Pono Capital Three, Inc.

R&D more than tripled year over year, which is the point of the money but also the reason the runway question matters: management asserts more than $78 million of cash covers at least twelve months, and names future government grants, subsidies and further securities sales as the sources beyond that. For former PTHR holders the trust is long gone and the investment is now a pre-revenue certification programme, where every additional year of development is funded by issuing stock into a 66.8 million share base.

Nasdaq Rule 5635 is engaged when an issuance exceeds twenty percent of shares outstanding or is priced below market, so against 31,230,914 Class A shares the preferred conversion is large enough to require holders' consent rather than being a mechanical exchange. Approving it converts a preferred claim that sits ahead of the common into common stock alongside it — removing a senior instrument at the cost of a permanently larger share count, with the exact number set by the conversion terms.

The Exchange Consideration is divided by the Redemption Price — the price at which Pono's own public shares are redeemed in connection with the deal — so the number of shares Horizon's holders receive moves with whatever redeeming Pono holders are paid, rather than with a fixed price. The numerator is $96 million less Horizon's closing debt, net of cash. The Nasdaq listing of the new Class A shares and warrants under HOVR and HOVRW is applied for rather than assured, and at closing Pono's units separate into their components and cease to be listed.

The exchange ratio floats rather than being fixed at a stated share price. Horizon's shareholders receive Pono Class A ordinary shares equal to $96 million less Horizon's closing debt net of cash, divided by the Redemption Price — defined as the price per share at which Pono actually redeems public shares in connection with the combination under its charter and IPO prospectus. The number of shares issued to the target is therefore not knowable until the redemption is run. Pono's units separate into their components at closing and cease to be listed on Nasdaq.

The consideration divides by the actual Redemption Price rather than by a fixed reference price: Horizon's shareholders receive Class A ordinary shares equal to $96 million less Horizon's closing debt net of cash, divided by the price per share at which Pono redeems its public shares in the combination. A higher redemption price therefore means fewer shares issued to Horizon, and a lower one means more. Pono's units separate into their component securities at closing and cease to be listed on Nasdaq, where the company will apply to list as HOVR and HOVRW. The meeting date is left blank.

The consideration is divided by the redemption price rather than by a fixed value: Horizon's shareholders receive new Pono Class A ordinary shares equal to $96 million less Horizon's closing debt net of cash, divided by the Redemption Price — the actual per-share price at which Pono redeems public shareholders in connection with the transaction. A higher redemption price therefore issues fewer shares to the target, and the target's own net debt cuts the numerator. The meeting is set for 10:00 a.m. Pacific Time on a date left blank, and Pono's units stop being listed at closing.