PONOU Pono Capital Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 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 Number 001-40734

 

AERWINS TECHNOLOGIES INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware		86-2049355
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
Shiba Koen Annex 6 f, 1-8, Shiba Koen 3-chome, Minato-ku, Tokyo, Japan		105-0011
(Address of Principal Executive Offices)		(Zip Code)

 

+813-6409-6761

(Registrant’s Telephone Number, Including Area Code)

 

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

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.000001 par value per share		AWIN		The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share		AWINW		The Nasdaq Stock Market LLC

 

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

 

Title of each class

N/A

 

Indicate 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 ☐

 

Indicate 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 ☐

 

Indicate 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. ☐

 

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

 

There were [62,688,215] shares of the registrant’s common stock, $0.0001 par value per share, outstanding as of August 21, 2023.

 

 

 

TABLE OF CONTENTS

 

Note About Forward-Looking Statements
PART I	FINANCIAL INFORMATION	4
Item 1.	Consolidated Financial Statements	4
	Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	4
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity as of June 30, 2023 and 2022 (Unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	39
Item 4.	Controls and Procedures	39
PART II	OTHER INFORMATION	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
	Signatures	43

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates and projections about AERWINS Technologies Inc.’s industry, management beliefs, and assumptions made by management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this Quarterly Report on Form 10-Q are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

 

 

PART I-FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

AERWINS TECHNOLOGIES INC.

 

CONSOLIDATED BALANCE SHEET

 

		June 30,				December 31,
		2023				2022
		(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	35,359			$	1,278,026
Notes receivable			-				3,488
Accounts receivable, net			159,278				980,688
Others receivable			802,438				2,089,921
Advances and prepayments to suppliers			2,921,394				611,959
Inventory			1,538,563				2,687,092
Escrow deposit			-				575,000
Total current assets			5,457,032				8,226,174
Long-term Assets
Property and equipment, net			-				1,390,547
Intangible assets, net			-				150,576
Investment-equity method			893,922				997,470
Operating lease right-of-use assets			-				693,474
Long-term loans receivable			98,294				107,735
Other non-current assets			184,232				213,370
Total long-term assets			1,176,448				3,553,172
Total Assets		$	6,633,480			$	11,779,346
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Short-term loans payable		$	207,656			$	-
Short-term loans payable, related party			692,185				-
Short-term loans payable			692,185				-
Accounts payable			6,320,552				3,333,675
Accounts payable, related party			312,424				-
Accounts payable			312,424				-
Notes payable			1,480,000				-
Others payable			438,883				230,060
Accrued expenses			863,561				402,036
Contract liabilities			737,980				1,104,582
Current portion of long-term loans			166,332				54,624
Finance leases liabilities-current			85,025				102,114
Operating leases liabilities-current			228,175				293,710
Other current liabilities			-				380,344
Total Current Liabilities			11,532,773				5,901,145
Longer-term liabilities
Long-term loans			2,836,367				3,259,237
Warrant liabilities			1,255,795				-
Derivative liability			1,456,641				-
Long-term convertible promissory note, net			456,677				-
Finance leases liabilities-non-current			57,527				87,056
Operating leases liabilities-non-current			244,238				397,720
Other long-term liabilities			165,509				225,284
Total long-term liabilities			6,472,754				3,969,297
Total Liabilities			18,005,527				9,870,442
Stockholders’ Equity (Deficit):
Common stock, par value $0.000001, 400,000,000 shares authorized; 61,409,146 and 46,929,065 shares issued and outstanding, respectively*			61				47
Preferred stock, par value $0.000001, 20,000,000 shares authorized; No shares issued and outstanding			-				-
Additional Paid-in capital			53,523,392				49,299,343
Retained earnings (Accumulated deficiency)			(65,695,768	)			(46,472,904	)
Treasury stock			(575,000	)			-
Accumulated other comprehensive income (loss)			1,375,268				(917,582	)
Stockholders’ Equity (Deficit)			(11,372,047	)			1,908,904
Total Liabilities and Stockholders’ Equity (Deficit)		$	6,633,480			$	11,779,346

 

*	Retrospectively restated for effect of the business combination on February 6, 2023.

 

See Notes to Consolidated Financial Statements (unaudited)

 

 

AERWINS TECHNOLOGIES INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

 

		For the six months ended June 30,					For the six months ended June 30,				For the three months ended June 30,				For the three months ended June 30,
		2023					2022				2023				2022
				(unaudited)
Revenues		$		457,753			$	1,934,118			$	25,703			$	321,171
Cost of revenues				600,280				2,047,280				265,680				425,962
Gross profit (loss)				(142,527	)			(113,162	)			(239,977	)			(104,791	)
Operating expenses:
Selling expenses				63,525				59,526				26,492				56,624
General and administrative expenses				10,108,287				2,722,078				4,215,208				1,462,361
Research and development expenses				6,795,396				4,484,102				4,751,800				2,208,964
Total operating expenses				16,967,208				7,265,706				8,993,500				3,727,949
Loss from operations				(17,109,735	)			(7,378,868	)			(9,233,477	)			(3,832,740	)
Other income (expenses):
Interest income (expenses), net				(484,950	)			(13,841	)			(478,082	)			(6,375	)
Gain(Loss) on foreign currency transaction				(10,420	)			88,539				585				41,591
Gain(Loss) on disposal of fixed assets				(1,191	)			-				18,513				-
Impairment on fixed assets				(1,565,853	)			-				(1,565,853	)			-
Equity in earnings of investee				(11,640	)			10,736				(17,816	)			(10,037	)
Gain on sale of investment securities				-				451,154				-				451,154
Gain on fair value adjustments of warrant				1,199,672				-				1,113,421				-
Gain on fair value adjustment of derivative				595,673								595,673
Derivative expense				(1,088,477	)			-				(1,088,477	)			-
Other income (expenses), net				100,555				293,863				(82,333	)			(13,409	)
Total other income (expenses)				(1,266,631	)			830,451				(1,504,369	)			462,924
Loss before income tax provision				(18,376,366	)			(6,548,417	)			(10,737,846	)			(3,369,816	)
Income tax benefit (expense)				-				-				-				-
Net loss
Less: net loss attributable to non-controlling interest
Net loss from continuing operations				(18,376,366	)			(6,548,417	)			(10,737,846	)			(3,369,816	)
Discontinued operations (Note 23)
Loss from discontinued operations				(846,499	)			(679,519	)			(683,474	)			(466,117	)
Loss on discontinued operations				(846,499	)			(679,519	)			(683,474	)			(466,117	)
Net loss		$		(19,222,865	)		$	(7,227,936	)		$	(11,421,320	)		$	(3,835,933	)
Other comprehensive income:
Foreign currency translation adjustment				2,292,850				(1,680,395	)			2,347,977				(1,485,139	)
Total comprehensive loss		$		(16,930,015	)		$	(8,908,331	)		$	(9,073,343	)		$	(5,321,072	)
Net loss per common share from continuing operations
Basic		$		(0.33	)		$	(0.15	)		$	(0.19	)		$	(0.08	)
Diluted		$		(0.33	)		$	(0.15	)		$	(0.19	)		$	(0.08	)
Net loss per common share from discontinued operations
Basic		$		(0.02	)		$	(0.02	)		$	(0.01	)		$	(0.01	)
Diluted		$		(0.02	)		$	(0.02	)		$	(0.01	)		$	(0.01	)
Weighted average common shares outstanding*
Basic *				54,957,819				42,712,850				56,871,014				43,509,237
Effect of dilutive securities *
Convertible debt *				1,742,620				-				3,466,090				-
Conversion of option warrants *				11,197,594				4,291,180				13,102,497				3,612,510
Diluted *				67,898,033				47,004,030				73,439,601				47,121,747

 

*	Retrospectively restated for effect of the business combination on February 6, 2023.

 

See Notes to Consolidated Financial Statements (unaudited)

 

 

AERWINS TECHNOLOGIES INC.

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)

 

		Shares				Amount				Shares				Amount				Capital				Deficit)				Stock				Income				Totals
		Common Stock								Preferred stock
		400,000,000 authorized								20,000,000 authorized								Additional				Retained								Accumulated
		$0.000001 Par Value								$0.000001 Par Value								Paid-in (Registered)				Earnings (Accumulated				Treasury				Other Comprehensive
		Shares				Amount				Shares				Amount				Capital				Deficit)				Stock				Income				Totals
Balance at January 1, 2022			41,206,803			$	41				-			$	-			$	32,288,699			$	(31,993,085	)		$	-			$	(238,057	)		$	57,598
Corporate bond conversion			2,034,611				2				-				-				8,399,182				-				-				-				8,399,184
Net income			-				-				-				-				-				(3,392,003	)			-				-				(3,392,003	)
Other comprehensive income			-				-				-				-				-				-				-				(195,256	)			(195,256	)
Balances at March 31, 2022 (unaudited)			43,241,414			$	43				-			$	-			$	40,687,881			$	(35,385,088	)		$	-			$	(433,313	)		$	4,869,523
Issuance of common stock			1,709,541				2				-				-				2,715,194				-				-				-				2,715,196
Issuance of common stock upon exercise of stock options			351,310				0				-				-				367,277				-				-				-				367,277
Net income			-				-				-				-				-				(3,835,933	)			-				-				(3,835,933	)
Other comprehensive income			-				-				-				-				-				-				-				(1,485,139	)			(1,485,139	)
Balances at June 30, 2022 (unaudited)			45,302,265			$	45				-			$	-			$	43,770,352			$	(39,221,021	)		$	-			$	(1,918,452	)		$	2,630,924

 

		Common Stock								Preferred stock
		400,000,000 authorized								20,000,000 authorized								Additional				Retained								Accumulated
		$0.000001 Par Value								$0.000001 Par Value								Paid-in (Registered)				Earnings (Accumulated				Treasury				Other Comprehensive
		Shares				Amount				Shares				Amount				Capital				Deficit)				Stock				Income				Totals
Balance at January 1, 2023			46,929,065			$	47				-			$	-			$	49,299,343			$	(46,472,904	)		$	-			$	(917,582	)		$	1,908,904
Issuance of common stock prior to the closing of Business Combination			5,000,000				5				-				-				(1,156,124	)			-				-				-				(1,156,119	)
Reverse recapitalization			3,740,187				4				-				-				(878,120	)			-				-				-				(878,116	)
Issuance of common stock warrants for services			413,103				0				-				-				4,338,298				-				-				-				4,338,298
Acquisition of treasury stock			57,500				-				-				-				-				-				(575,000	)			-				(575,000	)
Net loss			-				-				-				-				-				(7,801,544	)			-				-				(7,801,544	)
Other comprehensive income			-				-				-				-				-				-				-				(55,127	)			(55,127	)
Balances at March 31, 2023			56,139,855			$	56				-			$	-			$	51,603,397			$	(54,274,448	)		$	(575,000	)		$	(972,709	)		$	(4,218,704	)
Begining balances, value			56,139,855			$	56				-			$	-			$	51,603,397			$	(54,274,448	)		$	(575,000	)		$	(972,709	)		$	(4,218,704	)
Issuance of common stock for services			5,269,291				5				-				-				1,919,995				-				-				-				1,920,000
Net loss			-				-				-				-				-				(11,421,320	)			-				-				(11,421,320	)
Net income (loss)			-				-				-				-				-				(11,421,320	)			-				-				(11,421,320	)
Other comprehensive income			-				-				-				-				-				-								2,347,977				2,347,977
Balances at June 30, 2023			61,409,146			$	61				-			$	-			$	53,523,392			$	(65,695,768	)		$	(575,000	)		$	1,375,268			$	(11,372,047	)
Ending balances, value			61,409,146			$	61				-			$	-			$	53,523,392			$	(65,695,768	)		$	(575,000	)		$	1,375,268			$	(11,372,047	)

 

* Retrospectively restated for effect of the business combination on February 6, 2023.

 

See Notes to Consolidated Financial Statements (unaudited)

 

 

AERWINS TECHNOLOGIES INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		2023				2022
		For the Six Months ended
		June 30,				June 30,
		2023				2022
		(unaudited)				(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	(19,222,865	)		$	(7,227,936	)
Net income (loss) from discontinued operations			(846,499	)			(679,519	)
Net income (loss) from continuing operations			(18,376,366	)			(6,548,417	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation expenses			187,054				141,406
Amortization expenses			23,541				27,060
Interest expense			435,072				-
Non-cash lease expense			205,103				169,666
Share-based compensation			3,658,298				-
Change in fair value of warrant liabilities			(1,199,672	)			-
Change in fair value of derivative liability			(595,673	)			-
Revert of bad debt expenses			7,256				(691	)
Impairment loss			1,565,853				-
Loss on disposal of fixed assets			1,191				176
Gain on sale of investment securities			-				(451,154	)
Equity in earnings of investee			11,640				(10,736	)
Derivative Expense			1,088,477				-
Decrease (Increase) in operating assets:
Accounts receivable			(25,369	)			(198,989	)
Others Receivable			1,215,560				(501,927	)
Prepaid expenses			(36,368	)			(4,916	)
Advances and prepayments to suppliers			131,687				(87,865	)
Inventory			769,273				(29,642	)
Other non current assets			11,180				8,810
Increase (Decrease) in operating liabilities:
Accounts payable			2,871,733				(731,438	)
Notes payable			4,825				-
Others payable			291,147				(75,836	)
Accrued expenses			428,615				85,351
Deferred revenue			(288,338	)			269,441
Operating lease liabilities-current			(9,652	)			(34,097	)
Warrant liabilities			-				(68,023	)
Other current liabilities			(371,592	)			-
Operating lease liabilities-Non-current			(148,243	)			(134,547	)
Other non-current liabilities			(42,869	)			(154,616	)
Net cash provided (used) by continuing operations			(8,186,637	)			(8,330,984	)
Net cash provided (used) by discontinued operations			29,233				(706,552	)
Net cash provided (used) by operating activities			(8,157,404	)			(9,037,536	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets			(20,757	)			(22,407	)
Purchase of intangible assets			(36,186	)			(26,062	)
Proceeds from disposal of investments			-				487,427
Repayment of loans receivable			-				16,248
Net cash provided (used) by continuing operations			(56,943	)			455,206
Net cash provided (used) by discontinued operations			(5,245	)			(45,171	)
Net cash (used) by investing activities			(62,188	)			410,035
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from capital contribution			-				3,082,473
Proceeds from bond			2,797,697				-
Proceeds from loans			3,516,441				-
Repayments to loans			(2,612,192	)			(142,816	)
Payments for finance leases			(41,681	)			(47,240	)
Proceeds from reverse recapitalization with AERWINS Inc., net			1,595,831				-
Net cash provided (used) by continuing operations			5,256,096				2,892,417
Net cash provided (used) by discontinued operations			-				-
Net cash provided (used) by financing activities			5,256,096				2,892,417
Net increase (decrease) in cash and cash equivalents			(2,963,496	)			(5,735,084	)
Effects of exchange rates change on cash			1,720,829				(813,365	)
Cash and cash equivalents at beginning of period			1,278,026				10,020,459
Cash and cash equivalents at beginning of period held by discontinued operation			-				-
Cash and cash equivalents at ending of period held by discontinued operation			-				-
Cash and cash equivalents at end of period		$	35,359			$	3,472,010
Supplemental Disclosures of Cash Flow Information:
Cash paid (received) during year for:
Interest		$	11,708			$	14,234
Income taxes		$	-			$	-

  

See Notes to Consolidated Financial Statements (unaudited)

 

 

AERWINS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

(unaudited)

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

AERWINS Technologies Inc., a Delaware corporation (the “Company,” “we,” “us,” or “AERWINS”) together with its wholly owned subsidiary AERWINS, Inc., a Delaware corporation and its wholly owned subsidiary, A.L.I. Technologies Inc., a Japanese corporation (“ALI”) is the developer and manufacturer of air mobility platform, COSMOS (Centralized Operating System for Managing Open Sky), and the XTURISMO Limited Edition Hoverbike. All refences in this report on Form 10-Q to the “Company,” “we,” “us,” or “AERWINS” include both AERWINS and ALI.

 

Pono Capital Corp Merger

 

On February 3, 2023, we consummated a merger (the “Merger”) with Pono Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of the Company, then called Pono Capital Corp., a Delaware corporation (“Pono”) with and into AERWINS, Inc. (formerly named AERWINS Technologies Inc.), a Delaware corporation pursuant to an agreement and plan of merger, dated as of September 7, 2022 (as amended on January 19, 2023, the “Merger Agreement”), by and among Pono, Merger Sub, AERWINS, Mehana Equity LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of Pono, and Shuhei Komatsu in his capacity as the representative of the stockholders of AERWINS, Inc. (“Seller Representative”). The Merger and other transactions contemplated thereby (collectively, the “Business Combination”) closed on February 3, 2023 when pursuant to the Merger Agreement, Merger Sub merged with and into AERWINS, Inc. with AERWINS, Inc. surviving the Merger as a wholly-owned subsidiary of Pono, and Pono changed its name to “AERWINS Technologies Inc.” and the business of the Company became the business of AERWINS, Inc., and this business section primarily includes information regarding the AERWINS’, Inc. business.

 

The Business Combination was accounted for as a reverse recapitalization under the accounting principles generally accepted in the United States of America (“U.S. GAAP”). AERWINS was determined to be the accounting acquirer and Pono was treated as the acquired company for financial reporting purposes. Accordingly, the financial statements of the combined company represent a continuation of the financial statements of AERWINS.

 

On February 2, 2023, the Company entered into a Subscription Agreement (the “Agreement”) with AERWINS, Inc., and certain investors (collectively referred to herein as the “Purchasers”). Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate 3,196,311 shares of common stock (the “Shares”) of AERWINS, Inc. which was immediately exchanged for 5,000,000 Public Shares upon the consummation of the Business Combination in exchange for an aggregate sum of $5,000,000 (the “Purchase Price”) with the Purchase Price being paid to AERWINS, Inc. prior to the closing of the Business Combination (the “Closing”). Effective immediately prior to the Closing, AERWINS, Inc. issued the Shares to the Purchasers and thereafter immediately upon the Closing, the Shares were exchanged for the Public Shares, and the Public Shares were issued as a registered issuance of securities under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an effective registration filed by the Company on Form S-4 which was declared effective by the Securities and Exchange Commission on January 13, 2023.

 

On February 3, the Company received from the Business Combination with Pono net cash of $1,595,831. The Company also assumed $25,750 in prepaid expenses, $1,432,603 in other payable, $1,580,000 in notes payable ($1,480,000 as of June 30, 2023), $643,213 in warrant liabilities. The total funds from the Business Combination $1,595,831. This amount was available to repay certain indebtedness, transaction costs and for general corporate purposes, which primarily consisted of investment banking, legal, accounting, and other professional fees as follows:

 

SCHEDULE OF BUSINESS COMBINATION

Cash—Pono trust and working capital cash		$	1,802,594
Cash—Subscription agreement made immediately before the closing			5,000,000
Less: transaction costs and advisory fees			5,206,763
Total funds from the Business Combination		$	1,595,831

 

Regarding the notes payable of $1,480,000 described above, the Company has not paid by the due date. Accordingly, the Company is regarded as in default and recognizes interest expenses of $29,392 as accrued expenses.

 

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NOTE 2 - GOING CONCERN

 

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the period ended June 30, 2023, the Company has incurred net loss from continuing operations of $18,376,366 and accumulated deficit of $65,695,768. These factors raise substantial doubt on the Company’s ability to continue as a going concern.

 

Although the Company is attempting to commence operations and generate sufficient revenue, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of debt, or a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of debt, or a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

 

Unaudited Interim Consolidated Financial Information

 

The accompanying interim consolidated balance sheet as of June 30, 2023, the interim consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in shareholders’ equity (deficiency), and cash flows for the six months ended June 30, 2023 and 2022 and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2023 and the Company’s consolidated results of operations and cash flows for the six months ended June 30, 2023 and 2022. The consolidated results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

 

Use of Estimates

 

In preparing the consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long-lived assets, and valuation allowance of deferred tax assets. Actual results could differ from those estimates.

 

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Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand and deposits in banks that are unrestricted as to withdrawal or use, and which have original maturities of three months or less.

 

Accounts Receivable, net

 

Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.

 

Inventories

 

Inventories consist principally of raw materials used for rendering computing sharing services and for manufacturing hoverbikes. Work in progress represents the costs incurred to date on unfinished products or services. The costs recognized as work in progress include direct materials, direct labor, and overhead costs that are directly attributable to the production of the unfinished product or service. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method for merchandise. Net realizable value is calculated at estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Loss from inventories written down to net realizable value should be recognized whenever the utility of goods is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes. When inventories have been written down below cost, the reduced amount is to be considered the cost for subsequent accounting purposes.

 

Fixed assets

 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow:

 

SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS

		Depreciation Method		Useful Life
Building and building accessories		Straight-line method		8-38 years
Office equipment and furniture		Straight-line method		2-10 years
Software		Straight-line method		5 years
Design right		Straight-line method		7 years
Patent right		Straight-line method		8 years

 

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss).

 

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Lease-Lessee

 

In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain.

 

The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet.

 

The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually.

 

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

 

The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less.

 

Impairment of Long-Lived Assets

 

Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.

 

Equity Method

 

We apply the equity method to an investment in unconsolidated entities over which we have the ability to exercise significant influence. We initially record our investments based on the acquisition cost. Under the equity method, the carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the investment.

SCHEDULE OF SUBSIDIARIES 

				Percentage of Effective Ownership
Name of Subsidiary		Place of Organization		June 30, 2023				December 31, 2022
ASC TECH Agent		Japan			48.81	%			48.81	%

 

Warrant Liabilities

 

We account for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 — Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815), under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The Placement Warrants, Public Warrants, and Debt Warrants for periods where no observable traded price was available are valued using a Black Scholes model.

 

Convertible Promissory Notes and Derivative Instruments

 

The Company accounts for the fair value of the conversion feature in accordance with the guidance contained in ASC 815, which requires the Company to bifurcate and separately account for the conversion feature as an embedded derivative contained in the Company’s convertible promissory note. Accordingly, we account for the conversion option as an embedded derivative contained in the Company’s promissory note at fair value. The derivative liability is required to be remeasured at each reporting date and the change in fair value is recognized in our consolidated statements of operations.

 

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Foreign Currency Translation

 

The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.

 

The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes in shareholders’ deficit.

 

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:

SCHEDULE OF FOREIGN EXCHANGE RATES 

		2023				2022				2022
		Six months ended June 30, (unaudited)								Year ended December 31,
		2023				2022				2022
Current JPY: US$1 exchange rate			144.47				135.69				131.81
Average JPY: US$1 exchange rate			134.91				123.10				131.46
Foreign exchange rate			134.91				123.10				131.46

 

Consolidated Statements of Cash Flows

 

In accordance with FASB ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”.

 

To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales.

 

When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent.

 

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Cost of Revenues

 

Cost of revenues primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenues also includes royalty/license payments to vendors, and hosting and infrastructure costs related to the delivery of the Company’s products and services.

 

Advertising Expenses

 

Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses advertising costs as incurred, in accordance with the ASC 720-35, “Advertising Costs”. The advertising expenses for six months ended June 30, 2023 and 2022 (unaudited) were $63,525 and $59,526, respectively.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.

 

For the six months ended June 30, 2023, Customer A accounts for 25.9% of the Company’s total revenues.

 

For the six months ended June 30, 2022, Customer B, Customer C and Customer D accounts for respectively 17.9%, 14.8% and 13.5% of the Company’s total revenues.

 

As of June 30, 2023, Customer E accounts for 81.6% of the Company’s total accounts receivable. As of December 31, 2022, Customer E, Customer F and Customer G accounts for respectively 15.1%, 16.2% and 12.8% of the Company’s total accounts receivable

 

For the six months ended June 30, 2023, Vendor A and Vendor B accounts for respectively 39.5% and 16.4% of the Company’s total raw material purchases.

 

For the six months ended June 30, 2022, Vendor A, Vendor C and Vendor D accounts for respectively 30.1%, 19.3% and 11.2% of the Company’s total raw material purchases.

 

As of December 31, 2022, Vendor A accounts for 31.2% of the Company’s total accounts payable. As of June 30, 2023, Vendor A accounts for 20.1% of the Company’s total accounts payable.

 

Comprehensive Income or Loss

 

ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying consolidated statements of changes in shareholders’ deficit, consists of changes in unrealized gains and losses on foreign currency translation.

 

Earnings (Loss) Per Share

 

The Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common shares were exercised or equity awards vest resulting in the issuance of common shares that could share in the earnings (loss) of the Company.

 

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Related Parties and Transactions

 

The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.

 

Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence.

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

 

Income Taxes

 

Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

The Company follows ASC 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

 

Under the provisions of ASC 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations.

 

Fair Value Measurements

 

The Company performs fair value measurements in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

 

	●	Level 1: quoted prices in active markets for identical assets or liabilities;
	●	Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or
	●	Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

 

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NOTE 4 — ACCOUNTS RECEIVABLE, NET

 

Accounts receivable, net consists of the following:

 

SCHEDULE OF ACCOUNTS RECEIVABLE, NET

		June 30,
		2023 (unaudited)				December 31, 2022
Accounts receivable		$	166,054			$	980,688
Less: allowance for doubtful accounts			(6,776	)			-
Accounts receivable, net		$	159,278			$	980,688

 

Allowance for doubtful accounts movement is as follows:

 

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

		June 30,
		2023 (unaudited)				December 31, 2022
Beginning balance		$	-			$	(739	)
Change during the year			(7,256	)			739
Foreign currency translation adjustment			480				-
Ending balance		$	(6,776	)		$	-

 

Other receivable movement is as follows:

 

SCHEDULE OF OTHER RECEIVABLE

		June 30,
		2023 (unaudited)				December 31, 2022
Beginning balance		$	2,089,921			$	1,034,690
Change during the year			(1,182,560	)			1,189,020
Foreign currency translation adjustment			(104,923	)			(133,789	)
Ending balance		$	802,438			$	2,089,921

 

The change during the year in 2022 is mainly from increase of consumption tax receivable that has been refunded in 2023.

 

NOTE 5 — INVENTORY

 

Inventory consists of the following:

 

SCHEDULE OF INVENTORY

		June 30,
		2023 (unaudited)				December 31, 2022
Raw materials		$	209,330			$	1,533,784
Work in progress			1,288,027				1,135,852
Product			31,665				-
Stored item			9,541				17,456
Total		$	1,538,563			$	2,687,092

 

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NOTE 6 — SEGMENT INFORMATION

 

Management determined the Company’s operations constituted one reportable segment in accordance with ASC 280—Air mobility segment. Revenue by each service line can be found in Note 7 below.

 

NOTE 7 — REVENUE RECOGNITION

 

The Company currently generates its revenue from the following main sources:

 

Revenue from Computing Power Sharing services with Equipment Installation

 

The Company provides customers with computing power sharing services with equipment installation, which includes a one-time equipment installation and a certain period of time technology service. The Company recognizes revenue from one-time equipment installation at the point in time when the installation is completed and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly.

 

Revenue from Computing Power Sharing services without Equipment Installation

 

The Company also provides customers with computing power sharing services without equipment installation, which includes a one-time platform set up without equipment installation, and a certain period of time technology service. The Company recognizes revenue from one-time platform set up at the point in time when the platform is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly.

 

Revenue from Air Mobility Drone Solution

 

The Company provides customers with air mobility drone solution, which includes UAS (Unmanned Aircraft Systems) main equipment, laser scanner, software package, camera system, etc. The solution includes a one-time system set up and a certain period of time technology service. The Company recognizes revenue from one-time system set up at the point in time when the system is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Air Mobility Drone Solution is included in income from discontinued operations.

 

Revenue from Project Management

 

The Company provides customers with project management, which includes project planning and implementation, and providing needed technology human resources, such as construction engineers and software engineers for various projects. The Company recognizes revenue from project management over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Project Management is included in income from discontinued operations.

 

Revenue from Consulting Service

 

The Company provided a customer with consulting service related to IPO. The company recognizes revenue from the service over time as the service is rendered.

 

Disaggregation of Revenue

 

The Company disaggregates its revenues from contracts by service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months and three months ended June 30, 2023 and 2022 is as following (unaudited):

SCHEDULE OF DISAGGREGATION OF REVENUE

		2023				2022
		Six months ended
		June 30, (unaudited)
		2023				2022
Revenue from Computing Power Sharing services			101,453				836,059
Revenue from Project Management for Computing Share			6,300				1,098,059
Consulting Service			350,000				-
Total Revenue		$	457,753			$	1,934,118

 

		2023				2022
		Three months ended
		June 30, (unaudited)
		2023				2022
Revenue from Computing Power Sharing services			25,703				274,823
Revenue from Project Management for Computing Share			-				46,348
Total Revenue		$	25,703			$	321,171

 

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For the six months ended June 30 in 2023 and 2022 (unaudited), almost all of the revenue generated are attributed to the Company’s operation in Japan.

 

Revenue from Air Mobility Drone Solution and Project Management are included in income from discontinued operations.

 

Contract Liability

 

As of June 30, 2023 (unaudited) and December 31, 2022, the Company recognizes contract liability of $737,980 and $1,104,582 respectively. Contract liability primarily represents the Company’s remaining performance obligations under its service agreement at the end of the period, for which consideration has been received and revenue had not been recognized.

 

NOTE 8 — RELATED PARTY TRANSACTIONS

 

Guarantee provided by a director of A.L.I.

 

For the six months ended June 30 in 2023, the Company received a debt guarantee from the Representative Director of A.L.I. Daisuke Katano for a particular building lease agreement. The transaction amount is $12,452 which is calculated by the total rental fees paid during the period from January 1, 2023 to June 30, 2023 for the contracts for which guarantees were provided as of June 30, 2023. No warranty fees are paid.

 

Loan from a former director of Aerwins

 

On February 27, 2023, the Company’s wholly owned subsidiary in Japan, A.L.I. Technologies, entered into a loan agreement with Shuhei Komatsu, the Company’s Chief Executive Officer. Pursuant to the Agreement, Mr. Komatsu agreed to lend A.L.I. 200,000,000 yen (approximately $1,384,370 US Dollars based on a conversion rate of 0.006921 US Dollar for each $1 yen as of June 30, 2023). The original maturity date of the Loan under the Agreement was April 15, 2023, and was extended to June 30, 2023 (the “Maturity Date”). The interest rate under the Agreement is 2.475% per annum (calculated on a pro rata basis for 365 days a year), and the interest period is from February 27, 2023 until the Maturity Date. The Company recognizes $8,775 of accrued expenses. The Company has not paid 100,000,000 yen (approximately US$692,185) as of June 30, 2023. Accordingly, the Company is regarded in default and negotiates the terms with the lender.

 

Payable to Directors of Aerwins

 

In the second quarter of 2023, two directors of Aerwins, Kiran Sidhu and Daisuke Katano paid some payable on behalf of the Company. Mr. Sidhu paid $102,000 in the second quarter of 2023 and the same amount is outstanding as of June 30, 2023. Mr. Katano paid $210,424 in the second quarter of 2023 and the same amount is outstanding as of June 30, 2023. The Company will pay to them at an appropriate timing in light of its financial situation.

 

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NOTE 9 — PROPERTY AND EQUIPMENT, NET

 

Property and equipment consist of the following:

 

SCHEDULE OF PROPERTY AND EQUIPMENT

		June 30,
		2023 (unaudited)				December 31, 2022
Building		$	213,375			$	233,869
Accessory equipment			182,629				211,879
Structures			43,400				47,568
Vehicles			4,117				4,512
Tools, furniture and fixtures			1,818,832				1,751,969
Lease assets			170,496				186,871
Property and equipment, gross
Accumulated depreciation			(721,480	)			(534,426	)
Impairment			(1,711,369	)			(511,695	)
Property and equipment, net		$	-			$	1,390,547

 

Depreciation expense for six months ended June 30, 2023 and 2022, were respectively $187,054 and $141,406.

 

NOTE 10 — INTANGIBLE ASSETS, NET

 

The components of intangible assets as of June 30, 2023 and December 31, 2022 are as follows:

 

SCHEDULE OF INTANGIBLE ASSETS

		June 30,
		2023 (unaudited)				December 31, 2022
Software		$	662,075			$	706,320
Design right			101,578				111,334
Patent right			22,842				-
Intangible assets, gross
Accumulated amortization			(217,828	)			(191,813	)
Impairment			(568,667	)			(475,265	)
Intangible assets, net		$	-			$	150,576

 

Amortization expense for six months ended June 30, 2023 and 2022, were respectively $23,541 and $27,060.

 

NOTE 11 — IMPAIRMENT LOSS

 

For the six months ended June 30, 2023, the Company recognized impairment losses for the following assets:

 SCHEDULE OF IMPAIRMENT LOSS

Type		Impairment loss
Building		$	199,601
Accessory equipment			146,334
Structures			37,975
Tools, furniture and fixtures			562,650
Operating Lease right-of-use assets			472,414
Software			71,095
Design right			54,370
Patent right			21,414
Total		$	1,565,853

 

Because the Company continues to recognize operating losses, and the future cash flows from these assets for its business in Japan are uncertain, so it has decided to write down fixed assets in Japan, the Company recognizes impairment loss for all fixed assets in Japan. The Company recognized the reduction as impairment in the line item of impairment on fixed assets. The Company reduces the book value to zero and recognizes the amount as impairment because the future cash flows from these assets were uncertain at the end of this quarter.

 

NOTE 12 — LEASES

 

The components of lease costs are as follows:

SCHEDULE OF LEASE COSTS 

		2023				2022
		For the Six months Ended
		June 30, (unaudited)
		2023				2022
Short-term lease costs		$	39,233			$	536
Finance lease costs			47,411				51,127
Operating lease costs			177,160				107,922
Total lease costs		$	263,804			$	159,585

 

18

 

As of June 30, 2023, the future maturity of lease liabilities is as follows:

 SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES

Year ending December 31,			Finance lease				Operating lease
2023 (six months)		$	64,834			$	93,987
2024			50,078				227,438
2025			10,283				155,979
2026			10,283				-
Thereafter			12,854				-
Total lease payments			148,332				477,404
Less: imputed interest			(5,780	)			(4,991	)
Total lease liabilities			142,552				472,413
Less: current portion			85,025				228,175
Non-current lease liabilities		$	57,527			$	244,238

 

The following table presents supplemental information related to the Company’s leases:

 SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE

		2023				2022
		For the Six months Ended
		June 30, (unaudited)
		2023				2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			157,895				168,644
Financing cash flows from finance lease			41,681				47,240
Weighted average remaining lease term (years)
Finance leases			1.1				1.8
Operating leases			1.1				1.4
Weighted-average discount rate: (per annum)
Finance leases			2.66	%			2.38	%
Operating leases			0.94				0.94

 

Pursuant to the operating lease agreements, the Company made security deposits to the lessors. The amount of security deposits as of June 30, 2023 and as of December 31, 2022 is $152,598 and 174,111 respectively.

 

19

 

NOTE 13 — LONG-TERM DEBTS

 

The Company’s long-term loans borrowed from banks and other financial institutions, which consist of the following:

 SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS

Name of Lender		Original Amount Borrowed (JPY)				Loan Duration		Annual Interest Rate				Balance as of June 30, 2023 (unaudited)				Balance as of December 31, 2022
Mizuho Bank, Ltd.			40,000,000			1/22/2021— 1/22/2028			0.00	%			276,874				303,467
Mizuho Bank, Ltd.			60,000,000			1/22/2021— 1/22/2028			0.00	%			415,311				455,201
Mizuho Bank, Ltd.			50,000,000			1/22/2021— 1/22/2028			1.70	%			346,093				379,334
Japan Finance Corporation			50,000,000			12/29/2020— 12/31/2027			1.11	%			233,959				279,190
Japan Finance Corporation			250,000,000			12/29/2020— 1/31/2026			0.50	%			1,730,462				1,896,669
Aggregate outstanding principal balances													3,002,699				3,313,861
Less: current portion													(166,332	)			(54,624	)
Non-current portion												$	2,836,367			$	3,259,237

 

Interest expense for long-term debts was $11,708 and $14,234 for the six months ended June 30, 2023 and 2022 (unaudited), respectively.

 

NOTE 14 – CONVERTIBLE PROMISSORY NOTES, NET

 

On April 12, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with Lind Global Fund II LP (the “Investor”). Pursuant to the SPA, the Company agreed to issue to the Investor up to three secured convertible promissory notes in the aggregate principal amount of $6,000,000 for a purchase price of an aggregate of $5,000,000 and up to 5,601,613 warrants to acquire up to 5,601,613 shares of the Company’s common stock.

 

On April 12, 2023, the Company issued first tranche of convertible promissory note of $2,520,000 with maturity date of April 12, 2025 and no interest and issued warrant exercisable for 60 months to acquire 2,532,678 shares of common stock at $0.8926 per share. The note may convert into common shares at the option of the Holder. The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note. Debt issuance cost of $457,304, original issue discount of $420,000 and additional discount of $1,642,696 are recognized as reduction from the principal amount of the note and will be amortized over the life of the note utilizing straight-line method.

 

On May 23, 2023, the Company issued second tranche of convertible promissory note of $1,680,000 with maturity date of May 23, 2025 and no interest and issued warrant exercisable for 60 months to acquire 1,568,542 shares of common stock at $0.7316 per share. The note may convert into common shares at the option of the Holder. The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note. Debt issuance cost of $245,000, original issue discount of $280,000 and additional discount of $1,133,395 are recognized as reduction from the principal amount of the note and will be amortized over the life of the note utilizing straight-line method.

 

The notes consist of the following components as of June 30, 2023:

 SCHEDULE OF DEBT NOTES

Principal		$	4,200,000
Debt discount			(4,178,395	)
Interest expense			435,072
Net Carrying Balance at June 30, 2023		$	456,677

 

As of the year ended June 30, 2023, debt discount of the convertible notes consisted of following:

 SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES

Start Date		End Date		Debt Discount At Debt Issuance				Amortization				Debt Discount As of June 30, 2023
April 12, 2023		April 12, 2025		$	2,520,000				302,400			$	2,217,600
May 23, 2023		May 23, 2025			1,658,395				132,672				1,525,723
Total					4,178,395				435,072				3,743,323

 

20

 

NOTE 15 – DERIVATIVE LIABILITY

 

The derivative liability is derived from the debt conversion option features in Note 14. They were valued using Monte Carlo simulation model using assumptions detailed below. As of June 30, 2023, the derivative liability was $1,456,641. The Company recorded $595,673 gain from changes in derivative liability during the six months ended June 30, 2023. In addition, the Company recorded $1,088,477 as excess of derivative expense at initial valuation due to the total debt discount cannot excess the face amount of the convertible note balance. The Monte Carlo simulation model with following assumptions:

 SCHEDULE OF DERIVATIVE LIABILITY

Volatility			65% - 82.50	%
Risk-free rate			3.95% - 4.98	%
Stock price			$0.42 - $0.94
Dividend Yield			-
Expected life			4.79 – 5 years

 

Fair value of the derivative is summarized as below:

 SCHEDULE OF FAIR VALUE OF THE DERIVATIVE

			Derivative Liability
Balance at January 1, 2023		$	-
Additions			2,052,314
Change in fair value			(595,673	)
Ending Balance, June 30, 2023		$	1,456,641

 

NOTE 16 – WARRANT LIABILITY

 

The warrant liability is derived from warrants issued as debt warrants in Note 14, public warrants and placement warrants.

 

As of June 30, 2023, the total fair value of the warrant liability was $1,255,795.

 

The following table provides a reconciliation of the warrants measured at fair value using Level 1 inputs:

 SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS

		Public warrants
Balance at January 1, 2023		$	-
Additions			-
Transfer from Level 2			603,750
Change in fair value			(280,313	)
Ending Balance, June 30, 2023		$	323,437

 

The Black-Scholes model with the following assumptions inputs:

 SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS

Volatility			62.80% - 82.50	%
Risk-free rate			3.62% - 4.98	%
Stock price			$0.42 - $0.94
Dividend Yield			-
Expected life			4.79 – 5 years

 

The following table provides a reconciliation of the warrants measured at fair value using Level 2 inputs:

 SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS

		Public warrants				Placement warrants				Debt warrants
Balance at January 1, 2023		$	-				-				-
Additions			603,750				39,463				1,812,253
Transfer to Level 1			(603,750	)			-				-
Change in fair value			-				(18,180	)			(901,178	)
Ending Balance, June 30, 2023		$	-				21,283				911,075

 

21

 

NOTE 17 — INCOME TAXES

 

United States

 

Aerwins Technologies Inc. is a holding company registered in the State of Delaware incorporated in June 2022. The U.S. federal income tax rate is 21%.

 

Japan

 

The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. During the three months periods ended June 30, 2023 and 2022, all taxable income (loss) of the Company is generated in Japan. Income taxes in Japan applicable to the Company are imposed by the national, prefectural, and municipal governments, and in the aggregate resulted in an effective statutory rate of approximately 34.59% for the six months ended June 30, 2023 and 2022.

 

For the six months ended June 30, 2023 and 2022, the Company’s income tax expenses are as follows:

 SCHEDULE OF COMPANY' S INCOME TAX EXPENSES

		2023				2022
		For the Six months Ended
		June 30,
		2023				2022
Current		$	-			$	-
Deferred			-				-
Total		$	-			$	-

 

A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the six months ended June 30, 2023 and 2022 is as follows:

 SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE

		2023				2022
		For the Six months Ended
		June 30,
		2023				2022
Japanese statutory tax rate			34.59	%			34.59	%
Change in valuation allowance			(34.59	)%			(34.59	)%
Effective tax rate			(0.00	)%			(0.00	)%

 

For the six months ended June 30, 2023 and 2022 (unaudited)

 

The Company’s provision for income taxes for interim periods was determined using an estimate of its annual effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.

 

The Company recognized income tax expense for the six months ended June 30, 2023 and 2022, both of which were estimated corporate inhabitant taxes.

 

22

 

NOTE 18 — EQUITY METHOD

 

As of June 30, 2022 and 2021, the Company holds 48.81% of ASC TECH Agent. Accordingly, the Company applies equity method to its investment. For the six months ended June 30, 2023 and 202 (unaudited), net income from ASC TECH agent is recognized as equity in earnings of investee of $11,640 of loss and $10,736 of profit in the consolidated statements of operations and comprehensive income (loss).

 

NOTE 19 – SHAREHOLDERS’ DEFICIT

 

Aerwins was authorized to issue 400,000,000 shares of common shares, par value of $0.000001 per share, and 20,000,000 shares of preferred shares, par value of $0.000001 per share.

 

Business combination with Pono Capital Corp

 

On February 3, 2023, the Company consummated the Merger with Pono. On February 2, 2023, the Company entered into a Subscription Agreement with the Purchasers. In total, the number of Public Shares increased by 8,797,687 at the closing of the Business Combination.

 

Shares issued to service providers

 

The Company agreed with service providers to pay the service fees by issuing common stocks subject to the closing of the business combination. After the closing of the Business Combination, the Company issued 413,103 shares of common stock for the three months ended March 31, 2023. The Company issued 5,269,291 shares to consultants who provide the Company with several services for the three months ended June 30, 2023. These share issuances are recognized as expense at the fair value of the shares at the issuance date. The total amount of fair value of shares issued for the six months ended June 30, 2023 was $6,258,298 and $2,600,000 is recognized as prepaid expenses.

 

The Company’s outstanding shares increased by 14,480,081 for the six months ended June 30, 2023, and recognized Common stock of $14 and Additional Paid-in Capital of $4,224,049. As of June 30, 2023, there were 61,409,146 of common shares issued. The numbers of common stocks are retrospectively presented to reflect the legal capital of post-merger AERWINS.

 

NOTE 20 – EARNINGS (LOSS) PER SHARE

 

Basic earnings (loss) per share is calculated on the basis of weighted-average outstanding common shares. Diluted earnings (loss) per share is computed on the basis of basic weighted-average outstanding common shares adjusted for the dilutive effect of stock options. Dilutive common shares are determined by applying the treasury stock method to the assumed conversion of share repurchase liability to common shares related to the early exercised stock options.

 

The computation of basic and diluted earnings (loss) per share for the six months and three months ended June 30, 2023 and 2022 is as follows:

 

SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

		2023				2022
		For the Six months Ended
		June 30, (unaudited)
		2023				2022
Earnings (loss) per share – basic
Numerator:
Net loss from continuing operations		$	(18,376,366	)		$	(6,548,417	)
Net loss from discontinued operation			(846,499	)			(679,519	)
Denominator:
Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share			54,957,819				42,712,850
Denominator used for earnings (loss) per share
Loss per share from continuing operations (basic and diluted)		$	(0.33	)		$	(0.15	)
Loss per share from discontinued operation (basic and diluted)			(0.02	)			(0.02	)

 

		2023				2022
		For the Three months Ended
		June 30, (unaudited)
		2023				2022
Earnings (loss) per share – basic
Numerator:
Net loss from continuing operations		$	(10,737,846	)		$	(3,369,816	)
Net loss from discontinued operation			(683,474	)			(466,117	)
Denominator:
Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share			56,871,014				43,509,237
Denominator used for earnings (loss) per share
Loss per share from continuing operations (basic and diluted)		$	(0.19	)		$	(0.08	)
Loss per share from discontinued operation (basic and diluted)			(0.01	)			(0.01	)

 

Basic loss per share equals diluted loss per share because the calculation of diluted loss per share would be anti-dilutive.

 

23

 

NOTE 21 – STOCK-BASED COMPENSATION

 

On July 27, 2022, Aerwins issued stock options to certain directors of the Company which can be exercised for a total of 2,648,000 shares of the Company’s common stock with an exercise price of $0.00015 per share and a vesting period shall commence on the first business day following the occurrence of going public (the “Trigger Date”), and thereafter (i) one third of the option shall vest on the three months anniversary of the Trigger Date, (ii) one third of the option shall vest on the fifteen month anniversary of the Trigger Date; and (iii) the remaining one third of the option shall vest on the twenty seven month anniversary of the Trigger Date. The remaining weighted average contractual life as of June 30, 2023, is 9.33 years.

 

SCHEDULE OF STOCK BASED COMPENSATION

Grant date			July 27, 2022
Number of shares at grant date			4,142,277
Outstanding at January 31, 2023			4,142,277
Forfeiture			(2,969,049	)
Outstanding at June 30, 2023			1,173,228
Exercise price		$	0.00015
Consideration paid to the Company at the grant date		$	132

 

The number of shares is retrospectively presented to reflect the Business Combination with Pono.

 

The Company estimated the fair value of the stock-based compensation at $0.00005 using the Binomial Option Pricing Model with the following assumption inputs.

 

SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION

Exercise period			5 years
Share price on the issuance date		$	0.0001
Volatility			64.22	%
Expected dividend rate			0	%
Risk-free interest rate			2.88	%

 

NOTE 22 – FAIR VALUE MEASUREMENT

 

The estimated fair value of the Company’s financial instrument at June 30, 2023 and December 31, 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts.

 

SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT

		Amount at Fair Value				Level 1				Level 2				Level 3
June 30, 2023
Liabilities
Public Warrants		$	323,437			$	323,437			$	-			$	-
Placement Warrants		$	21,283			$	-			$	21,283			$	-
Debt Warrants		$	911,075			$	-			$	911,075			$	-
Subtotal : Warrant liabilities		$	1,255,795			$	323,437			$	932,358				-
Derivative Liability		$	1,456,641			$	-			$	1,456,641			$	-
Liabilities fair value		$	1,456,641			$	-			$	1,456,641			$	-

 

The Public Warrants are classified as Level 1 in the fair value hierarchy because they valued using quoted market prices. The Placement Warrants, Debt Warrants, and Derivative Liability are classified as Level 2 in the fair value hierarchy. This classification is based on the availability of significant inputs used in the Black-Sholes model and Monte Carlo simulation, which are observable in the market.

 

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from Level 2 to Level 1 during the period from January 1, 2023 due to the increase of observable market activity.

 

24

 

NOTE 23 – DISCONTINUED OPERATIONS

 

As at June 30, 2023, to facilitate cost reduction plan, the Company has made the strategic decision to discontinue drone solution service. The results of operations in relation to the Company’s Drone solution service have been classified by the Company as discontinued operations for the six months ended June 30, 2023 and 2022 and are shown below:

 

SCHEDULE OF DISCONTINUED OPERATIONS

		2023				2022				2023				2022
		For the six months ended June 30,								For the three months ended June 30,
		2023				2022				2023				2022
		(unaudited)								(unaudited)
Revenues		$	925,205			$	857,303			$	83,334			$	431,594
Cost of revenues			735,962				725,562				105,331				390,178
Gross profit			189,243				131,741				(21,997	)			41,416
Operating expenses:
Selling expenses			4,099				5,904				684				900
General and administrative expenses			715,547				576,135				352,200				327,582
Research and development expenses			167,053				229,736				109,834				178,875
Total operating expenses			886,699				811,775				462,718				507,357
Loss from operations			(697,456	)			(680,034	)			(484,715	)			(465,941	)
Other income (expenses):
Interest income (expenses), net			(1,164	)			-				(1,043	)			-
Gain (Loss) on disposal of fixed assets			(9,761	)			(176	)			-				(176	)
Impairment of fixed assets			(229,600	)			-				(205,684	)			-
Other income (expenses), net			91,482				691				7,968				-
Total other income (expenses)			(149,043	)			515				(198,759	)			(176	)
Loss before income tax provision		$	(846,499	)		$	(679,519	)		$	(683,474	)		$	(466,117	)

 

NOTE 24 – SUBSEQUENT EVENTS

 

A.L.I. Technologies has not been able to pay some accounts payable by due date. As of August 10, 2023, the health insurance association seized our bank account in Japan for delinquent health insurance premiums. As a result, 28,075 USD deposited in the bank account has been seized.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 1. Financial Statements and Supplementary Data” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and “Item 1A. Risk Factors” in our Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“Commission”) on March 31, 2023.

 

Overview

 

AERWINS Technologies Inc., a Delaware corporation (the “Company,” “we,” “us,” or “AERWINS”) together with its wholly owned subsidiary AERWINS, Inc., a Delaware corporation and its wholly owned subsidiary, A.L.I. Technologies Inc., a Japanese corporation (“ALI”) is the developer and manufacturer of air mobility platform, COSMOS (Centralized Operating System for Managing Open Sky), and the XTURISMO Limited Edition Hoverbike. All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” or “AERWINS” include both AERWINS and ALI, except that references to the “Company” “we,” “us,” or “Pono” in this Item 2 refer to Aerwins Technologies Inc. f/k/a Pono Capital Corp.

 

We were originally incorporated in Delaware on February 12, 2021 under the name “Pono Capital Corp” as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On August 13, 2021, we consummated an initial public offering. On February 3, 2023, we consummated a merger (the “Merger”) with Pono Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of the Company, then called Pono Capital Corp., a Delaware corporation (“Pono”) with and into AERWINS, Inc. (formerly named AERWINS Technologies Inc.), a Delaware corporation pursuant to an agreement and plan of merger, dated as of September 7, 2022 (as amended on January 19, 2023, the “Merger Agreement”), by and among Pono, Merger Sub, AERWINS, Mehana Equity LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of Pono, and Shuhei Komatsu in his capacity as the representative of the stockholders of AERWINS, Inc. (“Seller Representative”). The Merger and other transactions contemplated thereby (collectively, the “Business Combination”) closed on February 3, 2023 when pursuant to the Merger Agreement, Merger Sub merged with and into AERWINS, Inc. with AERWINS, Inc. surviving the Merger as a wholly-owned subsidiary of Pono, and Pono changed its name to “AERWINS Technologies Inc.” and the business of the Company became the business of AERWINS, Inc. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Pono Capital Corp was treated as the acquired company and AERWINS, Inc. was treated as the acquirer for financial statement reporting purposes.

 

The Business Combination occurred during the period for which the financial information herein is presented. The financial information included in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects the historical operations of the Company prior to the Business Combination and the combined operations after the Business Combination, unless otherwise noted. For additional information on the Business Combination please see the “Explanatory Note” on page 1 of this Quarterly Report on Form 10-Q. For additional information on the corporate history of our Company please see the section titled “Corporate History” on page 70 of our Annual Report.

 

Business Overview

 

We were incorporated in the State of Delaware on June 9, 2022. We conduct business activities principally through our 100%-owned subsidiary, A. L. I. Technologies Inc., a Japanese corporation (“A. L. I. Technologies”), which was established in Japan in September 2016 and was acquired by us in August, 2022.

 

We are developing our air mobility business with the aim of contributing to society as a global company that leads the air mobility society by providing infrastructure that enables anyone to use the airspace safely, securely, and conveniently through the constant challenge of new technologies and their implementation in society.

 

 

To realize this vision, we have developed the following business areas but we are focusing manned air mobility area for the future:

 

(1) manned air mobility area, which involves the sale and development of hoverbikes that can float at low altitude through difficult-to-move zones in times of disaster,

 

(2) unmanned air mobility domain, which provides solutions utilizing industrial drones (integrated provision of R&D, aircraft rental or sales, operators, operation management, and other software); and

 

(3) the computing power sharing domain, which provides services such as blockchain verification and AI.

 

Significant Market Opportunities

 

In today’s increasingly populated and interconnected world, traditional modes of urban transportation continue to create congestion and pollution, and dependent on land-based infrastructure. Transportation for the future requires a revolutionary solution.

 

The market opportunities based on our technologies are significant. According to an analysis by Frost & Sullivan, the autonomous vehicle services market is expected to grow from a mere $1.1 billion in 2019 to $202.5 billion in 2030 at a CAGR of 60.1%, facilitated by mutually beneficial business models across the entire mobility value chain. To capture the significant growth potential in the AAV market, we strive to continue to innovate and expand the boundaries for air-based mobility.

 

We have already completed our first manned flight test of the XTURISMO LTD EDITION prototype 1 which we tested in 2019. The current XTURISMO LTD EDITION made a debut to the public in October 2021 at Fuji Speedway Circuit in Japan. We will further develop the product to be resistant to wind of 6 meters per second and further to 8 meters per second to increase its safety features. In the future, we are also preparing to develop new models ranging from unmanned versions for logistical purposes to potentially hydrogen-based models. On the software side, we are currently further developing our traffic management system and developing a digital sky road infrastructure based on our existing air traffic control system.

 

Our air mobility enables urban mobility to expand into three-dimensional space. We believe our technology will change the future of transportation, improve lives, and create new industries. The XTURISMO LTD EDITION is a full spec version ranging from high quality carbon and equipped with intensive software capability which allows manual/autonomous/remote control driving experience. Each XTURISMO LTD EDITION is built to order, and accordingly, we begin production of each specific unit when a confirmed order is received by us. Due to the cost of the XTURISMO LTD EDITION, we have decided to limit the production of the XTURISMO LTD EDITION to 200 units. Most of the parts were created exclusively for the product with small unit orders resulting in the purchase price to be relatively expensive. The price of the current XTURISMO LTD EDITION is 77.7 million yen ($550,000 USD) per unit (including insurance and installation program) in Japan. We believe the price of the supply parts can be decreased if we are able to obtain further orders, and at such time we may be able to mass produce a less expensive model to facilitate safe, cost-effective, and easy-to-use air mobility solutions. Additionally, since the XTURISMO LTD EDITION is still in the development phase, the materials can change depending on the usage and unnecessary features can be omitted, both of which can reduce the price.

 

We design, develop, manufacture, market, and operate unmanned aircraft and their supporting systems and infrastructure for a wide range of industries and applications, including passenger transportation, logistics, and smart city management. For example, in a joint project with Yamanashi prefecture located in a mountainous region in Japan, we have conducted a logistics test for a hypothetical disaster situation using unmanned drones from three different manufacturers equipped with our proprietary air traffic control system (C.O.S.M.O.S.) to control these drones simultaneously. First, we designed and set up minimum flight routes for unmanned drones in C.O.S.M.O.S. that could be used during a disaster. These were then used as airways (equivalent to infrastructure as a smart city), and flights were made to deliver supplies needed in times of disaster by multiple vehicles flying simultaneously along the airways. Additionally, we have conducted similar tests with the Ministry of Land, Infrastructure, Transport and Tourism of Japan. We are also seeking to provide efficient services in the field of civil engineering, particularly for surveying and infrastructure inspections. We aim to use unmanned aircraft instead of the existing methods of surveying and visual inspection, which methods typically involve using Cessna aircraft or having workers perform such tasks in person. Furthermore, in the passenger sector, we develop, manufacture, sell, and operate XTURISMO LTD EDITION. We provide an integrated air mobility solution ranging from hardware to software.

 

Orders, Delivery and Financial Results

 

We are developing the following business areas:

 

(1) manned air mobility area, which involves the sale and development of hoverbikes that can float at low altitude through difficult-to-move zones in times of disaster, etc., and (b) industrial drone business, which involves the sale and development of industrial drones; and

 

(2) unmanned air mobility domain, which provides solutions utilizing industrial drones (integrated provision of R&D, aircraft rental or sales, operators, operation management, and other software); and

 

(3) the computing power sharing domain, which provides services such as blockchain verification and AI.

 

 

Discontinued Operations

 

As of June 30, 2023 we discontinued providing drone photography services and joint research and development services previously provided within our unmanned air mobility business. Current estimated costs and charges to be incurred in connection with discontinuing of this portion of our drone service business are not material.

 

Key Factors that Affect Our Results of Operations

 

Our business is affected by many factors which we discuss under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on March 31, 2023, and in subsequent filings. The following are a few of those key factors that may affect our financial condition and results of operations:

 

Our Purported Product Superiority.

 

Both hardware and software technologies are key factors intended to strengthen our competitive advantages. Regarding hardware, we developed air mobility CFRP material for XTURISMO which reduced the weight of the open propeller and its body. CFRP is also easy to process and corresponds to various designs and has strong resistance to dust and salt air. We also developed an original body and steering wheel which enables a driver to drive manually easier. The original hybrid engine has high power generation with low revolution and electric supply support to control the device system. Regarding software, the stability control of XTURISMO assists driving using sensor fusion surrounding the body and links with the cloud in real time through encrypted driving and control data communication. Also, C.O.S.M.O.S., the air traffic control platform connects with each hoverbike and provides flight and network management. These hardware and software solutions are all made in Japan.

 

Our Ability to Expand International Market

 

We are seeking to promote global expansion using partnerships, and our ability to succeed in this endeavor will affect our results of operations. Especially in the Gulf Cooperation Council, we have partners for creating the business in the area and will aim to raise funds which we believe will enable us to establish an office and R&D center in the area. We also expect that the area can be a distribution, manufacturing and marketing hub for the vehicles. After that or at the same time, we plan to expand sales channels to other regions, including the United States. Also, in order to facilitate such global expansion, we plan to acquire human resources in various countries outside of Japan.

 

Our Ability to Control Costs and Expenses and Improve Our Operating Efficiency

 

We are aiming to establish a highly profitable structure for the mass production of hovercrafts by using a fabless model which focuses on design and supply chain control. We plan to select subcontractors and suppliers appropriately based on cost, quality, and delivery date, and we will seek to build an efficient production system. We also hope to sign a partnership agreement with a local government to implement hovercrafts in society. We aim to reduce the cost of developing advanced technologies and implementing our products in society by utilizing subsidies as part of such support.

 

A Severe or Prolonged Slowdown in the Global and Japan Economy Could Materially and Adversely Affect Our Business and Our Financial Condition

 

In recent years, the economic indicators in Japan have shown mixed signs, and future growth of the Japanese economy is subject to many factors beyond our control. The Japanese economy is gradually recovering due to the effects of various government policies which encourage the transition to the post-COVID society. However, it is necessary to note downside risks due to fluctuations in the financial markets, price increases, and supply-chain constraints as global monetary tightening is progressing. Any future deterioration of the Japanese or global economy may result in a decline in consumption that would have a negative impact on demand for our products and their prices.

 

Results of Operations

 

Comparison of Results of Operations for the six Months Ended June 30, 2023, and 2022

 

The following table summarizes our operating results as reflected in our statements of income during the six months ended June 30, 2023 and 2022, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

 

		For the six Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
REVENUE		$	457,753				100.0	%		$	1,934,118				100.0	%		$	(1,476,365	)			(76.3	)%
COST OF REVENUE			600,280				131.1	%			2,047,280				105.9	%			(1,447,000	)			(70.7	)%
GROSS PROFIT			(142,527	)			(31.1	)%			(113,162	)			(5.9	)%			(29,365	)			25.9	%
Operating expenses
Selling expenses			63,525				13.9	%			59,526				3.1	%			3,999				6.7	%
General and administrative expenses			10,108,287				n.m.				2,722,078				140.7	%			7,386,209				271.3	%
Research and development expenses			6,795,396				n.m.				4,484,102				231.8	%			2,311,294				51.5	%
Total operating expenses			16,967,208				n.m.				7,265,706				375.7	%			9,701,502				133.5	%
Income (loss) from operations			(17,109,735	)			n.m.				(7,378,868	)			(381.5	)%			(9,730,867	)			131.9	%
Other income (expenses)			(1,266,631	)			(276.7	)%			830,451				42.9	%			(2,097,082	)			(252.5	)%
Income (loss) before income tax provision			(18,376,366	)			n.m.				(6,548,417	)			(338.6	)%			(11,827,949	)			180.6	%
Income taxes expense (benefit)			-				-				-				-				-				-
Net loss			(18,376,366	)			n.m.				(6,548,417	)			(338.6	)%			(11,827,949	)			180.6	%

 

 

Revenue

 

Our total revenues decreased by $1,476,365, or 76.3% to $457,753 for the six months ended June 30, 2023 from $1,934,118 for the six months ended June 30, 2022. The decrease in our revenues was due to a decrease in sales from shared computing business.

 

Cost of Revenue

 

Our total costs of revenues decreased by $ 1,447,000, or 70.7%, to $ 600,280 for the six months ended June 30, 2023 from $2,047,280 for the six months ended June 30, 2022. The decrease in our costs was attributable to the decrease of sales described above.

 

Gross Profit

 

Our total gross loss increased by $ 29,365 or 25.9%, to $ 142,527 for the six months ended June 30, 2023 from $113,162 for the six months ended June 30, 2022.

 

Operating Expenses

 

The following table sets forth the breakdown of our operating expenses for the six months ended June 30, 2023 and 2022:

 

		For the six Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
REVENUE		$	457,753				100.0	%		$	1,934,118				100.0	%		$	(1,476,365	)			(76.3	)%
Operating expenses
Selling expenses			63,525				13.9	%			59,526				3.1	%			3,999				6.7	%
General and administrative expenses			10,108,287				n.m.				2,722,078				140.7	%			7,386,209				271.3	%
Research and development expenses			6,795,396				n.m.				4,484,102				231.8	%			2,311,294				51.5	%
Total operating expenses			16, 967,208				n.m.				7,265,706				375.7	%			9,701,502				133.5	%

 

General and Administrative Expenses

 

Our general and administrative expenses primarily consist of employee salaries and welfare, consulting for company reorganization and going public, rental expense and travel and entertainment expenses.

 

		For the six Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
Salaries and welfare		$	1,233,994				12.2	%		$	1,125,100				41.3	%		$	108,894				9.7	%
Consulting and professional service fees			5,133,291				50.8	%			981,288				36.0	%			4,152,003				423.1	%
Share based payment			1,634,106				16.2	%			-				-				1,634,106				n.m.
Rent expense			81,593				0.8	%			72,926				2.7	%			8,667				11.9	%
Office, utility and other expenses			950,415				9.4	%			224,402				8.2	%			726,013				323.5.	%
Travel and entertainment expense			271,563				2.7	%			128,228				4.7	%			143,335				111.8	%
Commission fees expenses			292,234				2.9	%			11,186				0.4	%			281,048				n.m.
Other expenses			511,092				5.1	%			178,948				6.6	%			332,144				185.6	%
Total general and administrative expenses			10,108,287				100	%			2,722,078				100	%			7,386,209				271.3	%

 

* Refers to the percentage of total general and administrative expenses.

 

Our general and administrative expenses increased by $7,386,209 or 271.3%, to $10,108,287 for the six months ended June 30, 2023 from $2,722,078 for the six months ended June 30, 2022, primarily attributable to Consulting and professional service fees relating to the business combination with Pono.

 

 

Research and development expenses

 

Our research and development expenses primarily consist of employee salaries and welfare, and outsourcing expenses.

 

		For the six Months ended June 30,
		2023								2022								Variance
Research and Development Expenses		Amount				% of				Amount				% of				Amount				% of
Raw materials		$	4,084,773				60.1	%		$	1,719,734				38.4	%		$	2,365,039				137.5	%
Labor expenses			580,173				8.5	%			497,556				11.1	%			82,617				16.6	%
Outsourcing expenses			1,864,889				27.4	%			1,919,725				42.8	%			(54,836	)			(2.9	)%
Other expenses			265,560				3.9	%			347,086				7.7	%			(81,526	)			(23.5	)%
Total research and development expenses			6,795,396				100	%			4,484,102				100	%			2,311,294				51.5	%

 

* Refers to the percentage of total research and development expenses.

 

Our research and development expenses increased by $ 2,311,294, or 51.5%, to $ 6,795,396 for the six months ended June 30, 2023 from $4,484,102 for the six months ended June 30, 2022, primarily attributable to the increase in raw materials cost for development of XTURISMO.

 

Other Income (Expenses), net

 

Our other income (expenses) primarily includes impairment loss of fixed assets.

 

Total other income, net, decreased by $2,097,082 or 252.5% from $830,451 of income for the six months ended June 30, 2022 to $1,266,631 of expenses for the six months ended June 30, 2023.

 

Net Income (Loss) from Continuing Operations

 

As a result of the foregoing, we reported a net loss of $18,376,366 for the six months ended June 30, 2023 representing a $11,827,949 or 180.6% increase from a net loss of $6,548,417 for the six months ended June 30, 2022. All net loss is attributable to AERWINS Technologies Inc.

 

Comparison of Results of Operations for the three Months Ended June 30, 2023, and 2022

 

The following table summarizes our operating results as reflected in our statements of income during the three months ended June 30, 2023 and 2022, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

 

		For the three Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
REVENUE		$	25,703				100.0	%		$	321,171				100.0	%		$	(295,468	)			(92.0	)%
COST OF REVENUE			265,680				n.m.	%			425,962				132.6	%			(160,282	)			(37.6	)%
GROSS PROFIT			(239,977	)			(933.7	)%			(104,791	)			(32.6	)%			(135,186	)			129.0	%
Operating expenses
Selling expenses			26,492				103.1	%			56,624				17.6	%			(30,132	)			(53.2	)%
General and administrative expenses			4,215,208				n.m.	%			1,462,361				455.3	%			2,752,847				188.2	%
Research and development expenses			4,751,800				n.m.	%			2,208,964				687.8	%			2,542,836				115.1	%
Total operating expenses			8,993,500				n.m.	%			3,727,949				n.m.	%			5,265,551				141.2	%
Income (loss) from operations			(9,233,477	)			n.m.	%			(3,832,740	)			n.m.	%			(5,400,737	)			140.9	%
Other expenses			(1,504,369	)			n.m.	%			462,924				144.1	%			(1,967,293	)			(425.0	)%
Income (loss) before income tax provision			(10,737,846	)			n.m.	%			(3,369,816	)			n.m.	%			(7,368,030	)			218.6	%
Income taxes expense (benefit)			-				-				-				-				-				-
Net loss			(10,737,846	)			n.m.	%			(3,369,816	)			n.m.	%			(7,368,030	)			218.6	%

 

 

Revenue

 

Our total revenues decreased by $295,468, or 92.0% to $25,703 for the three months ended June 30, 2023 from $321,171 for the three months ended June 30, 2022. The decrease in our revenues was mainly due to a decrease in sales from shared computing business.

 

Cost of Revenue

 

Our total costs of revenues decreased by $ 160,282, or 37.6%, to $ 265,680 for the three months ended June 30, 2023 from $425,962 the three months ended June 30, 2022. The decrease in our costs was attributable to the decrease of sales described above.

 

Gross Profit

 

Our total gross profit decreased by $ 135,186, or 129.0%, to $ 239,977 of loss for the three months ended June 30, 2023 from $ 104,791 of loss for the three months ended June 30, 2022.

 

Operating Expenses

 

The following table sets forth the breakdown of our operating expenses for the three months ended June 30, 2023 and 2022:

 

		For the three Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
REVENUE		$	25,703				100.0	%		$	321,171				100.0	%		$	(295,468	)			(92.0	)%
Operating expenses
Selling expenses			26,492				103.1	%			56,624				17.6	%			(30,132	)			(53.2	)%
General and administrative expenses			4,215,208				n.m.	%			1,462,361				455.3	%			2,752,847				188.2	%
Research and development expenses			4,751,800				n.m.	%			2,208,964				687.8	%			2,542,836				115.1	%
Total operating expenses			8,993,500				n.m.	%			3,727,949				n.m.	%			5,265,551				141.2	%

 

General and Administrative Expenses

 

Our general and administrative expenses primarily consist of employee salaries and welfare, consulting for company reorganization and going public, rental expense and travel and entertainment expenses.

 

		For the three Months ended June 30,
		2023								2022								Variance
		Amount				% of				Amount				% of				Amount				% of
Salaries and welfare		$	474,063				11.2	%		$	500,006				34.2	%		$	(25,943	)			(5.2	)%
Consulting and professional service fees			1,092,364				25.9	%			633,412				43.3	%			458,952				72.5	%
Share-based payment			1,634,106				38.8	%			-				0.0	%			1,634,106				n.m.	%
Rent expense			42,149				1.0	%			34,401				2.4	%			7,748				22.5	%
Office, utility and other expenses			382,171				9.1	%			160,139				11.0	%			222,032				138.6	%
Travel and entertainment expense			58,945				1.4	%			68,957				4.7	%			(10,012	)			(14.5	)%
Commission fees expenses			283,409				6.7	%			4,808				0.3	%			278,601				n.m.	%
Other expenses			248,000				5.9	%			60,638				4.1	%			187,362				309.0	%
Total general and administrative expenses			4,215,208				100	%			1,462,361				100	%			2,752,847				188.2	%

 

* Refers to the percentage of total general and administrative expenses.

 

Our general and administrative expenses increased by $2,752,847 or 188.2%, to $4,215,208 for the three months ended June 30, 2023 from $2,752,847 for the three months ended June 30, 2022, primarily attributable to Share-based payment and Consulting and professional service fees relating to the business combination with Pono.

 

 

Research and development expenses

 

Our research and development expenses primarily consist of employee salaries and welfare, and outsourcing expenses.

 

		For the three Months ended June 30,
		2023								2022								Variance
Research and Development Expenses		Amount				% of				Amount				% of				Amount				% of
Raw materials		$	3,364,570				70.8	%		$	850,311				38.5	%		$	2,514,259				295.6	%
Labor expenses			296,743				6.2	%			189,604				8.6	%			107,139				56.5	%
Outsourcing expenses			928,331				19.5	%			925,693				41.9	%			2,638				0.3	%
Other expenses			162,156				3.4	%			243,356				11.0	%			(81,200	)			(33.4	)%
Total research and development expenses			4,751,800				100	%			2,208,964				100	%			2,542,836				115.1	%

 

* Refers to the percentage of total research and development expenses.

 

Our research and development expenses increased by $ 2,542,836, or 115.1%, to $ 4,751,800 for the three months ended June 30, 2023 from $ 2,208,964 for the three months ended June 30, 2022, primarily attributable to the increase in raw materials cost for development of XTURISMO.

 

Other Income (Expenses), net

 

Our other income (expenses) primarily includes impairment loss related to fixed asets.

 

Total other income, net, decreased by $1,967,293 or 425.0% from $462,924 of income for the three months ended June 30, 2022 to $1,504,369 of expenses for the three months ended June 30, 2023.

 

Net Income (Loss) from Continuing Operations

 

As a result of the foregoing, we reported a net loss of $10,737,846 for the three months ended June 30, 2023 representing a $7,368,030 or 218.6% increase from a net loss of $3,369,816 for the three months ended June 30, 2022. All net loss is attributable to AERWINS Technologies Inc.

 

Results from Discontinued Operations

 

As at June 30, 2023, to facilitate cost reduction plan, the Company discontinued providing drone photography services and joint research and development services previously provided within its unmanned air mobility business. The results of operations in relation to these services have been classified by the Company as discontinued operations for the six months ended June 30, 2023 and 2022 and are shown below:

 

		For the six months ended June 30,								For the three six months ended June 30,
		2023				2022				2023				2022
Revenues		$	925,205			$	857,303			$	83,334			$	431,594
Cost of revenues			735,962				725,562				105,331				390,178
Gross profit			189,243				131,741				(21,997	)			41,416
Operating expenses:
Selling expenses			4,099				5,904				684				900
General and administrative expenses			715,547				576,135				352,200				327,582
Research and development expenses			167,053				229,736				109,834				178,875
Total operating expenses			886,699				811,775				462,718				507,357
Loss from operations			(697,456	)			(680,034	)			(484,715	)			(465,941	)
Other income (expenses):
Interest income (expenses), net			(1,164	)			-				(1,043	)			-
Gain (Loss) on disposal of fixed assets			(9,761	)			(176	)			-				(176	)
Impairment of fixed assets			(229,600	)			-				(205,684	)			-
Other income (expenses), net			91,482				691				7,968				-
Total other income (expenses)			(149,043	)			515				(198,759	)			(176	)
Loss before income tax provision		$	(846,499	)		$	(679,519	)		$	(683,474	)		$	(466,117	)

 

 

Liquidity and Capital Resources

 

As of June 30, 2023, we had $35,359 in cash as compared to $1,278,026 as of December 31, 2022. We also had $159,278 in accounts receivable as of June 30, 2023 as compared to $980,688 as of December 31, 2022. Our accounts receivable primarily include balances due from services provided and accepted by customers. As of June 30, 2023, our working capital deficit was $6,037,574.

 

In assessing our liquidity, management monitors and analyzes our cash, our ability to raise funds and to generate sufficient revenue in the future, and our operating and capital expenditure commitments. We are looking for other sources, such as raising additional capital by issuing shares of stock, to meet our needs for cash. To that end, management is currently scrutinizing potential cost reductions among the operating expenses and other cost reductions to better align our expenses with revenues which resulted in our discontinuance as of June 30, 2023 of our drone photography services and joint research and development services previously provided within our unmanned air mobility business. Furthermore, we note that we have a history of operating losses, have not yet achieved profitable operations and expect to incur further losses. We have funded our operations primarily from equity and debt financing and shareholder loans. As of June 30, 2023, cash generated from financing activities was not sufficient to fund operations and, in particular, to fund our growth strategy in the short-term or long-term. In connection with our efforts to obtain additional working capital, we sold two Convertible Notes to the Selling Securityholder in the aggregate principal amount of $4,200,000 for an aggregate purchase price of $3,500,000 on April 12, 2023 and May 23, 2023, respectively, along with warrants to purchase 3,921,129 shares of our Common Stock and expect to close on the sale of a third Convertible Note in the principal amount of $1,800,000 for a purchase price of $1,500,000 which includes a warrant to purchase 1,680,484 shares of our Common Stock. See “Liquidity and Capital Resources – Recent Financing Transactions” below. The primary need for liquidity is to fund working capital and general corporate purposes, including personnel costs, capital expenditures and the costs of operating as a public company. The ability to fund operations, to make planned capital expenditures, to execute on the development and manufacture of air mobility platform COSMOS and the XTURISMO Limited Edition Hoverbike and to repay or refinance indebtedness depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or at all, or obtained on commercially reasonable terms acceptable to us.

 

During the quarter ended June 30, 2023, one of the Company’s directors, Kiran Sidhu and a former director, Daisuke Katano, paid some payables on behalf of the Company. Mr. Sidhu paid $102,000 and Mr. Katano paid $210,424. Each of these amounts remain outstanding as of June 30, 2023.

 

GOING CONCERN

 

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the period ended June 30, 2023, the Company has incurred net loss from continuing operations of $18,376,366 and accumulated deficit of $65,695,768. These factors raise substantial doubt on the Company’s ability to continue as a going concern.

 

Although the Company is attempting to commence operations and generate sufficient revenue, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of debt, or a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of debt, or a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

Certain Effects this Offering May Have on the Exercise of the Warrants

 

Sales of a substantial number of shares of our Common Stock in the public market by the Selling Securityholder and/or by our other existing securityholders, or the perception that those sales might occur, could depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our Common Stock. The Total Resale Shares represent a substantial percentage of our total outstanding Common Stock as of the date of this prospectus. The Total Resale Shares being offered for resale in this prospectus represent [37.7]% of our current total outstanding Common Stock, assuming the sale of all of the Convertible Notes and exercises of all Warrants. Consequently, the sale of all securities being offered in this prospectus could result in a significant decline in the public trading price of our Common Stock.

 

In the event of the exercise of any of Warrants for cash, we will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, we would receive an aggregate of approximately $2,355,516, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a “cashless basis,” we will not receive any proceeds upon such exercise. We intend to use the proceeds received from the exercise of the Warrants, if any, for working capital and general corporate purposes, including personnel costs, capital expenditures and the costs of operating as a public company. The amounts that we actually spend for any specific purpose may vary significantly, and will depend on a number of factors including, but not limited to, market conditions. We believe the likelihood that holders of our Warrants will exercise their Warrants, and therefore the amount of cash proceeds we would receive, is dependent upon the trading price of our Common Stock, the last reported sales price for which was $0.298 per share on July 20, 2023. If the trading price of our Common Stock is less than the Warrant Exercise Prices, respectively, we expect that holders of the Warrants will not exercise them. There is no guarantee the Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and we may receive no proceeds from the exercise of Warrants. We will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in our future liquidity projections, but we do not currently expect to rely on the cash exercise of Warrants to fund our operations. We instead currently expect to rely on the sources of funding described below, if available on reasonable terms or at all.

 

Recent Financing Transactions

 

Stock Purchase Agreement. On February 2, 2023, the Company entered into a Subscription Agreement (the “Agreement”) with AERWINS, Inc., and certain investors (collectively referred to herein as the “Purchasers”). Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate 3,196,311 shares of common stock (the “Shares”) of AERWINS, Inc. which was immediately exchanged for 5,000,000 shares of common stock of the Company (the “Company Shares”) upon the consummation of the Business Combination in exchange for an aggregate sum of $5,000,000 (the “Purchase Price”) with the Purchase Price being paid to AERWINS, Inc. prior to the closing of the Business Combination (the “Closing”). Effective immediately prior to the Closing, AERWINS, Inc. issued the Shares to the Purchasers and thereafter immediately upon the Closing, the Shares were exchanged for the Company Shares, and the Company Shares were issued as a registered issuance of securities under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an effective registration filed by the Company on Form S-4 (Registration No. 333-268625) which was declared effective by the Securities and Exchange Commission on January 13, 2023.

 

Standby Equity Purchase Agreement. On January 23, 2023 (the “Effective Date”), Pono entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd., (“YA”). The Company and its successors will be able to sell up to one hundred million dollars in aggregate gross purchase price of the Company’s shares of common stock, par value $0.000001 per share (the “Common Shares”) at the Company’s request 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 (as defined below) 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. “VWAP” means, for any trading day, the daily volume weighted average price of the Common Shares for such trading day on the principal market during regular trading hours as reported by Bloomberg L.P.

 

Pursuant to the SEPA, the Company is required to register all shares which YA may acquire. The Company agreed to file with the Securities and Exchange Commission (the “SEC”) a Registration Statement (as defined in the SEPA) 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. Pursuant to the SEPA, the use of proceeds from the sale of the shares by the Company to YA shall be used by the Company in the manner as will be set forth in the prospectus included in the Registration Statement (and any post-effective amendment thereto) and any prospectus supplement thereto filed pursuant to the SEPA. There are no other restrictions on future financing transactions. The SEPA does not contain any right of first refusal, participation rights, penalties or liquidated damages. The Company has paid YA Global II SPV, LLC, a subsidiary of YA, a structuring fee in the amount of $15,000, and, on the Effective Date, the Company agreed to issue to YA shares with aggregate value equal to one million dollars, as a commitment fee.

 

 

YA has agreed that neither it nor any of its affiliates shall engage in any short-selling or hedging of our common stock during any time prior to the public disclosure of the SEPA. 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 YA shall have made payment of Advances (as defined in the SEPA) pursuant to the SEPA for the Common Shares equal to the Commitment Amount (as defined in the SEPA).

 

Lind Global Financing. On April 12, 2023, we entered into the Purchase Agreement with the Selling Securityholder pursuant to which we agreed to issue to the Selling Securityholder up to three Convertible Notes in the aggregate principal amount of $6,000,000 for an aggregate purchase price of $5,000,000 and up to Warrants to purchase 5,601,613 shares of the Company’s Common Stock (the “Transaction”).

 

The closings of the Transaction (the “Closings and each a “Closing”) will occur in tranches (each a “Tranche”): the Closing of the first Tranche (the “First Closing”) occurred on April 12, 2023 and consisted of the issuance and sale to the Selling Securityholder of a Convertible Note with a purchase price of $2,100,000 and a principal amount of $2,520,000 and the issuance to the Selling Securityholder of a Warrant to acquire 2,352,678 shares of common stock and the Closing of the second Tranche (the “Second Closing) which occurred on May 23, 2023 and consisted of the issuance and sale to the Selling Securityholder of a Convertible Note with a purchase price of $1,400,000 and a principal amount of $1,680,000, and the issuance to the Selling Securityholder of a Warrant to acquire 1,568,542 shares of common stock. So long as no Event of Default has occurred under the Convertible Note sold at the First Closing and the Second Closing, the Closing of the third Tranche (the “Third Closing), will consist of the issuance and sale to the Selling Securityholder of a Convertible Note with a purchase price of $1,500,000 and a principal amount of $1,800,000, and the issuance to the Selling Securityholder of a Warrant to acquire 1,680,484 shares of common stock and will occur upon the effectiveness of the Registration Statement that includes this prospectus. The Third Closing is subject to certain conditions precedent as set forth in the Purchase Agreement. Pursuant to the Purchase Agreement, at each Closing, the Company agreed to pay the Selling Securityholder a commitment fee in an amount equal to 2.5% of the funding amount being funded by the Selling Securityholder at the applicable Closing.

 

The Convertible Note issued in the First Closing has a maturity date of April 12, 2025, the Convertible Note issued in the Second Closing has a maturity date of May 23, 2025 and the Convertible Note to be issued in the Third Closing will have a maturity date of two years from the date of issuance (the “Maturity Date”). Each Convertible Note has a conversion price equal to the lesser of: (i) US$0.90 (“Fixed Price”); or (ii) 90% of the lowest single volume weighted average price during the 20 Trading Days prior to conversion of each Convertible Note (the “Conversion Price”). The Convertible Note will not bear interest other than in the event that if certain payments under the Convertible Note as set forth therein are not timely made, the Convertible Note will bear interest at the rate of 2% per month (prorated for partial months) until paid in full. The Company will have the right to prepay the Convertible Note under the terms set forth therein.

 

The Warrants were issued or will be issued to the Selling Securityholder without payment of any cash consideration. Each Warrant will have an exercise period of 60 months from the date of issuance. The Exercise price of the First Closing Warrant and Second Closing Warrant is $0.8926 per share and $0.7316 per share, respectively, subject to adjustments as set forth in the Warrant. The exercise price for each the Warrant issued at the Third Closing will be an amount equal to 100% of the 10-day VWAP prior to such closing. For further details regarding the Transaction, see “The Lind Global Financing.”

 

Cash Flows for the Six Months Ended June 30, 2023 and 2022

 

The following table sets forth summary of our cash flows for the periods indicated:

 

		For the Six Months ended June 30,
		2023				2022
		Unaudited
Net cash provided by (used in) operating activities		$	(8,186,637	)		$	(8,330,984	)
Net cash provided by (used in) investing activities			(56,943	)			455,206
Net cash provided by (used in) financing activities			5,256,096				2,892,417
Net cash provided by (used in) discontinued operations			23,988				(751,723	)
Net increase (decrease) in cash and cash equivalents			(2,963,496	)			(5,735,084	)
Effect of exchange rate changes			1,720,829				(813,365	)
Cash and cash equivalents, beginning of the year			1,278,026				10,020,459
Cash and cash equivalents, end of the year		$	35,359			$	3,472,010

 

 

Operating Activities

 

Net cash used in operating activities was $8,186,637 for the six months ended June 30, 2023, primarily consisting of the following:

 

● Net loss of $19,222,865 for the six months ended June 30, 2023.

 

● Share-based compensation of $3,658,298.

 

● Impairment loss of $1,565,853.

 

● Decrease in Other receivable of $1,215,560.

 

● Increase in Accounts payable of $2,871,733.

 

Net cash used in operating activities was $8,330,984 for the six months ended June 30, 2022, primarily consisting of the following:

 

● Net loss of $7,227,936 for the six months ended June 30, 2022.

 

● Gain on sale of investment securities of $451,154.

 

● Increase in Other Receivable of $501,927

 

● Decrease in Accounts payable of $731,439.

 

Investing Activities

 

Net cash used in investing activities amounted to $56,943 for the six months ended June 30, 2023, and included purchase of fixed assets of $20,757 and purchase of intangible assets of $36,186.

 

Net cash provided by investing activities amounted to $455,206 for the six months ended June 30, 2022, and included a purchase of fixed assets of $22,407 and Proceeds from disposal of investments of $487,427.

 

Financing Activities

 

Net cash provided by financing activities amounted to $5,256,096, for the six months ended June 30, 2023 and primarily consisted of Proceeds from bond of $2,797,697 and Proceeds from reverse recapitalization of $1,595,831.

 

Net cash provided by financing activities amounted to $2,892,417 for the six months ended June 30, 2022 and primarily consisted of Proceeds from capital contribution of $3,082,473.

 

Contractual obligations

 

Lease commitment

 

The Company’s subsidiary, A. L. I. Technologies entered into 13 leases for its office space, multi-function printers and a vehicle, which were classified as operating leases. A. L. I. Technologies also entered into two leases classified as finance leases.

 

As of June 30, 2023, future minimum lease payments under the non-cancelable lease agreements are as follows:

 

Year ending December 31,		Finance lease				Operating lease
2023 (six months)			64,834				93,987
2024			50,078				227,438
2025			10,283				155,979
2026			10,283				-
Thereafter			12,854				-
Total lease payments			148,332				477,404
Less: imputed interest			(5,780	)			(4,991	)
Total lease liabilities			142,552				472,413
Less: current portion			85,025				228,175
Non-current lease liabilities		$	57,527			$	244,238

 

 

Long Term Debt

 

The Company’s long-term debts included loans borrowed from banks and other financial institutions.

 

As of June 30, 2023, future minimum loan payments are as follows:

 

Year ending December 31,		Loan Payment
2023			183,029
2024			324,315
2025			2,049,191
2026			311,612
Thereafter			177,739
Total			3,045,886
Less interest			43,187
Balance as of June 30, 2023		$	3,002,699

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as of June 30, 2023.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable, advances to suppliers, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application.

 

We believe critical accounting policies as disclosed in this prospectus reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.

 

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:

 

Use of Estimates

 

In preparing the consolidated financial statements in conformity U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long- lived assets, valuation allowance of deferred tax assets, and revenue recognition. Actual results could differ from those estimates.

 

Accounts Receivable

 

Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.

 

 

Lease-Lessee

 

In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain.

 

The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet.

 

The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually.

 

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

 

The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less.

 

Foreign Currency Translation

 

The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.

 

The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes shareholders’ deficit.

 

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:

 

		Six months ended June 30, (unaudited)								Year ended December 31,
		2023				2022				2022
Current JPY: US$1 exchange rate			144.47				135.69				131.81
Average JPY: US$1 exchange rate			134.91				123.10				131.46

 

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”.

 

To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales.

 

When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective at the reasonable assurance level. Management has determined that a material weakness exists due to our late filing of certain reports required to be filed by us with the SEC.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

PART II-OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

 

ITEM 1A. RISK FACTORS

 

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2022.

 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

[None.]

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

ITEM 6. EXHIBITS

 

Exhibit No.		Description
2.1†		Agreement and Plan of Merger, dated September 7, 2022, by and among Pono Capital Corp., Pono Merger Sub, Inc. and AERWINS Technologies Inc. (incorporated by reference to Exhibit 2.1 to Form 8-K filed by Pono Capital Corp. with the SEC on September 7, 2022).
2.2		Amendment No. 1 to the Agreement and Plan of Merger, dated January 19, 2023, by and among the Pono Capital Corp., Mehana Equity LLC, as Purchaser Representative, AERWINS Inc. and Shuhei Komatsu, as Seller Representative (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Pono Capital Corp. with the SEC on January 19, 2023).
3.1		Fourth Amended and Restated Certificate of Incorporation of AERWINS Technologies Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
3.2		Amended and Restated Bylaws of AERWINS Technologies Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
4.1		Warrant Agreement, dated August 10, 2021, by and between Pono Capital Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K, filed by Pono Capital Corp. on August 16, 2021).
4.2		Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1, filed by Pono Capital Corp. on July 8, 2021).
4.3		Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1, filed by Pono Capital Corp. on July 8, 2021).
4.4		Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1, filed by Pono Capital Corp. with the SEC on July 8, 2021).

 

 

10.1+		Form of AERWINS Technologies Inc. 2022 Equity Incentive Plan (incorporated by reference to Annex C to the proxy statement/prospectus which is part of the Registration Statement on Form S-4 filed by Pono Capital Corp. with the SEC on January 4, 2023).
10.2		Form of Indemnity Agreement. (incorporated by reference to Exhibit 10.2 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.3		Form of Registration Rights Agreement by certain AERWINS equity holders (included as Exhibit E to Annex A to the proxy statement/prospectus which is part of the Registration Statement on Form S-4 filed by Pono Capital Corp. with the SEC on January 4, 2023).
10.4		Form of Lockup by certain AERWINS equity holders (included as Exhibit C to Annex A to the proxy statement/prospectus which is part of the Registration Statement on Form S-4 filed by Pono Capital Corp. with the SEC on January 4, 2023).
10.5		Letter Agreement, dated August 10, 2021, by and among Pono Capital Corp., its officers, directors, and Mehana Equity LLC (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K, filed by Pono Capital Corp. on August 16, 2021).
10.6		Purchaser Support Agreement. (incorporated by reference to 10.4 to Form 8-K filed by Pono Capital Corp. with the SEC on September 7, 2022).
10.7		Voting Agreement. (incorporated by reference to Exhibit 10.5 to Form 8-K filed by Pono Capital Corp. with the SEC on September 7, 2022).
10.8+		Employment Agreement between AERWINS Technologies Inc. and Shuhei Komatsu, dated February 3, 2023. (incorporated by reference to Exhibit 10.8 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.9+		Employment Agreement between AERWINS Technologies Inc. and Taiji Ito, dated February 3, 2023. (incorporated by reference to Exhibit 10.9 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.10+		Employment Agreement between AERWINS Technologies Inc. and Kazuo Miura, dated February 3, 2023. (incorporated by reference to Exhibit 10.10 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.11+		Employment Agreement between AERWINS Technologies Inc. and Kensuke Okabe, dated February 3, 2023. (incorporated by reference to Exhibit 10.11 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.12		Form of Non-Competition and Non-Solicitation Agreement (included as Exhibit D to Annex A to the proxy statement/prospectus which is part of the Registration Statement on Form S-4 filed by Pono Capital Corp. with the SEC on January 4, 2023).
10.13+		Option Award Agreement between AERWINS Technologies Inc. and Shuhei Komatsu, dated February 3, 2023. (incorporated by reference to Exhibit 10.13 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.14+		Option Award Agreement between AERWINS Technologies Inc. and Taiji Ito, dated February 3, 2023. (incorporated by reference to Exhibit 10.14 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.15+		Option Award Agreement between AERWINS Technologies Inc. and Kazuo Miura, dated February 3, 2023. (incorporated by reference to Exhibit 10.15 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.16+		Option Award Agreement between AERWINS Technologies Inc. and Kensuke Okabe, dated February 3, 2023. (incorporated by reference to Exhibit 10.16 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).
10.17		Form of Subscription Agreement dated February 2, 2023. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on February 3, 2023).
10.18		Standby Equity Purchase Agreement dated January 23, 2023 with YA II PN, Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by Pono Capital Corp. on January 23, 2023).
10.19		Joint Venture Agreement between A.L.I. Technologies Inc. and Vault Investments LLC dated February 6, 2023. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on February 9, 2023).

 

 

10.20		Loan Agreement between A.L.I. Technologies Inc. and Shuhei Komatsu dated February 27, 2023. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on March 2, 2023).
10.21		Memorandum of Understanding with Outsourcing Inc. dated March 17, 2023. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on March 23, 2023).
10.22		Form of Securities Purchase Agreement dated April 12, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.23		Form of Secured Convertible Promissory Note dated April 12, 2023 (incorporated by reference to Exhibit 10.2 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.24		Form of Warrant dated April 12, 2023 (incorporated by reference to Exhibit 10.3 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.25		Form of Security Agreement dated April 12, 2023 (incorporated by reference to Exhibit 10.4 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.26		Form of Subsidiary Guaranty for AERWINS, Inc. dated April 12, 2023 (incorporated by reference to Exhibit 10.5 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.27		Form of Pledge Agreement for AERWINS, Inc. dated April 12, 2023 (incorporated by reference to Exhibit 10.6 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.28		Form of Pledge Agreement for A.L.I. Technologies Inc. dated April 12, 2023 (incorporated by reference to Exhibit 10.7 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
10.29		Form of Guarantor Security Agreement with AERWINS, Inc. dated April 12, 2023 (incorporated by reference to Exhibit 10.8 to Form 8-K filed by AERWINS Technologies Inc. on April 13, 2023).
31.1*		Rule 13a-14(a) Certification of Principal Executive Officer.
31.2*		Rule 13a-14(a) Certification of Principal Financial Officer.
32.1*		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Principal Executive Officer and Principal Financial Officer.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Extension Definitions Linkbase
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*	Filed or furnished herewith.
+	Management contract or compensatory plan or arrangement.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	AERWINS TECHNOLOGIES INC.
Dated: August 21, 2023	By:	/s/ Taiji Ito
	Name:	Taiji Ito
	Title:	Chief Executive Officer (Principal Executive Officer)
Dated: August 21, 2023	By:	/s/ Kensuke Okabe
	Name:	Kensuke Okabe
	Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

 

 

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Taiji Ito, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2023 of AERWINS Technologies Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 21, 2023

 

/s/ Taiji Ito
Taiji Ito
Chief Executive Officer (principal executive officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE

 

SARBANES-OXLEY ACT OF 2002

 

I, Kensuke Okabe, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2023 of AERWINS Technologies Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 21, 2023

 

/s/ Kensuke Okabe
Kensuke Okabe
Chief Financial Officer (principal financial officer and principal accounting officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO RULE 13a-14(b) OR

RULE 15d-14(b) and 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Aerwins Technologies Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Taiji Ito, Chief Executive Officer and Kensuke Okabe, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 21, 2023	By:	/s/ Taiji Ito
		Taiji Ito
		Chief Executive Officer (Principal Executive Officer)
Date: August 21, 2023		/s/ Kensuke Okabe
		Kensuke Okabe
		Chief Financial Officer (Principal Financial Officer)

 

The foregoing certification is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is not to be incorporated by reference into any filing of Aerwins Technologies Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 21, 2023
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-40734
Entity Registrant Name	AERWINS TECHNOLOGIES INC.
Entity Central Index Key	0001855631
Entity Tax Identification Number	86-2049355
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Shiba Koen Annex 6 f
Entity Address, Address Line Two	1-8, Shiba Koen 3-chome
Entity Address, Address Line Three	Minato-ku
Entity Address, City or Town	Tokyo
Entity Address, Country	JP
Entity Address, Postal Zip Code	105-0011
City Area Code	813
Local Phone Number	6409-6761
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		62,688,215
Common Stock, $0.000001 par value per share [Member]
Title of 12(b) Security	Common Stock, $0.000001 par value per share
Trading Symbol	AWIN
Security Exchange Name	NASDAQ
Redeemable Warrants [Member]
Title of 12(b) Security	Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
Trading Symbol	AWINW
Security Exchange Name	NASDAQ

v3.23.2

Consolidated Balance Sheet - USD ($)		Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents		$ 35,359	$ 1,278,026
Notes receivable			3,488
Accounts receivable, net		159,278	980,688
Others receivable		802,438	2,089,921
Advances and prepayments to suppliers		2,921,394	611,959
Inventory		1,538,563	2,687,092
Escrow deposit			575,000
Total current assets		5,457,032	8,226,174
Long-term Assets
Property and equipment, net			1,390,547
Intangible assets, net			150,576
Investment-equity method		893,922	997,470
Operating lease right-of-use assets			693,474
Long-term loans receivable		98,294	107,735
Other non-current assets		184,232	213,370
Total long-term assets		1,176,448	3,553,172
Total Assets		6,633,480	11,779,346
Current Liabilities:
Notes payable		1,480,000
Others payable		438,883	230,060
Accrued expenses		863,561	402,036
Contract liabilities		737,980	1,104,582
Current portion of long-term loans		166,332	54,624
Finance leases liabilities-current		85,025	102,114
Operating leases liabilities-current		228,175	293,710
Other current liabilities			380,344
Total Current Liabilities		11,532,773	5,901,145
Longer-term liabilities
Long-term loans		2,836,367	3,259,237
Warrant liabilities		1,255,795
Derivative liability		1,456,641
Long-term convertible promissory note, net		456,677
Finance leases liabilities-non-current		57,527	87,056
Operating leases liabilities-non-current		244,238	397,720
Other long-term liabilities		165,509	225,284
Total long-term liabilities		6,472,754	3,969,297
Total Liabilities		18,005,527	9,870,442
Stockholders’ Equity (Deficit):
Common stock, par value $0.000001, 400,000,000 shares authorized; 61,409,146 and 46,929,065 shares issued and outstanding, respectively	[1]	61	47
Preferred stock, par value $0.000001, 20,000,000 shares authorized; No shares issued and outstanding
Additional Paid-in capital		53,523,392	49,299,343
Retained earnings (Accumulated deficiency)		(65,695,768)	(46,472,904)
Treasury stock		(575,000)
Accumulated other comprehensive income (loss)		1,375,268	(917,582)
Stockholders’ Equity (Deficit)		(11,372,047)	1,908,904
Total Liabilities and Stockholders’ Equity (Deficit)		6,633,480	11,779,346
Nonrelated Party [Member]
Current Liabilities:
Short-term loans payable		207,656
Accounts payable		6,320,552	3,333,675
Related Party [Member]
Current Liabilities:
Short-term loans payable		692,185
Accounts payable		$ 312,424
[1] Retrospectively restated for effect of the business combination on February 6, 2023.

v3.23.2

Consolidated Balance Sheet (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.000001	$ 0.000001
Common Stock, Shares Authorized	400,000,000	400,000,000
Common Stock, Shares, Outstanding	61,409,146	46,929,065
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

v3.23.2

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues		$ 25,703	$ 321,171	$ 457,753	$ 1,934,118
Cost of revenues		265,680	425,962	600,280	2,047,280
Gross profit (loss)		(239,977)	(104,791)	(142,527)	(113,162)
Operating expenses:
Selling expenses		26,492	56,624	63,525	59,526
General and administrative expenses		4,215,208	1,462,361	10,108,287	2,722,078
Research and development expenses		4,751,800	2,208,964	6,795,396	4,484,102
Total operating expenses		8,993,500	3,727,949	16,967,208	7,265,706
Loss from operations		(9,233,477)	(3,832,740)	(17,109,735)	(7,378,868)
Other income (expenses):
Interest income (expenses), net		(478,082)	(6,375)	(484,950)	(13,841)
Gain(Loss) on foreign currency transaction		585	41,591	(10,420)	88,539
Gain(Loss) on disposal of fixed assets		18,513		(1,191)
Impairment on fixed assets		(1,565,853)		(1,565,853)
Equity in earnings of investee		(17,816)	(10,037)	(11,640)	10,736
Gain on sale of investment securities			451,154		451,154
Gain on fair value adjustments of warrant		1,113,421		1,199,672
Gain on fair value adjustment of derivative		595,673		595,673
Derivative expense		(1,088,477)		(1,088,477)
Other income (expenses), net		(82,333)	(13,409)	100,555	293,863
Total other income (expenses)		(1,504,369)	462,924	(1,266,631)	830,451
Loss before income tax provision		(10,737,846)	(3,369,816)	(18,376,366)	(6,548,417)
Income tax benefit (expense)
Net loss from continuing operations		(10,737,846)	(3,369,816)	(18,376,366)	(6,548,417)
Discontinued operations (Note 23)
Loss from discontinued operations		(683,474)	(466,117)	(846,499)	(679,519)
Loss on discontinued operations		(683,474)	(466,117)	(846,499)	(679,519)
Net loss		(11,421,320)	(3,835,933)	(19,222,865)	(7,227,936)
Other comprehensive income:
Foreign currency translation adjustment		2,347,977	(1,485,139)	2,292,850	(1,680,395)
Total comprehensive loss		$ (9,073,343)	$ (5,321,072)	$ (16,930,015)	$ (8,908,331)
Net loss per common share from continuing operations
Basic		$ (0.19)	$ (0.08)	$ (0.33)	$ (0.15)
Diluted		(0.19)	(0.08)	(0.33)	(0.15)
Net loss per common share from discontinued operations
Basic		(0.01)	(0.01)	(0.02)	(0.02)
Diluted		$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Weighted average common shares outstanding*
Basic	[1]	56,871,014	43,509,237	54,957,819	42,712,850
Effect of dilutive securities
Convertible debt	[1]	3,466,090		1,742,620
Conversion of option warrants	[1]	13,102,497	3,612,510	11,197,594	4,291,180
Diluted	[1]	73,439,601	47,121,747	67,898,033	47,004,030
[1] Retrospectively restated for effect of the business combination on February 6, 2023.

v3.23.2

Consolidated Statements of Changes in Shareholders' Equity (Deficiency) - USD ($)	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	AOCI Attributable to Parent [Member]	Total
Begining balances, value at Dec. 31, 2021	$ 41		$ 32,288,699	$ (31,993,085)		$ (238,057)	$ 57,598
Begining balance, shares at Dec. 31, 2021	41,206,803
Corporate bond conversion	$ 2		8,399,182				8,399,184
Corporate bond conversion, shares	2,034,611
Net income (loss)				(3,392,003)			(3,392,003)
Other comprehensive income						(195,256)	(195,256)
Ending balances, value at Mar. 31, 2022	$ 43		40,687,881	(35,385,088)		(433,313)	4,869,523
Ending balance, shares at Mar. 31, 2022	43,241,414
Begining balances, value at Dec. 31, 2021	$ 41		32,288,699	(31,993,085)		(238,057)	57,598
Begining balance, shares at Dec. 31, 2021	41,206,803
Net income (loss)							(7,227,936)
Other comprehensive income							(1,680,395)
Ending balances, value at Jun. 30, 2022	$ 45		43,770,352	(39,221,021)		(1,918,452)	2,630,924
Ending balance, shares at Jun. 30, 2022	45,302,265
Begining balances, value at Mar. 31, 2022	$ 43		40,687,881	(35,385,088)		(433,313)	4,869,523
Begining balance, shares at Mar. 31, 2022	43,241,414
Net income (loss)				(3,835,933)			(3,835,933)
Other comprehensive income						(1,485,139)	(1,485,139)
Issuance of common stock	$ 2		2,715,194				2,715,196
Issuance of common stock, shares	1,709,541
Issuance of common stock upon exercise of stock options	$ 0		367,277				367,277
Issuance of common stock upon exercise of stock options, shares	351,310
Ending balances, value at Jun. 30, 2022	$ 45		43,770,352	(39,221,021)		(1,918,452)	2,630,924
Ending balance, shares at Jun. 30, 2022	45,302,265
Begining balances, value at Dec. 31, 2022	$ 47		49,299,343	(46,472,904)		(917,582)	1,908,904
Begining balance, shares at Dec. 31, 2022	46,929,065
Net income (loss)				(7,801,544)			(7,801,544)
Other comprehensive income						(55,127)	(55,127)
Issuance of common stock prior to the closing of Business Combination	$ 5		(1,156,124)				(1,156,119)
Issuance of common stock prior to the closing of Business Combination, shares	5,000,000
Reverse recapitalization	$ 4		(878,120)				(878,116)
Reverse recapitalization, shares	3,740,187
Issuance of common stock warrants for services	$ 0		4,338,298				4,338,298
Issuance of common stock warrants for services, shares	413,103
Acquisition of treasury stock					(575,000)		(575,000)
Acquisition of treasury stock, shares	57,500
Ending balances, value at Mar. 31, 2023	$ 56		51,603,397	(54,274,448)	(575,000)	(972,709)	(4,218,704)
Ending balance, shares at Mar. 31, 2023	56,139,855
Begining balances, value at Dec. 31, 2022	$ 47		49,299,343	(46,472,904)		(917,582)	1,908,904
Begining balance, shares at Dec. 31, 2022	46,929,065
Net income (loss)							(19,222,865)
Other comprehensive income							2,292,850
Ending balances, value at Jun. 30, 2023	$ 61		53,523,392	(65,695,768)	(575,000)	1,375,268	(11,372,047)
Ending balance, shares at Jun. 30, 2023	61,409,146
Begining balances, value at Mar. 31, 2023	$ 56		51,603,397	(54,274,448)	(575,000)	(972,709)	(4,218,704)
Begining balance, shares at Mar. 31, 2023	56,139,855
Net income (loss)				(11,421,320)			(11,421,320)
Other comprehensive income						2,347,977	2,347,977
Issuance of common stock for services	$ 5		1,919,995				1,920,000
Issuance of common stock warrants for services, shares	5,269,291
Ending balances, value at Jun. 30, 2023	$ 61		$ 53,523,392	$ (65,695,768)	$ (575,000)	$ 1,375,268	$ (11,372,047)
Ending balance, shares at Jun. 30, 2023	61,409,146

v3.23.2

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (19,222,865)	$ (7,227,936)
Net income (loss) from discontinued operations	(846,499)	(679,519)
Net income (loss) from continuing operations	(18,376,366)	(6,548,417)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation expenses	187,054	141,406
Amortization expenses	23,541	27,060
Interest expense	435,072
Non-cash lease expense	205,103	169,666
Share-based compensation	3,658,298
Change in fair value of warrant liabilities	(1,199,672)
Change in fair value of derivative liability	(595,673)
Revert of bad debt expenses	7,256	(691)
Impairment loss	1,565,853
Loss on disposal of fixed assets	1,191	176
Gain on sale of investment securities		(451,154)
Equity in earnings of investee	11,640	(10,736)
Derivative Expense	1,088,477
Decrease (Increase) in operating assets:
Accounts receivable	(25,369)	(198,989)
Others Receivable	1,215,560	(501,927)
Prepaid expenses	(36,368)	(4,916)
Advances and prepayments to suppliers	131,687	(87,865)
Inventory	769,273	(29,642)
Other non current assets	11,180	8,810
Increase (Decrease) in operating liabilities:
Accounts payable	2,871,733	(731,438)
Notes payable	4,825
Others payable	291,147	(75,836)
Accrued expenses	428,615	85,351
Deferred revenue	(288,338)	269,441
Operating lease liabilities-current	(9,652)	(34,097)
Warrant liabilities		(68,023)
Other current liabilities	(371,592)
Operating lease liabilities-Non-current	(148,243)	(134,547)
Other non-current liabilities	(42,869)	(154,616)
Net cash provided (used) by continuing operations	(8,186,637)	(8,330,984)
Net cash provided (used) by discontinued operations	29,233	(706,552)
Net cash provided (used) by operating activities	(8,157,404)	(9,037,536)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets	(20,757)	(22,407)
Purchase of intangible assets	(36,186)	(26,062)
Proceeds from disposal of investments		487,427
Repayment of loans receivable		16,248
Net cash provided (used) by continuing operations	(56,943)	455,206
Net cash provided (used) by discontinued operations	(5,245)	(45,171)
Net cash (used) by investing activities	(62,188)	410,035
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from capital contribution		3,082,473
Proceeds from bond	2,797,697
Proceeds from loans	3,516,441
Repayments to loans	(2,612,192)	(142,816)
Payments for finance leases	(41,681)	(47,240)
Proceeds from reverse recapitalization with AERWINS Inc., net	1,595,831
Net cash provided (used) by continuing operations	5,256,096	2,892,417
Net cash provided (used) by discontinued operations
Net cash provided (used) by financing activities	5,256,096	2,892,417
Net increase (decrease) in cash and cash equivalents	(2,963,496)	(5,735,084)
Effects of exchange rates change on cash	1,720,829	(813,365)
Cash and cash equivalents at beginning of period	1,278,026	10,020,459
Cash and cash equivalents at beginning of period held by discontinued operation
Cash and cash equivalents at ending of period held by discontinued operation
Cash and cash equivalents at end of period	35,359	3,472,010
Cash paid (received) during year for:
Interest	11,708	14,234
Income taxes

v3.23.2

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS   AERWINS Technologies Inc., a Delaware corporation (the “Company,” “we,” “us,” or “AERWINS”) together with its wholly owned subsidiary AERWINS, Inc., a Delaware corporation and its wholly owned subsidiary, A.L.I. Technologies Inc., a Japanese corporation (“ALI”) is the developer and manufacturer of air mobility platform, COSMOS (Centralized Operating System for Managing Open Sky), and the XTURISMO Limited Edition Hoverbike. All refences in this report on Form 10-Q to the “Company,” “we,” “us,” or “AERWINS” include both AERWINS and ALI.   Pono Capital Corp Merger   On February 3, 2023, we consummated a merger (the “Merger”) with Pono Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of the Company, then called Pono Capital Corp., a Delaware corporation (“Pono”) with and into AERWINS, Inc. (formerly named AERWINS Technologies Inc.), a Delaware corporation pursuant to an agreement and plan of merger, dated as of September 7, 2022 (as amended on January 19, 2023, the “Merger Agreement”), by and among Pono, Merger Sub, AERWINS, Mehana Equity LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of Pono, and Shuhei Komatsu in his capacity as the representative of the stockholders of AERWINS, Inc. (“Seller Representative”). The Merger and other transactions contemplated thereby (collectively, the “Business Combination”) closed on February 3, 2023 when pursuant to the Merger Agreement, Merger Sub merged with and into AERWINS, Inc. with AERWINS, Inc. surviving the Merger as a wholly-owned subsidiary of Pono, and Pono changed its name to “AERWINS Technologies Inc.” and the business of the Company became the business of AERWINS, Inc., and this business section primarily includes information regarding the AERWINS’, Inc. business.   The Business Combination was accounted for as a reverse recapitalization under the accounting principles generally accepted in the United States of America (“U.S. GAAP”). AERWINS was determined to be the accounting acquirer and Pono was treated as the acquired company for financial reporting purposes. Accordingly, the financial statements of the combined company represent a continuation of the financial statements of AERWINS.   On February 2, 2023, the Company entered into a Subscription Agreement (the “Agreement”) with AERWINS, Inc., and certain investors (collectively referred to herein as the “Purchasers”). Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate 3,196,311 shares of common stock (the “Shares”) of AERWINS, Inc. which was immediately exchanged for 5,000,000 Public Shares upon the consummation of the Business Combination in exchange for an aggregate sum of $5,000,000 (the “Purchase Price”) with the Purchase Price being paid to AERWINS, Inc. prior to the closing of the Business Combination (the “Closing”). Effective immediately prior to the Closing, AERWINS, Inc. issued the Shares to the Purchasers and thereafter immediately upon the Closing, the Shares were exchanged for the Public Shares, and the Public Shares were issued as a registered issuance of securities under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an effective registration filed by the Company on Form S-4 which was declared effective by the Securities and Exchange Commission on January 13, 2023.   On February 3, the Company received from the Business Combination with Pono net cash of $1,595,831. The Company also assumed $25,750 in prepaid expenses, $1,432,603 in other payable, $1,580,000 in notes payable ($1,480,000 as of June 30, 2023), $643,213 in warrant liabilities. The total funds from the Business Combination $1,595,831. This amount was available to repay certain indebtedness, transaction costs and for general corporate purposes, which primarily consisted of investment banking, legal, accounting, and other professional fees as follows:   SCHEDULE OF BUSINESS COMBINATION           Cash—Pono trust and working capital cash   $ 1,802,594   Cash—Subscription agreement made immediately before the closing     5,000,000   Less: transaction costs and advisory fees     5,206,763   Total funds from the Business Combination   $ 1,595,831     Regarding the notes payable of $1,480,000 described above, the Company has not paid by the due date. Accordingly, the Company is regarded as in default and recognizes interest expenses of $29,392 as accrued expenses.

v3.23.2

GOING CONCERN	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 2 - GOING CONCERN   The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the period ended June 30, 2023, the Company has incurred net loss from continuing operations of $18,376,366 and accumulated deficit of $65,695,768. These factors raise substantial doubt on the Company’s ability to continue as a going concern.   Although the Company is attempting to commence operations and generate sufficient revenue, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of debt, or a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of debt, or a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation and Principles of Consolidation   The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.   Unaudited Interim Consolidated Financial Information   The accompanying interim consolidated balance sheet as of June 30, 2023, the interim consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in shareholders’ equity (deficiency), and cash flows for the six months ended June 30, 2023 and 2022 and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2023 and the Company’s consolidated results of operations and cash flows for the six months ended June 30, 2023 and 2022. The consolidated results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.   Use of Estimates   In preparing the consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long-lived assets, and valuation allowance of deferred tax assets. Actual results could differ from those estimates.     Cash and Cash Equivalents   Cash and cash equivalents include cash on hand and deposits in banks that are unrestricted as to withdrawal or use, and which have original maturities of three months or less.   Accounts Receivable, net   Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.   Inventories   Inventories consist principally of raw materials used for rendering computing sharing services and for manufacturing hoverbikes. Work in progress represents the costs incurred to date on unfinished products or services. The costs recognized as work in progress include direct materials, direct labor, and overhead costs that are directly attributable to the production of the unfinished product or service. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method for merchandise. Net realizable value is calculated at estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Loss from inventories written down to net realizable value should be recognized whenever the utility of goods is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes. When inventories have been written down below cost, the reduced amount is to be considered the cost for subsequent accounting purposes.   Fixed assets   Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow:   SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS     Depreciation Method   Useful Life Building and building accessories   Straight-line method   8-38 years Office equipment and furniture   Straight-line method   2-10 years Software   Straight-line method   5 years Design right   Straight-line method   7 years Patent right   Straight-line method   8 years   Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss).     Lease-Lessee   In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain.   The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet.   The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually.   As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.   The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less.   Impairment of Long-Lived Assets   Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.   Equity Method   We apply the equity method to an investment in unconsolidated entities over which we have the ability to exercise significant influence. We initially record our investments based on the acquisition cost. Under the equity method, the carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the investment. SCHEDULE OF SUBSIDIARIES          Percentage of Effective Ownership   Name of Subsidiary   Place of Organization   June 30, 2023     December 31, 2022   ASC TECH Agent   Japan     48.81 %     48.81 %   Warrant Liabilities   We account for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 — Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815), under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The Placement Warrants, Public Warrants, and Debt Warrants for periods where no observable traded price was available are valued using a Black Scholes model.   Convertible Promissory Notes and Derivative Instruments   The Company accounts for the fair value of the conversion feature in accordance with the guidance contained in ASC 815, which requires the Company to bifurcate and separately account for the conversion feature as an embedded derivative contained in the Company’s convertible promissory note. Accordingly, we account for the conversion option as an embedded derivative contained in the Company’s promissory note at fair value. The derivative liability is required to be remeasured at each reporting date and the change in fair value is recognized in our consolidated statements of operations.     Foreign Currency Translation   The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.   The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes in shareholders’ deficit.   Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES      2023     2022     2022       Six months ended June 30, (unaudited)     Year ended December 31,       2023     2022     2022   Current JPY: US$1 exchange rate     144.47       135.69       131.81   Average JPY: US$1 exchange rate     134.91       123.10       131.46   Foreign exchange rate     134.91       123.10       131.46     Consolidated Statements of Cash Flows   In accordance with FASB ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.   Revenue Recognition   The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”.   To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales.   When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent.     Cost of Revenues   Cost of revenues primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenues also includes royalty/license payments to vendors, and hosting and infrastructure costs related to the delivery of the Company’s products and services.   Advertising Expenses   Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses advertising costs as incurred, in accordance with the ASC 720-35, “Advertising Costs”. The advertising expenses for six months ended June 30, 2023 and 2022 (unaudited) were $63,525 and $59,526, respectively.   Concentration of Credit Risk   Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.   For the six months ended June 30, 2023, Customer A accounts for 25.9% of the Company’s total revenues.   For the six months ended June 30, 2022, Customer B, Customer C and Customer D accounts for respectively 17.9%, 14.8% and 13.5% of the Company’s total revenues.   As of June 30, 2023, Customer E accounts for 81.6% of the Company’s total accounts receivable. As of December 31, 2022, Customer E, Customer F and Customer G accounts for respectively 15.1%, 16.2% and 12.8% of the Company’s total accounts receivable   For the six months ended June 30, 2023, Vendor A and Vendor B accounts for respectively 39.5% and 16.4% of the Company’s total raw material purchases.   For the six months ended June 30, 2022, Vendor A, Vendor C and Vendor D accounts for respectively 30.1%, 19.3% and 11.2% of the Company’s total raw material purchases.   As of December 31, 2022, Vendor A accounts for 31.2% of the Company’s total accounts payable. As of June 30, 2023, Vendor A accounts for 20.1% of the Company’s total accounts payable.   Comprehensive Income or Loss   ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying consolidated statements of changes in shareholders’ deficit, consists of changes in unrealized gains and losses on foreign currency translation.   Earnings (Loss) Per Share   The Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common shares were exercised or equity awards vest resulting in the issuance of common shares that could share in the earnings (loss) of the Company.     Related Parties and Transactions   The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.   Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence.   Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.   Income Taxes   Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.   The Company follows ASC 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.   Under the provisions of ASC 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations.   Fair Value Measurements   The Company performs fair value measurements in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:     ● Level 1: quoted prices in active markets for identical assets or liabilities;   ● Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or   ● Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

v3.23.2

ACCOUNTS RECEIVABLE, NET	6 Months Ended
	Jun. 30, 2023
Credit Loss [Abstract]
ACCOUNTS RECEIVABLE, NET	NOTE 4 — ACCOUNTS RECEIVABLE, NET   Accounts receivable, net consists of the following:   SCHEDULE OF ACCOUNTS RECEIVABLE, NET                   June 30,           2023 (unaudited)     December 31, 2022   Accounts receivable   $ 166,054     $ 980,688   Less: allowance for doubtful accounts     (6,776 )     -   Accounts receivable, net   $ 159,278     $ 980,688     Allowance for doubtful accounts movement is as follows:   SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS                   June 30,           2023 (unaudited)     December 31, 2022   Beginning balance   $ -     $ (739 ) Change during the year     (7,256 )     739   Foreign currency translation adjustment     480       -   Ending balance   $ (6,776 )   $ -     Other receivable movement is as follows:   SCHEDULE OF OTHER RECEIVABLE                   June 30,             2023 (unaudited)     December 31, 2022   Beginning balance   $ 2,089,921     $ 1,034,690   Change during the year     (1,182,560 )     1,189,020   Foreign currency translation adjustment     (104,923 )     (133,789 ) Ending balance   $ 802,438     $ 2,089,921     The change during the year in 2022 is mainly from increase of consumption tax receivable that has been refunded in 2023.

v3.23.2

INVENTORY	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
INVENTORY	NOTE 5 — INVENTORY   Inventory consists of the following:   SCHEDULE OF INVENTORY                   June 30,             2023 (unaudited)     December 31, 2022   Raw materials   $ 209,330     $ 1,533,784   Work in progress     1,288,027       1,135,852   Product     31,665       -   Stored item     9,541       17,456   Total   $ 1,538,563     $ 2,687,092

v3.23.2

SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2023
Segment Reporting [Abstract]
SEGMENT INFORMATION	NOTE 6 — SEGMENT INFORMATION   Management determined the Company’s operations constituted one reportable segment in accordance with ASC 280—Air mobility segment. Revenue by each service line can be found in Note 7 below.

v3.23.2

REVENUE RECOGNITION	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
REVENUE RECOGNITION	NOTE 7 — REVENUE RECOGNITION   The Company currently generates its revenue from the following main sources:   Revenue from Computing Power Sharing services with Equipment Installation   The Company provides customers with computing power sharing services with equipment installation, which includes a one-time equipment installation and a certain period of time technology service. The Company recognizes revenue from one-time equipment installation at the point in time when the installation is completed and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly.   Revenue from Computing Power Sharing services without Equipment Installation   The Company also provides customers with computing power sharing services without equipment installation, which includes a one-time platform set up without equipment installation, and a certain period of time technology service. The Company recognizes revenue from one-time platform set up at the point in time when the platform is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly.   Revenue from Air Mobility Drone Solution   The Company provides customers with air mobility drone solution, which includes UAS (Unmanned Aircraft Systems) main equipment, laser scanner, software package, camera system, etc. The solution includes a one-time system set up and a certain period of time technology service. The Company recognizes revenue from one-time system set up at the point in time when the system is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Air Mobility Drone Solution is included in income from discontinued operations.   Revenue from Project Management   The Company provides customers with project management, which includes project planning and implementation, and providing needed technology human resources, such as construction engineers and software engineers for various projects. The Company recognizes revenue from project management over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Project Management is included in income from discontinued operations.   Revenue from Consulting Service   The Company provided a customer with consulting service related to IPO. The company recognizes revenue from the service over time as the service is rendered.   Disaggregation of Revenue   The Company disaggregates its revenues from contracts by service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months and three months ended June 30, 2023 and 2022 is as following (unaudited): SCHEDULE OF DISAGGREGATION OF REVENUE     2023     2022       Six months ended       June 30, (unaudited)       2023     2022   Revenue from Computing Power Sharing services     101,453       836,059   Revenue from Project Management for Computing Share     6,300       1,098,059   Consulting Service     350,000       -   Total Revenue   $ 457,753     $ 1,934,118         2023     2022       Three months ended       June 30, (unaudited)       2023     2022   Revenue from Computing Power Sharing services     25,703       274,823   Revenue from Project Management for Computing Share     -       46,348   Total Revenue   $ 25,703     $ 321,171       For the six months ended June 30 in 2023 and 2022 (unaudited), almost all of the revenue generated are attributed to the Company’s operation in Japan.   Revenue from Air Mobility Drone Solution and Project Management are included in income from discontinued operations.   Contract Liability   As of June 30, 2023 (unaudited) and December 31, 2022, the Company recognizes contract liability of $737,980 and $1,104,582 respectively. Contract liability primarily represents the Company’s remaining performance obligations under its service agreement at the end of the period, for which consideration has been received and revenue had not been recognized.

v3.23.2

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8 — RELATED PARTY TRANSACTIONS   Guarantee provided by a director of A.L.I.   For the six months ended June 30 in 2023, the Company received a debt guarantee from the Representative Director of A.L.I. Daisuke Katano for a particular building lease agreement. The transaction amount is $12,452 which is calculated by the total rental fees paid during the period from January 1, 2023 to June 30, 2023 for the contracts for which guarantees were provided as of June 30, 2023. No warranty fees are paid.   Loan from a former director of Aerwins   On February 27, 2023, the Company’s wholly owned subsidiary in Japan, A.L.I. Technologies, entered into a loan agreement with Shuhei Komatsu, the Company’s Chief Executive Officer. Pursuant to the Agreement, Mr. Komatsu agreed to lend A.L.I. 200,000,000 yen (approximately $1,384,370 US Dollars based on a conversion rate of 0.006921 US Dollar for each $1 yen as of June 30, 2023). The original maturity date of the Loan under the Agreement was April 15, 2023, and was extended to June 30, 2023 (the “Maturity Date”). The interest rate under the Agreement is 2.475% per annum (calculated on a pro rata basis for 365 days a year), and the interest period is from February 27, 2023 until the Maturity Date. The Company recognizes $8,775 of accrued expenses. The Company has not paid 100,000,000 yen (approximately US$692,185) as of June 30, 2023. Accordingly, the Company is regarded in default and negotiates the terms with the lender.   Payable to Directors of Aerwins   In the second quarter of 2023, two directors of Aerwins, Kiran Sidhu and Daisuke Katano paid some payable on behalf of the Company. Mr. Sidhu paid $102,000 in the second quarter of 2023 and the same amount is outstanding as of June 30, 2023. Mr. Katano paid $210,424 in the second quarter of 2023 and the same amount is outstanding as of June 30, 2023. The Company will pay to them at an appropriate timing in light of its financial situation.

v3.23.2

PROPERTY AND EQUIPMENT, NET	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	NOTE 9 — PROPERTY AND EQUIPMENT, NET   Property and equipment consist of the following:   SCHEDULE OF PROPERTY AND EQUIPMENT                   June 30,           2023 (unaudited)     December 31, 2022   Building   $ 213,375     $ 233,869   Accessory equipment     182,629       211,879   Structures     43,400       47,568   Vehicles     4,117       4,512   Tools, furniture and fixtures     1,818,832       1,751,969   Lease assets     170,496       186,871   Property and equipment, gross                 Accumulated depreciation     (721,480 )     (534,426 ) Impairment     (1,711,369 )     (511,695 ) Property and equipment, net   $ -     $ 1,390,547     Depreciation expense for six months ended June 30, 2023 and 2022, were respectively $187,054 and $141,406.

v3.23.2

INTANGIBLE ASSETS, NET	6 Months Ended
	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS, NET	NOTE 10 — INTANGIBLE ASSETS, NET   The components of intangible assets as of June 30, 2023 and December 31, 2022 are as follows:   SCHEDULE OF INTANGIBLE ASSETS                   June 30,           2023 (unaudited)     December 31, 2022   Software   $ 662,075     $ 706,320   Design right     101,578       111,334   Patent right     22,842       -   Intangible assets, gross                 Accumulated amortization     (217,828 )     (191,813 ) Impairment     (568,667 )     (475,265 ) Intangible assets, net   $ -     $ 150,576     Amortization expense for six months ended June 30, 2023 and 2022, were respectively $23,541 and $27,060.

v3.23.2

IMPAIRMENT LOSS	6 Months Ended
	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
IMPAIRMENT LOSS	NOTE 11 — IMPAIRMENT LOSS   For the six months ended June 30, 2023, the Company recognized impairment losses for the following assets:  SCHEDULE OF IMPAIRMENT LOSS         Type   Impairment loss   Building   $ 199,601   Accessory equipment     146,334   Structures     37,975   Tools, furniture and fixtures     562,650   Operating Lease right-of-use assets     472,414   Software     71,095   Design right     54,370   Patent right     21,414   Total   $ 1,565,853     Because the Company continues to recognize operating losses, and the future cash flows from these assets for its business in Japan are uncertain, so it has decided to write down fixed assets in Japan, the Company recognizes impairment loss for all fixed assets in Japan. The Company recognized the reduction as impairment in the line item of impairment on fixed assets. The Company reduces the book value to zero and recognizes the amount as impairment because the future cash flows from these assets were uncertain at the end of this quarter.

v3.23.2

LEASES	6 Months Ended
	Jun. 30, 2023
Leases [Abstract]
LEASES	NOTE 12 — LEASES   The components of lease costs are as follows: SCHEDULE OF LEASE COSTS      2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Short-term lease costs   $ 39,233     $ 536   Finance lease costs     47,411       51,127   Operating lease costs     177,160       107,922   Total lease costs   $ 263,804     $ 159,585       As of June 30, 2023, the future maturity of lease liabilities is as follows:  SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES Year ending December 31,     Finance lease       Operating lease                     2023 (six months)   $ 64,834     $ 93,987   2024     50,078       227,438   2025     10,283       155,979   2026     10,283       -   Thereafter     12,854       -   Total lease payments     148,332       477,404   Less: imputed interest     (5,780 )     (4,991 ) Total lease liabilities     142,552       472,413   Less: current portion     85,025       228,175                     Non-current lease liabilities   $ 57,527     $ 244,238     The following table presents supplemental information related to the Company’s leases:  SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE     2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Cash paid for amounts included in the measurement of lease liabilities:                 Operating cash flows from operating leases     157,895       168,644   Financing cash flows from finance lease     41,681       47,240   Weighted average remaining lease term (years)                 Finance leases     1.1       1.8   Operating leases     1.1       1.4   Weighted-average discount rate: (per annum)                 Finance leases     2.66 %     2.38 % Operating leases     0.94       0.94     Pursuant to the operating lease agreements, the Company made security deposits to the lessors. The amount of security deposits as of June 30, 2023 and as of December 31, 2022 is $152,598 and 174,111 respectively.

v3.23.2

LONG-TERM DEBTS	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
LONG-TERM DEBTS	NOTE 13 — LONG-TERM DEBTS   The Company’s long-term loans borrowed from banks and other financial institutions, which consist of the following:  SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Name of Lender   Original Amount Borrowed (JPY)     Loan Duration   Annual Interest Rate     Balance as of June 30, 2023 (unaudited)     Balance as of December 31, 2022   Mizuho Bank, Ltd.     40,000,000     1/22/2021— 1/22/2028     0.00 %     276,874       303,467   Mizuho Bank, Ltd.     60,000,000     1/22/2021— 1/22/2028     0.00 %     415,311       455,201   Mizuho Bank, Ltd.     50,000,000     1/22/2021— 1/22/2028     1.70 %     346,093       379,334   Japan Finance Corporation     50,000,000     12/29/2020— 12/31/2027     1.11 %     233,959       279,190   Japan Finance Corporation     250,000,000     12/29/2020— 1/31/2026     0.50 %     1,730,462       1,896,669   Aggregate outstanding principal balances                         3,002,699       3,313,861   Less: current portion                         (166,332 )     (54,624 ) Non-current portion                       $ 2,836,367     $ 3,259,237     Interest expense for long-term debts was $11,708 and $14,234 for the six months ended June 30, 2023 and 2022 (unaudited), respectively.

v3.23.2

CONVERTIBLE PROMISSORY NOTES, NET	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
CONVERTIBLE PROMISSORY NOTES, NET	NOTE 14 – CONVERTIBLE PROMISSORY NOTES, NET   On April 12, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with Lind Global Fund II LP (the “Investor”). Pursuant to the SPA, the Company agreed to issue to the Investor up to three secured convertible promissory notes in the aggregate principal amount of $6,000,000 for a purchase price of an aggregate of $5,000,000 and up to 5,601,613 warrants to acquire up to 5,601,613 shares of the Company’s common stock.   On April 12, 2023, the Company issued first tranche of convertible promissory note of $2,520,000 with maturity date of April 12, 2025 and no interest and issued warrant exercisable for 60 months to acquire 2,532,678 shares of common stock at $0.8926 per share. The note may convert into common shares at the option of the Holder. The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note. Debt issuance cost of $457,304, original issue discount of $420,000 and additional discount of $1,642,696 are recognized as reduction from the principal amount of the note and will be amortized over the life of the note utilizing straight-line method.   On May 23, 2023, the Company issued second tranche of convertible promissory note of $1,680,000 with maturity date of May 23, 2025 and no interest and issued warrant exercisable for 60 months to acquire 1,568,542 shares of common stock at $0.7316 per share. The note may convert into common shares at the option of the Holder. The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note. Debt issuance cost of $245,000, original issue discount of $280,000 and additional discount of $1,133,395 are recognized as reduction from the principal amount of the note and will be amortized over the life of the note utilizing straight-line method.   The notes consist of the following components as of June 30, 2023:  SCHEDULE OF DEBT NOTES Principal   $ 4,200,000   Debt discount     (4,178,395 ) Interest expense     435,072   Net Carrying Balance at June 30, 2023   $ 456,677     As of the year ended June 30, 2023, debt discount of the convertible notes consisted of following:  SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES Start Date   End Date   Debt Discount At Debt Issuance     Amortization     Debt Discount As of June 30, 2023   April 12, 2023   April 12, 2025   $ 2,520,000       302,400     $ 2,217,600   May 23, 2023   May 23, 2025     1,658,395       132,672       1,525,723   Total         4,178,395       435,072       3,743,323

v3.23.2

DERIVATIVE LIABILITY	6 Months Ended
	Jun. 30, 2023
Derivative Liability
DERIVATIVE LIABILITY	NOTE 15 – DERIVATIVE LIABILITY   The derivative liability is derived from the debt conversion option features in Note 14. They were valued using Monte Carlo simulation model using assumptions detailed below. As of June 30, 2023, the derivative liability was $1,456,641. The Company recorded $595,673 gain from changes in derivative liability during the six months ended June 30, 2023. In addition, the Company recorded $1,088,477 as excess of derivative expense at initial valuation due to the total debt discount cannot excess the face amount of the convertible note balance. The Monte Carlo simulation model with following assumptions:  SCHEDULE OF DERIVATIVE LIABILITY Volatility     65% - 82.50 % Risk-free rate     3.95% - 4.98 % Stock price     $0.42 - $0.94   Dividend Yield     -   Expected life     4.79 – 5 years     Fair value of the derivative is summarized as below:  SCHEDULE OF FAIR VALUE OF THE DERIVATIVE       Derivative Liability   Balance at January 1, 2023   $ -   Additions     2,052,314   Change in fair value     (595,673 ) Ending Balance, June 30, 2023   $ 1,456,641

v3.23.2

WARRANT LIABILITY	6 Months Ended
	Jun. 30, 2023
Warrant Liability
WARRANT LIABILITY	NOTE 16 – WARRANT LIABILITY   The warrant liability is derived from warrants issued as debt warrants in Note 14, public warrants and placement warrants.   As of June 30, 2023, the total fair value of the warrant liability was $1,255,795.   The following table provides a reconciliation of the warrants measured at fair value using Level 1 inputs:  SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS     Public warrants   Balance at January 1, 2023   $ -   Additions     -   Transfer from Level 2     603,750   Change in fair value     (280,313 ) Ending Balance, June 30, 2023   $ 323,437     The Black-Scholes model with the following assumptions inputs:  SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS Volatility     62.80% - 82.50 % Risk-free rate     3.62% - 4.98 % Stock price     $0.42 - $0.94   Dividend Yield     -   Expected life     4.79 – 5 years     The following table provides a reconciliation of the warrants measured at fair value using Level 2 inputs:  SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS     Public warrants     Placement warrants     Debt warrants   Balance at January 1, 2023   $ -       -       -   Additions     603,750       39,463       1,812,253   Transfer to Level 1     (603,750 )     -       -   Change in fair value     -       (18,180 )     (901,178 ) Ending Balance, June 30, 2023   $ -       21,283       911,075

v3.23.2

INCOME TAXES	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 17 — INCOME TAXES   United States   Aerwins Technologies Inc. is a holding company registered in the State of Delaware incorporated in June 2022. The U.S. federal income tax rate is 21%.   Japan   The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. During the three months periods ended June 30, 2023 and 2022, all taxable income (loss) of the Company is generated in Japan. Income taxes in Japan applicable to the Company are imposed by the national, prefectural, and municipal governments, and in the aggregate resulted in an effective statutory rate of approximately 34.59% for the six months ended June 30, 2023 and 2022.   For the six months ended June 30, 2023 and 2022, the Company’s income tax expenses are as follows:  SCHEDULE OF COMPANY' S INCOME TAX EXPENSES     2023     2022       For the Six months Ended       June 30,       2023     2022   Current   $   -     $    -   Deferred     -       -   Total   $ -     $ -     A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the six months ended June 30, 2023 and 2022 is as follows:  SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE     2023     2022       For the Six months Ended       June 30,       2023     2022   Japanese statutory tax rate     34.59 %     34.59 % Change in valuation allowance     (34.59 )%     (34.59 )% Effective tax rate     (0.00 )%     (0.00 )%   For the six months ended June 30, 2023 and 2022 (unaudited)   The Company’s provision for income taxes for interim periods was determined using an estimate of its annual effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.   The Company recognized income tax expense for the six months ended June 30, 2023 and 2022, both of which were estimated corporate inhabitant taxes.

v3.23.2

EQUITY METHOD	6 Months Ended
	Jun. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]
EQUITY METHOD	NOTE 18 — EQUITY METHOD   As of June 30, 2022 and 2021, the Company holds 48.81% of ASC TECH Agent. Accordingly, the Company applies equity method to its investment. For the six months ended June 30, 2023 and 202 (unaudited), net income from ASC TECH agent is recognized as equity in earnings of investee of $11,640 of loss and $10,736 of profit in the consolidated statements of operations and comprehensive income (loss).

v3.23.2

SHAREHOLDERS’ DEFICIT	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
SHAREHOLDERS’ DEFICIT	NOTE 19 – SHAREHOLDERS’ DEFICIT   Aerwins was authorized to issue 400,000,000 shares of common shares, par value of $0.000001 per share, and 20,000,000 shares of preferred shares, par value of $0.000001 per share.   Business combination with Pono Capital Corp   On February 3, 2023, the Company consummated the Merger with Pono. On February 2, 2023, the Company entered into a Subscription Agreement with the Purchasers. In total, the number of Public Shares increased by 8,797,687 at the closing of the Business Combination.   Shares issued to service providers   The Company agreed with service providers to pay the service fees by issuing common stocks subject to the closing of the business combination. After the closing of the Business Combination, the Company issued 413,103 shares of common stock for the three months ended March 31, 2023. The Company issued 5,269,291 shares to consultants who provide the Company with several services for the three months ended June 30, 2023. These share issuances are recognized as expense at the fair value of the shares at the issuance date. The total amount of fair value of shares issued for the six months ended June 30, 2023 was $6,258,298 and $2,600,000 is recognized as prepaid expenses.   The Company’s outstanding shares increased by 14,480,081 for the six months ended June 30, 2023, and recognized Common stock of $14 and Additional Paid-in Capital of $4,224,049. As of June 30, 2023, there were 61,409,146 of common shares issued. The numbers of common stocks are retrospectively presented to reflect the legal capital of post-merger AERWINS.

v3.23.2

EARNINGS (LOSS) PER SHARE	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER SHARE	NOTE 20 – EARNINGS (LOSS) PER SHARE   Basic earnings (loss) per share is calculated on the basis of weighted-average outstanding common shares. Diluted earnings (loss) per share is computed on the basis of basic weighted-average outstanding common shares adjusted for the dilutive effect of stock options. Dilutive common shares are determined by applying the treasury stock method to the assumed conversion of share repurchase liability to common shares related to the early exercised stock options.   The computation of basic and diluted earnings (loss) per share for the six months and three months ended June 30, 2023 and 2022 is as follows:   SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE     2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Earnings (loss) per share – basic                 Numerator:                 Net loss from continuing operations   $ (18,376,366 )   $ (6,548,417 ) Net loss from discontinued operation     (846,499 )     (679,519 ) Denominator:                 Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share     54,957,819       42,712,850   Denominator used for earnings (loss) per share                 Loss per share from continuing operations (basic and diluted)   $ (0.33 )   $ (0.15 ) Loss per share from discontinued operation (basic and diluted)     (0.02 )     (0.02 )       2023     2022       For the Three months Ended       June 30, (unaudited)       2023     2022   Earnings (loss) per share – basic                 Numerator:                 Net loss from continuing operations   $ (10,737,846 )   $ (3,369,816 ) Net loss from discontinued operation     (683,474 )     (466,117 ) Denominator:                 Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share     56,871,014       43,509,237   Denominator used for earnings (loss) per share                 Loss per share from continuing operations (basic and diluted)   $ (0.19 )   $ (0.08 ) Loss per share from discontinued operation (basic and diluted)     (0.01 )     (0.01 )   Basic loss per share equals diluted loss per share because the calculation of diluted loss per share would be anti-dilutive.

v3.23.2

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	NOTE 21 – STOCK-BASED COMPENSATION   On July 27, 2022, Aerwins issued stock options to certain directors of the Company which can be exercised for a total of 2,648,000 shares of the Company’s common stock with an exercise price of $0.00015 per share and a vesting period shall commence on the first business day following the occurrence of going public (the “Trigger Date”), and thereafter (i) one third of the option shall vest on the three months anniversary of the Trigger Date, (ii) one third of the option shall vest on the fifteen month anniversary of the Trigger Date; and (iii) the remaining one third of the option shall vest on the twenty seven month anniversary of the Trigger Date. The remaining weighted average contractual life as of June 30, 2023, is 9.33 years.   SCHEDULE OF STOCK BASED COMPENSATION Grant date     July 27, 2022   Number of shares at grant date     4,142,277   Outstanding at January 31, 2023     4,142,277   Forfeiture     (2,969,049 ) Outstanding at June 30, 2023     1,173,228   Exercise price   $ 0.00015   Consideration paid to the Company at the grant date   $ 132     The number of shares is retrospectively presented to reflect the Business Combination with Pono.   The Company estimated the fair value of the stock-based compensation at $0.00005 using the Binomial Option Pricing Model with the following assumption inputs.   SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION Exercise period     5 years   Share price on the issuance date   $ 0.0001   Volatility     64.22 % Expected dividend rate     0 % Risk-free interest rate     2.88 %

v3.23.2

FAIR VALUE MEASUREMENT	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENT	NOTE 22 – FAIR VALUE MEASUREMENT   The estimated fair value of the Company’s financial instrument at June 30, 2023 and December 31, 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts.   SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT     Amount at Fair Value     Level 1     Level 2     Level 3   June 30, 2023                                 Liabilities                                 Public Warrants   $ 323,437     $ 323,437     $ -     $ -   Placement Warrants   $ 21,283     $ -     $ 21,283     $ -   Debt Warrants   $ 911,075     $ -     $ 911,075     $ -   Subtotal : Warrant liabilities   $ 1,255,795     $ 323,437     $ 932,358       -   Derivative Liability   $ 1,456,641     $ -     $ 1,456,641     $ -   Liabilities fair value   $ 1,456,641     $ -     $ 1,456,641     $ -     The Public Warrants are classified as Level 1 in the fair value hierarchy because they valued using quoted market prices. The Placement Warrants, Debt Warrants, and Derivative Liability are classified as Level 2 in the fair value hierarchy. This classification is based on the availability of significant inputs used in the Black-Sholes model and Monte Carlo simulation, which are observable in the market.   Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from Level 2 to Level 1 during the period from January 1, 2023 due to the increase of observable market activity.

v3.23.2

DISCONTINUED OPERATIONS	6 Months Ended
	Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE 23 – DISCONTINUED OPERATIONS   As at June 30, 2023, to facilitate cost reduction plan, the Company has made the strategic decision to discontinue drone solution service. The results of operations in relation to the Company’s Drone solution service have been classified by the Company as discontinued operations for the six months ended June 30, 2023 and 2022 and are shown below:   SCHEDULE OF DISCONTINUED OPERATIONS     2023     2022     2023     2022       For the six months ended June 30,     For the three months ended June 30,       2023     2022     2023     2022       (unaudited)     (unaudited)   Revenues   $ 925,205     $ 857,303     $ 83,334     $ 431,594   Cost of revenues     735,962       725,562       105,331       390,178   Gross profit     189,243       131,741       (21,997 )     41,416                                     Operating expenses:                                 Selling expenses     4,099       5,904       684       900   General and administrative expenses     715,547       576,135       352,200       327,582   Research and development expenses     167,053       229,736       109,834       178,875   Total operating expenses     886,699       811,775       462,718       507,357                                     Loss from operations     (697,456 )     (680,034 )     (484,715 )     (465,941 )                                   Other income (expenses):                                 Interest income (expenses), net     (1,164 )     -       (1,043 )     -   Gain (Loss) on disposal of fixed assets     (9,761 )     (176 )     -       (176 ) Impairment of fixed assets     (229,600 )     -       (205,684 )     -   Other income (expenses), net     91,482       691       7,968       -   Total other income (expenses)     (149,043 )     515       (198,759 )     (176 )                                   Loss before income tax provision   $ (846,499 )   $ (679,519 )   $ (683,474 )   $ (466,117 )

v3.23.2

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 24 – SUBSEQUENT EVENTS   A.L.I. Technologies has not been able to pay some accounts payable by due date. As of August 10, 2023, the health insurance association seized our bank account in Japan for delinquent health insurance premiums. As a result, 28,075 USD deposited in the bank account has been seized.

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation   The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Unaudited Interim Consolidated Financial Information	Unaudited Interim Consolidated Financial Information   The accompanying interim consolidated balance sheet as of June 30, 2023, the interim consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in shareholders’ equity (deficiency), and cash flows for the six months ended June 30, 2023 and 2022 and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2023 and the Company’s consolidated results of operations and cash flows for the six months ended June 30, 2023 and 2022. The consolidated results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.
Use of Estimates	Use of Estimates   In preparing the consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long-lived assets, and valuation allowance of deferred tax assets. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents   Cash and cash equivalents include cash on hand and deposits in banks that are unrestricted as to withdrawal or use, and which have original maturities of three months or less.
Accounts Receivable, net	Accounts Receivable, net   Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.
Inventories	Inventories   Inventories consist principally of raw materials used for rendering computing sharing services and for manufacturing hoverbikes. Work in progress represents the costs incurred to date on unfinished products or services. The costs recognized as work in progress include direct materials, direct labor, and overhead costs that are directly attributable to the production of the unfinished product or service. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method for merchandise. Net realizable value is calculated at estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Loss from inventories written down to net realizable value should be recognized whenever the utility of goods is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes. When inventories have been written down below cost, the reduced amount is to be considered the cost for subsequent accounting purposes.
Fixed assets	Fixed assets   Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow:   SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS     Depreciation Method   Useful Life Building and building accessories   Straight-line method   8-38 years Office equipment and furniture   Straight-line method   2-10 years Software   Straight-line method   5 years Design right   Straight-line method   7 years Patent right   Straight-line method   8 years   Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss).
Lease-Lessee	Lease-Lessee   In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain.   The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet.   The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually.   As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.   The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets   Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.
Equity Method	Equity Method   We apply the equity method to an investment in unconsolidated entities over which we have the ability to exercise significant influence. We initially record our investments based on the acquisition cost. Under the equity method, the carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the investment. SCHEDULE OF SUBSIDIARIES          Percentage of Effective Ownership   Name of Subsidiary   Place of Organization   June 30, 2023     December 31, 2022   ASC TECH Agent   Japan     48.81 %     48.81 %
Warrant Liabilities	Warrant Liabilities   We account for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 — Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815), under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The Placement Warrants, Public Warrants, and Debt Warrants for periods where no observable traded price was available are valued using a Black Scholes model.
Convertible Promissory Notes and Derivative Instruments	Convertible Promissory Notes and Derivative Instruments   The Company accounts for the fair value of the conversion feature in accordance with the guidance contained in ASC 815, which requires the Company to bifurcate and separately account for the conversion feature as an embedded derivative contained in the Company’s convertible promissory note. Accordingly, we account for the conversion option as an embedded derivative contained in the Company’s promissory note at fair value. The derivative liability is required to be remeasured at each reporting date and the change in fair value is recognized in our consolidated statements of operations.
Foreign Currency Translation	Foreign Currency Translation   The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.   The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes in shareholders’ deficit.   Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES      2023     2022     2022       Six months ended June 30, (unaudited)     Year ended December 31,       2023     2022     2022   Current JPY: US$1 exchange rate     144.47       135.69       131.81   Average JPY: US$1 exchange rate     134.91       123.10       131.46   Foreign exchange rate     134.91       123.10       131.46
Consolidated Statements of Cash Flows	Consolidated Statements of Cash Flows   In accordance with FASB ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.
Revenue Recognition	Revenue Recognition   The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”.   To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales.   When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent.
Cost of Revenues	Cost of Revenues   Cost of revenues primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenues also includes royalty/license payments to vendors, and hosting and infrastructure costs related to the delivery of the Company’s products and services.
Advertising Expenses	Advertising Expenses   Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses advertising costs as incurred, in accordance with the ASC 720-35, “Advertising Costs”. The advertising expenses for six months ended June 30, 2023 and 2022 (unaudited) were $63,525 and $59,526, respectively.
Concentration of Credit Risk	Concentration of Credit Risk   Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.   For the six months ended June 30, 2023, Customer A accounts for 25.9% of the Company’s total revenues.   For the six months ended June 30, 2022, Customer B, Customer C and Customer D accounts for respectively 17.9%, 14.8% and 13.5% of the Company’s total revenues.   As of June 30, 2023, Customer E accounts for 81.6% of the Company’s total accounts receivable. As of December 31, 2022, Customer E, Customer F and Customer G accounts for respectively 15.1%, 16.2% and 12.8% of the Company’s total accounts receivable   For the six months ended June 30, 2023, Vendor A and Vendor B accounts for respectively 39.5% and 16.4% of the Company’s total raw material purchases.   For the six months ended June 30, 2022, Vendor A, Vendor C and Vendor D accounts for respectively 30.1%, 19.3% and 11.2% of the Company’s total raw material purchases.   As of December 31, 2022, Vendor A accounts for 31.2% of the Company’s total accounts payable. As of June 30, 2023, Vendor A accounts for 20.1% of the Company’s total accounts payable.
Comprehensive Income or Loss	Comprehensive Income or Loss   ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying consolidated statements of changes in shareholders’ deficit, consists of changes in unrealized gains and losses on foreign currency translation.
Earnings (Loss) Per Share	Earnings (Loss) Per Share   The Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common shares were exercised or equity awards vest resulting in the issuance of common shares that could share in the earnings (loss) of the Company.
Related Parties and Transactions	Related Parties and Transactions   The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.   Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence.   Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
Income Taxes	Income Taxes   Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.   The Company follows ASC 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.   Under the provisions of ASC 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations.
Fair Value Measurements	Fair Value Measurements   The Company performs fair value measurements in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:     ● Level 1: quoted prices in active markets for identical assets or liabilities;   ● Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or   ● Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

v3.23.2

ORGANIZATION AND DESCRIPTION OF BUSINESS (Tables)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SCHEDULE OF BUSINESS COMBINATION	SCHEDULE OF BUSINESS COMBINATION           Cash—Pono trust and working capital cash   $ 1,802,594   Cash—Subscription agreement made immediately before the closing     5,000,000   Less: transaction costs and advisory fees     5,206,763   Total funds from the Business Combination   $ 1,595,831

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS	Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow:   SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS     Depreciation Method   Useful Life Building and building accessories   Straight-line method   8-38 years Office equipment and furniture   Straight-line method   2-10 years Software   Straight-line method   5 years Design right   Straight-line method   7 years Patent right   Straight-line method   8 years
SCHEDULE OF SUBSIDIARIES	SCHEDULE OF SUBSIDIARIES          Percentage of Effective Ownership   Name of Subsidiary   Place of Organization   June 30, 2023     December 31, 2022   ASC TECH Agent   Japan     48.81 %     48.81 %
SCHEDULE OF FOREIGN EXCHANGE RATES	Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES      2023     2022     2022       Six months ended June 30, (unaudited)     Year ended December 31,       2023     2022     2022   Current JPY: US$1 exchange rate     144.47       135.69       131.81   Average JPY: US$1 exchange rate     134.91       123.10       131.46   Foreign exchange rate     134.91       123.10       131.46

v3.23.2

ACCOUNTS RECEIVABLE, NET (Tables)	6 Months Ended
	Jun. 30, 2023
Credit Loss [Abstract]
SCHEDULE OF ACCOUNTS RECEIVABLE, NET	Accounts receivable, net consists of the following:   SCHEDULE OF ACCOUNTS RECEIVABLE, NET                   June 30,           2023 (unaudited)     December 31, 2022   Accounts receivable   $ 166,054     $ 980,688   Less: allowance for doubtful accounts     (6,776 )     -   Accounts receivable, net   $ 159,278     $ 980,688
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS	Allowance for doubtful accounts movement is as follows:   SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS                   June 30,           2023 (unaudited)     December 31, 2022   Beginning balance   $ -     $ (739 ) Change during the year     (7,256 )     739   Foreign currency translation adjustment     480       -   Ending balance   $ (6,776 )   $ -
SCHEDULE OF OTHER RECEIVABLE	Other receivable movement is as follows:   SCHEDULE OF OTHER RECEIVABLE                   June 30,             2023 (unaudited)     December 31, 2022   Beginning balance   $ 2,089,921     $ 1,034,690   Change during the year     (1,182,560 )     1,189,020   Foreign currency translation adjustment     (104,923 )     (133,789 ) Ending balance   $ 802,438     $ 2,089,921

v3.23.2

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	Inventory consists of the following:   SCHEDULE OF INVENTORY                   June 30,             2023 (unaudited)     December 31, 2022   Raw materials   $ 209,330     $ 1,533,784   Work in progress     1,288,027       1,135,852   Product     31,665       -   Stored item     9,541       17,456   Total   $ 1,538,563     $ 2,687,092

v3.23.2

REVENUE RECOGNITION (Tables)	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
SCHEDULE OF DISAGGREGATION OF REVENUE	SCHEDULE OF DISAGGREGATION OF REVENUE     2023     2022       Six months ended       June 30, (unaudited)       2023     2022   Revenue from Computing Power Sharing services     101,453       836,059   Revenue from Project Management for Computing Share     6,300       1,098,059   Consulting Service     350,000       -   Total Revenue   $ 457,753     $ 1,934,118         2023     2022       Three months ended       June 30, (unaudited)       2023     2022   Revenue from Computing Power Sharing services     25,703       274,823   Revenue from Project Management for Computing Share     -       46,348   Total Revenue   $ 25,703     $ 321,171

v3.23.2

PROPERTY AND EQUIPMENT, NET (Tables)	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
SCHEDULE OF PROPERTY AND EQUIPMENT	Property and equipment consist of the following:   SCHEDULE OF PROPERTY AND EQUIPMENT                   June 30,           2023 (unaudited)     December 31, 2022   Building   $ 213,375     $ 233,869   Accessory equipment     182,629       211,879   Structures     43,400       47,568   Vehicles     4,117       4,512   Tools, furniture and fixtures     1,818,832       1,751,969   Lease assets     170,496       186,871   Property and equipment, gross                 Accumulated depreciation     (721,480 )     (534,426 ) Impairment     (1,711,369 )     (511,695 ) Property and equipment, net   $ -     $ 1,390,547

v3.23.2

INTANGIBLE ASSETS, NET (Tables)	6 Months Ended
	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF INTANGIBLE ASSETS	The components of intangible assets as of June 30, 2023 and December 31, 2022 are as follows:   SCHEDULE OF INTANGIBLE ASSETS                   June 30,           2023 (unaudited)     December 31, 2022   Software   $ 662,075     $ 706,320   Design right     101,578       111,334   Patent right     22,842       -   Intangible assets, gross                 Accumulated amortization     (217,828 )     (191,813 ) Impairment     (568,667 )     (475,265 ) Intangible assets, net   $ -     $ 150,576

v3.23.2

IMPAIRMENT LOSS (Tables)	6 Months Ended
	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF IMPAIRMENT LOSS	For the six months ended June 30, 2023, the Company recognized impairment losses for the following assets:  SCHEDULE OF IMPAIRMENT LOSS         Type   Impairment loss   Building   $ 199,601   Accessory equipment     146,334   Structures     37,975   Tools, furniture and fixtures     562,650   Operating Lease right-of-use assets     472,414   Software     71,095   Design right     54,370   Patent right     21,414   Total   $ 1,565,853

v3.23.2

LEASES (Tables)	6 Months Ended
	Jun. 30, 2023
Leases [Abstract]
SCHEDULE OF LEASE COSTS	The components of lease costs are as follows: SCHEDULE OF LEASE COSTS      2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Short-term lease costs   $ 39,233     $ 536   Finance lease costs     47,411       51,127   Operating lease costs     177,160       107,922   Total lease costs   $ 263,804     $ 159,585
SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES	As of June 30, 2023, the future maturity of lease liabilities is as follows:  SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES Year ending December 31,     Finance lease       Operating lease                     2023 (six months)   $ 64,834     $ 93,987   2024     50,078       227,438   2025     10,283       155,979   2026     10,283       -   Thereafter     12,854       -   Total lease payments     148,332       477,404   Less: imputed interest     (5,780 )     (4,991 ) Total lease liabilities     142,552       472,413   Less: current portion     85,025       228,175                     Non-current lease liabilities   $ 57,527     $ 244,238
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE	The following table presents supplemental information related to the Company’s leases:  SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE     2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Cash paid for amounts included in the measurement of lease liabilities:                 Operating cash flows from operating leases     157,895       168,644   Financing cash flows from finance lease     41,681       47,240   Weighted average remaining lease term (years)                 Finance leases     1.1       1.8   Operating leases     1.1       1.4   Weighted-average discount rate: (per annum)                 Finance leases     2.66 %     2.38 % Operating leases     0.94       0.94

v3.23.2

LONG-TERM DEBTS (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS	The Company’s long-term loans borrowed from banks and other financial institutions, which consist of the following:  SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Name of Lender   Original Amount Borrowed (JPY)     Loan Duration   Annual Interest Rate     Balance as of June 30, 2023 (unaudited)     Balance as of December 31, 2022   Mizuho Bank, Ltd.     40,000,000     1/22/2021— 1/22/2028     0.00 %     276,874       303,467   Mizuho Bank, Ltd.     60,000,000     1/22/2021— 1/22/2028     0.00 %     415,311       455,201   Mizuho Bank, Ltd.     50,000,000     1/22/2021— 1/22/2028     1.70 %     346,093       379,334   Japan Finance Corporation     50,000,000     12/29/2020— 12/31/2027     1.11 %     233,959       279,190   Japan Finance Corporation     250,000,000     12/29/2020— 1/31/2026     0.50 %     1,730,462       1,896,669   Aggregate outstanding principal balances                         3,002,699       3,313,861   Less: current portion                         (166,332 )     (54,624 ) Non-current portion                       $ 2,836,367     $ 3,259,237

v3.23.2

CONVERTIBLE PROMISSORY NOTES, NET (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
SCHEDULE OF DEBT NOTES	The notes consist of the following components as of June 30, 2023:  SCHEDULE OF DEBT NOTES Principal   $ 4,200,000   Debt discount     (4,178,395 ) Interest expense     435,072   Net Carrying Balance at June 30, 2023   $ 456,677
SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES	As of the year ended June 30, 2023, debt discount of the convertible notes consisted of following:  SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES Start Date   End Date   Debt Discount At Debt Issuance     Amortization     Debt Discount As of June 30, 2023   April 12, 2023   April 12, 2025   $ 2,520,000       302,400     $ 2,217,600   May 23, 2023   May 23, 2025     1,658,395       132,672       1,525,723   Total         4,178,395       435,072       3,743,323

v3.23.2

DERIVATIVE LIABILITY (Tables)	6 Months Ended
	Jun. 30, 2023
Derivative Liability
SCHEDULE OF DERIVATIVE LIABILITY	SCHEDULE OF DERIVATIVE LIABILITY Volatility     65% - 82.50 % Risk-free rate     3.95% - 4.98 % Stock price     $0.42 - $0.94   Dividend Yield     -   Expected life     4.79 – 5 years
SCHEDULE OF FAIR VALUE OF THE DERIVATIVE	Fair value of the derivative is summarized as below:  SCHEDULE OF FAIR VALUE OF THE DERIVATIVE       Derivative Liability   Balance at January 1, 2023   $ -   Additions     2,052,314   Change in fair value     (595,673 ) Ending Balance, June 30, 2023   $ 1,456,641

v3.23.2

WARRANT LIABILITY (Tables)	6 Months Ended
	Jun. 30, 2023
Warrant Liability
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS	The following table provides a reconciliation of the warrants measured at fair value using Level 1 inputs:  SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS     Public warrants   Balance at January 1, 2023   $ -   Additions     -   Transfer from Level 2     603,750   Change in fair value     (280,313 ) Ending Balance, June 30, 2023   $ 323,437
SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS	The Black-Scholes model with the following assumptions inputs:  SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS Volatility     62.80% - 82.50 % Risk-free rate     3.62% - 4.98 % Stock price     $0.42 - $0.94   Dividend Yield     -   Expected life     4.79 – 5 years
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS	The following table provides a reconciliation of the warrants measured at fair value using Level 2 inputs:  SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS     Public warrants     Placement warrants     Debt warrants   Balance at January 1, 2023   $ -       -       -   Additions     603,750       39,463       1,812,253   Transfer to Level 1     (603,750 )     -       -   Change in fair value     -       (18,180 )     (901,178 ) Ending Balance, June 30, 2023   $ -       21,283       911,075

v3.23.2

INCOME TAXES (Tables)	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
SCHEDULE OF COMPANY' S INCOME TAX EXPENSES	For the six months ended June 30, 2023 and 2022, the Company’s income tax expenses are as follows:  SCHEDULE OF COMPANY' S INCOME TAX EXPENSES     2023     2022       For the Six months Ended       June 30,       2023     2022   Current   $   -     $    -   Deferred     -       -   Total   $ -     $ -
SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE	A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the six months ended June 30, 2023 and 2022 is as follows:  SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE     2023     2022       For the Six months Ended       June 30,       2023     2022   Japanese statutory tax rate     34.59 %     34.59 % Change in valuation allowance     (34.59 )%     (34.59 )% Effective tax rate     (0.00 )%     (0.00 )%

v3.23.2

EARNINGS (LOSS) PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE	The computation of basic and diluted earnings (loss) per share for the six months and three months ended June 30, 2023 and 2022 is as follows:   SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE     2023     2022       For the Six months Ended       June 30, (unaudited)       2023     2022   Earnings (loss) per share – basic                 Numerator:                 Net loss from continuing operations   $ (18,376,366 )   $ (6,548,417 ) Net loss from discontinued operation     (846,499 )     (679,519 ) Denominator:                 Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share     54,957,819       42,712,850   Denominator used for earnings (loss) per share                 Loss per share from continuing operations (basic and diluted)   $ (0.33 )   $ (0.15 ) Loss per share from discontinued operation (basic and diluted)     (0.02 )     (0.02 )       2023     2022       For the Three months Ended       June 30, (unaudited)       2023     2022   Earnings (loss) per share – basic                 Numerator:                 Net loss from continuing operations   $ (10,737,846 )   $ (3,369,816 ) Net loss from discontinued operation     (683,474 )     (466,117 ) Denominator:                 Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share     56,871,014       43,509,237   Denominator used for earnings (loss) per share                 Loss per share from continuing operations (basic and diluted)   $ (0.19 )   $ (0.08 ) Loss per share from discontinued operation (basic and diluted)     (0.01 )     (0.01 )

v3.23.2

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
SCHEDULE OF STOCK BASED COMPENSATION	SCHEDULE OF STOCK BASED COMPENSATION Grant date     July 27, 2022   Number of shares at grant date     4,142,277   Outstanding at January 31, 2023     4,142,277   Forfeiture     (2,969,049 ) Outstanding at June 30, 2023     1,173,228   Exercise price   $ 0.00015   Consideration paid to the Company at the grant date   $ 132
SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION	The Company estimated the fair value of the stock-based compensation at $0.00005 using the Binomial Option Pricing Model with the following assumption inputs.   SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION Exercise period     5 years   Share price on the issuance date   $ 0.0001   Volatility     64.22 % Expected dividend rate     0 % Risk-free interest rate     2.88 %

v3.23.2

FAIR VALUE MEASUREMENT (Tables)	6 Months Ended
	Jun. 30, 2023
Fair Value Disclosures [Abstract]
SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT	The estimated fair value of the Company’s financial instrument at June 30, 2023 and December 31, 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts.   SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT     Amount at Fair Value     Level 1     Level 2     Level 3   June 30, 2023                                 Liabilities                                 Public Warrants   $ 323,437     $ 323,437     $ -     $ -   Placement Warrants   $ 21,283     $ -     $ 21,283     $ -   Debt Warrants   $ 911,075     $ -     $ 911,075     $ -   Subtotal : Warrant liabilities   $ 1,255,795     $ 323,437     $ 932,358       -   Derivative Liability   $ 1,456,641     $ -     $ 1,456,641     $ -   Liabilities fair value   $ 1,456,641     $ -     $ 1,456,641     $ -

v3.23.2

DISCONTINUED OPERATIONS (Tables)	6 Months Ended
	Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]
SCHEDULE OF DISCONTINUED OPERATIONS	SCHEDULE OF DISCONTINUED OPERATIONS     2023     2022     2023     2022       For the six months ended June 30,     For the three months ended June 30,       2023     2022     2023     2022       (unaudited)     (unaudited)   Revenues   $ 925,205     $ 857,303     $ 83,334     $ 431,594   Cost of revenues     735,962       725,562       105,331       390,178   Gross profit     189,243       131,741       (21,997 )     41,416                                     Operating expenses:                                 Selling expenses     4,099       5,904       684       900   General and administrative expenses     715,547       576,135       352,200       327,582   Research and development expenses     167,053       229,736       109,834       178,875   Total operating expenses     886,699       811,775       462,718       507,357                                     Loss from operations     (697,456 )     (680,034 )     (484,715 )     (465,941 )                                   Other income (expenses):                                 Interest income (expenses), net     (1,164 )     -       (1,043 )     -   Gain (Loss) on disposal of fixed assets     (9,761 )     (176 )     -       (176 ) Impairment of fixed assets     (229,600 )     -       (205,684 )     -   Other income (expenses), net     91,482       691       7,968       -   Total other income (expenses)     (149,043 )     515       (198,759 )     (176 )                                   Loss before income tax provision   $ (846,499 )   $ (679,519 )   $ (683,474 )   $ (466,117 )

v3.23.2

SCHEDULE OF BUSINESS COMBINATION (Details) - Pono Capital Corp [Member]	Feb. 03, 2023 USD ($)
Restructuring Cost and Reserve [Line Items]
Cash—Pono trust and working capital cash	$ 1,802,594
Cash—Subscription agreement made immediately before the closing	5,000,000
Less: transaction costs and advisory fees	5,206,763
Total funds from the Business Combination	$ 1,595,831

v3.23.2

ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($)			3 Months Ended
	Feb. 03, 2023	Feb. 02, 2023	Mar. 31, 2023	Jun. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Purchase price			$ 1,156,119
Pono Capital Corp [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net cash	$ 1,595,831
Prepaid expenses	25,750
Other payable	1,432,603
Notes payable	1,580,000			$ 1,480,000
Warrant liabilities	643,213
Total funds from business ccmbination	$ 1,595,831
Accrued expenses				$ 29,392
Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of purchase of shares			5,000,000
Purchase price			$ (5)
Subscription Agreement [Member] | Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of purchase of shares		3,196,311
Subscription Agreement [Member] | Public Shares [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of purchase of shares	8,797,687	5,000,000
Purchase price		$ 5,000,000

v3.23.2

GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating losses	$ 10,737,846	$ 3,369,816	$ 18,376,366	$ 6,548,417
Accumulated deficit	$ 65,695,768		$ 65,695,768		$ 46,472,904

v3.23.2

SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS (Details)	Jun. 30, 2023
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	8 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	38 years
Office Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	2 years
Office Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	10 years
Software Development [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years
Design Right [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years
Patents [Member]
Property, Plant and Equipment [Line Items]
Useful life	8 years

v3.23.2

SCHEDULE OF SUBSIDIARIES (Details) - ASC TECH Agent [Member]	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Name of entity	ASC TECH Agent
Place of Organization	Japan
Percentage of Effective Ownership	48.81%	48.81%	48.81%

v3.23.2

SCHEDULE OF FOREIGN EXCHANGE RATES (Details)	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Current JPY US Exchange Rate [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign exchange rate	144.47	131.81	135.69
Average J P Y U S Exchange Rate [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign exchange rate	134.91	131.46	123.10

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Advertising expenses	$ 63,525	$ 59,526
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer A [Member]
Product Information [Line Items]
Concentration of credit risk	25.90%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer B [Member]
Product Information [Line Items]
Concentration of credit risk		17.90%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer C [Member]
Product Information [Line Items]
Concentration of credit risk		14.80%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer D [Member]
Product Information [Line Items]
Concentration of credit risk		13.50%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer E [Member]
Product Information [Line Items]
Concentration of credit risk	81.60%		15.10%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer F [Member]
Product Information [Line Items]
Concentration of credit risk			16.20%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer G [Member]
Product Information [Line Items]
Concentration of credit risk			12.80%
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor A [Member]
Product Information [Line Items]
Concentration of credit risk	39.50%	30.10%
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor B [Member]
Product Information [Line Items]
Concentration of credit risk	16.40%
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor C [Member]
Product Information [Line Items]
Concentration of credit risk		19.30%
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor D [Member]
Product Information [Line Items]
Concentration of credit risk		11.20%
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Vendor A [Member]
Product Information [Line Items]
Concentration of credit risk	20.10%		31.20%

v3.23.2

SCHEDULE OF ACCOUNTS RECEIVABLE, NET (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Accounts receivable	$ 166,054	$ 980,688
Less: allowance for doubtful accounts	(6,776)
Accounts receivable, net	$ 159,278	$ 980,688

v3.23.2

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Beginning balance		$ (739)
Change during the year	(7,256)	739
Foreign currency translation adjustment	480
Ending balance	$ (6,776)

v3.23.2

SCHEDULE OF OTHER RECEIVABLE (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Beginning balance	$ 2,089,921	$ 1,034,690
Change during the year	(1,182,560)	1,189,020
Foreign currency translation adjustment	(104,923)	(133,789)
Ending balance	$ 802,438	$ 2,089,921

v3.23.2

SCHEDULE OF INVENTORY (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 209,330	$ 1,533,784
Work in progress	1,288,027	1,135,852
Product	31,665
Stored item	9,541	17,456
Total	$ 1,538,563	$ 2,687,092

v3.23.2

SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 25,703	$ 321,171	$ 457,753	$ 1,934,118
Computing Power Sharing Services [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	25,703	274,823	101,453	836,059
Project Management for Computing Share [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		$ 46,348	6,300	1,098,059
Consulting Service [Member]
Disaggregation of Revenue [Line Items]
Total Revenue			$ 350,000

v3.23.2

REVENUE RECOGNITION (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract liability	$ 737,980	$ 1,104,582

v3.23.2

RELATED PARTY TRANSACTIONS (Details Narrative)		6 Months Ended
	Feb. 27, 2023 JPY (¥)	Jun. 30, 2023 USD ($) $ / shares	Jun. 30, 2023 JPY (¥) ¥ / shares	Dec. 31, 2022 USD ($)
Related Party Transaction [Line Items]
Loans from a former director				$ 3,488
Loan Agreement [Member] | Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Loans from a former director	¥ 200,000,000	$ 1,384,370
Conversion rate | (per share)		$ 0.006921	¥ 1
Maturity date	Apr. 15, 2023
Interest rate	2.475%
Accrued expense		$ 8,775
Interest payable		692,185	¥ 100,000,000
Representative Director of A.L.I. [Member]
Related Party Transaction [Line Items]
Transaction amount		12,452
Related Party [Member] | Mr.Sidhu [Member]
Related Party Transaction [Line Items]
Loans payable		102,000
Related Party [Member] | Mr.Katano [Member]
Related Party Transaction [Line Items]
Loans payable		$ 210,424

v3.23.2

SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (721,480)	$ (534,426)
Impairment	(1,711,369)	(511,695)
Property and equipment, net		1,390,547
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	213,375	233,869
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	182,629	211,879
Structures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	43,400	47,568
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,117	4,512
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,818,832	1,751,969
Lease Assets [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 170,496	$ 186,871

v3.23.2

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 187,054	$ 141,406

v3.23.2

SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Accumulated amortization	$ (217,828)	$ (191,813)
Impairment	(568,667)	(475,265)
Intangible assets, net		150,576
Software Development [Member]
Property, Plant and Equipment [Line Items]
Intangible assets, gross	662,075	706,320
Design Right [Member]
Property, Plant and Equipment [Line Items]
Intangible assets, gross	101,578	111,334
Patents [Member]
Property, Plant and Equipment [Line Items]
Intangible assets, gross	$ 22,842

v3.23.2

SCHEDULE OF IMPAIRMENT LOSS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Line Items]
Total	$ 1,565,853		$ 1,565,853
Building [Member]
Property, Plant and Equipment [Line Items]
Total			199,601
Accessory Equipment [Member]
Property, Plant and Equipment [Line Items]
Total			146,334
Structures [Member]
Property, Plant and Equipment [Line Items]
Total			37,975
Tools Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total			562,650
Operating Lease Right of Use Assets [Member]
Property, Plant and Equipment [Line Items]
Total			472,414
Software [Member]
Property, Plant and Equipment [Line Items]
Total			71,095
Design Right [Member]
Property, Plant and Equipment [Line Items]
Total			54,370
Patent Right [Member]
Property, Plant and Equipment [Line Items]
Total			$ 21,414

v3.23.2

INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 23,541	$ 27,060

v3.23.2

SCHEDULE OF LEASE COSTS (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Short-term lease costs	$ 39,233	$ 536
Finance lease costs	47,411	51,127
Operating lease costs	177,160	107,922
Total lease costs	$ 263,804	$ 159,585

v3.23.2

SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Finance lease, 2023	$ 64,834
Operating lease, 2023	93,987
Finance lease, 2024	50,078
Operating lease, 2024	227,438
Finance lease, 2025	10,283
Operating lease, 2025	155,979
Finance lease, 2026	10,283
Operating lease, 2026
Finance lease, Thereafter	12,854
Operating lease, Thereafter
Finance lease, Total lease payments	148,332
Operating lease, Total lease payments	477,404
Finance lease, Less: imputed interest	(5,780)
Operating lease, Less: imputed interest	(4,991)
Finance lease, Total lease liabilities	142,552
Operating lease, Total lease liabilities	472,413
Finance lease, Less: current portion	85,025	$ 102,114
Operating lease, Less: current portion	228,175	293,710
Finance lease, Non-current lease liabilities	57,527	87,056
Operating lease, Non-current lease liabilities	$ 244,238	$ 397,720

v3.23.2

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating cash flows from operating leases	$ 157,895	$ 168,644
Financing cash flows from finance lease	$ 41,681	$ 47,240
Weighted average remaining lease term (years), Finance leases	1 year 1 month 6 days	1 year 9 months 18 days
Weighted average remaining lease term (years), Operating leases	1 year 1 month 6 days	1 year 4 months 24 days
Weighted-average discount rate: (per annum), Finance leases	2.66%	2.38%
Weighted-average discount rate: (per annum), Operating leases	0.94%	0.94%

v3.23.2

LEASES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Security deposits	$ 152,598	$ 174,111

v3.23.2

SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2023 JPY (¥)
Line of Credit Facility [Line Items]
Original Amount Borrowed	$ 4,200,000
Aggregate outstanding principal balances	3,002,699	$ 3,313,861
Less: current portion	(166,332)	(54,624)
Non-current portion	$ 2,836,367	3,259,237
Mizuho Bank Ltd [Member] | Debt One [Member]
Line of Credit Facility [Line Items]
Original Amount Borrowed | ¥			¥ 40,000,000
Loan term debt, start date	Jan. 22, 2021
Loan term debt, end date	Jan. 22, 2028
Original Amount Borrowed	0.00%		0.00%
Aggregate outstanding principal balances	$ 276,874	303,467
Mizuho Bank Ltd [Member] | Debt Two [Member]
Line of Credit Facility [Line Items]
Original Amount Borrowed | ¥			¥ 60,000,000
Loan term debt, start date	Jan. 22, 2021
Loan term debt, end date	Jan. 22, 2028
Original Amount Borrowed	0.00%		0.00%
Aggregate outstanding principal balances	$ 415,311	455,201
Mizuho Bank Ltd [Member] | Debt Three [Member]
Line of Credit Facility [Line Items]
Original Amount Borrowed | ¥			¥ 50,000,000
Loan term debt, start date	Jan. 22, 2021
Loan term debt, end date	Jan. 22, 2028
Original Amount Borrowed	1.70%		1.70%
Aggregate outstanding principal balances	$ 346,093	379,334
Japan Finance Corporation [Member] | Debt One [Member]
Line of Credit Facility [Line Items]
Original Amount Borrowed | ¥			¥ 50,000,000
Loan term debt, start date	Dec. 29, 2020
Loan term debt, end date	Dec. 31, 2027
Original Amount Borrowed	1.11%		1.11%
Aggregate outstanding principal balances	$ 233,959	279,190
Japan Finance Corporation [Member] | Debt Two [Member]
Line of Credit Facility [Line Items]
Original Amount Borrowed | ¥			¥ 250,000,000
Loan term debt, start date	Dec. 29, 2020
Loan term debt, end date	Jan. 31, 2026
Original Amount Borrowed	0.50%		0.50%
Aggregate outstanding principal balances	$ 1,730,462	$ 1,896,669

v3.23.2

LONG-TERM DEBTS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Debt Disclosure [Abstract]
Interest expense on long term debt	$ 11,708	$ 14,234

v3.23.2

SCHEDULE OF DEBT NOTES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Debt Disclosure [Abstract]
Principal	$ 4,200,000
Debt discount	(4,178,395)
Interest expense	435,072
Net carrying balance	$ 456,677

v3.23.2

SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Short-Term Debt [Line Items]
Amortization	$ 4,178,395
Convertible Debt [Member]
Short-Term Debt [Line Items]
Debt Discount	4,178,395
Amortization	435,072
Debt Discount	$ 3,743,323
Convertible Note One [Member]
Short-Term Debt [Line Items]
Start Date	Apr. 12, 2023
End Date	Apr. 12, 2025
Debt Discount	$ 2,520,000
Amortization	302,400
Debt Discount	$ 2,217,600
Convertible Note Two [Member]
Short-Term Debt [Line Items]
Start Date	May 23, 2023
End Date	May 23, 2025
Debt Discount	$ 1,658,395
Amortization	132,672
Debt Discount	$ 1,525,723

v3.23.2

CONVERTIBLE PROMISSORY NOTES, NET (Details Narrative)			3 Months Ended
	May 23, 2023 USD ($) Integer $ / shares shares	Apr. 12, 2023 USD ($) Integer $ / shares shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($)
Short-Term Debt [Line Items]
Debt instrument face amount				$ 4,200,000
Stock issued during period value new issues			$ 2,715,196
Debt instrument convertible terms of conversion feature	The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note	The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note
Common Stock [Member]
Short-Term Debt [Line Items]
Stock issued during period shares new issues | shares			1,709,541
Stock issued during period value new issues			$ 2
Common Stock [Member] | Convertible Promissory Note [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 1,133,395	$ 1,642,696
Stock issued during period shares new issues | shares	1,568,542	2,532,678
Stock issued during period value new issues	$ 1,680,000	$ 2,520,000
Debt instrument maturity date	May 23, 2025	Apr. 12, 2025
Share issued price per share | $ / shares	$ 0.7316	$ 0.8926
Conversion price | $ / shares	$ 0.90	$ 0.90
Trading days | Integer	20	20
Debt instrument unamortized discount	$ 280,000	$ 420,000
Common Stock [Member] | Convertible Promissory Note Payable [Member]
Short-Term Debt [Line Items]
Proceeds from Issuance of Common Stock	$ 245,000	457,304
Securities Purchase Agreement [Member]
Short-Term Debt [Line Items]
Debt instrument face amount		6,000,000
Proceeds from Issuance of Common Stock		5,000,000
Securities Purchase Agreement [Member] | Warrant [Member]
Short-Term Debt [Line Items]
Proceeds from Issuance of Warrants		$ 5,601,613
Securities Purchase Agreement [Member] | Common Stock [Member]
Short-Term Debt [Line Items]
Stock issued during period shares new issues | shares		5,601,613

v3.23.2

SCHEDULE OF DERIVATIVE LIABILITY (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares
Measurement Input, Price Volatility [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	65
Measurement Input, Price Volatility [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	82.50
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	3.95
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	4.98
Measurement Input, Share Price [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	0.42
Measurement Input, Share Price [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	0.94
Measurement Input, Expected Dividend Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield
Measurement Input, Expected Term [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected life	4 years 9 months 14 days
Measurement Input, Expected Term [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected life	5 years

v3.23.2

SCHEDULE OF FAIR VALUE OF THE DERIVATIVE (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Derivative Liability
Beginning balance
Additions	2,052,314
Change in fair value	(595,673)
Ending balance	$ 1,456,641

v3.23.2

DERIVATIVE LIABILITY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Derivative Liability
Derivative liability	$ 1,456,641		$ 1,456,641
Derivative gain			595,673
Derivative expense	$ 1,088,477		$ 1,088,477

v3.23.2

SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS (Details) - Public Warrants [Member] - Fair Value, Inputs, Level 1 [Member]	6 Months Ended
	Jun. 30, 2023 USD ($)
Class of Warrant or Right [Line Items]
Beginning balance
Additions
Transfer from level 2	603,750
Change in fair value	(280,313)
Ending balance	$ 323,437

v3.23.2

SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares
Measurement Input, Price Volatility [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	62.80
Measurement Input, Price Volatility [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	82.50
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	3.62
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	4.98
Measurement Input, Share Price [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	0.42
Measurement Input, Share Price [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield	0.94
Measurement Input, Expected Dividend Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Dividend yield
Measurement Input, Expected Term [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected term	4 years 9 months 14 days
Measurement Input, Expected Term [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected term	5 years

v3.23.2

SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS (Details) - Fair Value, Inputs, Level 2 [Member]	6 Months Ended
	Jun. 30, 2023 USD ($)
Public Warrants [Member]
Class of Warrant or Right [Line Items]
Beginning balance
Additions	603,750
Transfer to level 1	(603,750)
Change in fair value
Ending balance
Placement Warrants [Member]
Class of Warrant or Right [Line Items]
Beginning balance
Additions	39,463
Transfer to level 1
Change in fair value	(18,180)
Ending balance	21,283
Debt Warrants [Member]
Class of Warrant or Right [Line Items]
Beginning balance
Additions	1,812,253
Transfer to level 1
Change in fair value	(901,178)
Ending balance	$ 911,075

v3.23.2

WARRANT LIABILITY (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Warrant Liability
Warrant liability non current	$ 1,255,795

v3.23.2

SCHEDULE OF COMPANY' S INCOME TAX EXPENSES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Current
Deferred
Total

v3.23.2

SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE (Details)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Japanese statutory tax rate	34.59%	34.59%
Change in valuation allowance	(34.59%)	(34.59%)
Effective tax rate	(0.00%)	(0.00%)

v3.23.2

INCOME TAXES (Details Narrative)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	21.00%
Effective income tax percentage	34.59%	34.59%

v3.23.2

EQUITY METHOD (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Equity earnings	$ 11,640	$ 10,736
ASC TECH Agent [Member]
Equity interest	48.81%	48.81%	48.81%

v3.23.2

SHAREHOLDERS’ DEFICIT (Details Narrative) - USD ($)			3 Months Ended			6 Months Ended
	Feb. 03, 2023	Feb. 02, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, shares authorized			400,000,000			400,000,000	400,000,000
Common stock, par value			$ 0.000001			$ 0.000001	$ 0.000001
Preferred stock, shares authorized			20,000,000			20,000,000	20,000,000
Preferred stock, par value			$ 0.000001			$ 0.000001	$ 0.000001
Number of shares issued, value					$ 2,715,196
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Acquisitions				5,000,000
Number of shares issued					1,709,541
Number of shares issued for service providers			5,269,291
Number of shares issued, value					$ 2
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares issued, value					$ 2,715,194
Stock Issued During Period, Shares, Stock Splits						14,480,081
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs						$ 14
Adjustments to Additional Paid in Capital, Stock Split						$ 4,224,049
Shares, Issued			61,409,146			61,409,146
Subscription Agreement [Member] | Public Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Acquisitions	8,797,687	5,000,000
Subscription Agreement [Member] | Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Acquisitions		3,196,311
Number of shares issued				413,103
Number of shares issued for service providers			5,269,291
Number of shares issued, value						$ 6,258,298
Prepaid expenses			$ 2,600,000			$ 2,600,000

v3.23.2

SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings (loss) per share – basic
Net loss from continuing operations		$ (10,737,846)	$ (3,369,816)	$ (18,376,366)	$ (6,548,417)
Net loss from discontinued operation		$ (683,474)	$ (466,117)	$ (846,499)	$ (679,519)
Weighted average number of common shares outstanding used in calculating basic earnings (loss) per share	[1]	56,871,014	43,509,237	54,957,819	42,712,850
Loss per share from continuing operations basic		$ (0.19)	$ (0.08)	$ (0.33)	$ (0.15)
Loss per share from continuing operations diluted		(0.19)	(0.08)	(0.33)	(0.15)
Loss per share from discontinuing operations basic		(0.01)	(0.01)	(0.02)	(0.02)
Loss per share from discontinued operation diluted		$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
[1] Retrospectively restated for effect of the business combination on February 6, 2023.

v3.23.2

SCHEDULE OF STOCK BASED COMPENSATION (Details) - USD ($)		5 Months Ended
	Jul. 27, 2022	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
Number of shares at grant date	4,142,277
Number of shares outstanding beginning		4,142,277
Forfeiture		(2,969,049)
Number of shares outstanding ending		1,173,228
Exercise price	$ 0.00015
Consideration paid to the Company at the grant date	$ 132

v3.23.2

SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares
Share-Based Payment Arrangement [Abstract]
Fair value of stock based compensation	$ 0.00005
Exercise period	5 years
Share price on the issuance date	$ 0.0001
Volatility	64.22%
Expected dividend rate	0.00%
Risk-free interest rate	2.88%

v3.23.2

STOCK-BASED COMPENSATION (Details Narrative) - $ / shares		6 Months Ended
	Jul. 27, 2022	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
Issuance of stock option exercised	2,648,000
Common stock exercise price	$ 0.00015
Weighted average contractual term		9 years 3 months 29 days

v3.23.2

SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT (Details)	Jun. 30, 2023 USD ($)
Public Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	$ 323,437
Public Warrants [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	323,437
Public Warrants [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Public Warrants [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	21,283
Placement Warrants [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Placement Warrants [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	21,283
Placement Warrants [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Debt Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	911,075
Debt Warrants [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Debt Warrants [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	911,075
Debt Warrants [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Warrant Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	1,255,795
Warrant Liabilities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	323,437
Warrant Liabilities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	932,358
Warrant Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Derivative Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	1,456,641
Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value
Derivative Liability [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value	1,456,641
Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities fair value

v3.23.2

SCHEDULE OF DISCONTINUED OPERATIONS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 83,334	$ 431,594	$ 925,205	$ 857,303
Cost of revenues	105,331	390,178	735,962	725,562
Gross profit	(21,997)	41,416	189,243	131,741
Operating expenses:
Total operating expenses	462,718	507,357	886,699	811,775
Loss from operations	(484,715)	(465,941)	(697,456)	(680,034)
Other income (expenses):
Interest income (expenses), net	(1,043)		(1,164)
Gain (Loss) on disposal of fixed assets		(176)	(9,761)	(176)
Impairment of fixed assets	(205,684)		(229,600)
Other income (expenses), net	7,968		91,482	691
Total other income (expenses)	(198,759)	(176)	(149,043)	515
Loss before income tax provision	(683,474)	(466,117)	(846,499)	(679,519)
Selling and Marketing Expense [Member]
Operating expenses:
Total operating expenses	684	900	4,099	5,904
General and Administrative Expense [Member]
Operating expenses:
Total operating expenses	352,200	327,582	715,547	576,135
Research and Development Expense [Member]
Operating expenses:
Total operating expenses	$ 109,834	$ 178,875	$ 167,053	$ 229,736

v3.23.2

SUBSEQUENT EVENTS (Details Narrative)	Aug. 10, 2023 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Seized amount	$ 28,075

---