SBC Medical Group Holdings (SBC) Proxy Filing summary

Executive summary

• The proxy filing details a proposed merger between Pono Capital Two, Inc. and SBC Medical Group Holdings Incorporated, with Pono as the surviving public entity, to be renamed SBC Medical Group Holdings Incorporated upon closing.

• The merger consideration is $1 billion, subject to adjustments for working capital, indebtedness, and transaction expenses, to be paid in newly issued shares of Pono common stock.

• The transaction is structured as a reverse recapitalization, with SBC as the accounting acquirer and Pono as the legal acquirer.

• The combined company will be a “controlled company” under Nasdaq rules, with Dr. Yoshiyuki Aikawa expected to control approximately 66.9% of voting power post-merger.

• The special meeting for shareholder approval is scheduled for July 31, 2024, with redemption rights for public shareholders at approximately $10.92 per share.

Voting matters and shareholder proposals

• Shareholders are asked to vote on: (1) the business combination proposal, (2-4) charter amendments (name change, removal of SPAC provisions, restatement), (5) director elections, (6) an equity incentive plan, (7) approval of share issuance for Nasdaq compliance, and (8) adjournment if necessary.

• Approval of the business combination and related proposals is required for the merger to proceed; the adjournment proposal is not conditioned on the others.

• Sponsor, directors, and officers have agreed to vote in favor of all proposals and to waive redemption rights.

Board of directors and corporate governance

• The post-merger board will consist of five directors: three designated by SBC, one by Pono, and one mutually agreed upon, with a majority required to be independent under Nasdaq rules.

• The board will be classified into three staggered terms.

• The combined company will qualify for certain Nasdaq governance exemptions as a controlled company.