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Pono Capital Corp *

Pono Capital Corp *

Jun 16, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Aerwins Technologies Operations, Inc

ENTERPRISE VALUE: $750 million
ANTICIPATED SYMBOL: AWIN

Pono Capital Corp proposes to combine with Aerwins Technologies Operations, Inc.

AERWINS has developed and released the air mobility platform C.O.S.M.O.S. and the XTURISMO Limited Edition Hoverbike. AERWINS plans to continue to innovate, develop, and commercialize products that are necessary for the realization of a society empowered by air mobility.

SUBSEQUENT EVENTS – 1/23/23 – LINK

  • Standby Equity Purchase Agreement
    • The Company and its successors will be able to sell up to $100M in the aggregate gross purchase price of the Company’s shares of Class A common stock at any time during the 36 months following the date of the SEPA’s entrance into force.
    • The shares would be purchased at 96% or 97% (depending on the type of notice) of the Market Price and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock.
      • “Market Price” shall mean the lowest daily VWAP of the Common Shares during the three consecutive trading days commencing on the advance notice date, other than the daily VWAP on any excluded days.
    • Pursuant to the SEPA, the Company is required to register all shares which YA may acquire.
    • The Company agreed to file with the SEC a Registration Statement registering all of the shares of common stock that are to be offered and sold to YA pursuant to the SEPA.
    • The Company is required to have a Registration Statement declared effective by the SEC before it can raise any funds using the SEPA.
    • The Company may not issue more than 19.99% of its shares issued and outstanding as of the Effective Date without first receiving shareholder approval for such issuances, unless such additional shares may be issued consistent with the rules and regulations of the Nasdaq Stock Market.
    • Unless earlier terminated as provided under the SEPA, the SEPA shall terminate automatically on the earliest of
      • (i) the first day of the month next following the 36-month anniversary of the Effective Date or
      • (ii) the date on which the YA shall have made payment of Advances pursuant to the SEPA for the Common Shares equal to the Commitment Amount (as defined in the SEPA).

EXTENSION – 11/10/22 – LINK

  • Pono Capital Corp announced that Mehana Capital LLC, an affiliate of Mehana Equity LLC (the “Sponsor”), and AERWINS Technologies, Inc. (“AERWINS”), have each deposited $575,000 into the Company’s Trust account for its public stockholders, representing an aggregate of $0.10 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by three months from November 11, 2022, to February 13, 2023.

TRANSACTION

  • The transaction values AERWINS at $600 million, which is expected to result in a combined pro forma equity value of approximately $750 million, assuming no redemptions in the business combination.
  • Assuming no redemptions by Pono stockholders, it is estimated that the current stockholders of AERWINS will own approximately 80% of the issued and outstanding shares of the combined company at closing.
  • It is currently expected that the transaction will close in the fourth quarter of 2022 or the first quarter of 2023, assuming such closing conditions are met.
  • The Merger Consideration otherwise payable to AERWINS stockholders is subject to the withholding of a number of shares of Pono common stock equal to three percent (3.0%) of the Merger Consideration to be placed in escrow 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 Pono, the escrow agent shall distribute to Pono a number of shares of Pono common stock with a value equal to the absolute value of the adjustment amount.
    • If the adjustment is a positive adjustment in favor of AERWINS, Pono will issue to the AERWINS stockholders an additional number of shares of Pono common stock with a value equal to the adjustment amount.

PIPE

  • There is no PIPE for this transaction at this time.

LOCK-UP

  • Company & Sponsor
    • Six months from the Closing (or, in the case of Shuhei Komatsu, AERWINS’ Chief Executive Officer, thirty months from the Closing)
    • The date on which the closing sale price of Pono common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations and the like) for any twenty (20) trading days within any thirty (30) trading day period commencing at least one hundred and fifty (150) days after the Closing; provided that ? of such restricted shares shall be released from such restrictions if the closing stock price of Pono common stock reaches each of $13.00, $15.00, and $17.00.

NOTABLE CONDITIONS TO CLOSING

  • Approvals of any required governmental authorities and the expiration or termination of any anti-trust waiting periods.
  • After giving effect to the redemption, Pono shall have at least $5,000,001 of net tangible assets as required by its charter.
  • Note: Not a “condition”, but the parties agree to “waive any minimum cash requirement as a Closing condition.”

NOTABLE CONDITIONS TO TERMINATION

  • If there is a government order preventing the Closing
  • By either party if the Closing does not occur by January 31, 2023, subject to extension by Pono in connection with an Extension of the time period for it to close a business combination transaction.
  • By Pono if, after AERWINS delivers the PCAOB Audited Financials, Pono reasonably determines that the PCAOB Audited Financials differ in any material respect from AERWINS’ unaudited annual financial statements, or if the PCAOB Audited Financials are not delivered to Purchaser on or before September 30, 2022.

ADVISORS

  • Nelson Mullins Riley & Scarborough LLP is acting as legal counsel to Pono
  • Anthony L.G., PLLC is acting as legal counsel to AERWINS in the transaction.
  • Marshall & Stevens, Incorporated rendered a fairness opinion the board of directors of Pono in their consideration of the transaction.

EXTENSION – 8/10/22 – LINK

  • The Sponsor has deposited $1,150,000 into the trust account to extend the period of time it has to consummate its initial business combination by three months from August 13, 2022 to November 11, 2022

The below-announced combination was terminated on 8/10/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Benuvia [Terminated]

ENTERPRISE VALUE: $440 million
ANTICIPATED SYMBOL: TBD

Pono Capital Corp proposes to combine with Benuvia, Inc., a drug developer, and manufacturer of active pharmaceutical ingredients focused on cannabinoids, with a portfolio of drug products and intellectual property.

Benuvia, Inc. is a drug developer and manufacturer of active pharmaceutical ingredients focused on cannabinoids, with a growing portfolio of drug products and intellectual property. Benuvia owns the FDA approved cannabinoid drug SYNDROS® (dronabinol oral solution CII). SYNDROS® is FDA approved as a prescription drug for the treatment of chemotherapy-induced nausea and vomiting in cancer patients and loss of appetite in AIDS patients who have lost weight. Benuvia is pursuing 505(b)(2) fast-track approval with the FDA for Investigational New Drugs (“INDs”) for its dronabinol oral solution, with a focus on large opportunities that have significant unmet needs with industry research and studies supporting targeted efficacy endpoints.

Benuvia manufactures active pharmaceutical ingredients in its 83,000 square foot cannabinoid manufacturing facility that is permitted by the US DEA for Schedule I to III Controlled Substances, is FDA registered and a cGMP facility. Benuvia has a robust portfolio of patents and patents pending and is pursuing new intellectual properties for its drug products.

TRANSACTION

  • Pro forma enterprise valuation for Benuvia of $440 million.
  • The transaction will provide approximately $115 million in estimated gross proceeds to Benuvia; assuming no redemption by Pono shareholders.
  • The Merger Consideration otherwise payable to Benuvia stockholders is subject to the withholding of two escrows:
    • (i) a number of shares of Pono common stock equal to five percent (5.0%) of the Merger Consideration to be placed in escrow for post-closing adjustments (if any) to the Merger Consideration and
    • (ii) a number of shares mutually agreeable between Benuvia and Pono not to exceed twenty percent (20.0%) of the Merger Consideration to be held for downside protection for non-redeeming stockholders following Closing.
  • The Merger Consideration is subject to adjustment after the Closing based on confirmed amounts of the Closing Net Indebtedness of Benuvia as of the Closing Date.
    • If the adjustment is a negative adjustment in favor of Pono, the escrow agent shall distribute to Pono a number of shares of Pono common stock with a value equal to the absolute value of the adjustment amount.
    • If the adjustment is a positive adjustment in favor of Benuvia, Pono will issue to the Benuvia stockholders an additional number of shares of Pono common stock with a value equal to the adjustment amount.
  • The transaction is expected to close in the third quarter of 2022

PIPE

  • There is no PIPE for this transaction.

LOCK-UP

  • Company and SPAC
    • Six months from the Closing Date and 1/3 of the Restricted Securities will be released each at $13, $15, $17.

NOTABLE CONDITIONS TO CLOSING

  • After giving effect to the redemption, Pono shall have at least $5,000,001 of net tangible assets as required by its charter

NOTABLE CONDITIONS TO TERMINATION

  • By either party, if the Closing does not occur by December 31, 2022.

ADVISORS

  • EF Hutton, division of Benchmark Investments, LLC, is acting as the exclusive M&A advisor to Benuvia, Inc.
  • O’Melveny & Myers LLP is acting as legal advisor to Benuvia, Inc.
  • Nelson Mullins Riley & Scarborough LLP is acting as legal advisor to Pono Capital Corp.

MANAGEMENT & BOARD

Executive Officers

Dustin Shindo, —
Chief Executive Officer, Founder and Director

Mr. Shindo is an entrepreneur, executive, technologist, and a seasoned advisor with more than 25 years of industry experience. Today, Mr. Shindo also serves as the Chief Executive Officer of Junify Corporation since 2017, which operates in California and Japan. Junify offers zero trust network access software (software defined border) to help companies better secure their cloud resources. 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 that includes 70% of Hawaii’s population 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, signed customer contracts totaling USD 2+ billion, secured various financing sources for USD 500 million, including funds from Daiwa Securities, Sumitomo, and Goldman Sachs. 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.

Dr. Hank Wuh, —
Chief Strategy Officer and Director

Dr. Wuh is a physician, inventor, and entrepreneur. Dr. Wuh is President of Unicorn Whisperer, Inc. since July 2018 and is a member of the Board Directors of the Fulbright Association since January 2020, of Cellular Bioengineering, Inc. since August 2003, of The Daily Wellness Company since June 1996, and Lymphax, Inc. since December 2019. Dr. Wuh is also a Trustee of the University of Hawaii Foundation since April 2020, and an advisor to several medical technology companies. Dr. Wuh was the CEO of SKAI Ventures from September 2010 to December 2019 and the Executive Chairman of TruTag Technologies, Inc. from April 2011 to Aug 2018. Dr. Wuh received his B.A. from Johns Hopkins, a Master of Public Health from Harvard University School of Public Health,  Medical Doctorate from the Johns Hopkins University School of Medicine, orthopedic surgery residency at Stanford, and is Associate Clinical Professor of Surgery at the John A. Burns School of Medicine at the University of Hawaii.

Trisha Nomura, —
Chief Financial Officer

Ms. Nomura owns a consulting firm, Ascend Consulting, LLC. Prior to opening her own firm, Trisha worked in both public accounting and private industry, and was the Chief Operating Officer of HiHR and the Chief People Officer of ProService Hawaii. Trisha 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 is now proudly serving on the Association Board of Directors. Trisha 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.

Board of Directors

Kotaro Chiba, —
Director Nominee

Mr. Kotaro Chiba is 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. 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).

Steve Iwamura, —
Director Nominee and Chairperson of the Board’s Audit Committee

Mr. Steve Iwamura served as the Partner of Deloitte Touche Tohmatsu LLC from June 1999 to September 2020 based in Osaka, Japan. Mr. Iwamura was transferred to Japan and pioneered cross-border business advisory services to Japanese companies in Kansai. Mr. Iwamura also served foreign entities entering and doing business in Japan, including foreign joint venture agreement and operations, and venture companies seeking to partner with major Japanese companies. During his profession at Deloitte, Mr. Iwamura was responsible for the M&A negotiations and due diligence; forensic investigations on behalf of court-appointed administrators and creditors, documenting recommendations, providing litigation support and prepared testimony; cross-border restructuring and dispositions consulting together with coordinated multi-jurisdictional business planning; dispute resolution, mediation and negotiating settlement agreements; negotiating licensing agreements, distribution agreements and franchise rights; coordinating solutions for foreign venture operations in Japan involving foreign parent companies and major Japan company partners. Mr. Iwamura has been serving as an external advisor of Deloitte Touche Tohmatsu LLC, Osaka since October 2020, where he continues to perform similar services as above on a time limited basis under an annual services contract. From August 1984 to August 1990, Mr. Iwamura served as an Audit Manager of Deloitte & Touche based in Honolulu, Hawaii, where he provided audit services to Japanese subsidiaries in Hawaii. In June 1984, Mr. Iwamura received his BBA degree in Accounting at University of Hawaii.

Dr. Mike K. Sayama, —
Director Nominee

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 (EHI) 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. In 2010, he played a key role in obtaining a $16 million Federal Beacon Grant for Hawaii County to develop models for the use of health information technology. 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. His community service includes being a Director on the Bay Clinic Board (the Federally Qualified Health Center in East Hawaii) and the Abbot of Chozen-ji, International Zen Dojo.

 

ByAnthony Sozzi