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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 (Mark
One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2023

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from ______________ to ______________

 Commission
File Numbe r: 001-41462

 PONO

 (Exact
name of registrant as specified in its charter)

 Delaware

 88-1192288

 (State
or other jurisdiction of incorporation or organization)

 (IRS
Employer Identification No.)

Ilalo St. #102

 Honolulu,
 Hawaii 96813

 Telephone:
 (808) 892-6611

 (Address,
including zip code, and telephone number, including area code, of registrant's principal executive offices)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Units,
 each consisting of one share of Class A Common Stock and one Redeemable Warrant

 PTWOU

 The
 Nasdaq Stock Market LLC

 Class
 A Common Stock, $0.0001 par value per share

 PTWO

 The
 Nasdaq Stock Market LLC

 Redeemable
 Warrants, each warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share

 PTWOW

 The
 Nasdaq Stock Market LLC

 Securities registered pursuant to Section
12(g) of the Act: None.

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 As
of June 30, 2023, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $ 19,785,098.

 As
of March 18, 2024, there were 5,216,290 shares of the registrant's Class A common stock, par value $0.0001 per share, and 1 share
of the registrant's Class B common stock, par value $0.0001 per share, issued and outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE

 None.

 PONO

 Annual
Report on Form 10-K for the Period Ended December 31, 2023

 Page

 PART
 I

 ITEM
 1.

 BUSINESS

 ITEM
 1A.

 RISK
 FACTORS

 ITEM
 1B.

 UNRESOLVED
 STAFF COMMENTS

 ITEM
 1C.

 CYBERSECURITY

 ITEM
 2.

 PROPERTIES

 ITEM
 3.

 LEGAL
 PROCEEDINGS

 ITEM
 4.

 MINE
 SAFETY DISCLOSURES

 PART
 II

 ITEM
 5.

 MARKET
 FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM
 6.

 [RESERVED]

 ITEM
 7.

 MANAGEMENT'S
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM
 7A.

 QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 ITEM
 8.

 FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

 ITEM
 9.

 CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM
 9A.

 CONTROLS
 AND PROCEDURES

 ITEM
 9B.

 OTHER
 INFORMATION

 ITEM
 9C.

 DISCLOSURE
 REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 PART
 III

 ITEM
 10.

 DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM
 11.

 EXECUTIVE
 COMPENSATION

 ITEM
 12.

 SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 ITEM
 13.

 CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM
 14.

 PRINCIPAL
 ACCOUNTANT FEES AND SERVICES

 PART
 IV

 ITEM
 15.

 EXHIBITS
 AND FINANCIAL STATEMENT SCHEDULES

 ITEM
 16.

 FORM
 10–K SUMMARY

 CERTAIN
TERMS

 References
to "the Company," "Pono," "our," "us" or "we" refer to Pono Capital Two,
Inc., a blank check company incorporated in Delaware on March 11, 2022. References to our "Sponsor" refer to Mehana Capital
LLC, a Delaware limited liability company. References to our "IPO" refer to the initial public offering of Pono Capital Two,
Inc., which closed on August 9, 2022.

 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the
Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. The statements contained in this report
that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements
regarding our or our management's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words "anticipates," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "might," "plan," "possible,"
"potential," "predict," "project," "should," "would" and similar expressions
may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking
statements in this report may include, for example, statements about our:

 ability
 to complete our initial business combination;

 success
 in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 officers
 and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving
 our initial business combination, as a result of which they would then receive expense reimbursements;

 potential
 ability to obtain additional financing to complete our initial business combination;

 pool
 of prospective target businesses;

 the
 ability of our officers and directors to generate a number of potential investment opportunities;

 potential
 change in control if we acquire one or more target businesses for stock;

 the
 potential liquidity and trading of our securities;

 the
 lack of a market for our securities;

 use
 of proceeds not held in the trust account or available to us from interest income on the trust account balance; or

 financial
 performance following our IPO.

 The
forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments
and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors."
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may
vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable
securities laws and/or if and when management knows or has a reasonable basis on which to conclude that previously disclosed projections
are no longer reasonably attainable.

 PART
I

 ITEM
 1.

 BUSINESS

 Introduction

 We
are a blank check company incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to herein as our
initial business combination. Our Sponsor is Mehana Capital LLC, a Delaware limited liability company ("Sponsor").

 We
believe that there are many target companies that could become attractive public companies and we will seek a target in the disruptive
technology sector with a spotlight on companies in Asia with Japan in particular. While we may pursue an initial business combination
target in any industry or geographic region, we will seek to capitalize on the operational and investment experience of our management
team and focus on disruptive technology companies that we believe have significant growth prospects and the potential to generate attractive
returns for our stockholders. We expect to focus on identifying potential target companies with above-industry-average growth, and a
defensible market position where our management team's operational, strategic, or managerial expertise can assist in maximizing
value.

 The
Registration Statement for our initial public offering was declared effective on August 4, 2022 (the "Initial Public Offering,"
or "IPO"). On August 9, 2022, we consummated the Initial Public Offering of 11,500,000 Units, including 1,500,000 Units issued
pursuant to the exercise of the underwriters' over-allotment option in full, generating gross proceeds of $115,000,000. Each Unit
consists of one share of Class A common stock and one redeemable warrant ("Public Warrant"). Each Public Warrant entitles
the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share.

with the closing of the Initial Public Offering, we consummated the sale of 634,375 units (the "Placement Units") at a price
of $10.00 per Placement Unit in a private placement to the Sponsor, including 63,000 Placement Units issued pursuant to the exercise
of the underwriters' over-allotment option in full, generating gross proceeds of $6,343,750, which is described in Note 4.

 Following
the closing of the Initial Public Offering on August 9, 2022, an amount of $117,875,000 ($10.25 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (the "Trust
Account"), and will be invested only in U.S. government treasury obligations with maturities of 185 days or less or in money market
funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury
obligations, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the funds held in the Trust
Account, as described below.

 On
May 5, 2023, we held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned the Special Meeting
to May 8, 2023. On May 8, 2023, we held the Special Meeting. During the Special Meeting, stockholders approved an amendment to the Company's
amended and restated certificate of incorporation (the "Extension Amendment" (i) to extend the date by which the Company
has to consummate a business combination from May 9, 2023 to February 9, 2024 for no additional amount to be paid by the Sponsor into
the Trust Account, and (ii) to provide for the right of a holder of Class B common stock to convert such shares into shares of Class
A common stock on a one-for-one basis prior to the closing of a business combination at the election of the holder. As approved by the
stockholders of the Company, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware
Secretary of State on May 8, 2023. The Company's stockholders elected to redeem an aggregate of 9,577,250 shares of Class A common
stock of the Company in connection with the Special Meeting. Following such redemptions, the amount of funds remaining in the Trust Account
is approximately $20 million.

 In
connection with the Special Meeting, the Company and the Sponsor entered into non-redemption agreements with certain unaffiliated stockholders
owning, in the aggregate, 998,682 shares of the Company's Class A common stock, pursuant to which such stockholders agreed, among
other things, not to redeem or exercise any right to redeem such public shares in connection with the Extension Amendment. In connection
with the non-redemption agreements, the Sponsor agreed to transfer to the stockholders that entered into such agreements Sponsor Shares
upon the consummation of the Company's initial business combination.

 On
May 8, 2023, the Sponsor converted 2,874,999 Founder Shares of Class B common stock into 2,874,999 shares of Class A common stock.

 On
February 5, 2024, the Company held another special meeting of stockholders (the "Second Special Meeting"). During the Second
Special Meeting, stockholders approved another amendment to the Company's amended and restated certificate of incorporation to
extend the date by which the Company has to consummate a business combination (the "Combination Period") from February 9,
2024 to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account. As approved by the stockholders of
the Company, the Company filed another amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary
of State on February 5, 2024. The Company's stockholders elected to redeem an aggregate of 273,334 shares of Class A common stock
of the Company in connection with the Second Special Meeting. Following such redemptions, the amount of funds remaining in the trust
account is approximately $17.9 million.

 In
connection with the Second Special Meeting, the Company entered into a non-redemption agreement with an unaffiliated investor (the
"Holder") 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 (as
defined below), prior to the Second Special Meeting and to agree to waive its redemption rights and hold the shares until after the
closing of the business combination. In consideration of the Holder's agreement to waive its redemption rights with respect to
the shares, and subject to (i) the Holder acquiring 1,500,000 to 1,700,000 shares of Class A common stock in the open market, and
(ii) Holder's satisfaction of its other obligations under the non-redemption agreement, the Company, on the closing date of
the business combination, provided that Holder has continued to hold the Holder's shares through the closing date, SBC and
Yoshiyuki Aikawa, the chief executive officer of SBC, shall cause to be issued or transferred to Holder a number of shares of Class
A common stock held by Dr. Aikawa (the "Incentive Shares"), which will equal one (1) Incentive Share for each public
share purchased in the open market pursuant to the non-redemption agreement that is continuously owned by Holder until the closing
date of the business combination. This non-redemption agreement terminates on the earliest to occur of (i) the closing date of the
business combination, (ii) the termination of the related business combination agreement, or (iii) April 30, 2024 (the
"Clearance Date") if the Company has not cleared all SEC comments to its proxy statement in connection with the business
combination by that date. On March 15, 2024, the parties to the non-redemption agreement entered into an amendment to the
non-redemption agreement to extend the Clearance Date to June 30, 2024, and to agree to close the business combination on or before August
31, 2024.

 If
we are unable to complete a business combination within the Combination Period, we will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but no 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 interest
earned (net of taxes payable and less interest to pay dissolution expenses up to $100,000), 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 the remaining stockholders and our board of directors, proceed to commence a voluntary liquidation
and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements
of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account
in the event we do not complete a business combination within the Combination Period and, in such event, such amounts will be included
with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering
price per Unit ($10.00).

 On
January 31, 2023, we entered into an Agreement and Plan of Merger (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.

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 "Business Combination."

 As
a condition to closing of the 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 Business Combination, the holders of SBC securities as of the closing of the 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) $1,200,000,000,
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.

 On
April 26, 2023, the parties entered into an amendment to the Merger Agreement. Our board approved the amendment on April 25, 2023. Pursuant
to the Amendment, the Sponsor in its sole discretion may direct Pono to issue all or a portion of the Sponsor Shares on an earlier or
later date as it may determine, which date will not be earlier than the Closing. In addition, pursuant to the Amendment, the date by
which (i) SBC will complete its agreed upon disclosure schedules, (ii) Pono will complete its due diligence review of SBC, and (iii)
the parties to the Merger Agreement will agree upon any modifications or amendments to the Merger Agreement to the terms and conditions
therein, among other related matters, was extended from April 28, 2023 to May 31, 2023. SBC also agreed to purchase, or to cause one
of its Affiliates to purchase, equity in the Sponsor in an amount equal to $1,000,000, by way of a separate agreement to be entered into
on or before May 5, 2023.

 On
May 18, 2023, the parties entered into a Note Purchase Agreement pursuant to which the parties have agreed that Pono will issue and sell
to SBC a convertible promissory note of $1,000,000 in aggregate principal amount which note is convertible into shares of Class A Common
Stock, par value $0.0001 per share of Pono.

 On
May 26, 2023, the closing date of the purchase and sale of the Note, SBC delivered the Note reflecting the Principal Amount and SBC deposited
$1,000,000 by wire transfer into the specified Company account. The Note does not bear interest (unless otherwise required by applicable
law, in which event interest will accrue at the minimum rate required by applicable law) and the principal amount may be prepaid at any
time.

 On
May 30, 2023, the parties entered into Amendment No. 2 to the Merger Agreement. Our board approved the amendment on May 23, 2023. The
amendment extended the time for (i) SBC to deliver disclosure schedules, (ii) Pono to complete its due diligence review of SBC and (iii)
the parties to agree upon a modifications or amendments to the Merger Agreement to the terms and conditions therein until June 15, 2023.

 On
June 15, 2023, the parties entered into Amendment No. 3 to the Merger Agreement. Our board approved the amendment on June 15, 2023. The
amendment further extended the time for (i) SBC to deliver disclosure schedules, (ii) Pono to complete its due diligence review of SBC
and (iii) the parties to agree upon a modifications or amendments to the Merger Agreement to the terms and conditions therein until June
22, 2023.

 On
June 21, 2023, the parties entered into an Amended and Restated Agreement and Plan of Merger ("A&R Merger Agreement").
Our board approved the A&R Merger Agreement on June 15, 2023. The A&R Merger Agreement revised the target companies to be directly
or indirectly purchased by Pono following a restructuring of SBC's corporate structure, to include only the Service Companies and
certain other entities, and to no longer include the direct or indirect purchase of Medical Corporations, and as a result, removed other
references to the Medical Corporations, including the related representations and warranties, among others. The Medical Corporations
were removed for Japanese regulatory reasons under the Japanese Medical Care Act. Based on the provisions of the Japanese Medical Care
Act, in essence, medical corporations are considered not-for-profit organizations with a benevolent purpose of serving human-kind and
cannot be controlled by for-profit entities. More specifically, the Medical Corporations, even though considered related parties, are
independent business operators and, the Company does not exercise control over the day-to-day operations of their clinics (except to
the extent governed by our management services contracts). The removal of the Medical Corporations from the A&R Merger Agreement
required a reduction of the valuation. As a result, the schedule was delayed by approximately two months. Other than the reduction of
the valuation and delay, the overall transaction was not affected by this removal. The A&R Merger Agreement also extended the date
by which the disclosures schedules were to be delivered to August 31, 2023 and extended the date by which the Closing shall occur from
September 30, 2023 to December 31, 2023. Pursuant to the A&R Merger Agreement, the parties also agreed that any future expenses incurred
in connection with the extension of the time by which Pono must complete its initial business combination shall be borne entirely by
Pono, which replaces and supersedes the prior requirement under the Original Agreement for Pono and SBC to share such expenses equally.

 On
September 8, 2023, the parties entered into the First Amendment to the A&R Merger Agreement, which provided for the holders of SBC
securities collectively to be entitled to receive from Pono as Merger consideration, in the aggregate, a number of Pono 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. Our board approved the amendment on September 7, 2023.

 On
October 26, 2023, the parties entered into the Second Amendment to the A&R Merger Agreement (the "Second Amendment")
with the parties thereto. Prior to the Second Amendment, the Company's board of directors as of the Closing was to be designated
as follows: (i) three persons designated prior to the Closing by SBC, two of whom must qualify as independent directors; (ii) one person
designated prior to the Closing by the Company; and (iii) one person mutually agreed upon and designated prior to the Closing by the
Company and SBC, who must qualify as an independent director. Following the Second Amendment, the Company's board of directors
as of the Closing will be designated as follows: (i) three persons designated prior to the Closing by SBC, at least one of whom must
qualify as an independent director; (ii) one person designated prior to the Closing by the Company, who must qualify as an independent
director; and (iii) one person mutually agreed upon and designated prior to the Closing by the Company and SBC, who must qualify as an
independent director.

 On
December 28, 2023, the parties entered into the Third Amendment to the A&R Merger Agreement (the "Third Amendment") with
the parties thereto. The Third Amendment was entered into solely to extend the Outside Date (as defined in the A&R Merger Agreement)
from December 31, 2023 to March 31, 2024.

 On
February 27, 2024, the Company and SBC entered into an Amendment to the Note Purchase Agreement (the "Amended Note Purchase Agreement"),
which increased the purchase price of the Note from $1,000,000 to $2,700,000.

 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, December 29, 2023, and March 1, 2024 for additional information.

 Our
Company

 We
are a blank check company incorporated in Delaware on March 11, 2022 formed for the purpose of entering into a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a "business combination").
We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering and the sale of
the private placement units, the proceeds of the sale of our shares in connection with our initial business combination pursuant to the
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the
foregoing or other sources.

 We
believe that there are many target companies that could become attractive public companies and we will seek a target in the disruptive
technology sector with a spotlight on companies in Asia with Japan in particular. While we may pursue an initial business combination
target in any industry or geographic region, we will seek to capitalize on the operational and investment experience of our management
team and focus on disruptive technology companies that we believe have significant growth prospects and the potential to generate attractive
returns for our stockholders. We expect to focus on identifying potential target companies with above-industry-average growth, and a
defensible market position where our management team's operational, strategic, or managerial expertise can assist in maximizing
value.

 We
believe the traditional IPO and direct listing processes are not designed for these types of companies to execute on their ambitious
strategies. We believe using a SPAC structure is a disruptive alternative to, and creates more efficiencies than, the traditional IPO
approach. We also believe that because the industries in which we have particular expertise, and in which we will seek to identify a
potential business combination target, are often overlooked by traditional venture capital, public equity and private equity investors,
many high-quality companies in these industries are not well suited to a traditional IPO, direct listing or private equity buyout transaction.
Therefore, we believe our focus on these particular industries will provide unique access to the highest quality companies and management
teams and a substantial number of proprietary business combination opportunities. Our mission is to create a better solution to the conventional
IPO for these high growth, disruptive technology and technology-enabled companies, which addresses their needs for capital and liquidity,
while overcoming the key points of friction in the traditional IPO path in particular for businesses in Japan.

 We
believe our expertise will make us an attractive partner for companies seeking a clear and efficient path to listing their shares with
a significant degree of funding certainty including high-quality companies in Japan where certain of the Company's officers and
directors are familiar with Japanese business and M&A culture, which will have an impact on the dynamics of a business combination.
There are a large number of companies that desire to have publicly-traded shares to provide liquidity to investors and employees, create
a currency for mergers and acquisitions and access to equity capital markets. We may seek to combine with businesses owned by our founder
and minority investors, although we may consummate a transaction with businesses controlled by private equity investors or family-owned
businesses, which means there is a wide universe of potential partners. We believe our understanding of private deal execution and public
capital markets, and valuation dynamics in both markets, make us uniquely positioned to identify and execute a business combination with
a growth orientation.

 Our
Management Team

 Our
management team is led by Darryl Nakamoto, our Chief Executive Officer and Director, Allison Van Orman, our Chief Financial Officer,
and Dustin Shindo, our Chairman of the Board, who will be supported by Pono Capital Two, Inc.'s independent directors, sponsor,
accountants and legal counsel, as further described below. We believe our management team is well positioned to identify and evaluate
businesses within the technology industry that would benefit from being a public company and from access to our expertise. We believe
we can achieve this mission by utilizing our team's extensive experience in growing and operating technology companies as well
as our broad network of contacts in the technology sector.

 Competition

 In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other
entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout
funds, public companies and operating businesses seeking strategic business combinations. Many of these entities are well established
and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these
competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses
will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business
combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their
redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the
future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place
us at a competitive disadvantage in successfully negotiating an initial business combination.

 Employees

 We
currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters, but
they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial
business combination and the stage of the initial business combination process we are in. We do not intend to have any full-time employees
prior to the completion of our initial business combination.

 For
additional discussion of the general development of our business, see our final prospectus on Form 424B4, filed with the SEC on August
8, 2022.

 ITEM
 1A.

 RISK
 FACTORS

 As
a smaller reporting company, we are not required to make disclosures under this Item.

 ITEM
 1B.

 UNRESOLVED
 STAFF COMMENTS

 Not
applicable.

 ITEM
 1C.

 CYBERSECURITY

 We
are a SPAC with no business operations. Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition
transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity
risk management program or formal processes for assessing cybersecurity risk. Our board of directors is generally responsible for the
oversight of risks from cybersecurity threats, if there is any. We have not encountered any cybersecurity incidents since our IPO.

 ITEM
 2.

 PROPERTIES

 We
currently maintain our executive offices at 643 Ilalo St., #102, Honolulu, Hawaii 96813, and our telephone number is (808) 892-6611.
Our Sponsor is making this space available to us as part of a monthly administrative fee of $10,000. We consider our current office space
adequate for our current operations.

 ITEM
 3.

 LEGAL
 PROCEEDINGS

 We
may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not
currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding,
investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business,
financial condition or results of operations.

 ITEM
 4.

 MINE
 SAFETY DISCLOSURES

 Not
Applicable.

 PART
II

 ITEM
 5.

 MARKET
 FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our
units began to trade on The Nasdaq Global Market, or Nasdaq, under the symbol "PTWOU" on or about August 5, 2022, and the
shares of Class A common stock and warrants began separate trading on Nasdaq under the symbols "PTWO" and "PTWOW,"
respectively, on or about September 26, 2022.

 Holders
of Record

 As
of March 18, 2024, there were 5,216,290 shares of the registrant's Class A common stock issued and outstanding held by approximately
five stockholders of record, and 1 share of the registrant's Class B common stock issued and outstanding held by approximately
one stockholder of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial
owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

 Dividends

 We
have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of an initial
business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements
and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business
combination will be within the discretion of our board of directors at such time. It is the present intention of our board of directors
to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring
any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring
any share dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited
by restrictive covenants we may agree to in connection therewith.

 Securities
Authorized for Issuance Under Equity Compensation Plans

 None.

 Recent
Sales of Unregistered Securities

 There
were no unregistered securities to report which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report
on Form 8-K.

 Purchases
of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 ITEM
 6.

 [RESERVED]

 ITEM
 7.

 MANAGEMENT'S
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 References
in this report (the "Annual Report") to "we," "us," "Pono," or the
"Company" refer to Pono Capital Two,
Inc. References to our "management" or our "management team" refer to
our officers and directors, and references to the "Sponsor" refer to Mehana Capital LLC.
The following discussion and analysis of the Company's financial condition and results of operations should be read in
conjunction with the consolidated financial statements and the notes thereto contained
elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties. Please see "Special Note Regarding Forward-Looking
Statements" elsewhere in this report for a description of these risks and uncertainties.

 Overview

 We
are a blank check company incorporated in Delaware on March 11, 2022 formed for the purpose of entering into a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering (the "Initial Public Offering")
and the sale of the private placement units, the proceeds of the sale of our shares in connection with our initial business combination
pursuant to the shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination
of the foregoing or other sources.

 On
January 31, 2023, the Company entered into an Agreement and Plan of Merger, as amended and restated on June 21, 2023 (the "Merger
Agreement"), by and among the Company, Pono Two Merger Sub, Inc., a Delaware corporation incorporated in January 2023, and a wholly-owned
subsidiary of the Company ("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 personal capacity and his capacity as
Seller Representative.

to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the "Closing"), 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 "Business Combination."

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

 As
consideration for the Business Combination, the holders of SBC securities collectively will be entitled to receive from the Company,
in the aggregate, a number of the Company's 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.

 In
connection with the Merger Agreement, 1,200,000 Sponsor Shares will be issued to the Sponsor on the date that is the earlier of (a) the
six (6) month anniversary of the Closing or (b) the expiration of the "Founder Shares Lock-up Period" (as defined in the
Company's Insider Letter with the initial stockholders); provided that, the Sponsor in its sole discretion may direct Pono to issue
all or a portion of the Sponsor Shares on such earlier or later date as it shall determine (which date shall not be earlier than the
Closing).

 On
May 5, 2023, the Company held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned the Special
Meeting to May 8, 2023. On May 8, 2023, the Company held the Special Meeting. During the Special Meeting, stockholders approved an amendment
to the Company's amended and restated certificate of incorporation (i) to extend the date by which the Company has to consummate
a business combination from May 9, 2023 to February 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account,
and (ii) to provide for the right of a holder of Class B common stock to convert such shares into shares of Class A common stock on a
one-for-one basis prior to the closing of a business combination at the election of the holder. As approved by the stockholders of the
Company, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State
on May 8, 2023. The Company's stockholders elected to redeem an aggregate of 9,577,250 shares of Class A common stock of the Company
in connection with the Special Meeting. Following such redemptions, the amount of funds remaining in the trust account is approximately
$20 million.

 In
connection with the Special Meeting, the Company and the Sponsor entered into non-redemption agreements with certain unaffiliated stockholders
owning, in the aggregate, 998,682 shares of the Company's Class A common stock, pursuant to which such stockholders agreed, among
other things, not to redeem or exercise any right to redeem such public shares in connection with the Extension Amendment. In connection
with the non-redemption agreements, the Sponsor agreed to transfer to the stockholders that entered into such agreements Sponsor Shares
upon the consummation of the Company's initial business combination.

 On
May 8, 2023, the Sponsor converted 2,874,999 Founder Shares of Class B common stock into 2,874,999 shares of Class A common stock.

 On
September 8, 2023, Pono entered into the First Amendment to the A&R Merger Agreement (the "Amendment") with the parties
thereto. Prior to the Amendment, the A&R Merger Agreement provided for the holders of SBC securities collectively to be entitled
to receive from Pono, in the aggregate, a number of Pono securities with an aggregate value equal to (the "Merger Consideration")
(a) $1,200,000,000, 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. Pursuant
to the Amendment, the $1,200,000,000 amount in the Merger Consideration calculation above was reduced to $1,000,000,000.

 On
October 26, 2023, the parties entered into the Second Amendment to the A&R Merger Agreement (the "Second Amendment")
with the parties thereto. Prior to the Second Amendment, the Company's board of directors as of the Closing was to be designated
as follows: (i) three persons designated prior to the Closing by SBC, two of whom must qualify as independent directors; (ii) one person
designated prior to the Closing by the Company; and (iii) one person mutually agreed upon and designated prior to the Closing by the
Company and SBC, who must qualify as an independent director. Following the Second Amendment, the Company's board of directors
as of the Closing will be designated as follows: (i) three persons designated prior to the Closing by SBC, at least one of whom must
qualify as an independent director; (ii) one person designated prior to the Closing by the Company, who must qualify as an independent
director; and (iii) one person mutually agreed upon and designated prior to the Closing by the Company and SBC, who must qualify as an
independent director.

 On
December 28, 2023, the parties entered into the Third Amendment to the A&R Merger Agreement (the "Third Amendment") with
the parties thereto. The Third Amendment was entered into solely to extend the Outside Date (as defined in the A&R Merger Agreement)
from December 31, 2023 to March 31, 2024.

 On
February 5, 2024, the Company held another special meeting of stockholders (the "Second Special Meeting"). During the Second
Special Meeting, stockholders approved another amendment to the Company's amended and restated certificate of incorporation to
extend the date by which the Company has to consummate a business combination (the "Combination Period") from February 9,
2024 to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account. As approved by the stockholders of
the Company, the Company filed another amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary
of State on February 5, 2024. The Company's stockholders elected to redeem an aggregate of 273,334 shares of Class A common stock
of the Company in connection with the Second Special Meeting. Following such redemptions, the amount of funds remaining in the trust
account is approximately $17.9 million.

 In
connection with the Second Special Meeting, we entered into a non-redemption agreement with an unaffiliated investor (the
"Holder") 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,
prior to the Second Special Meeting and to agree to waive its redemption rights and hold the shares until after the closing of the
business combination. In consideration of the Holder's agreement to waive its redemption rights with respect to the shares,
and subject to (i) the Holder acquiring 1,500,000 to 1,700,000 shares of Class A common stock in the open market, and (ii)
Holder's satisfaction of its other obligations under the non-redemption agreement, the Company, on the closing date of the
business combination, provided that Holder has continued to hold the Holder's shares through the closing date, SBC and
Yoshiyuki Aikawa, the chief executive officer of SBC, shall cause to be issued or transferred to Holder a number of shares of Class
A common stock held by Dr. Aikawa (the "Incentive Shares"), which will equal one (1) Incentive Share for each public
share purchased in the open market pursuant to the non-redemption agreement that is continuously owned by Holder until the closing
date of the business combination. This non-redemption agreement terminates on the earliest to occur of (i) the closing date of the
business combination, (ii) the termination of the related business combination agreement, or (iii) April 30, 2024 (the
"Clearance Date") if the Company has not cleared all SEC comments to its proxy statement in connection with the business
combination by that date. On March 15, 2024, the parties to the non-redemption agreement entered into an amendment to the non-redemption agreement
to extend the Clearance Date to June 30, 2024, and to agree to close the business combination on or before August 31, 2024.

 Issuance
of Convertible Promissory Note

 On
May 18, 2023, we entered into a Note Purchase Agreement (the "Note Purchase Agreement") with SBC. On May 26, 2023, we issued
and sold to SBC a convertible promissory note (the "Note") of $1,000,000 in aggregate principal amount (the "Principal
Amount"). The Note is convertible into shares of our Class A common stock. On May 26, 2023, the closing date of the purchase and
sale of the Note, SBC delivered the Note reflecting the Principal Amount and SBC deposited $1,000,000 by wire transfer into a specified
Company. The Note does not bear interest (unless otherwise required by applicable law, in which event interest will accrue at the minimum
rate required by applicable law) and the Principal Amount may be prepaid at any time. On February 27, 2024, we entered into an Amendment to the Note Purchase Agreement (the "Amended Note Purchase
Agreement") with SBC, which increased the purchase price of the Note from $1,000,000 to $2,700,000.

 Immediately
prior to the merger being effected in connection with the consummation of the Business Combination, the outstanding Principal Amount
will be converted automatically into the number of shares of common stock equal to the quotient obtained by dividing (x) the Principal
Amount by (y) $10.00, subject to customary adjustments for any stock splits or combinations occurring prior to conversion.

 Results
of Operations

 We
have neither engaged in a ny operations nor generated any revenues to date. Our only activities
 from March 11, 2022 (inception) through December 31, 2023 were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and, after our Initial Public Offering, identifying a target company for a business combination. We
do not expect to generate any operating revenues until after the completion of our initial business combination. We will generate non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering. We incur expenses as a result of being
a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

 For
the year ended December 31, 2023, we had net income of $339,767, which resulted from interest and
dividend income on investments held in the Trust Account of $2,641,407, partially offset by operating and formation costs of $1,635,452,
franchise tax expense of $137,379, and income tax expense of $528,809.

 For
the period from March 11, 2022 (inception) through December 31, 2022, we had net income of $552,813, which resulted from operating and
formation costs of $382,051, income tax expenses of $248,508 and franchise tax expenses of $161,644, partially offset by interest and
dividend income on investments held in the Trust Account for $1,345,016.

 Liquidity,
Capital Resources, and Going Concern

 For
the year ended December 31, 2023, net cash used in operating activities was $2,132,921, which
was due to interest and dividends earned on marketable securities held in the Trust Account of $2,641,407, offset by net income
 of $339,767, and a change in operating assets and liabilities of $168,719.

 For
the period from March 11, 2022 (inception) through December 31, 2022, net cash used in operating
activities was $462,816, which was due to interest earned on marketable securities held in the Trust Account of $1,345,016, offset by
net income of $552,813 and a change in operating assets and liabilities of $329,387.

 For
the year ended December 31, 2023, net cash provided by investing activities was $101,010,630, which was due to proceeds from the Trust
Account for payment to redeeming shareholders of $100,078,879, proceeds from the Trust Account to pay franchise taxes of $931,751.

 For
the period from March 11, 2022 (inception) through December 31, 2022 net cash used in investing activities was $117,875,000 which was
due to the investment of cash in the Trust Account.

 For
the year ended December 31, 2023, net cash used in financing activities was $99,078,879, which was due to payment to redeeming shareholders
of $100,078,879, partially offset by proceeds from convertible promissory note of $1,000,000.

 For
the period from March 11, 2022 (inception) through December 31, 2022, net cash provided by financing
activities was $118,823,380, which was due to the proceeds from the sale of Units (as defined below) (net of the underwriting discount)
of $113,045,000, proceeds from the sale of Placement Units (as defined below) of $6,343,750, and proceeds from the issuance of Class
B common stock to the Sponsor of $25,000, offset in part by payment of offering costs of $590,370.

 The
registration statement for the Company's Initial Public Offering was declared effective on August 4, 2022. On August 9, 2022, the
Company consummated the Initial Public Offering of 11,500,000 units, (the "Units" and, with respect to the shares of Class
A common stock included in the Units sold, the "Public Shares"), including 1,500,000 Units issued pursuant to the exercise
of the underwriters' over-allotment option in full, generating gross proceeds of $115,000,000.

with the closing of the Initial Public Offering, the Company consummated the sale of 634,375 units (the "Placement
Units ") at a price of $10.00 per Placement Unit in a private placement to Mehana Capital
LLC (the "Sponsor"), including 63,000 Placement Units issued
pursuant to the exercise of the underwriters' over-allotment option in full, generating gross proceeds of $6,343,750.

 Following
the closing of the Initial Public Offering on August 9, 2022, an amount of $117,875,000 ($10.25 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Placement
Units was placed in a trust account.

 We
intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the funds
held in the trust account and not previously released to us to pay our taxes (which interest shall be net of taxes payable and excluding
deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our
annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account.
We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. We expect the only taxes payable
by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent that our common stock or debt is
used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account
will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our
growth strategies.

 As
of December 31, 2023, the Company had $284,394 in cash held outside of the Trust Account, working capital deficit, net of income tax
payable and franchise tax payable of $1,129,417 and accumulated deficit of $5,995,269. The Company has incurred and expects to continue
to incur significant costs in pursuit of the Company's financing and acquisition plans. For the year ended December 31, 2023 the
Company had loss from operations of $(1,772,831) and net cash used in operating activities was $2,132,921. The Company has further satisfied
liquidity needs through a Convertible Promissory Note of $1,000,000. The Company expects that it will need additional capital to satisfy
its liquidity needs beyond the net proceeds from the consummation of the Initial Public Offering held outside of the Trust Account for
paying existing accounts payable and consummating the Business Combination. Although certain of the Company's initial stockholders,
officers and directors or their affiliates have committed up to $1,500,000 Working Capital Loans (see Note 5) from time to time or at
any time, there is no guarantee that the Company will receive such funds. In addition, the Company will have until November 9, 2024 to
consummate a business combination. If a business combination is not consummated by November 9, 2024, less than one year after the date
these consolidated financial statements are issued, there will be a mandatory liquidation and subsequent dissolution
of the Company. Management has determined that the mandatory liquidation, along with the lack of liquidity, should a business combination
not occur, and potential subsequent dissolution, raises substantial doubt about the Company's ability to continue as a going concern.
No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November
9, 2024. The Company intends to complete the initial business combination before the mandatory liquidation date. However, there can be
no assurance that the Company will be able to consummate any business combination by November 9, 2024.

 Off-Balance
Sheet Arrangements

 As
of December 31, 2023 and December 31, 2022, we did not have any off-balance sheet arrangements.

 Contractual
Obligations

 Registration
and Stockholder Rights Agreement

 The
holders of the Founder Shares and Placement Units (including securities contained therein) and Units (including securities contained
therein) that may be issued upon conversion of working capital loans and extension loans, and any shares of Class A common stock issuable
upon the exercise of the Placement Warrants and any shares of Class A common stock and warrants (and underlying Class A common stock)
that may be issued upon conversion of the Units issued as part of the working capital loans and extension loans and Class A common stock
issuable upon conversion of the Founder Shares, will be entitled to registration rights pursuant to a registration rights agreement signed
on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the
Founder Shares, only after conversion to the Class A common stock). The holders of these securities are entitled to make up to two demands,
excluding short form demands, that the Company registers such securities. In addition, the holders have certain "piggy-back"
registration rights with respect to registration statements filed subsequent to the completion of the initial business combination and
rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

 Administrative
Support Agreement

 The
Company's Sponsor has agreed, commencing from the date of the Initial Public Offering through the earlier of the Company's
consummation of a business combination and its liquidation, to make available to the Company certain general and administrative services,
including office space, utilities and administrative services, as the Company may require from time to time. The Company has agreed to
pay to Mehana Capital LLC, the Sponsor, $10,000 per month for these services to complete a business combination. For the year ended December
31, 2023, $120,000 was incurred and paid to Mehana Capital LLC for these services. For the period from March 11, 2022 (inception) through
December 31, 2022, $50,000 was paid to Mehana Capital LLC for these services.

 Underwriting
Agreement

with the Initial Public Offering, the underwriters fully exercised the over-allotment option to purchase an additional 1,500,000 Units
at an offering price of $10.00 per Unit for an aggregate purchase price of $15,000,000.

 The
underwriters were paid a cash underwriting discount of $0.17 per Unit, or $1,955,000 in the aggregate, upon the closing of the Initial
Public Offering. In addition, $0.35 per unit, or $4,025,000 in the aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event
that the Company completes a business combination, subject to the terms of the underwriting agreement.

 Promissory
Note - Related Party

 On
April 25, 2022, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the "Promissory Note"). This loan is non-interest bearing and payable on the earlier
of (i) March 31, 2023 or (ii) the date on which Company consummates the Initial Public Offering. Prior to the Initial Public Offering,
the Company had borrowed $300,000 under the Promissory Note. The outstanding balance under the Promissory Note of $300,000 was repaid
at the closing of the Initial Public Offering on August 9, 2022.

 Critical
Accounting Estimates

 We
prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management
to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there
are material differences between these estimates and actual results, our financial condition or results of operations would be affected.
We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our
circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

 We
consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were
highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from
period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact
on our financial condition or results of operations. There are items within our financial statement that require estimation but are not
deemed critical, as defined above.

 For
a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Consolidated Financial
Statements in "Item 15. Exhibits and Financial Statement Schedules" of this report.

 Recent
Accounting Standards

 In
December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires
public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income
taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective
for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The accounting pronouncement
is not expected to have a material impact on our consolidated financial statements and related disclosures.

 ITEM
 7A.

 QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Not
required for smaller reporting companies.

 ITEM
 8.

 FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

 This
information appears following Item 15 of this Report and is included herein by reference.

 ITEM
 9.

 CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
 9A.

 CONTROLS
 AND PROCEDURES

 Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted
under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.

 Evaluation
of Disclosure Controls and Procedures

 As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation
of the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based upon their evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15
(e) under the Exchange Act) were effective.

 Changes
in Internal Control Over Financial Reporting

 During
the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

 Management's
Report on Internal Controls Over Financial Reporting

 As
required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act (as defined in Rules 13a-15(e) and 15-
d-15(e) under the Securities Exchange Act of 1934, as amended), our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external
reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures
that:

 (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of our company,

 (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and
directors, and

 (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our
consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or
procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31,
2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria,
management determined that we maintained effective internal control over financial reporting as of December 31, 2023.

 This
Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting
firm due to our status as an emerging growth company under the JOBS Act.

 ITEM
 9B.

 OTHER
 INFORMATION

 As
previously reported, in connection with the Second Special Meeting, the Company entered into a non-redemption agreement with an unaffiliated
investor (the "Holder") 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 (as defined
below), prior to the Second Special Meeting and to agree to waive its redemption rights and hold the shares until after the closing of
the business combination. The non-redemption agreement terminates on the earliest to occur of (i) the closing date of the business combination,
(ii) the termination of the related business combination agreement, or (iii) April 30, 2024 (the "Clearance Date") if the
Company has not cleared all SEC comments to its proxy statement in connection with the business combination by that date.

 On
March 15, 2024, the parties to the non-redemption agreement entered into an amendment to the non-redemption agreement to extend the Clearance
Date to June 30, 2024, and to agree to close the business combination on or before August 31, 2024.

 A form of the amendment to the non-redemption
agreement is filed with this Annual Report on Form 10-K as Exhibit 10.19 and is incorporated herein by reference. The foregoing description
of the amendment to the non-redemption agreement is not complete and is qualified in its entirety by reference to the amendment to the
non-redemption agreement filed herewith.

 ITEM
 9C.

 DISCLOSURE
 REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not
applicable.

 PART
III

 ITEM
 10.

 DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The
following table sets forth information about our directors and executive officers.

 Name

 Age

 Position

 Darryl
 Nakamoto

 Chief
 Executive Officer, Director

 Allison
 Van Orman

 Chief
 Financial Officer

 Dustin
 Shindo

 Chairman
 of the Board

 Kotaro
 Chiba

 Independent

 Mike
 Sayama

 Independent

 Trisha
 Nomura

 Independent
 Director, and Chairwoman of the Audit Committee

 Darryl
Nakamoto, Chief Executive Officer and Director

 Mr.
Nakamoto serves as our Chief Executive Officer and Director. He is an entrepreneur and executive with over 20 years of industry experience,
including his former role as CFO of a publicly traded company. Since 2017, Mr. Nakamoto serves as President and Owner of Viv, LLC, a
successful accounting and finance solutions provider. Since 2021, Mr. Nakamoto has also served as Controller of Hawaiian Springs, LLC.
From May 2016 to July 2017, Mr. Nakamoto served as President and CFO of DKI808 LLC, dba Premier Restoration Hawaii, where he secured
financing for the purchase of Maui Fire & Flood and expanded the full-service restoration business from Maui to Oahu. Between March
2014 and March 2016, Mr. Nakamoto served as President of Island Flooring. Mr. Nakamoto served as President of Kaiuli Energy from April
2012 to February 2014, a seawater air conditioning startup where he was responsible for strategic decisions and project developments.
In January 2024, Mr. Nakamoto began serving as a board member of Big Brothers
Big Sisters Hawaii, and from 2014 to 2020, Mr. Nakamoto served as Treasurer, Vice Chair and board member of the Japanese Cultural Center of Honolulu.

 From
January 2005 to March 2012, Mr. Nakamoto was CFO, Treasurer and Secretary of Hoku Scientific, a then publicly traded clean energy firm
based in Honolulu, Hawaii, where he managed all finance, accounting, and treasury functions. Between January 2003 and December 2004,
Mr. Nakamoto was a Finance Analyst for Frito-Lay of Hawaii. From March 2001 to January 2003, he worked as a Consultant for Akamai Consulting
Group/Syntera Solutions. He was a Regional Director for software development startup ActivityMax from 2000 to 2001. Mr. Nakamoto began
his career as an Accountant at KPMG from 1996 to 2000. Mr. Nakamoto is a CPA, not in public practice. He graduated from the University
of Washington in 1996 with a Bachelor of Arts in Accounting and a Bachelor of Arts in Finance. Mr. Nakamoto is a former Treasurer and
board member of the Make-A-Wish foundation of Hawaii. Mr. Nakamoto's public company experience, paired with his entrepreneurial
and management skills in a diverse array of industries makes him a valuable member of our management team and board of directors.

 Allison
Van Orman, Chief Financial Officer

 Ms.
Van Orman is an experienced Certified Public Accountant and entrepreneur. Since December 2000, Ms. Van Orman has served as Principal
at Allison D T Van Orman, CPA LLC, where she helps clients navigate complex tax compliance and tax planning issues and consults small
business owners to improve operations and identify areas of growth. Ms. Van Orman was sole proprietor of Grumpy Girl Clothing between
October 2003 and December 2010, performing duties such as product design, product costing and distribution, graphic design and marketing,
and public relations and communications for her business. From 1998 to 2000, Ms. Van Orman was an auditor/accountant at Chinaka, Siu,
& Co., CPAs in Honolulu, where she performed accounting and tax duties for small business clients as well as preparing audit programs
and supervising assistants on audits of non-profit organizations. Ms. Van Orman received her Bachelor of Science, Magna Cum Laude in
Accounting from Santa Clara University in 1995 and her MBA from the University of Hawaii in 1997. She is a licensed CPA in the State
of Hawaii, and currently a member of the American Institute of Certified Public Accountants ("AICPA"). Ms. Van Orman's
accounting experience makes her an invaluable asset to the management team.

 Dustin
Shindo, Chairman of the Board

 Mr.
Shindo serves as our Chairman of the Board. He is the Manager of Mehana Capital, LLC, our Sponsor, and is an entrepreneur,
executive, technologist, and a seasoned advisor with more than 25 years of industry experience. Mr. Shindo previously served as
Chairman of the Board of Pono Capital Three, Inc. until the closing of its business combination with New Horizon Aircraft Ltd. in
January 2024. Mr. Shindo also previously served as Chief Executive Officer of Pono Capital Corp. until the closing of its business
combination with AERWINS Technologies Inc. in February 2023. Recently, Mr. Shindo started
Joyn Corporation, a software company. Mr. Shindo is also the Vice President and director of Perfect Game Hawaii, a non-profit
entity supporting baseball. From 2017 to July 2022, Mr. Shindo served as the Chief Executive Officer of Junify Corporation,
which operates in California and Japan. Junify offers zero trust network access software (software defined border) to help companies
better secure their cloud resources. Mr. Shindo has also been retained for a number of consulting positions since July 2014 for
companies working in the health care, travel, technology, construction, and non-profit industries. From December 2012 to December
2018, Mr. Shindo served as the Chief Executive Officer of Pono Health based in California, Washington, and Hawaii, where he provided
consulting, data management, analytics, and software development services. Pono Health was the primary entity of Pono Corporation,
founded in December 2012. Mr. Shindo managed healthcare data for individuals in Hawaii and for clinics in Washington, Oregon and
Arizona. Mr. Shindo also developed analytics platform used to calculate gaps in care, cost savings, and other health
metrics.

 From
March 2001 to March 2010, Mr. Shindo served as the Chief Executive Officer of Hoku Scientific based in Honolulu, Hawaii, where he led
the company through an IPO on the NASDAQ Global Market and signed customer contracts totaling USD 2+ billion. From December 1995 to August
1997, Mr. Shindo served as the President of Mehana Brewing Company based in Hilo, Hawaii. In June 1995, Mr. Shindo received his Bachelor
of Art's degree in Accounting/Finance/Marketing at University of Washington based in Seattle, Washington. In May 1999, Mr. Shindo
received his Master's in Business Administration at Darden Graduate School of Business Administration, University of Virginia based
in Charlottesville, Virginia. In August 2015, Mr. Shindo completed the SEP program at Stanford Graduate School of Business, Stanford
University. Mr. Shindo's entrepreneurial, executive, and advising experience, paired with his public company experience through
Pono Capital Corp., Pono Capital Three, Inc., and Hoku Scientific, make him a valuable member of our board of directors.

 Our
Independent Directors

 Our
efforts to seek a suitable business combination target will be complemented and augmented by the expertise and network of relationships
of our directors, who each have extensive experience in business and financial matters. In addition to our seasoned executive team, we
have assembled a strong group of directors. The board is expected to be comprised of five individuals. These individuals bring together
a breadth of operating experience, industry connectivity and proprietary access to leading companies that enhance our value proposition.
Our board will be a driving force in our efforts to identify a target and effect a business combination and may invest personal capital
in the transaction. The Company's independent directors' bios are presented here.

 Kotaro
Chiba, Independent Director

 Kotaro
Chiba serves as an independent director. Mr. Chiba previously served as an Independent Director of Pono Capital Three, Inc. until the closing of its business combination with New Horizon Aircraft
Ltd. in January 2024 and as an Independent Director of Pono Capital Corp. until the closing of its business combination with AERWINS
Technologies Inc. in February 2023. Mr. Chiba is also the founder and General Partner of Chiba Dojo Fund, a venture capital based fund
in Tokyo focusing its investing on Internet and IOT related start-ups since September 2019. Before launching the Chiba Dojo Fund, Mr.
Chiba founded and continues to serve as the General Partner of the Drone Fund since in June 2017. The Drone Fund is a venture capital-based
fund in Tokyo focusing its investment on drones and air mobility start-ups. The Drone Fund aims to create a drone and air-mobility enabled
society. One of the Drone Fund's portfolio companies went public on the Tokyo Mothers Market in December 2019—the first drone
company to make an IPO in Japan. As an angel investor, Mr. Chiba has invested in more than 60 startups and 40 VC funds in Internet markets
and other fields. Mr. Chiba also currently serves or has served as Director of various mobility and technology companies, including:
Aeronext since April 2017, A.L.I. Technologies, Inc. since December 2017, Prodrone Co. Ltd. from October 2020 to October 2022, teTra
aviation from May 2020 to August 2022, and VFR from October 2021 to November 2022.

 Prior
to that, Mr. Chiba was the co-founder, Executive Vice President and director from January 2009 to July 2016 with COLOPL Inc., which focused
on mobile gaming services on smartphone applications as well as VR services and location data analysis consulting services, research
service dedicated to smartphones. In 2012, he helped lead the company's listing on the Tokyo Stock Exchange (Mothers) and then
in 2014 led the company to a US$4 billion IPO on the Tokyo Exchange market (first section). Prior to that, Mr. Chiba was the founder
and director from January 2000 to March 2007 for K Laboratory Inc. (now KLab Inc.) that develops mobile games and online games. Before
joining KLab Inc., Mr. Chiba was a mobile web media planner from April 1997 to December 1999 for Recruit Co. Ltd., which is Japan's
largest recruitment company and provides services such as job advertising, temporary staffing, sales promotion, and IT solution.

 Since
April 2019, Mr. Chiba has been a guest Professor at Keio University, a research-oriented campus located in the city of Fujisawa, Kanagawa
Prefecture, Japan where he teaches students to become technology innovators. Mr. Chiba is Keio University, SFC Campus graduate, in March
1997, with a Bachelor of Arts in Environment and Information Studies. He is also the first domestic customer of Honda Jet in Japan and
holds a private pilot license (FAA Japan). Mr. Chiba's extensive experience and knowledge in developing start-ups and working in
venture capital provides him with a unique perspective and makes him a valuable addition to our board of directors.

 Mike
Sayama, Ph. D., Independent Director

 Dr.
Mike Sayama serves as an independent director. Dr. Sayama previously served as an Independent Director of Pono Capital Three, Inc.
until the closing of its business combination with New Horizon Aircraft
Ltd. in January 2024 and as an Independent Director for AERWINS Technologies Inc. (f/k/a Pono Capital Corp.). Dr. Sayama was
formerly the Executive Director of Community First since it was established in July 2016 until January 2021. As the founding executive
director, he was responsible for operations, developing a strategic plan for an accountable health community in East Hawaii, community
relations, and fund raising. From January 2021 to June 2021 he served as the Director of Strategy to facilitate the transition to a new
management team.

 From
October 2013 to December 2018, Dr. Sayama served as a Vice President at Pono Health and was Director of Learning Health Homes, a project
where he was responsible for managing the East Hawaii Independent Physicians Association and implementing a data platform integrating
health plan, hospital, and physician data. Dr. Sayama also facilitated the reorganization of EHI and development of its strategic direction.
Community First, a 501(c) 3 non-profit, which serves as a neutral forum for healthcare stakeholders in East Hawaii, grew out of the Learning
Health Homes Initiative.

 From
August 1997 to October 2013, Dr. Sayama served as a Vice President of the Hawaii Medical Service Association, first in Health Benefits
Management and then in Customer Relations. In the first position, he streamlined preauthorization and appeal processes, including the
elimination of preauthorization for inpatient admissions without increase in inpatient utilization. In his second position he established
call centers in Hilo which stabilized the call center work force and improved the timeliness and accuracy of customer service.

 From
April 2001 to April 2005, Dr. Sayama was a Director on the City Bank Board, and from April 2005 to April 2009, was a Director on the
Boards of Central Pacific Bank and Central Pacific Financial Corporation.

 Regarding
education: In May 1975, he received his Bachelor of Arts degree in Psychology from Yale University, and in August 1979, his Master of
Arts degree in Clinical Psychology from University of Michigan. In August 1982, Dr. Sayama received his Ph. D. degree in Clinical Psychology
from University of Michigan. He is the author of several books on psychotherapy and Zen Buddhism.

 His
community service includes having been a Director on the Bay Clinic Board (the Federally Qualified Health Center in East Hawaii) and
currently serving as the Abbot of Chozen-ji, International Zen Dojo. Mr. Sayama brings broad knowledge of the healthcare technology industry,
as well as prior experience serving as a founding executive director, which makes him a valuable addition to our board of directors.

 Trisha
Nomura, Independent Director and Chairperson of the Board's Audit Committee

 Trisha
Nomura serves as an independent director and Chairwoman of our audit committee. Ms. Nomura previously served as an Independent
Director and Chairwoman of the audit committee of Pono Capital Three, Inc. until the closing of its business combination with New Horizon Aircraft
Ltd. in January 2024 and continues in these roles at the merged company. She also previously served as Chief Financial
Officer of Pono Capital Corp. until the closing of its business combination with AERWINS Technologies Inc. in February 2023. Since
July 2018, Ms. Nomura has owned a consulting firm, Ascend Consulting, LLC. Prior to opening her own firm, Ms. Nomura worked in both
public accounting and private industry. Ms. Nomura was the Chief Operating Officer of HiHR from July 2015 to December 2016, and the
Vice President of Strategic Services from May 2014 to July 2015. Ms. Nomura also served as the Chief People Officer of ProService
Hawaii from January 2017 to June 2018. Ms. Nomura currently serves as Vice President of the Hawaii Society of
Certified Public Accountants. Ms. Nomura began volunteering with the HSCPA since 2010 through the YCPA Squad, has been the
Treasurer of Kaneohe Little League since 2013, and is a member of the AICPA, where she was selected to attend the Leadership
Academy, has served as an at-large Council member and has also served on the Association Board of Directors. Ms. Nomura is a
CPA, not in public practice, and a CGMA. She is a graduate of Creighton University, where she obtained her Bachelor of Science in
Business Administration in accounting, and of the University of Hawaii at Manoa, where she earned her Master of Accountancy degree.
Ms. Nomura's consulting, accounting and management skills and knowledge make her an important addition to our board of
directors.

 Number
and Terms of Office of Officers and Directors

 We
have five directors. Our board of directors is divided into three classes, with only one class of directors being elected in each year
and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.
In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our
first fiscal year end following our listing on Nasdaq.

 The
term of office of the first class of directors, consisting of Kotaro Chiba, will expire at our first annual meeting of stockholders.
The term of office of the second class of directors, consisting of Darryl Nakamoto and Mike Sayama, will expire at our second annual
meeting of the stockholders. The term of office of the third class of directors, consisting of Trisha Nomura and Dustin Shindo, will
expire at our third annual meeting of stockholders. We may not hold an annual meeting of stockholders until after we complete our initial
business combination. We may not hold an annual meeting of stockholders until after we complete our initial business combination.

 Prior
to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders
of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of
our founder shares may remove a member of the board of directors for any reason. Pursuant to an agreement to be entered into concurrently
with the issuance and sale of our securities, our sponsor, upon completion of an initial business combination, will be entitled to nominate
individuals for election to our board of directors, as long as our sponsor holds any securities covered by the registration rights agreement.

 Our
officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms
of office. Our board of directors is authorized to nominate persons to the offices set forth in our amended and restated certificate
of incorporation as it deems appropriate. Our amended and restated certificate of incorporation provides that our officers may consist
of one or more chairman of the board of directors, chief executive officer, president, chief financial officer, vice presidents, secretary,
treasurer and such other offices as may be determined by the board of directors.

Independence

 Nasdaq
listing standards require that a majority of our board of directors be independent. An "independent director" is defined
generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship
which in the opinion of the company's board of directors, would interfere with the director's exercise of independent judgment
in carrying out the responsibilities of a director. Our independent directors have regularly scheduled meetings at which only independent
directors are present. Kotaro Chiba, Mike Sayama and Trisha Nomura are our independent directors.

 Committees
of the Board of Directors

 Our
board of directors has three standing committees: an audit committee, a compensation committee and a corporate governance and nominating
committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the
audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception,
the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors.

 Audit
Committee

 We
have established an audit committee of the board of directors. Kotaro Chiba, Mike Sayama, and Trisha Nomura serve as members of our
audit committee. Our board of directors has determined that Messrs. Chiba, Sayama and Nomura meet the independent director standard under
Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Trisha Nomura serves as the chairwoman of the audit committee.
Each member of the audit committee is financially literate, and our board of directors has determined that Ms. Nomura qualifies as an
"audit committee financial expert" as defined in applicable SEC rules. We have adopted an audit committee charter, which
details the principal functions of the audit committee, including:

 appointing,
 compensating and overseeing our independent registered public accounting firm;

 and approving the annual audit plan for the company;

 overseeing
 the integrity of our consolidated financial statements and our compliance with legal and regulatory requirements;

 discussing
 the annual audited consolidated financial statements and unaudited quarterly consolidated financial statements with management and
 the independent registered public accounting firm;

 pre-approving
 all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including
 the fees and terms of the services to be performed;

 appointing
 or replacing the independent registered public accounting firm;

 establishing
 procedures for the receipt, retention and treatment of complaints (including anonymous complaints) we receive concerning accounting,
 internal accounting controls, auditing matters or potential violations of law;

 monitoring
 our environmental sustainability and governance practices;

 establishing
 procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls
 or reports which raise material issues regarding our consolidated financial statements or accounting policies;

 approving
 audit and non-audit services provided by our independent registered public accounting firm;

 discussing
 earnings press releases and financial information provided to analysts and rating agencies;

 discussing
 with management our policies and practices with respect to risk assessment and risk management;

 any material transaction between our Chief Financial Officer that has been approved in accordance with our Code of Ethics for our
 officers, and providing prior written approval of any material transaction between us and our President; and

 producing
 an annual report for inclusion in our proxy statement, in accordance with applicable rules and regulations.

 The
audit committee is a separately designated standing committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.

 Financial
Experts on Audit Committee

to Nasdaq rules, the audit committee will at all times be composed exclusively of "independent directors" who are able to
read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement.

 Each
member of the audit committee is financially literate, and our board of directors has determined that Ms. Nomura qualifies as an "audit
committee financial expert" as defined in applicable SEC rules, which generally is any person who has past employment experience
in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results
in the individual's financial sophistication.

 Compensation
Committee

 We
have established a compensation committee of our board of directors. The members of our compensation committee are Kotaro Chiba, Mike
Sayama, and Trisha Nomura, and Mr. Sayama serves as chairman of the compensation committee. Under Nasdaq listing standards and applicable
SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent directors. Our
board of directors has determined that each Messrs. Chiba, Sayama and Nomura is independent. We have adopted a compensation committee
charter, which details the principal functions of the compensation committee, including:

 and approving corporate goals and objectives relevant to our President's compensation, evaluating our President's performance
 in light of those goals and objectives, and setting our President's compensation level based on this evaluation;

 setting
 salaries and approving incentive compensation and equity awards, as well as compensation policies, for all other officers who file
 reports of their ownership, and changes in ownership, of the company's common stock under Section 16(a) of the Exchange Act
 (the "Section 16 Officers"), as designated by our board of directors;

 making
 recommendations to the board of directors with respect to incentive compensation programs and equity-based plans that are subject
 to board approval;

 approving
 any employment or severance agreements with our Section 16 Officers;

 granting
 any awards under equity compensation plans and annual bonus plans to our President and the Section 16 Officers;

 approving
 the compensation of our directors; and

 producing
 an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations.

 Notwithstanding
the foregoing, as indicated above, other than the payment to Mehana Capital LLC, the Sponsor, of $10,000 per month, for up to nine months,
or 18 months if we have elected to extend the time to complete our initial business combination, for office space, utilities and secretarial
and administrative support, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of
our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order
to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial
business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements
to be entered into in connection with such initial business combination.

 The
charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such
adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the
compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

 Corporate
Governance and Nominating Committee

 We
have established a corporate governance and nominating committee of our board of directors. The members of our corporate governance and
nominating committee are Kotaro Chiba, Mike Sayama, and Trisha Nomura and Mr. Chiba serves as chairman of the corporate governance and
nominating committee. Under the Nasdaq listing standards, we are required to have a corporate governance and nominating committee composed
entirely of independent directors. Our board of directors has determined that each of Messrs. Chiba, Sayama and Nomura is independent.

 The
primary function of the corporate governance and nominating committee include:

 identifying
 individuals qualified to become members of the board of directors and making recommendations to the board of directors regarding
 nominees for election;

 the independence of each director and making a recommendation to the board of directors with respect to each director's independence;

 developing
 and recommending to the board of directors the corporate governance principles applicable to us and reviewing our corporate governance
 guidelines at least annually;

 making
 recommendations to the board of directors with respect to the membership of the audit, compensation and corporate governance and
 nominating committees;

 overseeing
 the evaluation of the performance of the board of directors and its committees on a continuing basis, including an annual self-evaluation
 of the performance of the corporate governance and nominating committee;

 considering
 the adequacy of our governance structures and policies, including as they relate to our environmental sustainability and governance
 practices;

 considering
 director nominees recommended by stockholders; and

 our overall corporate governance and reporting to the board of directors on its findings and any recommendations.

 Guidelines
for Selecting Director Nominees

 The
guidelines for selecting nominees generally provide that persons to be nominated:

 possess personal qualities and characteristics, accomplishments and reputation in the business community;

 have current knowledge and contacts in the communities in which we do business and, in our industry, or other industries relevant
 to our business;

 have the ability and willingness to commit adequate time to the board of directors and committee matters;

 demonstrate ability and willingness to commit adequate time to the board of directors and committee matters;

 possess the fit of the individual's skills and personality with those of other directors and potential directors in building
 a board of directors that is effective, collegial and responsive to our needs; and

 demonstrate diversity of viewpoints, background, experience, and other demographics, and all aspects of diversity in order to enable
 the board of directors to perform its duties and responsibilities effectively, including candidates with a diversity of age, gender,
 nationality, race, ethnicity, and sexual orientation.

 Each
year in connection with the nomination of candidates for election to the board of directors, the corporate governance and nominating
committee will evaluate the background of each candidate, including candidates that may be submitted by our stockholders.

 Code
of Ethics

 We
have adopted a Code of Ethics applicable to our directors, officers and employees. You can review these documents by accessing our public
filings at the SEC's web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request
from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

 Section
16(a) Beneficial Ownership Reporting Compliance

 Section
16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons
who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities. These executive
officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a)
forms filed by such reporting persons.

 Delinquent
Section 16(a) Reports

 Based
solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing
requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner, except
for one Form 3 filed late by ZUU Co. Ltd. on February 6, 2024, which was filed late due to administrative error.

 ITEM
 11.

 EXECUTIVE
 COMPENSATION

 Employment
Agreements

 We
have not entered into any employment agreements with our executive officers and have not made any agreements to provide benefits upon
termination of employment.

 Executive
Officers and Director Compensation

 None
of our executive officers or directors have received any cash compensation for services rendered to us. In addition, our sponsor, executive
officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or
our or their respective affiliates. Any such payments prior to an initial business combination will be made using funds held outside
the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls
in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection
with our activities on our behalf in connection with identifying and completing an initial business combination. The founder shares will
be worthless if we do not complete an initial business combination. Other than these payments and reimbursements, no compensation of
any kind, including finder's and consulting fees, will be paid by the company to our sponsor, executive officers and directors,
or any of their respective affiliates, prior to completion of our initial business combination.

 After
the completion of our initial business combination, members of our management team who remain with us may be paid consulting or management
fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation
materials or tender offer materials furnished to our stockholders in connection with a proposed business combination. We have not established
any limit on the amount of such fees that may be paid by the combined company to our members of management. It is unlikely the amount
of such compensation will be known at the time of the proposed business combination because the directors of the post-combination business
will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers
will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely
by independent directors or by a majority of the independent directors on our board of directors.

 We
do not intend to take any action to ensure that members of our management team maintain their positions with us after the completion
of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment
or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with us may influence our management's motivation in identifying or selecting
a target business but we do not believe that the ability of our management to remain with us after the completion of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any
agreements with our executive officers and directors that provide for benefits upon termination of employment.

 Compensation
Committee Interlocks and Insider Participation

 None
of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity
that has one or more executive officers serving on our board of directors.

 ITEM
 12.

 SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth as of March 18, 2024 the number of shares of common stock beneficially owned by (i) each person who is known
by us to be the beneficial owner of more than five percent of our issued and outstanding shares of common stock (ii) each of our officers
and directors; and (iii) all of our officers and directors as a group. As of March 18, 2024, we had 5,216,291 shares of common stock
issued and outstanding, including 5,216,290 shares of Class A common stock, and 1 share of Class B common stock.

 Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them. The following table does not reflect record of beneficial ownership of any shares of common
stock issuable upon exercise of the warrants, as the warrants are not exercisable within 60 days of March 18, 2024.

 Number
 of Shares

 Percentage
 of

 Name
 and Address of Beneficial Owner (1)

 Beneficially
 Owned

 Outstanding

 Mehana Capital
 LLC (Our Sponsor) (2)

 3,509,375

 67.28
 %

 Darryl Nakamoto

 %

 Allison Van Orman

 %

 Dustin Shindo (2)

 3,509,375

 67.28
 %

 Kotaro Chiba

 %

 Mike Sayama

 %

 Trisha Nomura

 %

 All officers and directors
 as a group

 3,509,375

 67.28
 %

 (6 individuals)

 ZUU
 Co. Ltd. (3)

 1,392,860

 26.7
 %

 (1)

 Unless
 otherwise noted, the business address of each of these entities and individuals is 643 Ilalo Street, #102, Honolulu, Hawaii 96813.

 (2)

 Includes
 3,509,374 shares of Class A common stock and 1 share of Class B common stock, which is convertible into 1 share of Class A common
 stock on a one-for-one basis at any time at the shareholder's election. Excludes 634,375 shares of Class A common stock issuable
 upon the exercise of 634,375 private placement warrants. Dustin Shindo is the control person of the Sponsor, and possesses all voting
 power. By virtue of this relationship, Dustin Shindo may be deemed to share beneficial ownership of the securities held of record
 by our sponsor. Dustin Shindo disclaims any such beneficial ownership except to the extent of his respective pecuniary interest

 (3)

 Based
 on the Schedule 13D/A filed by the holder on February 29, 2024. The holder's address is 3-6-28 Aobadai, Meguroku, Tokyo 154-0042, Japan.
 The reported securities are held directly by ZUU Funders Co. Ltd. ("Funders") and may be deemed to be held indirectly
 by ZUU Target Fund for SBC Medical Group HD Investment Partnership (the "Fund"), ZUU Co. Ltd. ("ZUU"), and
 Kazumasa Tomita ("Mr. Tomita" and, together with Funders, the Fund, and ZUU, the "Reporting Persons"). Funders
 is the operating partner of the Fund and a wholly-owned subsidiary of ZUU. ZUU is majority owned and controlled by Mr. Tomita. The
 Reporting Persons disclaim beneficial ownership, except to the extent of their pecuniary interest.

 ITEM
 13.

 CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Founder

 On
May 17, 2022, the Sponsor paid an aggregate of $25,000 to cover certain expenses on our behalf in exchange for the issuance of 2,875,000
shares of Class B common stock (the "Founder Shares"). The Founder Shares included an aggregate of up to 375,000 shares of
Class B common stock subject to forfeiture by the Sponsor to the extent that the underwriters' over-allotment option was not exercised
in full or in part, so that the Sponsor will own, on an as-converted basis, 20% of our issued and outstanding shares after the Initial
Public Offering. The underwriters exercised the over-allotment option in full, so those shares are no longer subject to forfeiture.

 The
Sponsor has agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees as disclosed
herein) until, with respect to any of the Class B common stock, the earlier of (i) six months after the date of the consummation of a
business combination, or (ii) the date on which the closing price of our common stock equals or exceeds $12.00 per share (as adjusted
for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing
after a business combination, with respect to the remaining any of the Class B common stock, upon six months after the date of the consummation
of a business combination, or earlier, in each case, if, subsequent to a business combination, we consummate a subsequent liquidation,
merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their common
stock for cash, securities or other property. On May 8, 2023, the Sponsor converted 2,874,999 Founder Shares of Class B common stock
into 2,874,999 shares of Class A common stock, which shares include these same transfer restrictions.

 Promissory
Note - Related Party

 On
April 25, 2022, the Sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering
pursuant to a promissory note (the "Promissory Note"). This loan was non-interest bearing and payable on the earlier of (i)
March 31, 2023 or (ii) the date on which we consummated the Initial Public Offering. Prior to the Initial Public Offering, we had borrowed
$300,000 under the Promissory Note. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of the Initial
Public Offering on August 9, 2022.

 Administrative
Support Agreement

 The
Sponsor has agreed, commencing from the date of the Initial Public Offering through the earlier of our consummation of a business combination
and its liquidation, to make available to us certain general and administrative services, including office space, utilities and administrative
services, as we may require from time to time. We have agreed to pay to the Sponsor, $10,000 per month for these services to complete
a business combination. For the year ended December 31, 2023 and the period from March 11, 2022 (inception) through December 31, 2022,
$120,000 and $50,000 were paid to Mehana Capital LLC for these services, respectively.

 Convertible
Promissory Note

 On
May 26, 2023, we entered into a Convertible Promissory Note with SBC, pursuant to which SBC agreed to loan us an aggregate principal
of $1,000,000 (the "Convertible Promissory Note"). The Convertible Promissory Note is non-interest bearing and is due and
payable upon the earlier to occur of (i) the date on which our initial Business Combination is consummated and (ii) our liquidation on
or before November 9, 2024, or such later liquidation date as may be approved by our stockholders. There is an outstanding balance of
$1,000,000 for this SBC loan as of December 31, 2023. The Convertible Promissory Note may be converted into Class A Common Stock at one
share for each $10 of additional capital contribution at the option of SBC. As of December 31, 2023 and December 31, 2022, the outstanding
balance under the Convertible Promissory Note amounted to an aggregate of $1,000,000 and $0, respectively.

 Related
Party Loans

 In
order to finance transaction costs in connection with the initial business combination, the Sponsor or an affiliate of the Sponsor or
certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete the initial business
combination, we will repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion
of the working capital held outside the Trust Account to repay such loaned amounts, including the repayment of loans from the Sponsor
to pay for any amount deposited to pay for any extension of the time to complete the initial business combination, but no proceeds from
the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Units, at a price of $10.00
per Unit at the option of the lender, upon consummation of the initial business combination. The Units would be identical to the Placement
Units. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect
to such loans. As of December 31, 2023 and December 31, 2022, we did not have any outstanding related party loans.

 General

 If
any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity
to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations
to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual
obligations that may take priority over their duties to us.

 Other
than equity provided to our independent directors, no compensation of any kind, including finder's and consulting fees, will be
paid to our sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with
the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. The Sponsor has agreed to pay for the formation costs, and waived to seek reimbursement from the Company for such
costs. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or
their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or
ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

 After
our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees
from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender
offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will
be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial
business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director
compensation. We have entered into a registration rights agreement pursuant to which our sponsor is entitled to certain registration
rights with respect to the placement warrants and the shares of our Class A common stock issuable upon conversion of the Founder Shares.

 Policy
for Approval of Related Party Transactions

 Our
audit committee of our board of directors has adopted a charter, providing for the review, approval and/or ratification of "related
party transactions," which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated
by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing or
proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already
committed to, the business purpose of the transaction and the benefits of the transaction to the company and to the relevant related
party. Any member of the audit committee who has an interest in the related party transaction under review by the committee shall abstain
from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate
in some or all of the committee's discussions of the related party transaction. Upon completion of its review of the related party
transaction, the committee may determine to permit or to prohibit the related party transaction. An affirmative vote of a majority of
the members of the audit committee, present at a meeting at which a quorum is present, will be required in order to approve a related
party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous
written consent of all of the members of the audit committee will be required to approve a related party transaction. Our audit committee
will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or our or any of their affiliates.

 These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or officer. To further minimize conflicts of interest, we have agreed not to
consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we,
or a committee of independent directors, have obtained an opinion from either an independent investment banking firm that is a member
of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.

 Furthermore,
no finder's fees, reimbursements, consulting fee, monies in respect of any payment of a loan or other compensation will be paid
by us to our Sponsor, officers or directors or any affiliate of our Sponsor, officers or directors prior to, for services rendered to
us prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination
(regardless of the type of transaction that it is). However, the following payments will be made to our Sponsor, officers or directors,
or our or their affiliates, none of which will be made from the proceeds of the IPO held in the trust account prior to the completion
of our initial business combination:

 Payment
 to Mehana Capital LLC, our Sponsor, of $10,000 per month, for up to 27 months if we elect to extend the time to complete our initial
 business combination, for office space, utilities and secretarial and administrative support;

 Reimbursement
 for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

 Repayment
 of non-interest-bearing loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors
 to finance transaction costs in connection with an intended initial business combination, the terms of which (other than as described
 above) have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans
 may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business
 combination. The units would be identical to the placement units.

 Repayment
 of loans from our Sponsor to pay for any amount deposited to pay for any extension of the time to complete our initial business combination.
 All of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of
 our initial business combination. The units would be identical to the placement units.

 Our
audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.

Independence

 Nasdaq
listing standards require that a majority of our board of directors be independent. For a description of the director independence, see
"— Part III, Item 10 - Directors, Executive Officers and Corporate Governance".

 ITEM
 14.

 PRINCIPAL
 ACCOUNTANT FEES AND SERVICES.

 The
firm of Marcum LLP, or Marcum, acts as our independent registered public accounting firm. The following is a summary of fees paid to
Marcum for services rendered.

 Audit
Fees.

 For
the year ended December 31, 2023, fees for our independent registered public accounting firm were $120,902 for the services Marcum
performed in connection with the audit of our December 31, 2023 consolidated financial statements included in this Annual Report on
Form 10-K.

 For
the period from March 11, 2022 (inception) through December 31, 2022, fees for our independent registered public accounting firm
were $108,184 for the services Marcum performed in connection with our Initial Public Offering and the audit of our December 31,
2022 consolidated financial statements included in this Annual Report on Form 10-K.

 Audit-Related
Fees.

 For
the year ended December 31, 2023 and for the period from March 11, 2022 (inception) through December 31, 2022, our independent registered
public accounting firm did not render assurance and related services that are reasonably related to the performance of the audit or review
of consolidated financial statements.

 Tax
Fees. For the year ended December 31, 2023 and the period from March 11, 2022 (inception) through December 31, 2022, Marcum did not
render any tax return services, planning or tax advice.

 All
Other Fees. For the year ended December 31, 2023 and the period from March 11, 2022 (inception) through December 31, 2022, there
were no fees billed for products and services provided by our independent registered public accounting firm other than those set forth
above.

 Pre-Approval
Policy

 Our
audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve
all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board
of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve
all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject
to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to
the completion of the audit).

 part
IV

 ITEM
 15.

 EXHIBITS
 AND FINANCIAL STATEMENT SCHEDULES

 (a)

 The
 following documents are filed as part of this Form 10-K:

 (1)

 Financial
 Statements:

 Page

 Report
 of Independent Registered Public Accounting Firm (PCAOB ID 688)

 Balance Sheets

 Statements of Operations

 Statements of Changes in Stockholders' Equity (Deficit)

 Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (2)

 Financial
 Statement Schedules:

 None.

 (3)

 Exhibits

 The
following exhibits are filed with this report. Exhibits which are incorporated herein by reference can be obtained from the SEC's
website at sec.gov.

 Exhibit
 No.

 Description

 1.1

 Underwriting Agreement, dated August 4, 2022, between the Company and EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters named therein, (incorporated by reference to Exhibit 1.1 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 2.1

 Amended and Restated Agreement and Plan of Merger, dated June 21, 2023, by and among Pono, Merger Sub, SBC, the Purchaser Representative, and the Seller Representative (incorporated by reference to Exhibit 2.1 filed with the Form 8-K filed by the Registrant on June 22, 2023).

 2.2

 Amendment No. 1 to Amended and Restated Agreement and Plan of Merger, dated September 8, 2023, by and among Pono, Merger Sub, SBC, Yoshiyuki Aikawa, and the Seller Representative. (incorporated by reference to Exhibit 2.2 filed with the Form 8-K filed by the Registrant on September 11, 2023).

 2.3

 Amendment No. 2 to Amended and Restated Agreement and Plan of Merger, dated October 26, 2023, by and among Pono, Merger Sub, SBC, Yoshiyuki Aikawa, and the Seller Representative. (incorporated by reference to Exhibit 2.2 filed with the Form 8-K filed by the Registrant on October 26, 2023).

 2.4

 Amendment No. 3 to Amended and Restated Agreement and Plan of Merger, dated December 28, 2023, by and among Pono, Merger Sub, SBC, Yoshiyuki Aikawa, and the Seller Representative. (incorporated by reference to Exhibit 2.2 filed with the Form 8-K filed by the Registrant on December 29, 2023).

 3.1

 Third Amended and Restated Certificate of Incorporation dated August 4, 2022 (incorporated by reference to Exhibit 3.1 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 3.2

 Certificate of Amendment to Third Amended and Restated Certificate of Incorporation, dated May 8, 2023 (incorporated by reference to Exhibit 3.1 filed with the Form 8-K filed by the Registrant on May 9, 2023).

 3.3

 Certificate of Amendment to Third Amended and Restated Certificate of Incorporation, dated February 5, 2024 (incorporated by reference to Exhibit 3.1 filed with the Form 8-K filed by the Registrant on February 8, 2024).

 3.4

 By Laws (incorporated by reference to Exhibit 3.3 filed with the Form S-1 filed by the Registrant on June 14, 2022).

 4.1

 Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 filed with the Form S-1/A filed by the Registrant on July 22, 2022).

 4.2

 Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 filed with the Form S-1/A filed by the Registrant on July 22, 2022).

 4.3

 Specimen Warrant Certificate (incorporated by reference to Exhibit 4.1 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 4.4

 Warrant Agreement, dated August 4, 2022, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 4.5*

 Description of Securities

 10.1

 Amended and Restated Securities Subscription Agreement, dated May 17, 2022, between the Registrant and Mehana Capital LLC (incorporated by reference to Exhibit 10.6 filed with the Form S-1 filed by the Registrant on June 14, 2022).

 10.2

 Amendment to the Amended and Restated Securities Subscription Agreement, dated July 21, 2022, between the Registrant and Mehana Capital LLC (incorporated by reference to Exhibit 10.7 filed with the Form S-1/A filed by the Registrant on July 22, 2022).

 10.3

 Promissory Note, dated April 25, 2022, issued to Mehana Capital LLC (incorporated by reference to Exhibit 10.5 filed with the Form S-1 filed by the Registrant on June 14, 2022).

 10.4

 Letter Agreement, dated August 4, 2022, among the Company, Mehana Capital LLC, each of the executive officers and directors of the Company, and EF Hutton, division of Benchmark Investments, LLC (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 10.5

 Investment Management Trust Agreement, dated August 4, 2022, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.2 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 10.6

 Registration Rights Agreement, dated August 4, 2022, among the Company and certain securityholders (incorporated by reference to Exhibit 10.3 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 10.7

 Placement Unit Purchase Agreement, dated August 4, 2022, between the Company and Mehana Capital LLC (incorporated by reference to Exhibit 10.4 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 10.8

 Form of Indemnity Agreement (incorporated by reference to Exhibit 10.4 filed with the Form S-1/A filed by the Registrant on July 22, 2022).

 10.9

 Administrative Support Agreement, dated August 4, 2022, by and between the Company and Mehana Capital LLC (incorporated by reference to Exhibit 10.6 filed with the Form 8-K filed by the Registrant on August 9, 2022).

 10.10

 Form of Lock-up Agreement (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on February 2, 2023).

 10.11

 Form of Non-Competition Agreement (incorporated by reference to Exhibit 10.2 filed with the Form 8-K filed by the Registrant on February 2, 2023).

 10.12

 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 filed with the Form 8-K filed by the Registrant on February 2, 2023).

 10.13

 Purchaser Support Agreement (incorporated by reference to Exhibit 10.4 filed with the Form 8-K filed by the Registrant on February 2, 2023).

 10.14

 Voting Agreement (incorporated by reference to Exhibit 10.5 filed with the Form 8-K filed by the Registrant on February 2, 2023).

 10.15

 Form of Non-Redemption Agreement (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on May 4, 2023).

 10.16

 Note Purchase Agreement, dated as of May 18, 2023, by and between Pono Capital Two, Inc. and SBC Medical Group Holdings Incorporated (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on May 19, 2023).

 10.17

 Form of Convertible Promissory Note (incorporated by reference to Exhibit 10.2 filed with the Form 8-K filed by the Registrant on May 19, 2023).

 10.18

 Form of Non-Redemption Agreement (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on January 18, 2024).

 10.19*

 Amendment to the Non-Redemption Agreement.

 10.20

 Amendment to Note Purchase Agreement, dated as of February 27, 2024, by and between Pono Capital Two, Inc. and SBC Medical Group Holdings Incorporated (incorporated by reference to Exhibit 10.1 filed with the Form 8-K filed by the Registrant on March 1, 2024).

 Form of Code of Ethics (incorporated by reference to Exhibit 14 filed with the Form S-1/A filed by the Registrant on July 22, 2022).

 31.1*

 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1*

 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2*

 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1*

 Clawback Policy.

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 Cover

 *

 Filed
 herewith.

 Certain
 of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant
 agrees to furnish a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

 ITEM
 16.

 FORM
 10-K SUMMARY.

 None.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Dated:

 PONO

 By:

 /s/
 Darryl Nakamoto

 Name:

 Darryl
 Nakamoto

 Title:

 Chief
 Executive Officer, Director

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Darryl Nakamoto

 Chief
 Executive Officer, Director

 Darryl
 Nakamoto

 (Principal
 Executive Officer)

 /s/
 Allison Van Orman

 Chief
 Financial Officer

 Allison
 Van Orman

 (Principal
 Accounting and Financial Officer)

 /s/
 Dustin Shindo

 Chairman
 of the Board

 Dustin
 Shindo

 /s/
 Kotaro Chiba

 Kotaro
 Chiba

 /s/
 Mike Sayama

 Mike
 Sayama

 /s/
 Trisha Nomura

 Trisha
 Nomura

 PONO

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 688)

 Balance Sheets as of December 31, 2023 and December 31, 2022

 Statements of Operations for the year ended December 31, 2023 and for the period from March 11, 2022 (inception) through December 31,
 2022

 Statements of Changes in Stockholders' Equity (Deficit) for the year ended December 31, 2023 and for the period from March 11,
 2022 (inception) through December 31, 2022

 Statements of Cash Flows for the year ended December 31, 2023 and for the period from March 11, 2022 (inception) through December 31,
 2022

 Notes
 to Consolidated Financial Statements

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Stockholders and Board of Directors of

 Pono
Capital Two, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Pono Capital Two, Inc. (the "Company") as of December 31, 2023
and 2022, the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the year ended
December 31, 2023 and for the period from March 11, 2022 (inception) through December 31, 2022, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the year
ended December 31, 2023 and for the period from March 11, 2022 (inception) through December 31, 2022, in conformity with accounting principles
generally accepted in the United States of America.

 Explanatory
Paragraph – Going Concern

 The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note
1 to the financial statements, the Company is a Special Purpose Acquisition Corporation that was formed for the purpose of entering into
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more
businesses on or before November 9, 2024. The Company entered into an agreement and plan of merger with a business combination target
on January 31, 2023; however, the completion of this transaction is subject to the approval of the Company's stockholders among
other conditions. There is no assurance that the Company will obtain the necessary approvals, satisfy the required closing conditions,
raise the additional capital it needs to fund its operations, and complete the transaction prior to November 9, 2024, if at all. The
Company also has no approved plan in place to extend the business combination deadline and fund operations for any period of time after
November 9, 2024, in the event that it is unable to complete a business combination by that date. These matters raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans with regard to these matters are also described
in Note 1. The financial statements do not include any adjustments that may be necessary should the Company be unable to continue as
a going concern.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit s. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 /s/ Marcum
 llp

 Marcum LLP

 We
 have served as the Company's auditor since 2022.

 Boston,
 MA

 March
 18, 2024

 F- 1

 PONO

BALANCE SHEETS

 Assets:

 Current assets:

 Cash

 $
 284,394

 $
 485,564

 Prepaid expenses

 110,149

 236,625

 Total Current Assets

 394,543

 722,189

 Marketable securities
 held in Trust Account

 20,850,793

 119,220,016

 Total
 Assets

 $
 21,245,336

 $
 119,942,205

 Liabilities and Stockholders'
 Deficit:

 Current liabilities:

 Accounts payable

 $
 43,910

 $
 79,440

 Accrued expenses

 480,050

 76,420

 Convertible Promissory
 Note

 1,000,000

 —

 Franchise tax payable

 72,978

 161,644

 Income tax payable

 11,317

 248,508

 Excise
 tax payable

 1,000,789

 —

 Total Current Liabilities

 2,609,044

 566,012

 Deferred underwriting
 fee payable

 4,025,000

 4,025,000

 Total
 Liabilities

 6,634,044

 4,591,012

 Commitments and Contingencies
 (Note 6)

 -

 Class A common stock subject to possible redemption,
 1,922,750 and 11,500,000 shares at redemption value of $ 10.72 and $ 10.32 per share as of December 31, 2023 and 2022, respectively

 20,606,204

 118,709,864

 Stockholders' Deficit:

 Preferred stock, $ 0.0001
 par value; 1,000,000 shares authorized; no shares issued and outstanding

 —

 —

 Class
 A common stock, $ 0.0001 par value; 100,000,000 shares authorized; 3,566,874 1 and 691,875 shares issued and outstanding
 (excluding 1,922,750 and 11,500,000 shares subject to possible redemption) at December 31, 2023 and December 31, 2022, respectively

 Class B common stock, $ 0.0001
 par value; 10,000,000 shares authorized; 1 and 2,875,000 issued and outstanding at December 31, 2023 and December 31, 2022, respectively

 —

 Common stock value

 —

 Additional paid-in capital

 —

 —

 Accumulated
 deficit

 ( 5,995,269
)

 ( 3,359,028
)

 Total
 Stockholders' Deficit

 ( 5,994,912
)

 ( 3,358,671
)

 Total
 Liabilities and Stockholders' Deficit

 $
 21,245,336

 $
 119,942,205

 2,874,999 converted Class
 B shares are not subject to possible redemption

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 2

 PONO

STATEMENTS OF OPERATIONS

 For
 the year ended

 For
 the period from
 March
 11, 2022

 (inception)
 through

 Operating and formation costs

 $
 1,635,452

 $
 382,051

 Franchise tax expense

 137,379

 161,644

 Loss from Operations

 ( 1,772,831
)

 ( 543,695
)

 Other Income:

 Interest and dividend
 income on investments held in Trust Account

 2,641,407

 1,345,016

 Income before income taxes

 868,576

 801,321

 Income tax expense

 ( 528,809
)

 ( 248,508
)

 Net

 $
 339,767

 $
 552,813

 Basic
 weighted average shares outstanding, Class A common stock

 7,840,002

 5,951,288

 Basic
 net income per share, Class A common stock

 $
 0.04

 $
 0.06

 Diluted
 weighted average shares outstanding, Class A common stock

 7,900,002

 5,951,288

 Diluted
 net income per share, Class A common stock

 $
 0.04

 $
 0.06

 Basic
 weighted average shares outstanding, Class B common stock

 1,008,220

 2,683,051

 Basic
 net income per share, Class B common stock

 $
 0.04

 $
 0.06

 Diluted
 weighted average shares outstanding, Class B common stock

 1,008,220

 2,683,051

 Diluted
 net income per share, Class B common stock

 $
 0.04

 $
 0.06

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 3

 PONO

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

 FOR
THE YEAR ENDED DECEMBER 31, 2023

 Capital

 Class
 A

 Common Stock

 Class
 B

 Common Stock

 Additional
 Paid-in

 Accumulated

 Total
 Stockholders'

 Capital

 Balance at December

 691,875

 $

 2,875,000

 $

 $
 —

 $
 ( 3,359,028
)

 $
 ( 3,358,671
)

 Shareholder
 non-redemption agreement

 —

 —

 —

 —

 709,691

 —

 709,691

 Shareholder
 non-redemption agreement

 —

 —

 —

 —

 ( 709,691
)

 —

 ( 709,691
)

 Conversion
 of Class B common stock to Class A common stock

 2,874,999

 ( 2,874,999
)

 ( 288
)

 —

 —

 —

 Excise
 tax

 —

 —

 —

 —

 —

 ( 1,000,789
)

 ( 1,000,789
)

 Accretion
 of Class A common stock subject to redemption to redemption amount

 —

 —

 —

 —

 —

 ( 1,975,219
)

 ( 1,975,219
)

 Net

 —

 —

 —

 —

 —

 339,767

 339,767

 Balance
 at December 31, 2023

 3,566,874

 $

 $
 —

 $
 —

 $
 ( 5,995,269
)

 $
 ( 5,994,912
)

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 4

 PONO

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

 FOR
THE PERIOD FROM MARCH 11, 2022 (INCEPTION) THROUGH DECEMBER 31, 2022

 Class
 A

 Common Stock

 Class
 B

 Common Stock

 Additional
 Paid-in

 Accumulated

 Total
 Stockholders'

 Capital

 Balance at March 11, 2022
 (inception)

 —

 $
 —

 —

 $
 —

 $
 —

 $
 —

 $
 —

 Balance

 —

 $
 —

 —

 $
 —

 $
 —

 $
 —

 $
 —

 Issuance
 of Class B common stock to Sponsor (1)

 —

 —

 2,875,000

 24,712

 —

 25,000

 Issuance
 of Placement Units

 634,375

 —

 —

 6,343,687

 —

 6,343,750

 Issuance of Representative
 shares

 57,500

 —

 —

 67,269

 —

 67,275

 Proceeds
 allocated to Public Warrants

 —

 —

 —

 —

 2,978,500

 —

 2,978,500

 Value of
 offering costs allocated to the fair value of equity instruments

 —

 —

 —

 —

 ( 205,388
)

 —

 ( 205,388
)

 Accretion
 of Class A common stock subject to redemption to redemption amount

 —

 —

 —

 —

 ( 9,208,780
)

 ( 3,911,841
)

 ( 13,120,621
)

 Net

 —

 —

 —

 —

 552,813

 552,813

 Balance
 at December 31, 2022

 691,875

 $

 2,875,000

 $

 $
 —

 $
 ( 3,359,028
)

 $
 ( 3,358,671
)

 Balance

 691,875

 $

 2,875,000

 $

 $
 —

 $
 ( 3,359,028
)

 $
 ( 3,358,671
)

 (1)
 Includes up to
 375,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the
underwriters (see Note 5). The underwriters exercised their over-allotment option in full on August 9, 2022; thus, no shares of common
stock remain subject to forfeiture as of August 9, 2022 (see Note 5).

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 5

 PONO

STATEMENTS OF CASH FLOWS

 For
 the year ended

 For
the period from

March 11,2022
 (inception) through

 Cash Flows from Operating
 Activities:

 Net income

 $
 339,767

 $
 552,813

 Adjustments to reconcile
 net income to net cash used in operating activities:

 Interest and dividend income on investments
 held in Trust Account

 ( 2,641,407
)

 ( 1,345,016
)

 Changes in operating assets
 and liabilities:

 Prepaid expenses

 126,476

 ( 236,625
)

 Accounts payable

 ( 35,530
)

 79,440

 Accrued expenses

 403,630

 76,420

 Franchise tax payable

 ( 88,666
)

 161,644

 Income
 tax payable

 ( 237,191
)

 248,508

 Net
 cash used in operating activities

 ( 2,132,921
)

 ( 462,816
)

 Cash Flows from Investing
 Activities:

 Investment of cash in Trust
 Account

 —

 ( 117,875,000
)

 Proceeds from Trust Account
 to pay taxes

 931,751

 —

 Proceeds
 from Trust Account for payment to redeeming shareholders

 100,078,879

 —

 Net
 cash provided by (used in) investing activities

 101,010,630

 ( 117,875,000
)

 Cash Flows from Financing
 Activities:

 Proceeds from convertible
 promissory note

 1,000,000

 —

 Payment to redeeming shareholders

 ( 100,078,879
)

 —

 Proceeds from sale of private
 placement units

 6,343,750

 Proceeds from issuance
 of Class B common stock to Sponsor

 —

 25,000

 Proceeds from sale of Units,
 net of underwriting discount paid

 113,045,000

 Proceeds from promissory
 note - related party

 —

 300,000

 Repayment of Promissory
 note - related party

 ( 300,000
)

 Advance from Sponsor for
 payment of formation costs

 —

 Repayment to Sponsor for
 payment of formation costs

 —

 ( 412
)

 Payment
 of offering costs

 —

 ( 590,370
)

 Net
 cash (used in) provided by financing activities

 ( 99,078,879
)

 118,823,380

 Net Change in Cash

 ( 201,170
)

 485,564

 Cash - Beginning of period

 485,564

 —

 Cash - End of period

 $
 284,394

 $
 485,564

 Supplemental disclosure
 of non-cash investing and financing activities:

 Excise tax related to redemption of Class A
 common stock

 $
 1,000,789

 $
 —

 Shareholder non-redemption
 agreement

 $
 709,691

 $
 —

 Accretion of Class A
 common stock subject to redemption to redemption amount

 $
 1,975,219

 $
 13,120,621

 Fair value of Representative Shares

 $
 —

 $
 67,275

 Deferred underwriting
 fee payable

 $
 —

 $
 4,025,000

 Cash paid for income
 and franchise taxes

 $
 992,045

 —

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 6

 PONO

 NOTES

 NOTE
1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN

 Pono
Capital Two, Inc. (the "Company") is a blank check company incorporated in Delaware on March 11, 2022. The Company was formed
for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (a "business combination"). The Company is not limited to a particular industry or
geographic region for purposes of consummating a business combination. The Company is an early stage and emerging growth company and,
as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

 As
of December 31, 2023, the Company had not commenced any operations. All activity for the period from March 11, 2022 (inception) through
December 31, 2023 relates to the Company's formation and initial public offering ("Initial Public Offering") and subsequent
costs related to completing a business combination. The Company will not generate any operating revenues until after the completion of
a business combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds
derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

 The
registration statement for the Company's Initial Public Offering was declared effective on August 4, 2022. On August 9, 2022, the
Company consummated the Initial Public Offering of 11,500,000 units, (the "Units" and, with respect to the Class A common
stock included in the Units sold, the "Public Shares"), including 1,500,000 Units issued pursuant to the exercise of the
underwriters' over-allotment option in full, generating gross proceeds of $ 115,000,000, which is discussed in Note 3.

with the closing of the Initial Public Offering, the Company consummated the sale of 634,375 units (the "Placement Units")
at a price of $ 10.00 per Placement Unit in a private placement to Mehana Capital LLC (the "Sponsor"), including 63,000 Placement
Units issued pursuant to the exercise of the underwriters' over-allotment option in full, generating gross proceeds of $ 6,343,750,
which is described in Note 4.

 Following
the closing of the Initial Public Offering on August 9, 2022, an amount of $ 117,875,000 ($ 10.25 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (the "Trust
Account"), and will be invested only in U.S. government treasury obligations with maturities of 185 days or less or in money market
funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury
obligations, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the funds held in the Trust
Account, as described below.

 Transaction
costs related to the issuances described above amounted to $ 6,637,645, consisting of $ 1,955,000 of cash underwriting fees, $ 4,025,000
of deferred underwriting fees and $ 67,275 of costs related to Representative Shares and $ 590,370 of other offering costs. In addition,
at December 31, 2023, $ 284,394 of cash was held outside of the Trust Account and is available for working capital purposes.

 On
September 23, 2022, the Company announced that the holders of the Units may elect to separately trade the Public Shares and the Public
Warrants (as defined in Note 3) commencing on September 26, 2022. Those Public Shares not separated will continue to trade on The Nasdaq
Global Market under the symbol "PTWOU," and the Class A Common Stock and warrants that are separated will trade on The Nasdaq
Global Market under the symbols "PTWO" and "PTWOW," respectively.

 F- 7

 PONO

 NOTES

 The
Company's management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a business combination. There is no assurance that the Company will be able to complete a business combination successfully. The Company
must complete a business combination with one or more target businesses that together have an aggregate fair market value of at least
 80 % of the value of the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on income
earned on the Trust Account) at the time of the agreement to enter into an initial business combination. The Company will only complete
a business combination if the post-transaction company owns or acquires 50 % or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act of 1940, as amended (the "Investment Company Act").

 The
Company will provide its holders of Public Shares (the "Public Stockholders") with the opportunity to redeem all or a portion
of their Public Shares upon the completion of a business combination either (i) in connection with a stockholder meeting called to approve
the business combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of
a business combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will
be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $ 10.25 per Public
Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
tax obligations). There will be no redemption rights upon the completion of a business combination with respect to the Company's
warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion
of the Initial Public Offering in accordance with the Financial Accounting Standards Board's ("FASB") Accounting Standards
Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity ("ASC 480").

 The
Company will proceed with a business combination if the Company has net tangible assets of at least $ 5,000,001 upon consummation of such
business combination and a majority of the shares voted are voted in favor of the business combination. If the Company seeks stockholder
approval of a business combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated certificate
of incorporation (the "Amended and Restated Certificate of Incorporation") provides that a Public Stockholder, together with
any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a "group" (as
defined under Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), will be restricted from
seeking redemption rights with respect to 15% or more of the Public Shares without the Company's prior written consent.

 If
a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the
Company will offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission ("SEC"),
and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC
prior to completing a business combination.

 The
Sponsor has agreed (a) to vote its Class B common stock, the common stock included in the Placement Units and the Public Shares purchased
in the Initial Public Offering in favor of a business combination, (b) not to propose an amendment to the Amended and Restated Certificate
of Incorporation with respect to the Company's pre-business combination activities prior to the consummation of a business combination
unless the Company provides dissenting Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any
such amendment; (c) not to redeem any shares (including the Class B common stock) and Placement Units (including underlying securities)
into the right to receive cash from the Trust Account in connection with a stockholder vote to approve a business combination (or to
sell any shares in a tender offer in connection with a business combination if the Company does not seek stockholder approval in connection
therewith) or a vote to amend the provisions of the Amended and Restated Certificate of Incorporation relating to stockholders'
rights of pre-business combination activity and (d) that the Class B common stock and Placement Units (including underlying securities)
shall not participate in any liquidating distributions upon winding up if a business combination is not consummated. However, the Sponsor
will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased in the Initial Public
Offering if the Company fails to complete its business combination.

 F- 8

 PONO

 NOTES

to the Third Amended and Restated Certificate of Incorporation of the Company, the Company had until 9 months (or up to 18 months from
the closing of the Initial Public Offering at the election of the Company pursuant to nine one month extensions subject to satisfaction
of certain conditions, including the deposit of $379,500 ($0.033 per unit) for such one month extension, into the Trust Account, or as
extended by the Company's stockholders in accordance with the Amended and Restated Certificate of Incorporation) from the closing
of the Initial Public Offering to consummate a business combination (the "Combination Period"). On February 5, 2024, the
Company filed an amendment to the Third Amended and Restated Certificate of Incorporation of the Company (i) to extend the Combination
Period from February 9, 2023 to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account and (ii) to
provide for the right of a holder of Class B common stock to convert such shares into shares of Class A common stock on a one-for-one
basis prior to the closing of a business combination at the election of the holder If the Company is unable to complete a business combination
within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but no 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 interest earned (net of taxes payable and less interest
to pay dissolution expenses up to $100,000), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish Public Stockholders' rights as stockholders (including the right to receive further liquidation distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
stockholders and the Company's board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution
of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The
underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company
does not complete a business combination within the Combination Period and, in such event, such amounts will be included with the funds
held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is
possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price
per Unit ($ 10.00).

 The
Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products
sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce
the amounts in the Trust Account to below $ 10.25 per share, except as to any claims by a third party who executed a waiver of any and
all rights to seek access to the Trust Account and except as to any claims under the Company's indemnity of the underwriters of
the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities
Act"). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have
to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company's
independent registered accounting firm), prospective target businesses or other entities with which the Company does business, execute
agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

 F- 9

 PONO

 NOTES

 Going
Concern and Liquidity

 As
of December 31, 2023, the Company had $ 284,394 in cash held
outside of the Trust Account, working capital deficit, net of income tax payable and franchise tax payable of $ 1,129,417
and accumulated deficit of $ 5,995,269.
The Company has incurred and expects to continue to incur significant costs in pursuit of the Company's financing and
acquisition plans. For the year ended December 31, 2023, the Company had a loss from operations of $ 1,772,831
and net cash used in operating activities was $ 2,132,921.
The Company's liquidity needs to date have been further satisfied through a Convertible Promissory Note of $ 1,000,000
issued on May 26, 2023. The Company expects that it will need additional capital to satisfy its liquidity needs beyond the net
proceeds from the consummation of the Initial Public Offering held outside of the Trust Account for paying existing accounts payable
and consummating the Business Combination. Although certain of the Company's initial stockholders, officers and directors or
their affiliates have committed up to $ 1,500,000
Working Capital Loans (see Note 5) from time to time or at any time, there is no guarantee that the Company will receive such funds.
In addition, the Company will have until November 9, 2024 to consummate a business combination. If a business combination is not
consummated by November 9, 2024, less than one year after the date these consolidated financial statements are
issued, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the
mandatory liquidation, along with the lack of liquidity, should a business combination not occur, and potential subsequent
dissolution, raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been
made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 9, 2024. The
Company intends to complete the initial business combination before the mandatory liquidation date. However, there can be no
assurance that the Company will be able to consummate any business combination by November 9, 2024.

 Risks
and Uncertainties

 The
military action commenced in February 2022 between the Russian Federation and Belarus in the country of Ukraine and related economic sanctions,
as well as the military action between Hamas and Israel and the risk of escalations of other military conflicts have created and are
expected to create global economic consequences. As a result, the Company's ability to consummate a business combination, or the
operations of a target business with which the Company ultimately consummates a business combination, may be materially and adversely
affected. Further, the Company's ability to consummate a transaction may be dependent on the ability to raise equity and debt financing
which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party
financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world
economy and the specific impact on the Company's financial position, results of operations and/or ability to consummate a business
combination are not yet determinable. These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

 On
August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and
certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023 (the "Excise Tax").
The Excise Tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount
of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes
of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against
the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the Excise Tax. The
U.S. Department of the Treasury (the "Treasury") has been given authority to provide regulations and other guidance to carry
out and prevent the abuse or avoidance of the Excise Tax.

 Any
redemption or other repurchase that occurs on or after January 1, 2023, in connection with a business combination, votes relating to
certain amendments to the Company's Amended and Restated Certificate of Incorporation or otherwise, may be subject to the Excise
Tax. Whether and to what extent the Company would be subject to the Excise Tax in connection with a business combination, votes relating
to certain amendments to the Company's Amended and Restated Certificate of Incorporation or otherwise would depend on a number
of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, extension
or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any "PIPE" or other equity issuances
in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same
taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. The mechanics of any
required payment of the Excise Tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete
a business combination and in the Company's ability to effect an extension of the time in which the Company must complete a business
combination or complete a business combination.

 F- 10

 PONO

 NOTES

 Consideration
of IR Act Excise Tax

 On
May 8, 2023, the Company's stockholders redeemed 9,577,250 Class A shares for a total of $ 100,078,879. The Company evaluated the
classification and accounting of the stock redemption under ASC 450, "Contingencies". ASC 450 states that when a loss contingency
exists the likelihood that the future events will confirm the loss or impairment of an asset or the incurrence of a liability can range
from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company
evaluated the current status and probability of completing a Business Combination as of December 31, 2023 and determined that a contingent
liability should be calculated and recorded. As of December 31, 2023, the Company recorded $ 1,000,789 of excise tax liability calculated
as 1% of shares redeemed.

 Proposed
Business Combination

 On
January 31, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among the Company,
Pono Two Merger Sub, Inc., a Delaware corporation incorporated in January 2023, and a wholly-owned subsidiary of the Company ("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.

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 "Business Combination."

 As
a condition to closing of the 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 Business Combination, the holders of SBC securities as of the closing of the Business Combination, collectively
will be entitled to receive from the Company, in the aggregate, a number of the Company's 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.

 The
Merger Consideration otherwise payable to SBC stockholders at the Closing is subject to a number of shares of Pono Class A common stock
equal to three percent (3.0%) of the Merger Consideration being placed in escrow with an escrow agent to be agreed by the parties, for
post-closing adjustments (if any) to the Merger Consideration.

 The
Merger Consideration is subject to adjustment after the Closing based on confirmed amounts of the Closing Net Indebtedness, Net Working
Capital and transaction expenses as of the Closing Date. If the adjustment is a negative adjustment in favor of the Company, the escrow
agent shall distribute to the Company a number of shares of the Company's Class A common stock with a value equal to the absolute
value of the adjustment amount. If the adjustment is a positive adjustment in favor of SBC, the Company will issue to the SBC stockholders
an additional number of shares of the Company's Class A common stock with a value equal to the adjustment amount.

 F- 11

 PONO

 NOTES

 On
April 26, 2023, the Company entered into an amendment to the Merger Agreement (the "Amendment") with the other parties thereto.
Prior to the Amendment, the Merger Agreement provided that the 1,200,000 newly issued shares of Class A Common Stock ("Sponsor
Shares") will be issued to the Sponsor on the date that is the earlier of (a) the six (6) month anniversary of the Closing or (b)
the expiration of the "Founder Shares Lock-up Period" (as defined in the Company's Insider Letter with the initial
stockholders). Pursuant to the Amendment, the Sponsor in its sole discretion may direct the Company to issue all or a portion of the
Sponsor Shares on an earlier or later date as it may determine, which date will not be earlier than the Closing. In addition, pursuant
to the Amendment, the date by which (i) SBC will complete its agreed upon disclosure schedules, (ii) the Company will complete its due
diligence review of SBC, and (iii) the parties to the Merger Agreement will agree upon any modifications or amendments to the Merger
Agreement to the terms and conditions therein, among other related matters, was extended from April 28, 2023 to May 31, 2023. SBC also
agreed to purchase, or to cause one of its Affiliates to purchase, equity in the Sponsor in an amount equal to $ 1,000,000, by way of
a separate agreement. In the event that the parties failed to agree upon and execute the investment documents by May 5, 2023, then, for
a period of two business days thereafter, either party could have terminated the Merger Agreement by providing written notice to the
other party. In the event that the investment documents were agreed upon and executed by all parties by May 5, 2023, but SBC did not
make payment for the investment on or before May 15, 2023, then, for a period of two business days thereafter, the Company could have
terminated the Merger Agreement by providing written notice to SBC. Neither party provided notice of termination of the Merger Agreement
within two business days as a result of failing to agree upon the investment documents by May 5, 2023.

 On
May 5, 2023, the Company held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned the Special
Meeting to May 8, 2023. During the Special Meeting, stockholders approved an amendment to the Company's amended and restated certificate
of incorporation (i) to extend the date by which the Company has to consummate a business combination from May 9, 2023 to February 9,
2024 for no additional amount to be paid by the Sponsor into the Trust Account and (ii) to provide for the right of a holder of Class
B common stock to convert such shares into shares of Class A common stock on a one-for-one basis prior to the closing of a business combination
at the election of the holder (the "Extension Amendment"). The Company's stockholders elected to redeem an aggregate
of 9,577,250 shares of Class A common stock of the Company in connection with the Special Meeting. Following such redemptions, the amount
of funds remaining in the trust account is approximately $ 20.0 million.

 In
connection with the Special Meeting, the Company and the Sponsor entered into non-redemption agreements with certain unaffiliated stockholders
owning, in the aggregate, 998,682 shares of the Company's Class A common stock, pursuant to which such stockholders agreed, among
other things, not to redeem or exercise any right to redeem such public shares in connection with the Extension Amendment. In connection
with the non-redemption agreements, the Sponsor agreed to transfer to the stockholders that entered into such agreements Sponsor Shares
upon the consummation of the Company's initial business combination.

 On
May 8, 2023, the Sponsor converted 2,874,999 Founder Shares of Class B common stock into 2,874,999 shares of Class A common stock, pursuant
to the Third Amended and Restated Certificate of Incorporation of the Company.

 On
February 3, 2024, the Company held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned
the Special Meeting to February 3, 2024. During the Special Meeting, stockholders approved an amendment to the Company's amended
and restated certificate of incorporation (i) to extend the date by which the Company has to consummate a business combination from February
9, 2024 to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account and (ii) to provide for the right
of a holder of Class B common stock to convert such shares into shares of Class A common stock on a one-for-one basis prior to the closing
of a business combination at the election of the holder (the "Extension Amendment"). The Company's stockholders elected
to redeem an aggregate of 273,334 shares of Class A common stock of the Company in connection with the Special Meeting. Following such
redemptions, the amount of funds remaining in the trust account is approximately $ 17.9 million.

 F- 12

 PONO

 NOTES

 On
February 27, 2024, the Company and SBC entered into an Amendment to the Note Purchase Agreement (the "Amended Note Purchase Agreement"),
which increased the purchase price of the Note from $ 1,000,000 to $ 2,700,000. In connection with entering into the Amended Note Purchase
Agreement, the Company and SBC amended the Note (the "Amended Note") to increase the Principal Amount from $ 1,000,000 to
$ 2,700,000. In consideration for entering into the Amended Note, each of the parties to the Merger Agreement agreed to release each other
party from any claims arising out of any termination of the Merger Agreement or failure to consummate the transactions contemplated thereby.

 Amended
and Restated Merger Agreement

 On
June 21, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the "A&R Merger Agreement")
with the parties thereto. Prior to the A&R Merger Agreement, the Merger Agreement provided that by June 22, 2023: (i) SBC shall complete
its agreed upon disclosure schedules, (ii) the Company shall complete its due diligence review of SBC, and (iii) the parties to the Original
Agreement shall agree upon any modifications or amendments to the Original Agreement to the terms and conditions therein. The parties
entered into the A&R Merger Agreement in connection with such requirements.

 The
A&R Merger Agreement revised the target companies to be directly or indirectly purchased by the Company following a restructuring
of SBC's corporate structure, to include only the Service Companies and Other Entities, and to no longer include the direct or
indirect purchase of SBC's Medical Corporations, and as a result, removed other references to the Medical Corporations, including
the related representations and warranties, among others. Pursuant to the A&R Merger Agreement, the parties agreed that, following
the date of the A&R Merger Agreement, SBC used its commercially reasonable efforts to complete its disclosure schedules and delivered
them to the Company by August 31, 2023. Upon delivery of the disclosure schedules to the Company, the disclosure schedules were deemed
to modify and supplement SBC's representations and warranties set forth in the A&R Merger Agreement. The A&R Merger Agreement
also extended the date by which the Closing shall occur from September 30, 2023 (subject to extension) to December 31, 2023. Pursuant
to the A&R Merger Agreement, the parties also agreed that any future expenses incurred in connection with the extension of the time
by which the Company must complete its initial business combination shall be borne entirely by the Company, which replaces and supersedes
the prior requirement under the Original Agreement for the Company and SBC to share such expenses equally. See the Current Report on
Form 8-K filed by the Company with the SEC on June 22, 2023 for additional details.

 On
September 8, 2023, Pono entered into the First Amendment to the A&R Merger Agreement (the "Amendment") with the parties
thereto. Prior to the Amendment, the A&R Merger Agreement provided for the holders of SBC securities collectively to be entitled
to receive from Pono, in the aggregate, a number of Pono securities with an aggregate value equal to (the "Merger Consideration")
(a) $1,200,000,000, 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. Pursuant
to the Amendment, the $1,200,000,000 amount in the Merger Consideration calculation above was reduced to $1,000,000,000.

 On
October 26, 2023, Pono entered into the Second Amendment to the Merger Agreement (the "Amendment") with the parties thereto.
Prior to the Amendment, the Pono board of directors as of the Closing was to be designated as follows: (i) three persons designated prior
to the Closing by SBC, two of whom must qualify as independent directors; (ii) one person designated prior to the Closing by Pono; and
(iii) one person mutually agreed upon and designated prior to the Closing by Pono and SBC, who must qualify as an independent director.
Following the Amendment, the Pono board of directors as of the Closing will be designated as follows: (i) three persons designated prior
to the Closing by SBC, at least one of whom must qualify as an independent director; (ii) one person designated prior to the Closing
by Pono, who must qualify as an independent director; and (iii) one person mutually agreed upon and designated prior to the Closing by
Pono and SBC, who must qualify as an independent director.

 F- 13

 PONO

 NOTES

 On
December 28, 2023, Pono entered into the Third Amendment to the Merger Agreement (the "Amendment") with the parties thereto.
The Amendment was entered into solely to extend the Outside Date (as defined in the Merger Agreement) from December 31, 2023 to March
31, 2024.

 NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis
of Presentation

 The
accompanying consolidated financial statements of the Company are presented in conformity with accounting principles generally
accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the SEC.

 Principles
of Consolidation

 The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant
intercompany balances and transactions have been eliminated in consolidation.

 Emerging
Growth Company

 The
Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.

 Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company's consolidated financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the
extended transition period difficult or impossible because of the potential differences in accounting standards used.

 Use
of Estimates

 The
preparation of the consolidated financial statements in conformity with GAAP requires the Company's management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the
reporting period.

 F- 14

 PONO

 NOTES

 Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the consolidated financial statements,
which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly,
the actual results could differ from those estimates.

 Cash

 The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did no t have any cash equivalents as of December 31, 2023 and December 31, 2022.

 Investments
Held in Trust Account

 As
of December 31, 2023 and December 31, 2022, the assets held in the Trust Account were held in money market funds, which were invested
in U.S. Treasury securities. All of the Company's investments held in the Trust Account are classified as trading securities. Such
trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of investments held in Trust Account are included in interest and dividend income on investments held in
Trust Account in the accompanying statements of operations. The estimated fair values of investments held in the Trust Account are determined
using available market information. The Company had $ 20,850,793 and $ 119,220,016 in investments held in the Trust Account as of December
31, 2023 and December 31, 2022, respectively.

 Common
Stock Subject to Possible Redemption

 All
of the Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the
redemption of such Public Shares in connection with the Company's liquidation, if there is a stockholder vote or tender offer in
connection with the business combination and in connection with certain amendments to the Company's Amended and Restated Certificate
of Incorporation. In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock
that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company's control) is classified as temporary equity. Ordinary liquidation events, which involve the
redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of ASC 480. Although the
Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its Public Shares
in an amount that would cause its net tangible assets (stockholders' equity) to be less than $ 5,000,001. However, the threshold
in its charter would not change the nature of the underlying shares as redeemable and thus Public Shares would be required to be disclosed
outside of permanent equity. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value
of redeemable common stock to equal the redemption value at the end of each reporting period. Such changes are reflected in additional
paid-in capital, or in the absence of additional paid-in capital, in accumulated deficit.

 F- 15

 PONO

 NOTES

 As
of December 31, 2023, the Class A common stock reflected in the balance sheets is reconciled in the following table:

OF REDEEMABLE CLASS A COMMON STOCK

 Gross proceeds

 $
 115,000,000

 Less:

 Proceeds allocated to Public
 Warrants

 ( 2,978,500
)

 Issuance costs allocated
 to Class A common stock

 ( 6,432,257
)

 Plus:

 Accretion
 of Class A common stock subject to redemption to redemption amount

 13,120,621

 Class
 A common stock subject to possible redemption as of December 31, 2022

 118,709,864

 Plus:

 Accretion of Class A common
 stock subject to redemption to redemption amount

 1,975,219

 Redemption of Class A common
 stock subject to redemption

 ( 100,078,879
)

 Class
 A common stock subject to possible redemption as of December 31, 2023

 $
 20,606,204

 Income
Taxes

 The
Company complies with the accounting and reporting requirements of Accounting Standards Codification ("ASC") Topic 740 -
 Income Taxes ("ASC 740") which requires an asset and liability approach to financial accounting and reporting for
income taxes. Deferred income tax assets and liabilities are computed for differences between the unaudited condensed consolidated financial
statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws
and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a
measurement attribute for the unaudited condensed consolidated financial statement recognition and measurement of tax positions taken
or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. The Company's management determined the United States is the Company's only major
tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.
There were no unrecognized tax benefits as of December 31, 2023 and December 31, 2022 and no amounts accrued for interest and penalties.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

 Net
Income Per Share

 Net
income per share is computed by dividing net income by the weighted-average number of shares outstanding during the period. Therefore,
the income per share calculation allocates income shared pro rata between Class A and Class B common stock. As a result, the calculated
net income per share is the same for Class A and Class B common stock. The Company has not considered the effect of the Public Warrants
(as defined in Note 3) and Placement Warrants (as defined in Note 4), to purchase an aggregate of 12,134,375 shares in the calculation
of income per share, since the exercise of the warrants is contingent upon the occurrence of future events. The 100,000 Class A Shares
(as defined in Note 5) that would be issuable upon conversion of the Convertible Promissory Note have been included in the calculation
of diluted net income per ordinary share.

 F- 16

 PONO

 NOTES

 The
following table reflects the calculation of basic and diluted net income per share:

OF BASIC AND DILUTED NET INCOME PER SHARE

 Class
 A

 Class
 B

 Class
 A

 Class
 B

 For
 the year ended

 December 31, 2023

 For
 the period from
 March
 11, 2022
 (inception)
 through

 Class
 A

 Class
 B

 Class
 A

 Class
 B

 Basic net income per share:

 Numerator:

 Net

 $
 301,052

 $
 38,715

 $
 381,031

 $
 171,782

 Denominator:

 Basic weighted average shares outstanding

 7,840,002

 1,008,220

 5,951,288

 2,683,051

 Basic net income per share

 $
 0.04

 $
 0.04

 $
 0.06

 $
 0.06

 Diluted net income per share:

 Numerator:

 Net

 $
 301,313

 $
 38,454

 $
 381,031

 $
 171,782

 Denominator:

 Diluted weighted average shares outstanding

 7,900,002

 1,008,220

 5,951,288

 2,683,051

 Diluted net income per share

 $
 0.04

 $
 0.04

 $
 0.06

 $
 0.06

 Concentration
of Credit Risk

 Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $ 250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.

 Fair
Value of Financial Instruments

 The
Company applies ASC Topic 820, Fair Value Measurement ("ASC 820"), which establishes a framework for measuring fair
value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price
that would be received for an asset or paid to transfer a liability in the Company's principal or most advantageous market in an
orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires
an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable
inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market
data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity's own assumptions based
on market data and the entity's judgments about the assumptions that market participants would use in pricing the asset or liability
and are to be developed based on the best information available in the circumstances.

 The
carrying amounts reflected in the balance sheet for current assets and current liabilities approximate fair value due to their short-term
nature. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

 Level
1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement
are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

 F- 17

 PONO

 NOTES

 Level
2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying
terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted
intervals.

 Level
3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when
little or no market data exists for the assets or liabilities.

 See
Note 9 for additional information on assets measured at fair value.

 Derivative
Financial Instruments

 The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then
re-valued at each reporting date, with changes in the fair value reported in the statement of operations. For derivative instruments
that are classified as equity, the derivative instruments are initially measured at fair value (or allocated value), and subsequent changes
in fair value are not recognized as long as the contracts continue to be classified in equity.

 Warrants

 The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common
stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted
at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date
thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statement of operations.

 The
warrants are not precluded from equity classification, and are accounted for as such on the date of issuance, and each balance sheet
date thereafter.

 Offering
Costs

 The
Company complies with the requirements of ASC Topic 340, Other Assets and Deferred Costs and SEC Staff Accounting Bulletin ("SAB")
Topic 5A-Expenses of Offering. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial
Public Offering date that are directly related to the Initial Public Offering. The Company recorded offering costs as a reduction of
temporary equity in connection with the warrants and shares.

 Recent
Accounting Standards

 In
December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires
public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income
taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective
for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The accounting pronouncement
is not expected to have a material impact on our consolidated financial statements and related disclosures.

 F- 18

 PONO

 NOTES

 NOTE
3. INITIAL PUBLIC OFFERING

 The
registration statement for the Company's Initial Public Offering was declared effective on August 4, 2022. On August 9, 2022, the
Company consummated the Initial Public Offering of 11,500,000 Units, including 1,500,000 Units issued pursuant to the exercise of the
underwriters' over-allotment option in full, generating gross proceeds of $ 115,000,000. Each Unit consisted of one share of Class
A common stock and one redeemable warrant ("Public Warrant"). Each Public Warrant entitles the holder to purchase one share
of Class A common stock at an exercise price of $ 11.50 per whole share (see Note 7).

 NOTE
4. PRIVATE PLACEMENT

with the closing of the Initial Public Offering, the Company consummated the sale of 634,375 Placement Units at a price of $ 10.00 per
Placement Unit in a private placement to the Sponsor, including 63,000 Placement Units issued pursuant to the exercise of the underwriters'
over-allotment option in full, generating gross proceeds of $ 6,343,750. Each Placement Unit consists of one share of Class A common stock
("Placement Share") and one warrant ("Placement Warrant"). The proceeds from the sale of the Placement Units
were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a business
combination within the Combination Period, the proceeds from the sale of the Placement Units held in the Trust Account will be used to
fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Placement Units will expire worthless.

 NOTE
5. RELATED PARTY TRANSACTIONS

 Founder

 On
May 17, 2022, the Sponsor was issued 2,875,000 shares (the "Founder Shares") of Class B common stock for an aggregate price
of $ 25,000. The Founder Shares included an aggregate of up to 375,000 shares of Class B common stock subject to forfeiture by the Sponsor
to the extent that the underwriters' over-allotment option was not exercised in full or in part, so that the Sponsor would own,
on an as-converted basis, 20 % of the Company's issued and outstanding shares after the Initial Public Offering. The underwriters
exercised the over-allotment option in full, so those shares are no longer subject to forfeiture.

 The
Sponsor has agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees as disclosed
herein) until, with respect to any of the Class B common stock, the earlier of (i) six months after the date of the consummation of a
business combination, or (ii) the date on which the closing price of the Company's common stock equals or exceeds $ 12.00 per share
(as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading
day period commencing after a business combination, with respect to the remaining any of the Class B common stock, upon six months after
the date of the consummation of a business combination, or earlier, in each case, if, subsequent to a business combination, the Company
consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company's
stockholders having the right to exchange their common stock for cash, securities or other property. On May 8, 2023, the Sponsor converted
 2,874,999 Founder Shares of Class B common stock into 2,874,999 shares of Class A common stock, which shares include these same transfer
restrictions.

 F- 19

 PONO

 NOTES

 Promissory
Note - Related Party

 On
April 25, 2022, the Sponsor agreed to loan the Company an aggregate of up to $ 300,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the "Promissory Note"). This loan is non-interest bearing and payable on the earlier
of (i) March 31, 2023 or (ii) the date on which Company consummates the Initial Public Offering. Prior to the Initial Public Offering,
the Company had borrowed $ 300,000 under the Promissory Note. The outstanding balance under the Promissory Note of $ 300,000 was repaid
at the closing of the Initial Public Offering on August 9, 2022.

 Administrative
Support Agreement

 The
Company's Sponsor has agreed, commencing from the date of the Initial Public Offering through the earlier of the Company's
consummation of a business combination and its liquidation, to make available to the Company certain general and administrative services,
including office space, utilities and administrative services, as the Company may require from time to time. The Company has agreed to
pay to Mehana Capital LLC, the Sponsor, $ 10,000 per month for these services to complete a business combination. For the year ended December
31, 2023, $ 120,000 was incurred and paid to Mehana Capital LLC for these services. For the period from March 11, 2022 (inception) through
December 31, 2022, $ 50,000 was incurred and paid to Mehana Capital LLC for these services.

 Convertible
Promissory Note

 On
May 26, 2023, the Company entered into a Convertible Promissory Note with SBC, pursuant to which SBC agreed to loan the Company an aggregate
principal of $ 1,000,000 (the "Convertible Promissory Note"). The Convertible Promissory Note is non-interest bearing and
is due and payable upon the earlier to occur of (i) the first business day following the consummation of the Company's initial
Business Combination and (ii) May 17, 2024, unless accelerated upon the occurrence of an event of default. There is an outstanding balance
of $ 1,000,000 for this SBC loan as of December 31, 2023. The Convertible Promissory Note will automatically convert into Class A Common
Stock at one share for each $10 in outstanding principal amount. As of December 31, 2023 and December 31, 2022, the outstanding balance
under the Convertible Promissory Note amounted to an aggregate of $ 1,000,000 and $ 0, respectively.

 Related
Party Loans

 In
order to finance transaction costs in connection with the initial business combination, the Sponsor or an affiliate of the Sponsor or
certain of the Company's officers and directors may, but are not obligated to, loan the Company funds as may be required. If the
Company completes the initial business combination, the Company will repay such loaned amounts. In the event that the initial business
combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned
amounts, including the repayment of loans from the Sponsor to pay for any amount deposited to pay for any extension of the time to complete
the initial business combination, but no proceeds from the Trust Account would be used for such repayment. Up to $ 1,500,000 of such loans
may be convertible into Units, at a price of $ 10.00 per Unit at the option of the lender, upon consummation of the initial business combination.
The Units would be identical to the Placement Units. The terms of such loans by the Company's officers and directors, if any, have
not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and December 31, 2022, the Company
did not have any outstanding related party loans other than the Convertible Promissory Note referenced above.

 Non-redemption
Agreement

 On
May 5, 2023, the Company held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned the Special
Meeting to May 8, 2023. On May 8, 2023, the Company held the Special Meeting. During the Special Meeting, stockholders approved an amendment
to the Company's amended and restated certificate of incorporation (i) to extend the date by which the Company has to consummate
a business combination from May 9, 2023 to February 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account,
and (ii) to provide for the right of a holder of Class B common stock to convert such shares into shares of Class A common stock on a
one-for-one basis prior to the closing of a business combination at the election of the holder. As approved by the stockholders of the
Company, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State
on May 8, 2023. The Company's stockholders elected to redeem an aggregate of 9,577,250 shares of Class A common stock of the Company
in connection with the Special Meeting. Following such redemptions, the amount of funds remaining in the trust account was approximately
$ 20 million.

 F- 20

 PONO

 NOTES

 In
connection with the Special Meeting, the Company and the Sponsor entered into non-redemption agreements with certain unaffiliated stockholders
owning, in the aggregate, 998,682 shares of the Company's Class A common stock, pursuant to which such stockholders agreed, among
other things, not to redeem or exercise any right to redeem such public shares in connection with the Extension Amendment.

 The
Company estimated the aggregate fair value of the 339,565 Sponsor Shares attributable to the Non-Redeeming Stockholders to be $ 709,691
or $ 2.09 per share. Each Non-Redeeming Stockholder acquired from the Sponsor an indirect economic interest in the Sponsor Shares. The
excess of the fair value of the Sponsor Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic
5A. Accordingly, in substance, it was recognized by the Company as a capital contribution by the Sponsor to induce these holders of the
Class A shares not to redeem, with a corresponding charge to additional paid-in capital to recognize the fair value of the shares transferred
as an offering cost.

 NOTE
6. COMMITMENTS AND CONTINGENCIES

 Registration
and Stockholder Rights Agreement

 The
holders of the Founder Shares and Placement Units (including securities contained therein) and Units (including securities contained
therein) that may be issued upon conversion of working capital loans and extension loans, and any shares of Class A common stock issuable
upon the exercise of the Placement Warrants and any shares of Class A common stock and warrants (and underlying Class A common stock)
that may be issued upon conversion of the Units issued as part of the working capital loans and extension loans and Class A common stock
issuable upon conversion of the Founder Shares, will be entitled to registration rights pursuant to a registration rights agreement signed
on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the
Founder Shares, only after conversion to the Class A common stock). The holders of these securities are entitled to make up to two demands,
excluding short form demands, that the Company registers such securities. In addition, the holders have certain "piggy-back"
registration rights with respect to registration statements filed subsequent to the completion of the initial business combination and
rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

 Underwriting
Agreement

with the Initial Public Offering, the underwriters fully exercised the over-allotment option to purchase an additional 1,500,000 Units
at an offering price of $ 10.00 per Unit for an aggregate purchase price of $ 15,000,000.

 The
underwriters were paid a cash underwriting discount of $ 0.17 per Unit, or $ 1,955,000 in the aggregate, upon the closing of the Initial
Public Offering. In addition, $ 0.35 per unit, or $ 4,025,000 in the aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event
that the Company completes a business combination, subject to the terms of the underwriting agreement.

 F- 21

 PONO

 NOTES

 Representative

 Upon
closing of the Initial Public Offering, the Company issued 57,500 shares of Class A common stock to the underwriters. The underwriters
have agreed not to transfer, assign or sell the Representative Shares until the completion of the initial business combination. In addition,
the underwriters have agreed (i) to waive their redemption rights with respect to the Representative Shares in connection with the completion
of the initial business combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to
the Representative Shares if the Company fails to complete its initial business combination within 18 months from the closing of the
Initial Public Offering.

 The
Representative Shares are subject to a lock-up for a period of 180 days immediately following the commencement of sales of the registration
statement pursuant to Rule 5110(e)(1) of FINRA's NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities may not
be sold, transferred, assigned, pledged or hypothecated or the subject of any hedging, short sale, derivative, put or call transaction
that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective
date of the registration statement, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately
following the commencement of sales of the Initial Public Offering except to any underwriter and selected dealer participating in the
Initial Public Offering and their bona fide officers or partners, registered persons or affiliates or as otherwise permitted under Rule
5110(e)(2).

 The
initial measurement of the fair value of the Representative Shares was determined using the market approach to value the subject interest.
Based on the indication of fair value using the market approach, the Company determined the fair value of the Representative Shares to
be $ 1.17 per share or $ 67,275 (for the 57,500 Representative Shares issued) as of the date of the Initial Public Offering (which is also
the grant date).

 Right
of First Refusal

 For
a period beginning on the closing of the Initial Public Offering and ending 12 months from the closing of a business combination, the
Company has granted EF Hutton a right of first refusal to act as lead-left book running manager and lead left manager for any and all
future private or public equity, convertible and debt offerings during such period. In accordance with FINRA Rule 5110(g)(3)(A)(i), such
right of first refusal shall not have a duration of more than three years from the effective date of the registration statement.

 NOTE
7. STOCKHOLDERS' DEFICIT

 Preferred
stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with
such designations, voting and other rights and preferences as may be determined from time to time by the Company's board of directors.
As of December 31, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

 Class
A common stock — The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $ 0.0001
per share. Holders of the Company's Class A common stock are entitled to one vote for each share. As of December 31, 2023 and December
31, 2022, there were 5,489,624 and 12,191,875 shares of Class A common stock issued and outstanding, including 1,922,750 and 11,500,000
shares of Class A common stock subject to possible redemption and classified as temporary equity. As of December 31, 2023 and December
31, 2022, the remaining 3,566,874 and 691,875 shares are classified as permanent equity and are comprised of 2,874,999 shares that were
converted from Class B common stock into Class A common stock, 634,375 shares included in the Placement Units and 57,500 Representative
Shares.

 F- 22

 PONO

 NOTES

 Class
B common stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $ 0.0001
per share. Holders of Class B common stock are entitled to one vote for each share. As of December 31, 2023 and December 31, 2022, there
were 1 and 2,875,000 shares of Class B common stock issued and outstanding, respectively. Of the 2,875,000 shares of Class B common stock
outstanding as of December 31, 2022, up to 375,000 shares were subject to forfeiture to the extent that the underwriters' over-allotment
option was not exercised in full or in part, so that the initial stockholders would collectively own 20 % of the Company's issued
and outstanding common stock after the Initial Public Offering. On August 9, 2022, the underwriters exercised the over-allotment option
in full, so those shares are no longer subject to forfeiture.

 The
holders of record of the common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In
connection with any vote held to approve the initial business combination, the insiders, officers and directors, have agreed to vote
their respective shares of common stock acquired in the Initial Public Offering or following the Initial Public Offering in the open
market, in favor of the proposed business combination.

of Class B common stock shall be convertible into shares of Class A common stock on a one-for-one basis automatically on the closing
of the business combination at a ratio for which the numerator shall be equal to the sum of 20 % of all shares of Class A Common Stock
issued and outstanding or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) by the Company, related
to or in connection with the consummation of the initial business combination (excluding any securities issued or issuable to any seller
in the initial business combination, any Placement Warrants issued to the Sponsor or its affiliates upon conversion of loans to the Company)
plus the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial business combination; and
the denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial business
combination.

 On
May 8, 2023, the Sponsor converted 2,874,999 Founder Shares of Class B common stock into 2,874,999 shares of Class A common stock.

 Warrants
 — As of December 31, 2023 and December 31, 2022, there were 11,500,000 Public Warrants and 634,375 Placement Warrants outstanding.
Each whole Public Warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 per share,
subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of the Initial Public Offering
and 30 days after the completion of the initial business combination. Pursuant to the warrant agreement, a warrant holder may exercise
its Public Warrants only for a whole number of shares of Class A common stock. No fractional Public Warrants will be issued upon separation
of the units and only whole Public Warrants will trade. The Public Warrants will expire five years after the completion of the initial
business combination or earlier upon redemption or liquidation.

 The
Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial business
combination, the Company will use its best efforts to file with the SEC a registration statement covering the shares of Class A common
stock issuable upon exercise of the Public Warrants, to cause such registration statement to become effective and to maintain a current
prospectus relating to those shares of Class A common stock until the Public Warrants expire or are redeemed, as specified in the warrant
agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not
effective by the 60th business day after the closing of the initial business combination, Public Warrant holders may, until such time
as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration
statement, exercise Public Warrants on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act; provided
that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their
Public Warrants on a cashless basis.

 Once
the Public Warrants become exercisable, the Company may call the Public Warrants for redemption:

 in
 whole and not in part;

 at
 a price of $ 0.01 per Public Warrant;

 F- 23

 PONO

 NOTES

 upon not less than 30 days'
 prior written notice of redemption given after the Public Warrants become exercisable (the "30-day redemption period")
 to each Public Warrant holder; and

 if, and only if, the reported
 last sale price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
 recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing once the Public Warrants become
 exercisable and ending three business days before the Company sends the notice of redemption to the Public Warrant holders.

 If
and when the Public Warrants become redeemable by the Company, the Company may not exercise the redemption right if the issuance of shares
of common stock upon exercise of the Public Warrants is not exempt from registration or qualification under applicable state blue sky
laws or the Company is unable to effect such registration or qualification.

 In
addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes
in connection with the closing of the initial business combination at a Newly Issued Price of less than $9.20 per share of Class A common
stock (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any
such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,
as applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity
proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the
initial business combination (net of redemptions), and (z) the market value is below $9.20 per share, then the exercise price of the
warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and
the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater
of the Market Value and the Newly Issued Price.

 The
Placement Warrants are identical to the Public Warrants except that, so long as they are held by the Sponsor or its permitted transferees,
(i) they (including the Class A common stock issuable upon exercise of these Placement Warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of the initial business combination, and
(ii) the holders thereof (including with respect to shares of Class A common stock issuable upon exercise of such Placement Warrants)
are entitled to registration rights.

 The
Company accounts for the 12,134,375 warrants issued in connection with the Initial Public Offering (including 11,500,000 Public Warrants
and 634,375 Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that the warrants described
above are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value).
Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.

 F- 24

 PONO

 NOTES

 NOTE
8. INCOME TAXES

 The
Company's net deferred tax assets (liabilities) as of December 31, 2023 and 2022 are as follows:

OF NET DEFERRED TAX ASSETS AND LIABILITIES

 Deferred tax assets

 Start-up costs

 $
 318,746

 $
 80,230

 Net
 operating loss carryforwards

 15,119

 —

 Total deferred tax assets

 333,864

 80,230

 Valuation allowance

 ( 333,864
)

 ( 80,230
)

 Deferred tax assets,
 net of allowance

 $
 —

 $
 —

 The
income tax provision for the year ended December 31, 2023 and 2022 consists of the following:

OF INCOME TAX PROVISION

 Federal

 Current

 $
 528,809

 $
 248,508

 Deferred

 ( 176,665
)

 ( 80,230
)

 State

 Current

 —

 —

 Deferred

 ( 76,969
)

 —

 Change in valuation
 allowance

 253,634

 80,230

 Income tax provision

 $
 528,809

 $
 248,508

 In
assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. After consideration of all of the information available, management believes that significant uncertainty
exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the
period ended December 31, 2023 and 2022 the change in the valuation allowance was $ 253,634 and $ 80,230, respectively.

 As of December 31, 2023 and 2022,
the Company has $ 299,023 and $ 0, respectively, of state net operating loss carryovers, which do not expire, to offset future taxable
income.

 A
reconciliation of the federal income tax rate to the Company's effective tax rate are as follows:

OF FEDERAL INCOME TAX RATE

 Statutory federal income tax rate

 21.0
 %

 21.0
 %

 State taxes, net of federal tax benefit

 ( 6.5
)%

 0.0
 %

 Previous tax year adjustment

 1.5
 %

 —
 %

 Non-deductible transaction costs

 15.7
 %

 —
 %

 Other permanent items, net

 —
 %

 —
 %

 Change in valuation
 allowance

 29.2
 %

 10.0
 %

 Income tax provision

 60.9
 %

 31.0
 %

 The
Company files income tax returns in the U.S. federal and the state of Hawaii jurisdictions and is subject to examination by the taxing
authorities.

 F- 25

 PONO

 NOTES

 NOTE
9. FAIR VALUE MEASUREMENTS

 The
following table presents information about the Company's financial assets that are measured at fair value on a recurring basis
as of December 31, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to
determine such fair value:

 SCHEDULE OF FINANCIAL ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS

 Description

at

 Fair Value

 Level

 Level

 Level

 December 31, 2023

 Assets

 Investments held in Trust
 Account:

 —

 —

 —

 —

 U.S.
 Treasury Securities

 $
 20,850,793

 $
 20,850,793

 $
 —

 $
 —

 Description

 at Fair Value

 Level

 Level

 Level

 December 31, 2022

 Assets

 Investments held in Trust
 Account:

 —

 —

 —

 —

 U.S.
 Treasury Securities

 $
 119,220,016

 $
 119,220,016

 $
 —

 $
 —

 NOTE
10. SUBSEQUENT EVENTS

 The
Company has evaluated subsequent events and transactions that occurred after the consolidated balance sheet date up to the date that
the consolidated financial statements were issued. Based upon this review, other than those subsequent events described below, the Company
did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

 On
January 11, 2024, Pono Capital Two, Inc., a Delaware corporation (the "Company" or "Pono"), filed an amended
preliminary proxy statement with the U.S. Securities and Exchange Commission ("SEC") in connection with the special meeting
of stockholders. As more fully described in the proxy statement, the special meeting will be held for the purpose of considering and
voting on a proposal to amend (the "Extension Amendment") the Company's Third Amended and Restated Certificate of Incorporation
(the "Charter"), to extend the date by which the Company has to consummate a business combination from February 9, 2024 to
November 9, 2024.

 In
connection with the Extension Amendment, public stockholders may elect to redeem their shares for a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account established in connection with the Company's initial public
offering (the "Trust Account"), including interest not previously released to the Company to pay franchise and income taxes,
divided by the number of then outstanding public shares. If the Extension Amendment is approved by the requisite vote of stockholders,
the remaining holders of public shares will retain their right to redeem their public shares when the business combination is submitted
to the stockholders, subject to any limitations set forth in the Charter, as amended by the Extension Amendment.

 On
January 11, 2024, the Company entered into a non-redemption agreement with an unaffiliated investor (the "Holder") which
agreed to acquire from public stockholders of the Company 1,500,000
to 1,700,000
shares of Class A common stock, par value $ 0.0001
per share, of the Company ("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 ("Business Combination") with SBC Medical Group Holdings Incorporated, a Delaware
corporation (the "Target"), prior to the stockholder meeting to vote on the Extension Amendment (the "Meeting
Date") and to agree to waive its redemption rights and hold the shares until after the closing of the Business Combination. In
consideration of the Holder's agreement to waive its redemption rights with respect to the shares, and subject to (i) the
Holder acquiring 1,500,000
to 1,700,000
shares of Common Stock in the open market, and (ii) Holder's satisfaction of its other obligations under the non-redemption
agreement, the Company, on the closing date of the Business Combination, provided that Holder has continued to hold the
Holder's shares through the closing date, Target and Yoshiyuki Aikawa, the chief executive officer of the Target, shall cause
to be issued or transferred to Holder a number of shares of Common Stock held by Dr. Aikawa (the "Incentive Shares"),
which will equal one (1) Incentive Share for each public share purchased in the open market pursuant to the non-redemption agreement
that is continuously owned by Holder until the closing date of the Business Combination. This non-redemption agreement terminates on
the earliest to occur of (i) the closing date of the Business Combination, (ii) the termination of the related Business Combination
Agreement, or (iii) April 30, 2024 (the "Clearance Date") if the Company has not cleared all SEC comments to its proxy
statement in connection with the Business Combination by that date. On March 15, 2024, the parties to the non-redemption agreement entered into an amendment to the non-redemption agreement
to extend the Clearance Date to June 30, 2024, and to agree to close the business combination on or before August 31, 2024.

 On
February 3, 2024, the Company held a special meeting of stockholders (the "Special Meeting"), and the chairman adjourned
the Special Meeting to February 3, 2024. During the Special Meeting, stockholders approved an amendment to the Company's amended
and restated certificate of incorporation (i) to extend the date by which the Company has to consummate a business combination from February
9, 2024 to November 9, 2024 for no additional amount to be paid by the Sponsor into the Trust Account and (ii) to provide for the right
of a holder of Class B common stock to convert such shares into shares of Class A common stock on a one-for-one basis prior to the closing
of a business combination at the election of the holder (the "Extension Amendment"). The Company's stockholders elected
to redeem an aggregate of 273,334 shares of Class A common stock of the Company in connection with the Special Meeting. Following such
redemptions, the amount of funds remaining in the trust account is approximately $ 17.9 million.

 On
February 27, 2024, the
Company and SBC entered into an Amendment to the Note Purchase Agreement (the "Amended Note Purchase Agreement"), which increased
the purchase price of the Note from $ 1,000,000 to $ 2,700,000. In connection with entering into the Amended Note Purchase Agreement, the
Company and SBC amended the Note (the "Amended Note") to increase the Principal Amount from $ 1,000,000 to $ 2,700,000. In
consideration for entering into the Amended Note, each of the parties to the Merger Agreement agreed to release each other party from
any claims arising out of any termination of the Merger Agreement or failure to consummate the transactions contemplated thereby.

 F- 26