with an unaffiliated investor which agreed to acquire from public stockholders of the Company 1,500,000 to 1,700,000 shares of Class A common stock in the open market, at a prices no higher than the redemption price per share payable to stockholders who exercise redemption rights in connection with the stockholder vote to approve the Company’s proposed business combination with SBC Medical Group Holdings Incorporated, prior to the stockholder meeting to vote on the Extension Amendment and to agree to waive its redemption rights and hold the shares until after the closing of the Business Combination. Please see the Current Reports on Form 8-K we filed with the SEC on January 18, 2024 for additional information.

On January 31, 2023, we entered into an Agreement and Plan of Merger, as amended and restated on June 21, 2023 (as amended by Amendment No. 1, dated September 8, 2023, Amendment No. 2, dated October 26, 2023, Amendment No. 3 dated December 28, 2023, and as it may be further amended or supplemented from time to time, the “Merger Agreement”), by and among us, Pono Two Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”), SBC Medical Group Holdings Incorporated, a Delaware corporation (“SBC”), Mehana Capital, LLC, in its capacity as Purchaser Representative, and Yoshiyuki Aikawa, in his capacity as Seller Representative.

Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement, Merger Sub will merge with and into SBC, with SBC continuing as the surviving corporation. The transactions contemplated by the Merger Agreement are referred to herein as the “SBC Business Combination.”

As a condition to closing of the SBC Business Combination, SBC will complete certain restructuring transactions pursuant to which SBC Medical Group Co., Ltd., a Japanese corporation (“SBC-Japan”) and certain related entities which carry on the business of SBC-Japan and such other related entities, will become subsidiaries of SBC.

As consideration for the SBC Business Combination, the holders of SBC securities as of the closing of the SBC Business Combination, collectively will be entitled to receive from us, in the aggregate, a number of our securities with an aggregate value equal to (a) $1,000,000,000, minus (b) the amount, if any, by which $3,000,000 exceeds SBC’s Net Working Capital, plus (c) the amount, if any, by which SBC’s Net Working Capital exceeds $3,000,000, minus (d) the aggregate amount of any outstanding indebtedness (minus cash held by SBC) of SBC at Closing, minus (e) specified transaction expenses of SBC associated with the Business Combination.

Please see the Current Reports on Form 8-K we filed with the SEC on February 2, 2023, June 22, 2023, September 11, 2023, October 26, 2023, and December 29, 2023 for additional information.

PTWO and the other parties to the Merger Agreement are working towards satisfaction of the conditions to complete the SBC Business Combination, including the necessary filings with the U.S. Securities and Exchange Commission related to the transaction, but are concerned that there may not be sufficient time before the Termination Date to consummate the SBC Business Combination. Accordingly, PTWO’s board of directors (the “Board”) has determined that, given PTWO’s expenditure of time, effort and money on identifying SBC as a target business and completing the SBC Business Combination, it is in the best interests of its stockholders to approve the Extension Amendment to allow for additional time to consummate the SBC Business Combination if needed, and, assuming that the Extension Amendment is so approved and the Charter is amended, PTWO believes it will have sufficient time to consummate the SBC Business Combination before the Extended Date.

If the Extension Amendment is approved and the Board determines that PTWO will not be able to consummate an initial business combination by the Extended Date and does not to seek any further extension to consummate a business combination, PTWO would then look to wind up the Company’s affairs and redeem 100% of the outstanding public shares.

In connection with the Extension Amendment, public stockholders may elect (the “Election”) to redeem their shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to PTWO to pay franchise and income taxes, divided by the number of then outstanding public shares, regardless of whether such public stockholders vote “FOR” or “AGAINST” the Extension Amendment, and an Election can also be made by public stockholders who do not vote, or do not instruct their broker or bank how to vote, at the Special Meeting. Public stockholders may make an Election regardless of whether such public stockholders were holders as of the record date. Each redemption of shares by our public stockholders will decrease the amount in our Trust Account, which held approximately $20,904,498.68 of marketable securities as of January 18, 2024. In addition, public stockholders who do not make the Election would be entitled to have their shares redeemed for cash if PTWO has not completed a business combination by the Extended Date and does not to seek any further extension to consummate a business combination. Mehana Capital LLC, our sponsor (the “Sponsor”), our officers and directors and the representative of the underwriters in the our initial public offering (collectively, the “Sponsor Group”) hold the right to vote over an aggregate of 3,509,375 shares of Common Stock which include 3,509,374 shares of Class A common stock and one share of our Class B Common Stock. Prior to our initial public offering (“IPO”), 2,875,000 shares of Class B common stock were sold to the Sponsor, 2,874,999 of which were converted into shares of Class A common stock on May 8, 2023, which we refer to as the “Founder Shares. ” The Sponsor also purchased 634,375 units (the “Private Placement Units”) in a private placement which occurred simultaneously with the completion of the IPO, which include 634,375 shares of Class A common stock.

Subject to applicable securities laws (including with respect to material nonpublic information), the Company or the initial stockholders or any of their respective affiliates may (i) purchase public shares from institutional and other investors (including those who elect to redeem, or indicate an intention to redeem, public shares), (ii) enter into transactions with such investors and others to provide them with incentives to not redeem their public shares, or (iii) execute agreements to purchase such public shares from such investors or enter into non-redemption agreements. In the event that the initial stockholders or any of their respective affiliates purchase public shares in situations in which the tender offer rules restrictions on purchases would apply, they (a) would purchase the public shares at a price no higher than the price offered through the Company’s redemption process (i.e., approximately $10.80 per share, based on the amounts held in the Trust Account as of January 18, 2024 after the release of interest income to be used by the Company to pay its income and franchise tax obligations); (b) would represent in writing that such public shares will not be voted in favor of approving the Extension Amendment proposal; and (c) would waive in writing any redemption rights with respect to the public shares so purchased.

To the extent any such purchases by the initial stockholders or any of their respective affiliates are made in situations in which the tender offer rules restrictions on purchases apply, we will disclose in a Current Report on Form 8-K prior to the Special Meeting the following: (i) the number of public shares purchased outside of the redemption offer, along with the purchase price(s) for such public shares; (ii) the purpose of any such purchases; (iii) the impact, if any, of the purchases on the likelihood that the Extension Amendment proposal will be approved; (iv) the identities of the securityholders who sold to the initial stockholders or any of their respective affiliates (if not purchased on the open market) or the nature of the securityholders (e.g., 5% security holders) who sold such public shares; and (v) the number of shares of common stock for which the Company has received redemption requests pursuant to its redemption offer.

The purpose of such share purchases and other transactions would be to increase the likelihood of otherwise limiting the number of public shares electing to redeem. If such transactions are effected, the consequence could be to cause the Extension Amendment proposal to be effectuated in circumstances where such effectuation could not otherwise occur. Consistent with SEC guidance, purchases of shares by the persons described above would not be permitted to be voted for Extension Amendment proposal at the Special Meeting and could decrease the chances that the Extension Amendment proposal would be approved. In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Company hereby represents that any Company securities purchased by the initial stockholders or any of their respective affiliates in situations in which the tender offer rules restrictions on purchases would apply would not be voted in favor of approving the Extension Amendment proposal.

To exercise your redemption rights, you must tender your shares to the Company’s transfer agent at least two business days prior to the Special Meeting (or February 1, 2024). You may tender your shares by either delivering your share certificate to the transfer agent or by delivering your shares electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system. If you hold your shares in street name, you will need to instruct your bank, broker or other nominee to withdraw the shares from your account in order to exercise your redemption rights.

We are not permitted to use the proceeds placed in the Trust Account and the interest earned thereon to pay any excise taxes or any other similar fees or taxes in nature that may be imposed on us pursuant to any current, pending or future rules or laws, including without limitation any excise tax due imposed under the Inflation Reduction Act (IRA) of 2022 (H.R. 5376) on any redemptions or stock buybacks by the Company. For the avoidance of doubt, the proceeds placed in the Company’s Trust Account and the interest earned thereon will not be used to pay for any excise tax due under the IRA in connection with any redemptions of the Company’s Class A common stock prior to or in connection with its initial business combination.

As of January 18, 2024, there was approximately $20,904,498.68 in the Trust Account. If the Extension Amendment is approved, the redemption price per share will be approximately $10.80 per share (after deducting taxes payable). The closing price of the Company’s Class A common stock on January 22, 2024 was $10.84. The Company cannot assure stockholders that they will be able to sell their shares of the Company’s Class A common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares.

If the Extension Amendment proposal is not approved and we do not consummate a business combination by February 9, 2024, as contemplated by our IPO prospectus and in accordance with our Charter, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest not previously released to us (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no distribution from the Trust Account with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, our Sponsor, our officers and directors and our other initial stockholders will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares or the Private Placement Units.

Subject to the foregoing, the affirmative vote of the holders of at least sixty-five percent (65%) of all then outstanding shares of the Common Stock, including the Founder Shares and the shares underlying the Private Placement Units, will be required to approve the Extension Amendment proposal. The approval of the Extension Amendment is essential to the implementation of the Board’s plan to extend the date by which we must consummate our initial business combination. Notwithstanding stockholder approval of the Extension Amendment, the Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by our stockholders.

Our board has fixed the close of business on December 29, 2023 as the record date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting and any adjournment thereof. Only holders of record of the Company’s Common Stock on that date are entitled to have their votes counted at the Special Meeting or any adjournment thereof.

After careful consideration of all relevant factors, the Board has determined that each of the proposals are advisable and recommends that you vote or give instruction to vote “FOR” such proposals.

Enclosed is the Proxy Statement containing detailed information concerning the Extension Amendment and the Adjournment proposals and the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read this material carefully and vote your shares.

Sincerely,

/s/ Darryl Nakamoto

Darryl Nakamoto

Chief Executive Officer

January 23, 2024