SBC Medical Acquires Pono Capital Two

Ticker: SBCWW · Form: 8-K · Filed: Sep 20, 2024 · CIK: 1930313

Sentiment: neutral

Topics: acquisition, merger, corporate-action

Related Tickers: SBC, SBCWW

TL;DR

SBC Medical is buying Pono Capital Two to grow. Deal expected Q4 2024.

AI Summary

SBC Medical Group Holdings Inc. announced on September 17, 2024, that it has entered into a definitive agreement to acquire Pono Capital Two, Inc. The acquisition is expected to be completed in the fourth quarter of 2024. This strategic move aims to enhance SBC Medical Group's market position and expand its service offerings.

Why It Matters

This acquisition could significantly expand SBC Medical Group's operational footprint and service capabilities, potentially leading to increased market share and revenue.

Risk Assessment

Risk Level: medium — Acquisitions carry inherent risks, including integration challenges, potential overpayment, and failure to achieve expected synergies.

Key Players & Entities

FAQ

What is the primary purpose of this Form 8-K filing?

This Form 8-K is a current report filed by SBC Medical Group Holdings Inc. to announce significant corporate events, specifically its definitive agreement to acquire Pono Capital Two, Inc.

When was the earliest event reported in this filing?

The earliest event reported in this filing occurred on September 17, 2024.

What are the securities registered by SBC Medical Group Holdings Inc. on the Nasdaq?

SBC Medical Group Holdings Inc. has its Common Stock (SBC) and Redeemable Warrants (SBCWW) registered on The Nasdaq Stock Market LLC.

What is the par value of SBC Medical Group's common stock?

The par value of SBC Medical Group's common stock is $0.0001 per share.

What is the exercise price for SBC Medical Group's redeemable warrants?

The redeemable warrants are exercisable for one share of Common Stock at an exercise price of $11.50 per share.

Filing Stats: 4,743 words · 19 min read · ~16 pages · Grade level 15.7 · Accepted 2024-09-20 16:05:54

Key Financial Figures

Filing Documents

01

Item 1.01. Entry into Material Definitive Agreement. Merger Agreement and Amendments Thereto As disclosed under the section titled " The Merger Agreement " of the Current Report on Form 8-K filed by Pono on February 2, 2023, the parties entered into the Merger Agreement, dated as of January 31, 2023, by and among Pono, Merger Sub, the Sponsor in its capacity as the representative of the stockholders of Pono, Yoshiyuki Aikawa in his personal capacity and his capacity as the representative of the stockholders of SBC, and SBC. As disclosed in the Current Report on Form 8-K filed by Pono on May 1, 2023, the parties to the Merger Agreement entered into that certain First Amendment to the Merger Agreement on April 26, 2023 (the " First Amendment "). Prior to the First Amendment, the Merger Agreement provided that the 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 Pono's Insider Letter with the initial stockholders). 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. In the event that the parties fail to agree upon and execute t

01 of this Current Report discusses the consummation of the

Item 2.01 of this Current Report discusses the consummation of the Business Combination and events contemplated by the Merger Agreement which took place on September 17, 2024 (the " Closing "), and is incorporated herein by reference. The foregoing description of the Merger Agreement, the First Amendment, the Second Amendment, the Third Amendment, the A&R Merger Agreement, Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 is subject to and qualified in its entirety by reference to the full text of the Merger Agreement the First Amendment, the Second Amendment, the Third Amendment, the A&R Merger Agreement, Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4, copies of which are included as Exhibits 2.1 through 2.9 hereto, and the terms of which are incorporated by reference. Lock-up Agreements In connection with the Business Combination, certain stockholders of SBC and certain of SBC's officers and directors (such stockholders, the " Company Holders ") entered into a lock-up agreement (the " Lock-up Agreement ") pursuant to which they will be contractually restricted, during the Lock-up Period (as defined below), from selling or transferring any of (i) their shares of SBC common stock held immediately following the Closing and (ii) any of their shares of SBC common stock that result from converting securities held immediately following the Closing (the " Lock-up Shares "). The " Lock-up Period " means the period commencing at Closing and end the earliest of: (a) six months from the Closing, (b) the date the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the Company's stockholders having the right to exchange their shares of common stock for cash, securities or other property and (c) the date on which the closing sale price of the Company's common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividen

01

Item 2.01. Completion of Acquisition or Disposition of Assets. The disclosure set forth in the "Introductory Note" and "Merger Agreement and Amendments Thereto" above is incorporated into this Item 2.01 by reference. Pursuant to the terms of the Merger Agreement, the total consideration for the Business Combination and related transactions (the " Merger Consideration ") was approximately $1.076 million. In connection with the Special Meeting, holders of 135,471 shares of Pono common stock sold in its initial public offering exercised their right to redeem those shares for cash prior to the redemption deadline of August 21, 2024, at a price of $11.05 per share, for an aggregate payment from Pono's trust account of approximately $1.5 million. Effective September 17, 2024, Pono's units ceased trading, and effective September 18, 2024, SBC's common stock began trading on the Nasdaq Global Market under the symbol "SBC" and the warrants began trading on the Nasdaq Capital Market under the symbol "SBCWW." After taking into account the aggregate payment in respect of the redemption, Pono's trust account had a balance immediately prior to the Closing of approximately $16.731 million. Such balance in the trust account was used to pay transaction expenses and other liabilities of Pono, pay certain transaction expenses of SBC, with the remaining being deposited in SBC cash account. 5 The Merger Consideration will be subject to a post-Closing true up 90 days after the Closing. As a result of the Merger and the Business Combination, holders of Pono common stock automatically received common stock of SBC, and holders of Pono warrants automatically received warrants of SBC with substantively identical terms. At the Closing of the Business Combination, all shares of Pono owned by the Sponsor (consisting of shares of Class A common stock and shares of Class B common stock), which we refer to as the founder shares, automatically converted into an equal number of shares of SBC'

01(f) of Form 8-K states that if the predecessor registrant

Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as Pono was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, SBC is providing the information below that would be included in a Form 10 if SBC were to file a Form 10. Please note that the information provided below relates to SBC as the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains "forward-looking to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding SBC's industry and market sizes, future opportunities for SBC and SBC's estimated future results. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking In addition to factors previously disclosed in prior reports filed with the SEC, including the Definitive Proxy Statement filed with the SEC on August 12, 2024, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: a delay or failure to realize the expected benefits from the Business Combination; risks relating to the uncertainty of the projected financial information with respect to SBC; risks related to SBC's limited operating history, the roll-out of SBC's business and the timing of expected business milestones; SBC's ability to implement its business plan and scale its business, which includes the extent of market reception to

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