Horizon Aircraft, Inc. executed a letter of intent to acquire Pono Capital Three, Inc. (NasdaqGM:PTHR) from a group of shareholders in a reverse merger transaction on June 23, 2023. Horizon Aircraft, Inc. entered into a definitive Business Combination agreement to acquire Pono Capital Three, Inc. from a group of shareholders for $94.9 million in a reverse merger transaction on August 15, 2023. Pursuant to the agreement, it is intended that Horizon Aircraft 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. As consideration, the stockholders of the Horizon Aircraft will receive an estimated 9,053,156 new Pono Class A ordinary shares. 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. In connection with the Business Combination, it is expected that Pono will redomesticate as a British Columbia company and change its name to ?Horizon Aircraft Ltd.? or such other name as may be determined by the Target Company. 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. It is anticipated that, upon the completion of the Business Combination, Pono?s public shareholders will retain an ownership interest of approximately 43.3% of the outstanding shares of the Combined Entity, the Sponsor will retain an ownership interest of approximately 20.7% and the Horizon securityholders will own approximately 35.5% of the outstanding shares of the Combined Entity. Upon closing of the Business Combination, the post-closing company will be renamed ?New Horizon Aircraft Ltd.? and will continue to do business as ?Horizon Aircraft? with its common stock and warrants trading on The Nasdaq Stock Market, LLC (?Nasdaq?) under the ticker symbols ?HOVR? and ?HOVRW,? respectively.

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 including any waiting period (and any extension thereof) applicable to the consummation of this Agreement under any Antitrust Laws shall have expired or been terminated, all consents required to be obtained from or made with any Governmental Authority in order to consummate the transactions contemplated by the agreement shall have been obtained or made, receipt of specified third party consents, after giving effect to the redemption and any proceeds from the Equity Financing, Horizon Aircraft shall have net tangible assets of at least $5,000,001, the members of the post-closing Board shall have been elected or appointed as of the closing consistent with the requirements, the Registration Statement shall have been declared effective by the SEC, the shares of Pono Class A Ordinary Shares issued as exchange consideration shall have been approved for listing on Nasdaq, Closing Deliveries including Registration Rights agreement, escrow agreement, employment agreements, non-competition and non-solicitation agreements, and lock-up agreement shall have been executed and delivered, Horizon shall have converted, terminated, extinguished and cancelled in full any outstanding Horizon Convertible Securities, convertible debt or commitments, Pono shall have received written resignations, effective as of the closing, of each of the directors and officers of Horizon Aircraft as requested. The boards of directors of Horizon Aircraft and Pono have unanimously approved the Business Combination Agreement and the proposed transactions. Pono Capital shareholders approved the transaction at the extraordinary general meeting of Pono?s shareholders held on January 4, 2024. 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. As of January 11, 2024, the business combination is expected to be completed on January 12, 2024. Andrew Tucker and Peter Strand of Nelson Mullins Riley & Scarborough LLP are serving as U.S. legal counsel and Fang and Associates Barristers & Solicitors is serving as Canadian legal counsel to Pono in the transaction. Nelson Mullins also conducted legal diligence review on behalf of Pono. Dorsey & Whitney LLP is serving as U.S. legal counsel and Brett Kagetsu, Tara Amiri, Paul Armitage, Brent Kerr, Ian Macdonald and Todd Bissett of Gowling WLG (Canada) LLP acted as Canadian legal advisors to Horizon Aircraft in the transaction. Advantage Proxy, Inc. acted as proxy solicitor to Pono. Mark Zimkind of Continental Stock Transfer & Trust Company acted as transfer agent and registrar to Pono.

Horizon Aircraft, Inc. completed the acquisition of Pono Capital Three, Inc. (NasdaqGM:PTHR) from a group of shareholders in a reverse merger transaction on January 12, 2024. Beginning January 16, 2024, the combined company will operate as New Horizon Aircraft, Ltd. and the common shares and warrants will trade on the Nasdaq Stock Exchange under the ticker symbols ?HOVR? and ?HOVRW?, respectively. Brandon Robinson, Founder, Chief Executive Officer and Chairman of the Board of Horizon Aircraft, and the current management team including Jason O?Neill, Chief Operating Officer, Brian Robinson, Chief Engineer, and Brian Merker, Chief Financial Officer, will continue to lead Horizon Aircraft.