ALI, a flying motorcycle company, was the first company in Japan to be listed on NASDAQ.President Katano talks about the background

ALITechnologies (hereafter ALI), a domestic venture that develops and sells single-seater drones known as the flying motorcycle XTURISMO, has its parent company, AERWINS Technologies (hereafter Airwinds), which is a US corporation, as SPAC. Using , it reported that it had “merged and listed” against PONO CAPITAL, which is also a US corporation. From February 6th local time, stock trading on the US NASDAQ market began. As a result, ALI is effectively “listed” on the NASDAQ.

Dow Jones Group’s MarketWatch reported that the stock price temporarily fell 56% in trading on February 6 (local time), the first day of the merger listing. According to MarketWatch, it closed at $5.15 on February 6, with a market capitalization of about $350 million (about ¥46.1 billion). The price continued to decline in the trading on February 7, and was temporarily traded at around $2.50.

According to ALI, this is the first SPAC listing by a Japanese startup company in Japan. In early February, just before the merger listing, Daisuke Katano, president of ALI, and Mr. Kotaro Chiba, director and investor of PONO CAPITAL, responded to the interview about the background of choosing SPAC listing.

“Japanese venture to NASDAQ”

SPAC is an abbreviation for Special Purpose Acquisition Company, and is called a “special purpose acquisition company” in Japanese. By listing a corporation that will be an acquisition vehicle (box) in advance and merging it with a promising unlisted business company within a certain period of time, the business company is effectively “listed.” Compared to a regular stock listing (IPO), it has the advantage of being able to be listed in a short period of time.

The mechanism of SPAC and “why is it said that SPAC is over now?”

In an interview with Business Insider Japan, ALI President Katano said,The SPAC listing was not what we had originally aimed forsaid.

Although we will omit the detailed timeline, we initially proceeded with the listing process with an eye on listing on the Tokyo Stock Exchange, but in March 2022 we switched our target to listing on NASDAQ, and in the summer of 2022, we will be listed on a merger using SPAC ( There is a history of switching to SPAC listing).

We chose the NASDAQ market as a market that can be expected to be accessed by a wider range of investors than the Tokyo Stock Exchange.

However, why did you choose SPAC listing, which is unprecedented in Japan, when you were initially considering NADAQ listing on a stand-alone basis? President Katano

“If you want to raise as much money as possible, you should reach out to a wide range of investors. (Omitted) A scheme like SPAC that allows us to deeply understand our company and determine the price (assessment price) is more suitable.”

He explained that he felt the possibility of SPAC listing.

In fact, during negotiations with PONO CAPITAL, we decided to list SPAC because “the conditions you presented were attractive to us” (same as above).

There are various factors in the “conditions” here, but “our pre-valuation (appraisal value just before investment) as of September 2022 is $600 million (approximately at the exchange rate as of February 5). 78.7 billion yen).

Consult with SEC on measures to clear investor’s “conflict of interest”

What is interesting about ALI (Airwinds)’s SPAC listing is the relationship between Mr. Chiba and ALI.

Mr. Chiba is a management member of PONO CAPITAL and at the same time an investor who has invested in ALI independently from the standpoint of a drone fund.

Mr. Chiba admits that he “had the potential for a conflict of interest” as an investor.

What should be done to prevent conflicts of interest from becoming a reality in the actual merger process?

We also consulted with the U.S. Securities and Exchange Commission (SEC).”We will set the stage and introduce[PONO and Airwinds]but we will never get into the negotiations.”(Mr. Chiba) explains that it was judged that it would be possible to clear the form.

The merger process proceeded with a thorough firewall, such as removing all emails and information sharing within PONO.

“We managed PONO, but did not get involved in the actual merger process, which is why we were able to realize this merger. (Mr. Chiba)

Reason why PONO chose ALI

PONO also has a reason for choosing ALI (Airwinds).

In fact, there are several acquisition vehicles (corporations) named “PONO” that Mr. Chiba is involved in. For example, at the time of writing the preceding article in August 2022, there were “PONO CAPITAL” and “PONO CAPITAL TWO”.

However, as stated in the previous articleAs of August, PONO CAPITAL is considering a merger and listing with a drug discovery ventureWas. After that, the merger talks became a blank slate, and it became necessary to find the next promising merger partner as soon as possible.

This is because the SPAC system has a deadline of “if a merger partner cannot be decided within about 18 to 24 months, it must be forcibly dissolved”.

On the PONO side, it is necessary to understand the business of the merger partner, change the partner company to American accounting standards, and conduct an audit in order to merge at NASDAQ. In other words, it takes a certain amount of physical time to go public through a merger.

In this regard, ALI (Airwinds), which was proceeding with the NASDAQ listing process, had good conditions for PONO.

In addition, PONO’s management team and ALI’s management team had met in 2021 and had a certain level of understanding of ALI’s business.

This “good timing” has also played a major role in the background leading up to this SPAC listing.