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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington
D.C. 20549

 FORM

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

 For
the fiscal year ended December 31, 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

 (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.)

 The
 Walnut Building

 Mill St, Suite 204

 Los
 Angeles, CA

 90021

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

 (702) - 527-1270

 (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 -hundredth of a share of Common Stock at an exercise price of $1,150 per
 share

 AWINW

 The
 Nasdaq Stock Market LLC

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

 Title
 of each class

 N/A

by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

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

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

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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold was approximately $ 16,752,613 as of the last business day of the registrant's most recently completed
second fiscal quarter. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed
to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners
are, in fact, affiliates of the registrant.

 There were 924,890
 shares of the registrant's common stock, $0.000001 par value per share, outstanding as of April 15, 2024.

 TABLE
OF CONTENTS

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officer and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 Signatures

 CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K 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 Annual Report on Form 10-K 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 Annual Report on Form 10-K and the information incorporated by reference in this Annual
Report on Form 10-K to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances
on which any statement is based.

 SUMMARY
RISK FACTORS

 Our
business is subject to numerous risks and uncertainties, including those described in the "Risk Factors" section beginning
on page 23 and elsewhere in this Form 10-K. These risks represent challenges to the successful implementation of our strategy and to
the growth and future profitability of our business. Below is a summary of material risks, uncertainties and other factors that could
have a material effect on the Company and its operations:

 Risks
Related to the Lind Global Financing

 It
 is not possible to predict the actual number of shares of common stock, if any, we will issue upon conversion of the Convertible
 Notes or sell upon exercise of the Warrants by Lind Global, or the actual gross proceeds resulting from exercise of those warrants;

 Investors
 who buy shares of common stock from Lind Global at different times will likely pay different prices; and

 We
 may use proceeds from issuance of the Convertible Notes sales of shares of our common stock upon exercise of the Warrants in ways
 with which you may not agree or in ways which may not yield a significant return.

 Risks
Related to our Business

 We
 have incurred, and in the future may continue to incur, net losses;

 We
 are a holding company and will depend upon our subsidiary Aerwin Development CA LLC for our cash flows;

 We
 will need additional capital, and we cannot be sure that additional financing will be available;

 Our
 business performance may be adversely affected if the growth of the Air Mobility Vehicle industry slows down;

 Our
 future growth depends on the demand for, and customers' willingness to adopt, our planned Manned Air Vehicle;

 We
 may be unable to make product deliveries as we have not completed the design of our planned MAV and due to limited production capacity;

 We
 may not be able to engage customers successfully and to obtain meaningful orders in the future.

 We
 may become subject to product liability claims or warranty claims, which could harm our financial condition and liquidity if we are
 not able to successfully defend or insure against such claims;

 If
 we fail to successfully develop and commercialize new products, services and technologies that are well received by customers, our
 operating results may be materially and adversely affected;

 The
 execution of our business plans requires a significant amount of capital. In addition, our future capital needs will require us to
 sell additional equity or debt securities that may dilute the equity interests of our shareholders or introduce covenants that may
 restrict our operations or our ability to pay dividends;

 The
 failure to attract and retain additional qualified personnel could prevent us from executing our business strategy;

 We
 and our subsidiaries may need to defend ourselves against claims of intellectual property infringement, which may be time-consuming
 and costly;

 Our
 or our subsidiaries' intellectual property rights may not protect us effectively;

 Failure
 to comply with laws and regulations could harm our business;

 We
 are exposed to fluctuations in currency exchange rates;

 Nasdaq
 may delist the Company's securities from trading on its exchange, which could limit investors' ability to make transactions
 in our securities and subject the Company to additional trading restrictions;

 The
 market price of our common stock may be volatile, and you could lose all or part of your investment; and

 As
 an "emerging growth company" under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements.

 PART
I

 ITEM
1. BUSINESS

Technologies Inc., a Delaware corporation (the "Company," "we," "us," or "AERWINS") together
with its wholly owned subsidiary Aerwin Development CA LLC, a California limited liability company ("Aerwin Development"),
is redesigning its single-seat optionally Manned Air Vehicle ("MAV" or "Manned Air Vehicle"). All refences in
this Form 10-K to the "Company," "we," "us," or "AERWINS" include both AERWINS and Aerwin
Development.

 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., and this business section primarily includes information regarding the AERWINS',
Inc. business. We formed Aerwin Development on October 18, 2023.

 On April 2, 2024, the Company consolidated its issued and outstanding share
on the basis of one post-consolidation share for each 100 pre-consolidation common shares. All share figures and reference have been retrospectively
adjusted.

 For
additional information on the corporate history of our Company please see the section titled " Corporate History " on
page 20 of this Form 10-K.

 Mission

 With
the mission of "Transforming society from the sky down," we aim to realize an "Air Mobility Society" in which
cars, specialized crafts, and drones can fly freely. To this end, are redesigning our single-seat optionally Manned Air Vehicle. We aim
to align this vehicle with the stringent requirements of the Federal Aviation Administration's ("FAA") Powered Ultra-Light
Air Vehicle Category, setting a new standard for safe low-altitude manned flight.

 To
achieve this goal, we have established AERWIN Development Company LLC, a California subsidiary with offices in Los Angeles, California,
and entered into the Letter of Intent with Helicopter Technology discussed below. Helicopter Technology is a designer, developer, and
manufacturer of over 20 FAA-approved helicopters and turbine systems with over 20,000 square feet of facilities located five miles from
the Company's Los Angeles office. Its primary focus is helicopter rotor blades with capabilities that include tool design and fabrication,
structural design and assembly, and fatigue testing. They are an FAA-approved repair station, certified ISO 9001:2015 + AS9100D, ISO
9001:2015 + AS9110C, hold various EU approvals, and have U.S. Department of Defense ("DOD") clearance.

 The
specifications for our MAV has a target price of $200,000 and is designed to be used for sightseeing, sports, agriculture, surveillance,
field delivery and numerous military applications. Training time for flying the MAV is expected to last three to five days, with a payload
of up to 250 pounds to carry a single-seat occupant, cargo, or weaponry. The MAV is expected to be designed to be manually or entirely
remotely controlled with an innovative and proprietary three-rotor configuration to reduce sound and increase stability at a cruise speed
of up to 40 miles per hour at a height ranging from 20 to 50 feet.

 The
timeline for the planned development and launch of our redesigned MAV is as follows:

 End
 of 2024 – Schematic design and detailed specifications;

 End
 of 2025 – Prototype parts design, fabrication, and systems finalization;

 End
 of 2026 – Commencement of assembly, test planning, then testing, and DOD review; and

 End
 of 2027 – Begin sales of the MAV.

 Our
Chief Executive Officer, Kiran Sidhu, will lead the MAV development initiative. He plans to lead a dedicated U.S.-based team working
with and within Helicopter Technology to design, build, and commercialize the MAV within the Federal Aviation Regulation Part 103 requirements
for ultralight aircraft.

 Data
from the U.S. Bureau of Labor Statistics and Indeed.com reveal that the Los Angeles metropolitan area is home to the highest number of
aerospace engineers in the U.S., with over 4,000 aerospace engineers. The region potentially employs over 50,000 professionals in the
aerospace and defense sector. Prominent aerospace entities like Jet Propulsion Laboratory in Pasadena, SpaceX in Hawthorne, and NASA
Armstrong Flight Research Center in Palmdale are nearby, and major aerospace corporations, including Boeing, Lockheed Martin, and Raytheon,
have a local presence.

 Manned
Air Vehicle Development Letter of Intent

 Effective
as of December 19, 2023 (the "Effective Date"), we entered into a letter of intent (the "Letter of Intent") with
Helicopter Technology Company ("Helicopter Technology") regarding the design, development, manufacturing, sales, and marketing
(collectively, the "Project") of the MAV (the "MAV"). Under the Letter of Intent, we and Helicopter Technology
will form an entity (the "Operating Company") that will be owned 70% by us and 30% by Helicopter Technology. The Operating
Company agreed to enter into an agreement with Helicopter Technology to design, build, assemble, and test the MAV planned to meet the
FAA Powered Ultra-Light Category (the "Development Services Agreement"). In addition, according to the Development Services
Agreement, Helicopter Technology will determine and obtain all required regulatory approvals for the MAV, providing all the necessary
labor, materials, and customized equipment. The Letter of Intent contemplates that we and Helicopter Technology will enter into a manufacturing
supply agreement on terms to be mutually agreed on. In addition, the parties will work together to secure the funding required to start
production of the MAV. Helicopter Technology already has a working capital arrangement with its bank. The Operating Company will pay
Helicopter Technology its costs plus 15% of such amount to provide the services it provides pursuant to the Development Services Agreement
in addition to equity compensation in our company no less favorable than comparable compensation to our executive management.

 The
Operating Company will enter into a marketing and support agreement with us whereby we plan to provide certain engineering oversight,
accounting, marketing, sales, advertising, development of a dealer distribution network, online marketplace, and other distribution channels,
and financial management, budgeting, accounting, legal, and other administrative services as may be required by the Operating Company.
The Operating Company will pay us our costs plus 15% of such amount to provide these services. Payments will be subject to the available
cash flow of the Operating Company. In addition, we have agreed to provide working capital to the Operating Company of up to a maximum
of $1,700,000 for its operations over the first 12 months.

to the Letter of Intent, the parties intend to use their best efforts to negotiate and enter into an operating agreement for the Operating
Company (the "Operating Agreement") within 45 days of executing the Letter of Intent. The Letter of Intent also contains
additional customary conditions for entering into the Operating Agreement. The Company and Helicopter Technology are in ongoing discussions in an effort to finalize each of the agreements contemplated by the Letter
of Intent.

 Discontinued
Operations

 On
December 27, 2023, we discontinued the operations of A.L.I. Technologies Inc., a Japanese corporation ("A.L.I.") which is
our wholly-owned indirect subsidiary, as part of our operations, moved to Los Angeles, California, and continued the development of a
line of FAA-compliant manned and unmanned crafts for low-altitude flight. Among the reasons for discontinuing the business of A.L.I.,
was the desire to develop an MAV that would comply with the Federal Aviation Regulation Part 103 requirements for ultralight aircraft
and the difficulties that we believed the XTURISMO limited edition hoverbike being developed by A.L.I. would encounter. Following the
discontinuation, on December 27, 2023, A.L.I. filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20,
"Tokutei Kanzai Kakari" [Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed
on January 10, 2024, and proceedings have commenced. See "Item 3 – Legal Proceedings" and the discussion regarding
the A.L.I. Bankruptcy.

 ALI's
discontinued operations include the manned air mobility business, including the further development of the XTURISMO limited edition hoverbike,
the air mobility platform COSMOS (Centralized Operating System for Managing Open Sky), the computing power-sharing business, drone photography
business and drone and artificial intelligence research and development business.

 Significant
Market Opportunities

 In
today's increasingly populated and interconnected world, traditional modes of urban transportation continue to contribute to congestion
and pollution, and they are primarily confined to land-based infrastructure. Mobility for the future requires a revolutionary solution.

 The
Total Addressable Market (TAM) for Autonomous Urban aircraft is expected to increase at a cumulative annual growth rate of 29% from 2020
to 2040, reaching $162 billion. 2

 See UBS report/Japan Ministry of Economy, Trade and Industry.

 Estimated
urban air mobility opportunities by market share are as follows:

 See:
Urban Air Mobility eVTOL/Urban Air Mobility TAM Update: A Slow Take-Off, But Sky's the Limit, Morgan Stanley May 6, 2021.

 3)

 Manned
 Air Mobility

 The
manned air mobility industry has been the focus of much attention, with demonstration tests being conducted in many countries and a roadmap
published in Japan under the leadership of the Ministry of Economy, Trade, and Industry.

 According
to data published by Morgan Stanley Research in 2019, the global market for manned air mobility, including hoverbikes, is expected to
grow to over 150 trillion yen (approximately $1,036 billion USD) by 2040 according to long-term global forecasts. Data published by PWC
in 2020 indicates that the air mobility market in Japan will grow to approximately 2.5 trillion yen (approximately $17 billion USD) by
2040. According to "Flying Cars Global Market Report 2021" published by The Business Research Company in 2021, the global
market is expected to grow at a CAGR of 58.7% to 35 billion yen (approximately $241 million USD) by 2025. The report says that the key
to growth will be the development of infrastructure system requirements, aircraft development, and institutional response, particularly
in passenger transportation.

 The
manned air mobility field in the air mobility industry, to which we belong, is expected to contribute to solving various social issues
such as eliminating traffic congestion and improving productivity in cities, reducing land infrastructure costs for the approximately
20,000 marginalized villages in rural areas (remote islands and mountainous regions) in Japan, transporting people between inhabited
islands, replacing helicopters, and diversifying entertainment and sightseeing, as advanced mobility that can go "wherever they
want" and "whenever they want."

 Marketing,
Sales and Distribution

 We
plan to develop a marketing, sales and advertising programs following completion of the schematic design and detailed specification phase
of our redesigned MAV during 2025 and 2026 as well as begin seeking indications of interest by prospective dealers as part of a dealer
distribution network and other distribution channels including online sales.

 Competition

 We
recognize that there are no new alternatives at this time, as hoverbikes and drones themselves are substitutes for existing solutions
at this time. Most of the industry's production experience in the manned air mobility business is still in the demonstration stage,
although eHang in China has produced and delivered products. Many companies are still in the research and development stage and are not
disclosing their sales prices. The low-altitude manned flight market is, however, evolving and is expected to be highly competitive with
a variety of aircraft manufactured in the United States and abroad. With the introduction of new technologies and the potential entry
of new competitors into the market that may offer alternatives to our planned MAV, we expect competition to increase in the future, which
could harm our business, results of operations, or financial condition once we complete development and commence production and sales.
We expect to face significant competition from other manufacturers of low-altitude manned flight vehicles, which may have an adverse
effect on expected revenues.

 We
believe our ability to compete successfully with other manufactures will also depend on a number of factors including purchase price,
safety, after-sales support and product warranties, and on factors such as brand, established customer relationships and financial and
manufacturing resources. Many of the incumbents have, and future entrants may have, greater resources than we have and may also be able
to devote greater resources to the development of their current and future vehicles. They may also have greater access to larger potential
customer bases and have and may continue to establish cooperative or strategic relationships amongst themselves or with third parties
(including OEMs) that may further enhance their resources and offerings.

 Intellectual
Property

 In
connection with our redesign of the MAV, we are evaluating the utility of the proprietary systems, technologies and other intellectual
property developed or owned by A.L.I. given that we elected to discontinue all of its operations, shift development, production and potentially
initial sales efforts to the United States. Our success depends in part on our ability to protect our technology and intellectual property
we may develop or license as part of our efforts to develop the MAV. We expect to rely on a combination of patents, patent applications,
trade secrets, know-how, copyrights, trademarks, intellectual property licenses and other contractual rights to establish and protect
proprietary rights in technology we utilize in connection with the development and ultimate sale of the MAV. In addition, we plan to
enter into confidentiality and non-disclosure agreements with our employees and business partners. The agreements we plan to enter into
with our employees will provide that all software, inventions, developments, works of authorship and trade secrets created by them during
the course of their employment are our property or that of the Operating Company.

 COVID-19

 On
March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The pandemic has resulted in the implementation
of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of
the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily
closing businesses. While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted
at this time, such as the extent and effectiveness of containment actions, it has already had an adverse effect on the global economy
and the lasting effects of the pandemic continue to be unknown. As of the date of this Form 10-K, the extent of the future impact of
COVID-19 is still highly uncertain and cannot be predicted.

Developments

 Closing
of Business Combination

 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 "Company," "we," "us, "our" "AERWINS,"
or "AERWINS Technologies").

to the terms of the Merger Agreement, the total consideration for the Business Combination and related transactions (the
"Merger Consideration") was approximately $600 million. In connection with the Special Meeting, holders of 11,328,988
pre-consolidated shares of Pono common stock sold in its initial public offering exercised their right to redeem those shares for
cash prior to the redemption deadline of January 25, 2023, at a price of $10.50 per share, for an aggregate payment from
Pono's trust account of approximately $118.9 million. Effective February 3, 2023, Pono's units ceased trading, and
effective February 6, 2023, AERWINS Technologies' common stock began trading on the Nasdaq Global Market under the symbol
"AWIN" and the warrants began trading on the Nasdaq Capital Market under the symbol "AWINW."

 After
taking into account the aggregate payment in respect of the redemption, Pono's trust account had a balance immediately prior to
the Closing of $1,795,997. Such balance in the trust account was used to pay transaction expenses and other liabilities of Pono, pay
certain transaction expenses of AERWINS, Inc., with the remaining being deposited in AERWINS, Inc. cash account. In connection with the
Business Combination, a warrant holder of AERWINS, Inc. received a warrant to purchase 4,693 shares of AERWINS Technologies'
common stock as Merger Consideration as set forth in the Merger Agreement. The Merger Consideration was subject to a post-Closing true
up 90 days after the Closing. The post-Closing true up period expired on May 5, 2023 without any claims having been made.

 As
a result of the Merger and the Business Combination, holders of Pono common stock automatically received common stock of AERWINS Technologies,
and holders of Pono warrants automatically received warrants of AERWINS Technologies with substantively identical terms. At the Closing
of the Business Combination, all shares of Pono owned by the Sponsor (consisting of shares of Class A common stock and shares of Class
B common stock), which we refer to as the founder shares, automatically converted into an equal number of shares of AERWINS Technologies'
common stock, and Private Placement Warrants held by the Sponsor, automatically converted into warrants to purchase one share of AERWINS
Technologies common stock with substantively identical terms. As of the Closing: public stockholders owned approximately 0.3% of the
outstanding shares of AERWINS Technologies common stock; the Sponsor and its affiliates owned approximately 6.7% of the outstanding shares
of AERWINS Technologies common stock and AERWINS, Inc.'s former security holders collectively owned approximately 93.0% of the
outstanding shares of AERWINS Technologies common stock.

 At
the closing of the Merger, we issued to the former shareholders of AERWINS, an aggregate of 519,291 shares of common stock, of which
14,079 shares are being held in escrow (the "Escrow Shares"). The Escrow Shares were subject to a post-Closing true up
90 days after the Closing based on confirmed amounts of the Closing Net Indebtedness of AERWINS, the Net Working Capital of AERWINS,
and certain Transaction Expenses, each of which are defined in the Merger Agreement. If the adjustment is a negative adjustment in favor
of us, the escrow agent shall distribute to us a number of shares of our common stock with a value equal to the adjustment amount. If
the adjustment is a positive adjustment in favor of AERWINS, we will issue to the former AERWINS stockholders an additional number of
shares of our common stock with a value equal to the adjustment amount. The post-Closing true up period expired on May 5, 2023 without
any claims having been made. In addition, at the closing of the Merger, the Company issued an aggregate of 1,500 shares of common stock
(the "Compensation Shares") to Boustead Securities, LLC ("Boustead"), in partial satisfaction of fees due to
them in connection with the Merger. In addition, Boustead is entitled to an increase in the number of Compensation Shares on the 18 0t h
day following the closing of the Merger (the "Measurement Date") if the VWAP for the common stock during over the five trading
days prior to the Measurement Date is less than $1,000 per share (the "Adjustment"). The number of shares of common stock
subject to the Adjustment is equal to (1) $1,500,000 divided by the average VWAP of the common stock over the five trading days prior
to the Measurement Date, minus (2) the number of Compensation Shares.

 Lock-up
Agreements

 In
connection with the Business Combination, certain stockholders of AERWINS, Inc. and certain of AERWINS', Inc. officers and directors
(such stockholders, the "Company Holders") entered into a lock-up agreement (the "Lock-up Agreement") pursuant
to which they are contractually restricted, during the Lock-up Period (as defined below), from selling or transferring any of (i) their
shares of AERWINS common stock held immediately following the closing and (ii) any of their shares of AERWINS common stock that result
from converting securities held immediately following the closing (the "Lock-up Shares"). The "Lock-up Period"
means the period commencing at closing and end the earliest of: (a) six months from the closing (or, in the case of Shuhei Komatsu, AERWINS'
Chief Executive Officer, thirty months from the closing), (b) the date the Company consummates a liquidation, merger, share exchange
or other similar transaction with an unaffiliated third party that results in all of the Company's stockholders having the right
to exchange their shares of common stock for cash, securities or other property and (c) the date on which the closing sale price of the
Company's common stock equals or exceeds $1,200 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations
and the like) for any twenty (20) trading days within any thirty (30) trading day period commencing at least one hundred and fifty (150)
days after the closing; provided that 1/3 of such restricted shares shall be released from such restrictions if the closing stock price
of the Company's common stock reaches each of $1,300, $1,500, and $1,700.

 The
Sponsor is subject to a lock-up pursuant to a letter agreement (the "Sponsor Lock-up Agreement"), entered into at the
time of the IPO (as defined below), among Pono, the Sponsor and the other parties thereto, pursuant to which the Sponsor is subject
to a lock-up beginning on the Closing and end the earliest of: (a) six months from the Closing, (b) the date the Company consummates
a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the
Company's stockholders having the right to exchange their shares of the Company's common stock for cash, securities or
other property and (c) the date on which the closing sale price of the Company's common stock equals or exceeds $1,200 per
share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations and the like) for any twenty (20)
trading days within any thirty (30) trading day period commencing at least one hundred and fifty (150) days after the Closing;
provided that 1/3 of such restricted shares shall be released from such restrictions if the closing stock price of the
Company's common stock reaches each of $1,300, $1,500, and $1,700. "IPO" means Pono's public offering of
10,000,000 pre-consolidation units (the "Units") at pre-consolidated of $10.00 per Unit, generating gross proceeds of
$100,000,000, which was consummated on August 13, 2021.

 Indemnification
Agreements

 On
February 7, 2023, AERWINS Technologies entered into indemnification agreements, with each of AERWINS Technologies' directors containing
provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation
Law. The indemnification agreements will require AERWINS Technologies, among other things, to indemnify its directors against certain
liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified.

 Non-Competition
and Non-Solicitation Agreements

 Following
execution of the Merger Agreement, certain significant stockholders of AERWINS, Inc. entered into non-competition and non-solicitation
agreements (the "Non-Competition and Non-Solicitation Agreements"), pursuant to which they agreed not to compete with Pono,
AERWINS, Inc. and their respective subsidiaries during the two-year period following the Closing and, during such two-year restricted
period, not to solicit employees or customers or clients of such entities. The Non-Competition and Non-Solicitation Agreements also contain
customary non-disparagement and confidentiality provisions.

 Registration
Rights Agreements

 At
the closing of the Business Combination, certain significant stockholders of AERWINS, Inc. entered into a registration rights agreement
with Pono providing for the right to three demand registrations, piggy-back registrations and shelf registrations with respect to the
Merger Consideration shares.

 Purchaser
Support Agreement

 Simultaneously
with the execution of the Merger Agreement, Lind Global Representative entered into a support agreement (the "Purchaser Support
Agreement") in favor of Pono and AERWINS, Inc. and their present and future successors and subsidiaries. In the Purchaser Support
Agreement, the Purchaser Representative agreed to vote all equity interests in Pono in favor of the Merger Agreement and related transactions
and to take certain other actions in support of the Merger Agreement and related transactions. The Purchaser Support Agreement also prevents
the Purchaser Representative from transferring its voting rights with respect to equity interests in Pono or otherwise transferring equity
interests in Pono prior to the meeting of Pono's stockholders to approve the Merger Agreement and related transactions, except
for certain permitted transfers.

 Voting
Agreement

 Simultaneously
with the execution of the Merger Agreement, certain stockholders of AERWINS, Inc. entered into a voting agreement (the "Voting
Agreement") in favor of Pono and AERWINS, Inc. and their present and future successors and subsidiaries. In the Voting Agreement
for certain stockholders of AERWINS, they each agreed to vote all of their AERWINS, Inc. stock interests in favor of the Merger Agreement
and related transactions and to take certain other actions in support of the Merger Agreement and related transactions. The Voting Agreement
also prevents them from transferring their voting rights with respect to their AERWINS, Inc. stock or otherwise transferring their AERWINS
stock prior to the AERWINS, Inc. approval of the Merger Agreement and related transactions, except for certain permitted transfers.

 Executive
Employment Agreements

 On
February 3, 2023, the Company entered into employment agreements (the "Employment Agreements") with executive officers: Shuhei
Komatsu (former Chief Executive Officer), Taiji Ito (Global Markets Executive Officer), Kazuo Miura (former Chief Product Officer) and
Kensuke Okabe (former Chief Financial Officer). The Employment Agreements all provide for at-will employment that may be terminated by
the Company for death or disability and with or without cause, by the executive with or without good reason, or mutually terminated by
the parties. The Employment Agreements for Mr. Komatsu, Mr. Ito, Mr. Miura, and Mr. Okabe provide for a severance payment equal to the
remaining base salary for the remaining period of the respective term of employment (each term is one (1) year) upon termination by the
Company without cause or termination by such executive for good reason. The executive agreements provide for a base salary of $200,000,
$200,000, $200,000 and $200,000 for Mr. Komatsu, Mr. Ito, Mr. Miura and Mr. Okabe, respectively, as well as possible annual performance
bonuses and equity grants under the equity incentive plan if and when determined by the Company's Compensation Committee. No performance
bonuses were paid under these agreements.

Award Agreements

 On
February 3, 2023, the Company entered into Option Award Agreements (the "Option Award Agreements") with former executive
officers: Shuhei Komatsu (former Chief Executive Officer), Taiji Ito (former Global Markets Executive Officer and Chief Executive Officer),
Kazuo Miura (former Chief Product Officer) and Kensuke Okabe (former Chief Financial Officer).

 The
Option Award Agreements grants to each of the following persons options to acquire shares of the Company's common stock, to vest
as set forth in the Option Award Agreements, as follows:

 Shuhei
 Komatsu–- 15,256 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr.
 Komatsu's resignation.

 Taiji
 Ito–- 7,039 options at an exercise price of $0.015 per share of common stock

 Kazuo
 Miura–- 7,399 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr. Komatsu's
 resignation.

 Kensuke
 Okabe–- 4,693 options at an exercise price of $0.015 per share of common stock

 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
31,963 shares of common stock (the "Shares") of AERWINS, Inc. which was immediately exchanged for 50,000 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.

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 Form 10-K included in the Registration
Statement (and any post-effective amendment thereto) and any Form 10-K 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).

 Loan
Agreement

 On
February 27, 2023, the wholly owned subsidiary of the Company's wholly owned subsidiary, A.L.I. Technologies Inc., a Japanese corporation
("A.L.I.") entered into a Loan Agreement with Shuhei Komatsu, the Company's former Chief Executive Officer (the "Agreement").
The Agreement was approved by the Company's Board of Directors on February 26, 2023 and by the Company's Compensation Committee
on February 26, 2023. Pursuant to the Agreement, Mr. Komatsu agreed to lend A.L.I. 200,000,000 yen (approximately $1,469,400 US Dollars
based on a conversion rate of $0.007347 US Dollar for each $1 yen as of February 27, 2023) (the "Loan"). The original maturity
date of the Loan under the Agreement was April 15, 2023, and was extended to June 30, 2023 (the "Maturity Date") pursuant
to the terms of a memorandum agreement signed on May 15, 2023 (the "Memorandum"). 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 April
21, 2023. Pursuant to the terms of the Memorandum, the Company paid Mr. Komatsu 100,000,000 yen (approximately US$753,266), the interest
rate was increased to 14.6% per annum as of April 22, 2023 and A.L.I. agreed to delay damages in the amount of 480,000 yen (approximately
US$3,616). In addition, A.L.I pledged as collateral for the Loan shares of ASC Tech Agent Co., Ltd. held by A.L.I. and the equity interest
in any entity in which A.L.I. may transfer its drone service business in the future. We are in discussions with Mr. Komatsu regarding
further extension of the maturity date of the Loan and other alternatives regarding settlement of this debt.

 If
any of the following events occur while the Loan is outstanding, the Loan will become immediately due and payable together with all interest
thereon: (i) if payment is suspended or bankruptcy proceedings are initiated against A.L.I., (ii) if A.L.I. initiates legal proceedings
related to debt reorganization involving court intervention or when facts are recognized as having occurred that payment has been suspended,
(iii) if provisional seizure, preservation seizure, seizure order, or delinquent disposition is received by A.L.I., (iv) if A.L.I. is
delayed in make any payments under the Agreement, (v) if A.L.I. violates any provisions of the Agreement or (vi) upon the occurrence
of any equivalent reasons requiring the preservation of the right to claim arise in addition to the foregoing. Pursuant to the Agreement,
if A.L.I. does not timely repay the Loan in accordance with the terms of the Agreement, the interest rate on the Loan will increase to
14.6% per annum until the full payment is made. Under the Agreement, for any litigation arising under the Agreement, regardless of the
amount or claim, the exclusive court of jurisdiction will be the Tokyo District Court.

 Summary
of Lind Global Financing

 On
April 12, 2023, we entered into the Purchase Agreement with Lind Global pursuant to which we agreed to issue to Lind Global up to three
secured convertible promissory notes (the "Convertible Notes" and each a "Convertible Note") in the aggregate
principal amount of $6,000,000 for an aggregate purchase price of $5,000,000 and warrants (the "Warrants" and each a "Warrant")
to purchase 56,016 shares of the Company's common stock (the "Transaction"). On August 25, 2023 (the "Amendment
Date"), we entered into an Amendment to Senior Convertible Promissory Note First Closing Note and an Amendment to the Senior Convertible
Promissory Note Second Closing Note with Lind Global (collectively, the "Floor Note Amendments") which amended the Conversion
Price (as defined below) to include a floor price of $18.176(the "Floor Price"). In addition to inclusion of a Floor Price,
the Note Amendments also provide that at the option of Selling Securityholder, if in connection with a conversion under the Closing Notes,
as amended, the Conversion Price is deemed to be the Floor Price, then in addition to issuing the Conversion Shares (as defined in the
Closing Notes) at the Floor Price, we agreed to pay to Selling Securityholder a cash amount equal to (i) the number of shares of common
stock that would be issued to Selling Securityholder upon a conversion determined by dividing the dollar amount to be converted being
paid in shares of common stock by ninety percent (90%) of the lowest single VWAP during the twenty (20) Trading Days prior to the applicable
date of conversion (notwithstanding the Floor Price) less (ii) the number of Conversion Shares issued to Selling Securityholder in connection
with the conversion; and (iii) multiplying the result thereof by the VWAP on the Conversion Date.

 The
closings of the Transaction (the "Closings and each a "Closing") occured 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 Lind Global of a Convertible Note with a purchase price of $2,100,000 and a principal amount of $2,520,000 (the "First Closing
Note") and the issuance to Lind Global of a Warrant to acquire 23,527 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 Lind Global of a Convertible Note
with a purchase price of $1,400,000 and a principal amount of $1,680,000 (the "Second Closing Note"), and the issuance to
Lind Global of a Warrant to acquire 15,685 shares of common stock. The Convertible Notes issued in the First Closing and the Second
Closing are hereinafter referred to as the "Closing Notes". As provided for in the January Note Amendments, neither party to the Purchase Agreement is obligated to complete the previously agreed
on third Tranche (the "Third Closing), which would have consisted of the issuance and sale to Lind Global of a Convertible Note
with a purchase price of $1,500,000 with a principal amount of $1,800,000, and the issuance to Lind Global a Warrant to acquire
16,805 shares of common stock. The Third Closing would have closed upon the effectiveness of the Registration Statement discussed below,
but the Registration Statement was never declared effective by the SEC. Pursuant to the Purchase Agreement, at each Closing, the Company
agreed to pay Lind Global a commitment fee in an amount equal to 2.5% of the funding amount being funded by Lind Global at the applicable
Closing. Pursuant to the Purchase Agreement, at each Closing, the Company
agreed to pay Lind Global a commitment fee in an amount equal to 2.5% of the funding amount being funded by Lind Global at the applicable
Closing.

 The
Convertible Note issued in the First Closing has a maturity date of April 12, 2025 and the Convertible Note issued in the Second Closing
has a maturity date of May 23, 2025 (the "Maturity Date").

 Each
Convertible Note has a conversion price equal to the lesser of: (i) US$9.00 ("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")
"), provided that in no event shall the Conversion Price be less than $18.176 (the "Floor Price"), and in the event
that the calculation as set forth above would result in a Conversion Price less than the Floor Price, the "Conversion Price"
shall be the Floor Price.

 In
addition to inclusion of a Floor Price, the Note Amendments also provide that at the option of Selling Securityholder, if in connection
with a conversion under the Closing Notes, as amended, the Conversion Price is deemed to be the Floor Price, then in addition to issuing
the Conversion Shares (as defined in the Closing Notes) at the Floor Price, we agreed to pay to Selling Securityholder a cash amount
equal to (i) the number of shares of common stock that would be issued to Selling Securityholder upon a conversion determined by dividing
the dollar amount to be converted being paid in shares of common stock by ninety percent (90%) of the lowest single VWAP during the twenty
(20) Trading Days prior to the applicable date of conversion (notwithstanding the Floor Price) less (ii) the number of Conversion Shares
issued to Selling Securityholder in connection with the conversion; and (iii) multiplying the result thereof by the VWAP on the Conversion
Date.

 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 to Lind Global 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 $89.26 per share and $73.16
per share, respectively, subject to adjustments as set forth in the Warrant.

 In
the event that there is no effective registration statement registering the shares underlying the Warrants or upon the occurrence of
a Fundamental Transaction as defined in the Purchase Agreement, then the Warrants may be exercised by means of a "cashless exercise"
at the holder's option, such that the holder may use the appreciated value of the Warrants (the difference between the market price
of the underlying shares of common stock and the exercise price of the underlying warrants) to exercise the warrants without the payment
of any cash.

 In
accordance with our obligations under the Purchase Agreement, we filed a registration statement on Form S-1 on May 12, 2023 (the "May
2023 Registration Statement") with the SEC to register under the Securities Act the resale by Lind Global of up to 112,223 shares
of common stock issuable by us upon partial conversion of the Convertible Notes and exercise of the Warrants issued by us in connection
with the Purchase Agreement. We plan to withdraw the May 2023 Registration Statement as permitted pursuant to the SPA Amendment No. 2
discussed below.

 The
Purchase Agreement contains customary registration rights, representations, warranties, conditions and indemnification obligations by
each party, including our agreement to refrain from engaging in certain "Prohibited Transactions" as defined in the Purchase
Agreement, to hold a special meeting of shareholders for the purpose of obtaining shareholder approval of the Transactions, certain events
giving rise to a default under the Convertible Notes, obligations to use the proceeds from certain future financings to repay a portion
of the principal amount of the Convertible Notes, our pledge to Lind Global of the ownership interests in our subsidiaries, a grant by
us and our subsidiaries of a security interest in all of their respective assets and rights as collateral for the obligations due under
the Convertible Notes, and a guaranty by our subsidiaries of our obligations under the Convertible Notes.

 The
A.L.I. Bankruptcy constitutes an event of default pursuant to the Closing Notes in the aggregate principal amount of $4,200,000. Consequently,
Lind Global may at any time, at its option, (1) demand payment of an amount equal to 120% of the outstanding principal amount of the
Closing Notes and (2) exercise all other rights and remedies available to it under the Closing Notes and other agreements entered into
among the Company and Lind in connection with the issuance of the Closing Notes (collectively, the "Transaction Documents");
provided, however, that (x) upon the occurrence of the event of default described above, Lind Global, in its sole and absolute discretion
(without the obligation to provide notice of such event of default), may: (a) from time-to-time demand that all or a portion of the outstanding
principal amount of the Closing Notes be converted into shares of the Company's common stock at the lower of (i) the then-current
Conversion Price (that price being $18.176 per share (the "Floor Price")) and (ii) eighty-percent (80%) of the average of
the three (3) lowest daily volume weighted average prices ("VWAPs") during the 20 trading days prior to the delivery by Lind
Global of the applicable notice of conversion or (b) exercise or otherwise enforce any one or more of Lind Global's rights, powers,
privileges, remedies and interests under the Closing Notes, the Transaction Documents or applicable law.

 The
Closing Notes also provide that at the option of Lind Global, if in connection with a conversion under the Closing Notes, the Conversion
Price is deemed to be the Floor Price, then in addition to issuing the Conversion Shares (as defined in the Closing Notes) at the Floor
Price, the Company will also pay to Lind Global a cash amount equal to (i) the number of shares of common stock that would be issued
to Lind Global upon a conversion determined by dividing the dollar amount to be converted being paid in shares of common stock by ninety
percent (90%) of the lowest single VWAP during the twenty (20) trading days prior to the applicable date of conversion (notwithstanding
the Floor Price) less (ii) the number of shares of the Company's common stock issued to Lind Global in connection with the conversion;
and (iii) multiplying the result thereof by the VWAP on the date of conversion.

 On
January 23, 2024, the Company and Lind Global entered into an Amendment No. 2 to Senior Convertible Promissory Note First Closing
Note and an Amendment No. 2 to the Senior Convertible Promissory Note Second Closing Note (collectively, the "January Note
Amendments") which amended the Closing Notes to, subject to the conditions discussed below, (i) reduce the aggregate principal
amount of the Closing Notes from $4,200,000 to $3,500,000, (ii) require the Company to repay an aggregate of $1,750,000 of the
principal amount of the Closing Notes no later than the closing date of a public offering of the Company's common stock where
it receives gross proceeds of at least $13,500,000 (the "Public Offering") no later than April 15, 2024 and (iii)
requires Lind Global to convert no less than an aggregate of $1,750,000 of the Closing Notes no later than 11 months after the
closing of the Public Offering, provided that at the time of such conversion Lind Global receives shares of common stock that may be
disposed of without restrictive legend at their issuance pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an available exemption from or in a transaction not subject to
the registration requirements of the Securities Act (the "Mandatory Conversion Amount").

 In
addition, on January 23, 2024, the Company and Lind Global entered into Amendment No. 2 to Securities Purchase Agreement (the "SPA
Amendment No. 2") to, subject to the conditions discussed below, (i) eliminate the obligation of the Company and Lind Global to
complete the Third Closing discussed above, (ii) delete the clause
obligating the Company to register the shares of common stock issuable upon conversion of the Closing Notes and exercise of the Warrants
(collectively, the "Closing Securities") or pay Lind Global any delay payments as a result of the Company's failure
to register the Closing Securities, (iii) eliminate certain restrictions on the Company's right to issue equity and debt in future
transactions and (iv) eliminate Lind Global's right to participate in future offerings of the Company's securities, other
than its rights to participate in this offering.

 The
January Note Amendments and the SPA Amendment are subject to the Company completing a public offering of its Common Stock where it receives
gross proceeds of at least $13,500,000 (the "Public Offering") and making the Mandatory Prepayment as discussed above. In
as much as the Company failed to complete the Public Offering by April 15, 2024, Lind Global is not obligated to fulfill the terms of
the January Note Amendments. The Company plans to enter into discussions with Lind Global to extend the time period in which it is obligated
to complete the Public Offering.

 Officer
and Director Changes

 On
March 20, 2023, Shuhei Komatsu resigned from his positions as Chief Executive Officer and Director and Chairman of the Board of Directors
of the Company (the "Board"). Mr. Komatsu previously served as the Company's Chief Executive Officer and a Director
and Chairman of the Board since February 3, 2023. Mr. Komatsu's resignation was not the result of any disagreement with the Company
on any matter relating to the Company's operations, policies or practices.

 On
March 20, 2023, the Company's Board appointed Taiji Ito to serve as Chief Executive Officer of the Company. Mr. Ito formerly served
as the Company's Global Markets Executive Officer and as a Director of the Company, and has served in such capacities since his
appointment to those positions on February 3, 2023 until his resignation as discussed below.

 On
March 22, 2023, the Board appointed Daisuke Katano to fill the vacancy on its Board created upon Mr. Komatsu's resignation to serve
as a Director of the Company, and on the same date also appointed Mr. Katano to serve as the Company's Chief Operating Officer.

 On
March 22, 2023, the Board appointed Marehiko Yamada to serve as the Chairman of the Board. Mr. Yamada was appointed as an independent
director of the Company on February 3, 2023. On March 22, 2023, the Company's Board of Directors also appointed Dr. Sayama to serve
as the Vice-Chair of the Board. Dr. Sayama was appointed as an independent director of the Company on February 3, 2023. On March 22,
2023, the Company's Board also appointed Kensuke Okabe to serve as Secretary of the Company. Mr. Okabe was appointed as the Company's
Chief Financial Officer on February 3, 2023.

 On
March 22, 2023, the Board also appointed Mr. Yamada as the Chair of the Company's Compensation Committee and appointed Dr. Sayama
as the Chair of the Company's Nominating and Corporate Governance Committee. Dr. Sayama previously served as the Chair of the Company's
Compensation Committee from February 3, 2023 to March 22, 2023. Mr. Yamada previously served as the Chair of the Company's Nominating
and Corporate Governance Committee from February 3, 2023 to March 22, 2023.

 On
March 27, 2023, the Board approved the removal of Kazuo Miura as the Company's Chief Product Officer. Mr. Miura served as the Company's
Chief Product Officer since his appointment to this position on February 3, 2023. Mr. Miura's removal was not the result of any
disagreement with the Company on any matter relating to the Company's operations, policies or practices.

 On
May 15, 2023, the Company's Board appointed Kiran Sidhu as the Chairman of the Board. Following the appointment of Mr. Sidhu, Dr.
Sayama and Mr. Yamada resigned as members of the Board, effective May 18, 2023 and May 15, 2023, respectively. Their resignations were
not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices.

 On
May 22, 2023, the Board also appointed Katharyn (Katie) Field and Pavanveer (Pavan) Gill as independent directors to fill the vacancies
on the Board created by the resignations of Dr. Sayama and Mr. Yamada. Following the appointment of Ms. Field and Mr. Gill, Mr. Iwamura
resigned as a member of the Board. Mr. Iwamura's resignation was not the result of any disagreement with the Company on any matter
relating to the Company's operations, policies or practices.

 On
July 17, 2023, Daisuke Katano resigned as a member of our Board of Directors and on July 25, 2023 resigned as our Chief Operating Officer.
Mr. Katano's resignation was not the result of any dispute or disagreement with the Company or the Board on any matter relating
to the operations, policies or practices of the Company.

 On
July 18, 2023, the Board appointed Kiran Sidhu as Executive Chairman of the Board and President of the Company and expanded the size
of the Board by one person, to a total of seven persons, appointing Mr. Robert Lim as an independent Director of the Company, filling
the vacancy created by Mr. Katano's resignation. Mr. Lim's term is to serve in such position until his earlier death, resignation
or removal from office.

 On
July 18, 2023, the Board changed the composition of the Committees of the Board to be comprised of the following persons:

 The
 Audit Committee shall be comprised of the following persons: Katharyn Field, Committee Chair and Audit Committee Financial Expert;
 Robert Lim; and, Pavanveer Gill.

 The
 Compensation Committee shall be comprised of the following persons: Pavanveer Gill, Committee Chair; Robert Lim; and, Katharyn Field.

 The
 Nominating and Corporation Governance Committee shall be comprised of the following persons: Robert Lim, Committee Chair; Katharyn
 Field; and, Pavanveer Gill.

 On
July 18, 2023, the Board formed a "Funding Committee of the Board" that is comprised on the following persons: Katharyn Field
as Committee Chair; Mr. Lim; and, Mr. Katano. The purpose of the committee is to consider funding alternatives and make recommendations
on such alternatives to the Board.

 On
August 24, 2023, we appointed Yinshun (Sue) He as our Chief Financial Officer following the resignation of Kensuke Okabe.

 On
December 12, 2023, Kiran Sidhu was appointed as our Chief Executive Officer following the resignation of Taiji Ito as our Chief Executive
Officer. Mr. Ito remains as a director of the Company. As part of this change, the Board appointed Ms. Field as the Chairman of the Board
to take on the role formerly held by Mr. Sidhu who will remain as a director of the Company in addition to his role as its CEO.

 Potential Nasdaq Delisting

 As previously
disclosed in the Current Report on Form 8-K filed on April 21, 2023 by the Company, on April 20, 2023, Nasdaq Listing Qualifications
staff ("Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notified the Company that it no longer complied
with the minimum bid price requirement under Listing Rule 5450(a)(1). In accordance with Listing Rule 5810(c)(3)(A), the Company was
provided 180 calendar days, or until October 17, 2023, to regain compliance with Rule 5450(a)(1) (the "Bid Price Rule").
As previously disclosed on a Form 8-K filed with the SEC on October 23, 2023, on October 18, 2023, Staff notified the Company that
it had determined to delist the Company as it did not comply with the requirements for continued listing on the Exchange. As
previously disclosed in the Current Report on Form 8-K filed with the SEC on November 28, 2023, the Company appealed Nasdaq's
determination in accordance with the procedures set forth in the Nasdaq Listing Rules and requested a hearing (the "Hearing
Request") before the Nasdaq Hearings Panel (the "Panel"). As previously disclosed on a Form 8-K filed with the SEC
on November 28, 2023, on November 21, 2023, Staff issued an additional delist determination letter after the Company failed to file
its Form 10-Q for the period ended September 30, 2023 (the "Delinquent Report"), as required by Listing Rule 5250(c)(1)
(the "Periodic Filing Rule"). On November 28, 2023, the Company filed its Delinquent Report and, thus, regained
compliance with the Periodic Filing Rule. As previously disclosed on a Form 8-K filed with the SEC on December 12, 2023, on December
6, 2023, Staff issued an additional delist determination letter as the Company's no longer complied with the $50,000,000
minimum market value of listed securities requirement set forth in Listing Rule 5450(b)(2)(A) (the "MVLS Rule"), which
served as an additional and separate basis for delisting.

 A hearing before the Panel was
conducted on January 4, 2024. The Panel conditionally granted the Company's request to transfer its shares from The Nasdaq Global
Market to The Nasdaq Capital Market, effective at the open of trading on January 18, 2024 and the Company's request for an exception
to the Exchange's listing rules until April 15, 2024, to demonstrate compliance, subject to the satisfaction of the following conditions
(the "Panel Decision"):

 1.

 On or before January 23, 2024, the Company shall file a Form S-1 for a public offering of up to $13.5 million contemplated in its presentation to the Panel;

 2.

 On or before January 19, 2024, the Company shall file all necessary documentation required to transfer its listing from The Nasdaq Global Market to The Nasdaq Capital Market;

 3.

 On or before January 31, 2024, the Company will complete the deconsolidation of its Japanese subsidiary A.L.I. Technologies Inc. ("A.L.I. Technologies");

 4.

 On or before March 28, 2024, the Company will implement a reverse stock split in a range of 1-for-10 to 1-for-100 with a target per share price of $7.00 per share;

 5.

 On or before April 15, 2024, the Company shall demonstrate compliance with all applicable continued listing requirements for The Nasdaq Capital Market under Rule 5550.

 The Panel Decision indicates that
the Company may request that the Nasdaq Listing and Hearing Review Council (the "Council") review the Panel Decision, in which
case a written request for review would need to be received within 15 days from the date of the Panel Decision. The Council may also on
its own motion determine to review the Panel Decision.

 The Panel Decision has no immediate
effect on the listing of the Company's common stock on the Nasdaq Global Market. The Company plans to fulfil each of the conditions
as stated in the Panel Decision. To this end, the Company filed a Registration Statement on Form S-1 which this prospectus is a part on
January 23, 2024 and completed the filing of all necessary documentation required to transfer its listing from The Nasdaq Global Market
to The Nasdaq Capital Market. In addition, in satisfaction of the A.L.I. Technologies deconsolidation condition of the Panel Decision
and as previously disclosed in a Form 8-K filed by the Company with the SEC on January 16, 2024, the Tokyo District Court entered an order
on January 10, 2024, (the "January 10 Order") confirming that bankruptcy proceedings are commenced against the A.L.I. Technologies,
that A.L.I. Technologies is found to be insolvent and other administrative matters relating to the A.L.I. Technologies bankruptcy filing.
Finally, on November 20, 2023, our stockholders voted to approve an amendment of our Fourth Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation"), to effectuate a reverse stock split of our common stock at a ratio of no less than 1-for-10
and no more than 1-for-100, with such ratio to be determined at the sole discretion of our board of directors and, effective as of April
2, 2024, we effectuated a 1-for-100 reverse stock split of our common stock. No assurance can be given, however, as to the definitive
date on which the remaining fifth condition set forth in the Panel Decision will be achieved.

 Following a request submitted
by the Company on April 12, 2024, the Panel granted a further extension to the exception granted on January 16, 2024, to the Company,
as amended on January 17, 2024 (the "Decision"), to extend the Company's deadline to regain compliance with Listing
Rule 5550(b)(1) (the "Equity Requirement"). In granting the extension, the Panel noted that as of April 15, 2024, the Company
has regained compliance with Nasdaq Listing Rule 5550(b)(1). Based on the information presented, the Panel determined to grant the Company's
request for an exception extension to regain compliance with the Equity Requirement until May 31, 2024, subject to the Company demonstrating
compliance with all applicable continued listing requirements for The Nasdaq Capital Market under Rule 5550.

 On April 17, 2024, the Company received an Additional Staff Delisting Determination
(the "Additional Staff Determination") from Nasdaq. The Additional Staff Determination noted that the Company is now delinquent
in filing its Form 10-K for the period ended December 31, 2023 (the "Form 10-K"), which additional delinquency may serve as
a separate basis for the delisting of the Company's securities from Nasdaq. The Additional Staff Determination notified the Company
that the Nasdaq Hearings Panel (the "Panel") will consider this matter in their decision regarding the Company's continued
listing on The Nasdaq Capital Market and that it should present its views with respect to this additional deficiency to the Panel in writing
no later than April 24, 2024. On April 30, 2024, the Company filed its delinquent Form 10-K for the period ended December 31, 2023.

 Submission
of Matters to a Vote of Security Holders

 On
November 20, 2023, the Company held its 2023 virtual special meeting of stockholders to vote on the following matters:

 Stockholders
voted to approve the amendment of the Company's Fourth Amended and Restated Certificate of Incorporation (the "Certificate
of Incorporation"), to effectuate a reverse stock split of the Company's outstanding shares of our common stock, at a ratio
of no less than 1-for-10 and no more than 1-for-100, with such ratio to be determined at the sole discretion of the Board (the "Reverse
Stock Split").

 Stockholders
voted to approve, for purposes of complying with NASDAQ Listing Rule 5635(b), the issuance of the shares of the Company's common
stock pursuant to its purchase agreement with Lind Global representing more than 20% of our common stock outstanding, which would result
in a "change of control" of the Company under applicable Nasdaq listing rules.

 Stockholders
voted to approve, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of more than 20% of the Company's issued
and outstanding common stock pursuant to its purchase agreement with Lind Global.

Sales of Unregistered Securities

 On February 27, 2024 and March 22, 2024, we entered into and completed the sale to two unrelated accredited investors (the "Investors"),
of 100,000 shares and 35,500 unregistered shares, respectively, of our Common Stock at a price of $4.00 per share for an aggregate
of $542,000 in cash (the "Offerings"). The Offerings were made pursuant to the terms of a Subscription Agreement. In connection
with the Offerings, the Company entered into a Piggyback Registration Rights Agreement with each Investor whereby the Company agreed to
register the Common Stock acquired by the Investor in the Offering if at any time while the Investor remains the holder of such shares,
the Company proposes to file any registration statement under the Securities Act of 1933, as amended (the "Securities Act")
with respect to its Common Stock for its own account or for shareholders of the Company for their account, subject to certain customary
exceptions.

 Effects
of Inflation

 We
have not been affected by inflationary pressure as we are in the development stage of the MAV and have not commenced production.

 Employees

 Prior
to the closing of the Business Combination, at December 31, 2022, the Company had three executive officers and the Company did not have
any full-time employees prior to the completion of the Business Combination.

 Following
the December 27, 2023 discontinuation of A.L.I., we have two employees as of January 22, 2024. Of these, both are part-time, temporary,
or other temporary employees. No labor union has been formed, but labor-management relations are amicable.

 Facilities

 Prior
to the December 27, 2023 discontinuation of A.L.I., our headquarters were located at Shiba Koen Annex 6 f, 1-8, Shiba Koen 3-chome, Minato-ku,
Tokyo, Japan 105-0011, where we leased and occupied office space with an aggregate floor area of approximately 340 square meters from
unrelated third parties under operating lease agreements. Our manufacturing and shipping facility was located at 1-2-11 Fukamidai, Yamato-shi,
Kanagawa. Our testing facilities was located at 72 Misawa, Minobu-cho, Minami Koma-gun, Yamanashi. We no longer occupy any of these offices
or facilities and following the discontinuance of ALI's operations and bankruptcy filing on December 27, 2023, we moved our corporate
offices to The Walnut Building, 691 Mill St, Suite 240, Los Angeles, California 90021 where we lease this this office.

 We
believe that our existing office is generally adequate to meet our current needs, but we expect to seek additional space as needed to
accommodate our future growth. There are no major facilities currently inactive.

 Insurance

 We
currently do not maintain any types of insurance, employer's liability insurance, or general liability insurance policies. Once
we commence commercialization of the MAV which is expected in 2027, we will purchase insurance policies that are either legally compulsory
or required by our customers.

 Government
Regulation

 Our
business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible
for monitoring and enforcing employment and labor laws, workplace safety, environmental laws, consumer protection laws, anti-bribery
laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements
may be more stringent than those in the United States. Noncompliance with applicable regulations or requirements could subject us to
investigations, sanctions, mandatory recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties
or injunctions.

 Although
we expect to operate under the ultralight aircraft exceptions of Federal Aviation Regulation Part 103, aircraft, including the MAVs,
are subject to substantial regulation and changes to those regulations under international, federal, state, local and foreign laws regarding
safety, performance, and import regulations. Our planned vehicles will need to comply with many governmental standards and regulations
relating to vehicle safety, fuel economy, emissions control, noise control, and vehicle recycling, among others. Compliance with all
of these requirements may delay our production launch or require substantially higher compliance costs than anticipated, thereby adversely
affecting our business and financial condition.

 We
plan to design the MAV to conform with Federal Aviation Regulation Part 103 requirements for ultralight aircraft. We do not believe we
need to achieve FAA Certification for domestic MAV flight operations and sales as long as we continue to conform to FAR Part 103 in terms
of aircraft specifications and flight operations. Changes in FAA regulations requiring certification for flight operations or sales might
result in us incurring significantly increased costs to comply with those new regulations and in attempting to correct any issues causing
such delays. Also, the impact of new or changed laws or regulations on the planned MAV compliance or the costs of complying with such
laws and regulations cannot be predicted.

 Further,
as we sell our MAV products internationally, we will face challenges in quickly and sufficiently familiarizing ourselves with foreign
regulatory environments and policy frameworks. If any new regulation is put in place, or a different interpretation of existing regulation
is adopted, our ability to manufacture, market, sell or operate our MAVs may be limited or otherwise affected. Failure to comply with
applicable regulations or to obtain, maintain or renew the necessary permits, licenses, registrations or certificates could cause delays
in, or prevent us from, manufacturing, marketing, selling and operating our MAVs products, meeting product demand and expectations, introducing
new products or expanding our service coverage, and could materially and adversely affect our operation results. If we are found to be
in violation of applicable laws or regulations, we could be subject to administrative punishment, including fines, injunctions, recalls
or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on our business, financial
condition, results of operations and prospects.

 We
are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations
in the United States, including the U.S. Foreign Corrupt Practices Act, or the FCPA and other anti-corruption laws and regulations. The
FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly
offering, promising, authorizing or providing anything of value to a "foreign official" for the purposes of influencing official
decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and
keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate
internal accounting controls. A violation of these laws or regulations could adversely affect our business, results of operations, financial
condition and reputation.

 We
expect to have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities
in the ordinary course of business. We may also enter into joint ventures and/or other business partnerships with government agencies
and state-owned or affiliated entities. These interactions subject us to an increased level of compliance-related concerns. We are in
the process of implementing policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives,
consultants, agents and business partners with applicable anti-corruption, anti-bribery, anti-money laundering, financial and economic
sanctions and similar laws and regulations. However, our policies and procedures may not be sufficient, and our directors, officers,
employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

 Non-compliance
with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower
complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences,
remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial
condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments
in our shares.

 Corporate
History

 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 ("Initial Public Offering"). The registration statement for
the Company's Initial Public Offering was declared effective on August 10, 2021. On August 13, 2021, the Company consummated its
Initial Public Offering of 10,000,000 pre-consolidation units (the "Units" and, with respect to the Class A common stock included
in the Units being offered, the "Public Shares"), at pre-consolidated price of $10 per Unit, generating gross proceeds of
$100,000,000 (see Note 6) (the "Initial Public Offering"). The Company granted the underwriter a 45-day option to purchase
up to an additional 1,500,000 pre-consolidation Units at the Initial Public Offering price to cover over-allotments, if any. Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 469,175 pre-consolidation
units (the "Placement Units") to the Sponsor at a price of $10.00 per Placement Unit, generating total gross proceeds of $4,691,750
(the "Private Placement").

 On August 18, 2021, the underwriters exercised the over-allotment option in full, and the closing of the issuance and sale of the additional
Units occurred (the "Over-allotment Option Units"). The total aggregate issuance by the Company of 1,500,000 pre-consolidation
units at a price of $10.00 per unit resulted in total gross proceeds of $15,000,000. On August 18, 2021, simultaneously with the sale
of the Over-allotment Option Units, the Company consummated the private sale of an additional 52,500 pre-consolidation Placement Units,
generating gross proceeds of $525,000. The Placement Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended,
as the transactions did not involve a public offering. A total of $116,725,000, comprised of the proceeds from the Offering and the proceeds
of private placements that closed on August 13, 2021 and August 18, 2021, net of the underwriting commissions, discounts, and offering
expenses, was deposited in a trust account established for the benefit of the Company's public stockholders. On October 8, 2021,
the Class A ordinary shares and Public Warrant included in the Units began separate trading.

 On
March 17, 2022, the Company entered into an Agreement and Plan of Merger (the "Old Merger Agreement"), by and among Pono,
Merger Sub, Benuvia, Inc., a Delaware corporation ("Benuvia"), Mehana Equity, LLC, in its capacity as Purchaser Representative,
and Shannon Soqui, in his capacity as Seller Representative. Pursuant to the Old Merger Agreement, at the closing of the transactions
contemplated by the Old Merger Agreement, Merger Sub would merge with and into Benuvia, with Benuvia continuing as the surviving corporation.
The Business Combination Agreement and related agreements are further described in the Company's Current Report on Form 8-K filed
with the SEC on March 18, 2022. On August 8, 2022, the Company and Benuvia mutually terminated the Merger Agreement pursuant to Section
8.1(a) of the Merger Agreement, effective immediately. Neither party was required to pay the other a termination fee as a result of the
mutual decision to terminate the Merger Agreement.

 On November 9, 2022, the Company entered into Purchase Agreements and completed the private sale of an aggregate of 115,000 pre-consolidation
Placement Units at a purchase price of $10.00 per Placement Unit in a private placement and deposited $1,150,000 into the Company's
Trust account for its public stockholders, representing $0.10 per pre-consolidated public share, allowing the Company to extend the period
of time it had to consummate its initial business combination by three months from November 11, 2022 to February 13, 2023. The Purchase
Agreements and related agreements are further described in the Company's Current Report on Form 8-K filed with the SEC on November
10, 2022.

 On
December 31, 2022, substantially all of the assets held in the Trust Account were held in mutual funds.

 No
payments for our expenses were made in the offering described above directly or indirectly to (i) any of our directors, officers or their
associates, (ii) any person(s) owning 10% or more of any class of our equity securities or (iii) any of our affiliates, except in connection
with the repayment of outstanding loans and pursuant to the administrative support agreement disclosed herein which we entered into with
our sponsor.

 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 "Company," "we," "us, "our"
"AERWINS," or "AERWINS Technologies").

to the terms of the Merger Agreement, the total consideration for the Business Combination and related transactions (the
"Merger Consideration") was approximately $600 million. In connection with the Special Meeting, holders of 11,328,988
pre-consolidated shares of Pono common stock sold in its initial public offering exercised their right to redeem those shares for
cash prior to the redemption deadline of January 25, 2023, at a pre-consolidated price of $10.50 per share, for an aggregate payment
from Pono's trust account of approximately $118.9 million. Effective February 3, 2023, Pono's units ceased trading, and
effective February 6, 2023, AERWINS Technologies' common stock began trading on the Nasdaq Global Market under the symbol
"AWIN" and the warrants began trading on the Nasdaq Capital Market under the symbol "AWINW."

 After
taking into account the aggregate payment in respect of the redemption, Pono's trust account had a balance immediately prior to
the Closing of $1,795,997. Such balance in the trust account was used to pay transaction expenses and other liabilities of Pono, pay
certain transaction expenses of AERWINS, Inc., with the remaining being deposited in AERWINS, Inc. cash account. In connection with the
Business Combination, a warrant holder of AERWINS, Inc. received a warrant to purchase 4,693 shares of AERWINS Technologies'
common stock as Merger Consideration as set forth in the Merger Agreement. The Merger Consideration was subject to a post-Closing true
up 90 days after the Closing. The post-Closing true up period expired on May 5, 2023 without any claims having been made.

 As
a result of the Merger and the Business Combination, holders of Pono common stock automatically received common stock of AERWINS Technologies,
and holders of Pono warrants automatically received warrants of AERWINS Technologies with substantively identical terms. At the Closing
of the Business Combination, all shares of Pono owned by the Sponsor (consisting of shares of Class A common stock and shares of Class
B common stock), which we refer to as the founder shares, automatically converted into an equal number of shares of AERWINS Technologies'
common stock, and Private Placement Warrants held by the Sponsor, automatically converted into warrants to purchase one share of AERWINS
Technologies common stock with substantively identical terms. As of the Closing: public stockholders owned approximately 0.3% of the
outstanding shares of AERWINS Technologies common stock; the Sponsor and its affiliates owned approximately 6.7% of the outstanding shares
of AERWINS Technologies common stock and AERWINS, Inc.'s former security holders collectively owned approximately 93.0% of the
outstanding shares of AERWINS Technologies common stock.

 At
the closing of the Merger, we issued to the former shareholders of AERWINS, an aggregate of 519,291 shares of common stock, of which
14,079 shares are being held in escrow (the "Escrow Shares"). The Escrow Shares were subject to a post-Closing true up
90 days after the Closing based on confirmed amounts of the Closing Net Indebtedness of AERWINS, the Net Working Capital of AERWINS,
and certain Transaction Expenses, each of which are defined in the Merger Agreement. If the adjustment was a negative adjustment in favor
of us, the escrow agent was required to distribute to us a number of shares of our common stock with a value equal to the adjustment
amount. If the adjustment was a positive adjustment in favor of AERWINS, we were required to issue to the former AERWINS stockholders
an additional number of shares of our common stock with a value equal to the adjustment amount. The post-Closing true up period expired
on May 5, 2023 without any claims having been made. In addition, at the closing of the Merger, the Company issued an aggregate of 1,500
shares of common stock (the "Compensation Shares") to Boustead Securities, LLC ("Boustead"), in partial satisfaction
of fees due to them in connection with the Merger. In addition, Boustead is entitled to an increase in the number of Compensation Shares
on the 180th day following the closing of the Merger (the "Measurement Date") if the VWAP for the common stock during over
the five trading days prior to the Measurement Date is less than $1,000 per share (the "Adjustment"). The number of shares
of common stock subject to the Adjustment is equal to (1) $1,500,000 divided by the average VWAP of the common stock over the five trading
days prior to the Measurement Date, minus (2) the number of Compensation Shares.

 AERWINS,
Inc. formerly named AERWINS Technologies Inc. until it changed its name to AERWINS, Inc. on January 24, 2023, was incorporated in the
State of Delaware on June 9, 2022. A. L. I. Technologies Inc., a Japanese corporation and a wholly owned subsidiary of AERWINS, Inc.
was established in Japan in September 2016 ("A.L.I."). On August 5, 2022, pursuant to the terms of a share exchange agreement
among the Company, A. L. I. Technologies, the shareholders of A. L. I. Technologies and Shuhei Komatsu, as the representative of the
shareholders of A. L. I. Technologies, we issued 300,000 shares of AERWINS, Inc. common stock to the shareholders of A. L. I. Technologies
in exchange for 20,067 shares A. L. I. Technologies' common stock, representing 100% of the issued and outstanding capital stock
of A. L. I. Technologies. As a result of this transaction, A. L. I. Technologies became AERWINS Inc.'s 100%-owned subsidiary and
the former shareholders of A. L. I. Technologies became the owners of 100% of AERWINS, Inc. outstanding common stock as of August 5,
2022.

 We formed Aerwin Development on October 18, 2023.

 On
December 27, 2023, we discontinued the remaining operations of A.L.I. as part of the move of our operations to Los Angeles, California
and continued development of a line of FAA compliant manned and unmanned crafts for low-altitude. This discontinuance follows our discontinuation
of A.L.I.'s drone photography services and joint research and development services previously provided within our unmanned air
mobility business as of June 30, 2023. Following this discontinuation, on December 27, 2023, A.L.I. filed a voluntary bankruptcy petition
with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari" [Special Trusteeship Section], Case ID: No. 8234
of 2023 (Fu) (the "A.L.I. Bankruptcy"). See "Item 3 – Legal Proceedings" and the discussion regarding the
A.L.I. Bankruptcy.

 On April 2, 2024, the Company consolidated its issued and outstanding share on the basis of one post-consolidation share for each 100
pre-consolidation common shares. All share figures and references have been retrospectively adjusted.

 ITEM
1A. RISK FACTORS

 An
investment in our securities carries a significant degree of risk. You should carefully consider the following risks, as well as the
other information contained in this Form 10-K, including our historical financial statements and related notes included elsewhere in
this Form 10-K, before you decide to purchase our securities. Any one of these risks and uncertainties has the potential to cause material
adverse effects on our business, prospects, financial condition and operating results which could cause actual results to differ materially
from any forward-looking statements expressed by us and a significant decrease in the value of our common stock shares and warrants.
Refer to "Cautionary Statement Regarding Forward-Looking Statements."

 We
may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential
risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties
that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse
effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.

 Risks
Relating to Our Business and Industry

 AERWINS,
Inc. has incurred net losses in the past and may do so in the future, and in the future, the Company may also incur, net losses.

 For
the years ended December 31, 2023 and 2022, we had net losses from continuing operations of $9,516,032 and $2,470, respectively,
and had net operating cash outflows of $6,577,441 and $16,865,274, respectively. We expect our expenses to increase in future periods
as we continue to develop our planned MAV. We also expect to incur substantial costs and expenses as a result of being a public company.
We cannot assure you that we will be able to generate net profits or positive operating cash flows in the future. Our ability to achieve
profitability depends in large part on, among other factors, our ability to complete development and commercialization of our planned
MAV. If we are unable to generate adequate revenues or effectively manage our expenses, we may continue to incur significant losses in
the future and may not be able to achieve or subsequently maintain profitability.

 We
are a holding company and depend upon our subsidiary AERWIN Development CA LLC for our cash flows.

 We
are a holding company. Following the discontinuance of ALI's business, all of our operations are conducted, by our operating subsidiary,
Aerwin Development CA LLC, a California limited liability company. Furthermore, we don't expect to launch sales until the end of
2027. Consequently, our cash flows and our ability to meet our obligations depend upon the cash flows of our operating subsidiary and
the payment of funds by this operating subsidiary to us in the form of dividends, distributions or otherwise. The ability of our subsidiary
to make any payments to us depends on their earnings, the terms of their indebtedness, including the terms of any credit facilities and
legal restrictions. Any failure to receive dividends or distributions from our subsidiary when needed could have a material adverse effect
on our business, results of operations or financial condition.

 We
will need additional capital, and we cannot be sure that additional financing will be available.

 As
of and for the year ended December 31, 2023, we incurred net loss from continuing operations of $9,516,032 and accumulated
deficiency of $72,411,375 and as of and for the year ended December 31, 2022, we incurred continuing operating losses of $2,470
and accumulated deficiency of $46,472,904. Our ability to continue as a going concern is dependent on us obtaining adequate capital
to fund operating losses until we become profitable. Our ability to obtain financing will depend, among other things, on our
development efforts, business plans, operating performance and condition of the capital markets at the time we seek financing. We
cannot assure you that additional financing will be available to us on favorable terms when required, or at all. If we raise
additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences, or
privileges senior to the rights of our common stock, and the existing stockholders may experience dilution.

 A
new health epidemic could significantly disrupt our operations and adversely affect our results of operations.

 Our
business could be significantly affected by public health epidemics that may hit the United States and/or other countries where we may
sell our products, such as the outbreak of coronavirus, avian influenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola
virus or other disease. For example, the severity of the recent COVID-19 pandemic resulted in lock-downs, travel restrictions and quarantines
imposed by governments across the world and materially affected general commercial activities on a global scale.

 A
COVID-19 outbreak may result in potential customers failing to place orders for our planned MAV or make payments on amounts owed to us
in a timely manner or at all, which may materially and adversely impact our business and result of operations. Lingering effects of the
COVID-19 pandemic has caused, and is expected to cause in the near future, an economic downturn in many countries. Such general economic
slowdown may reduce the demand for our products.

 Our
business performance may be adversely affected if the growth of the Air Mobility Vehicle industry slows down.

 In
the manned air mobility business, we have acquired various technological expertise and relationships with various technology partners.
We recognize that this trend will continue in the future. However, if the growth of the market slows down due to laws and regulations,
economic trends, or changes in social awareness that restrict business in the industries in which we are involved, and if our business
does not expand accordingly, our business performance may be affected.

 Our
future growth depends on the demand for, and customers' willingness to adopt, our planned Manned Air Vehicle.

 We
operate in the new and evolving Manned Air Vehicle industry. Our business and operating results depend in large part on the acceptance
of and demand for our MAVs. The success of these products is and will be subject to risks, including with respect to:

 the
 extent of market reception and adoption of MAVs as transportation and logistics solutions;

 our
 navigating a new and evolving regulatory environment;

 our
 timely fulfillment of product orders;

 our
 ability to produce safe, high-quality and cost-effective MAVs on an ongoing basis;

 the
 performance of our MAVs relative to customer expectations and customers' interest in and demand for our MAVs; and

 our
 building a well-recognized and respected brand.

 Our
failure to manage the risks described above may discourage current or potential customers from purchasing our MAVs, and there may be
downward price pressure on our MAVs. If the market for MAVs does not develop as we expect or develops more slowly than we expect, our
business, prospects, financial condition and operating results will be materially and adversely affected.

 We
may be unable to successfully redesign, build and commercialize our planned MAV as we have not completed its design nor finalized the
agreements to carry out the activities contemplated by the Letter of Intent.

 Commercial
production of our manned MAVs requires that we complete its redesign and the timely and adequate supply of various types of raw materials
and components in order to build it. In addition, while we have entered into the Letter of Intent with Helicopter Technology that contemplates
both product development and manufacturing, we have not finalized the definitive agreements contemplated by the Letter of Intent nor
have we obtained the working capital needed to carry out the activities contemplated by those agreements. Further, we have no experience
in designing MAV's, high-volume manufacturing or sales of our MAVs. We cannot assure you that we will be able to complete the redesign
of the MAV as we expect and to commence production on an efficient and cost-effective basis, or to procure sufficient raw materials and
components to meet our future production requirements. While we expect to rely on Helicopter Technology to redesign and produce our MAV's
as discussed in the Letter of Intent, there is no assurance that we will be able to design an MAV that satisfies consumer preferences
and commence production on an efficient and cost-effective basis. While we expect to obtain components from multiple sources whenever
possible, disruption in the supply of components could temporarily disrupt commercial production of our MAVs. We may experience operational
difficulties with Helicopter Technology or other contract manufacturers we may utilize in the future, including reductions in the availability
of production capacity, failure to comply with product specifications, insufficient quality control, failure to meet production deadlines,
increases in manufacturing costs and longer lead time. Any of the foregoing could result in our failure to make timely deliveries to
our customers. Such failure would materially and adversely affect our business, results of operations, financial condition and prospects.

 We
may not be able to engage customers successfully and to obtain meaningful orders in the future.

 Our
success depends on our ability to generate revenue and operate profitably, which depends in part on our ability to identify customers
and convert them into orders for our MAV's. We do not currently have any revenue or orders from customers. If we are unable to
negotiate, finalize and satisfy the conditions of customer orders, or only able to do so on terms that are unfavorable to us, we will
not be able to generate any revenue, which would have a material adverse effect on our business, prospects, operating results and financial
condition. Further, if our targeted customers do not commit to make meaningful orders, or at all, it could adversely affect our business,
prospects and results of operations. Delays in delivery of the MAV, unexpected performance problems or other events could cause us to
fail to meet contractual commitments to deliver the MAV, resulting in defects in material or workmanship or unexpected problems in our
manufacturing process, which could lead to unanticipated revenue and earnings losses and financial penalties. The occurrence of any of
these events could harm our business, prospects, results of operations and financial results.

 Our
reputation and the trading price of our common stock may be negatively affected by adverse publicity or detrimental conduct against us.

 Adverse
publicity concerning our failure or perceived failure to comply with legal and regulatory requirements, alleged accounting or financial
reporting irregularities, regulatory scrutiny and further regulatory action or litigation could harm our reputation and cause the trading
price of our common stock to decline and fluctuate significantly. The negative publicity and the resulting decline of the trading price
of our common stock may lead to the filing of shareholder class action lawsuits against us and some of our senior executive officers,
and may potentially have further severe impact on the market price of our common stock and divert management's attention from the
day-to-day operations of our company.

 We
may continue to be the target of adverse publicity and detrimental conduct against us, including complaints, anonymous or otherwise,
to regulatory agencies regarding our operations, accounting, revenues and regulatory compliance. Additionally, allegations against us
may be posted on the internet by any person or entity which identifies itself or on an anonymous basis. We and our subsidiaries may be
subject to government or regulatory investigation or inquiries, or shareholder lawsuits, as a result of such third-party conduct and
may be required to incur significant time and substantial costs to defend ourselves, and there is no assurance that we and our subsidiaries
will be able to conclusively refute each of the allegations within a reasonable period of time or at all. Our reputation may also be
negatively affected as a result of the public dissemination of allegations or malicious statements about us, which in turn may materially
and adversely affect the trading price of our common stock.

 We
are a relatively young company with a short operating history, and we may not be able to achieve growth, effectively manage our growth
or implement our business strategies.

 Although
our subsidiary, ALI had been providing air mobility solutions since September 2016, we discontinued all of its operations as of December
27, 2023 when we filed a voluntary bankruptcy petition with the Tokyo District Court. Consequently, our historical performance will not
be indicative of our future performance due to our limited operating history related to the development and commercialization of our
MAV business. Furthermore, our short history of accepting orders for the MAVs developed by ALI and delivering them to customers for testing,
training and demonstration purposes is no longer indicative of our future performance relative to the MAV that is being redesigned by
us in the United States. There is only a limited historical basis for making judgments on the demand for our planned MAV currently under
development or our ability to produce and deliver MAVs, or to become profitable in the future.

 You
should consider our business and future prospects in light of the risks and challenges we face as a new entrant to a nascent industry,
including risks and challenges associated with our ability to:

 Design,
 develop and manufacture a safe product;

 maintain
 reliable, secure, high-performance and scalable infrastructure;

 identify
 suitable facilities to commence manufacturing;

 navigate
 the evolving and complex regulatory environment across all the markets in which we plan to operate;

 anticipate
 and adapt to changing market conditions, including technological developments and changes in the competitive landscape, and adjust,
 manage and execute our marketing and sales activities to cater to local economic and demographic conditions, cultural differences
 and customer preferences across all markets we enter into;

 successfully
 market our MAV business;

 improve
 and maintain our operational efficiency; and

 attract,
 retain and motivate talented employees.

 If
we fail to address any or all of these risks and challenges, our business may be materially and adversely affected.

 As
our business grows, we or our subsidiaries may adjust our product offerings. These adjustments may not bring about expected results and
may instead have a material and adverse impact on our financial condition and results of operations. Our revenue structure may continue
to evolve in response to market demand. In particular, we expect the revenue from sales of MAVs to begin in 2027. Our growth is dependent
on the development of a redesigned MAV. We may not accurately identify market needs before we invest in the development of our planned
MAV. In addition, we might face difficulties or delays in the development process, which may result in continued losses.

 In
pursuit of our growth strategy, we or our subsidiaries may enter into new strategic relationships to further penetrate our targeted markets.
Should these relationships fail to materialize and develop into demand or orders for our products, or should we fail to work effectively
with these companies, we may lose opportunities to generate sales growth and our business, results of operations and financial condition
could be adversely affected.

 We
may not be successful in competing in the MAV industry.

 We
operate in the MAV industry. In addition to competing with other MAV companies, we compete with traditional industry players providing
similar solutions, such as aircraft and ground transportation service providers. Many of our current and potential competitors, particularly
international competitors, have significantly greater financial, technical, manufacturing, marketing and other resources than we do and
may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their
products.

 We
expect competition in our industry to intensify in the future in light of increased demand for alternative transportation, continuing
globalization and consolidation in the global MAV industry. Factors affecting competition include, among others, ability to innovate,
development speed, product quality, reliability, safety and features, pricing and customer service. Increased competition may lead to
lower MAV unit sales and increased inventory, which may result in downward price pressure and adversely affect our business, financial
condition, operating results and prospects.

 Our
ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and will affect
our market share. If our competitors introduce MAVs or services that are superior in quality or performance and/or lower in price compared
with our planned MAV, we may be unable to attract customers at prices that would allow us to generate attractive rates of return on our
investment, if at all.

 We
face risks related to our information technology systems, and potential cyber-attacks and security and privacy breaches.

 Our
use of technology is critical in our continued operations. We are susceptible to operational, financial and information security risks
resulting from cyber-attacks and/or technological malfunctions. Successful cyber-attacks and/or technological malfunctions affecting
us, or our service providers can result in, among other things, financial losses, the inability to complete development and production
of our planned MAV, the unauthorized release of customer information or confidential information and reputational risk. We have not experienced
any material losses to date relating to cybersecurity attacks, other information breaches or technological malfunctions. However, there
can be no assurance that we will not incur such losses in the future. As cybersecurity threats continue to evolve, we may be required
to use additional resources to continue to modify or enhance protective measures or to investigate security vulnerabilities.

 We
may store and collect personal information about future customers and will be responsible for protecting that information from privacy
breaches that may occur through procedural or process failure, information technology malfunction or deliberate unauthorized intrusions.
Any such theft or privacy breach would have a material adverse effect on our business, prospects, revenue, results of operation and financial
condition. We are subject to laws, rules and regulations in the United States and other jurisdictions relating to the collection, processing,
storage, transfer and use of personal data. Our ability to execute transactions and to possess and use personal information and data
in conducting our business subjects us to legislative and regulatory burdens that may require us to notify regulators and customers,
employees and other individuals of a data security breach. Evolving compliance and operational requirements under the privacy laws, rules
and regulations of jurisdictions in which we operate impose significant costs that are likely to increase over time. In addition, non-compliance
could result in proceedings against us by governmental entities and/or significant fines, could negatively impact our reputation and
may otherwise adversely impact our business, financial condition and operating results.

 An
accident involving an MAV provided by us or another manufacturer could harm the MAV industry.

 An
accident involving an MAV provided by us or another manufacturer could cause regulatory agencies around the world to tighten restrictions
on the use of MAVs, particularly over-populated areas, and could cause the public to lose confidence in our products and MAVs generally.
There are risks associated with autopilot, flight control, communications and other advanced technologies, and, from time to time, there
have been accidents associated with these technologies. The safety of certain cutting-edge technologies depends in part on user interaction,
and users may not be accustomed to using such technologies. We or our subsidiaries could face unfavorable and tightened regulatory control
and intervention on the use of autopilot and other advanced technologies and be subject to liability and government scrutiny to the extent
accidents associated with our autonomous navigation systems occur. Should a high-profile accident occur resulting in substantial casualty
or damages, involving our MAVs, public confidence in and regulatory attitudes toward MAVs could deteriorate. Any of the foregoing could
materially and adversely affect our results of operations, financial condition and growth prospects.

 We
may be compelled to undertake product recalls or take other actions, which could adversely affect our brand image and results of operations.

 Our
MAVs may not perform in line with customers' expectations. Any product defects, accidents or any other failure of our MAVs to perform
as expected could harm our reputation and result in adverse publicity, revenue loss, delivery delays and product recalls, which could
harm our brand and reputation. Any product recall or lawsuit seeking significant monetary damages either in excess of or outside of our
insurance coverage may have a material adverse effect on our business and financial condition. In the future, we may, voluntarily or
involuntarily, initiate a recall if any of our MAVs, including any systems or components sourced from our suppliers, prove to be defective
or noncompliant with applicable laws and regulations. Such recalls, whether voluntary or involuntary and whether caused by systems or
components engineered or manufactured by us or our suppliers, could incur significant expenses and adversely affect our brand image in
our target markets. They may also inhibit or prevent commercialization of our current and future product candidates.

 We
may become subject to product liability claims or warranty claims, which could harm our financial condition and liquidity if we are not
able to successfully defend or insure against such claims.

 We
may be exposed to significant product liability claims if our MAVs do not perform as expected or malfunction. Any defects, errors, or
failures in our products or the misuse of our MAVs, operating systems and infrastructure could also result in injury, death or property
damage. Our risks in this area are particularly pronounced given we have limited field experience in the operation or development of
MAVs. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability
claim could generate substantial negative publicity about our MAVs and business and inhibit or prevent commercialization of our current
and future MAV models. Any insurance coverage we may obtain in the future might not be sufficient to cover all potential product liability
claims. In addition, insurance coverage may not be available in the future at economical prices, or at all. Even if we are fully insured
as it relates to a claim, the claim could nevertheless diminish our brand and divert management's attention and resources, which
could have a negative impact on our business, financial condition and result of operations.

 We
plan to generally provide standard warranties on our MAVs. The term of a warranty is expected to be between six months to three years,
depending on the product line and the specific part or component. The occurrence of any material defects in our MAVs could make us liable
for damages and warranty claims. In addition, we could incur significant costs to correct any defects or other problems, including costs
related to product recalls. Warranty claims may also lead to litigation. Any negative publicity related to the perceived quality of our
MAVs could affect our brand image, decrease retailer, distributor and customer demand, and adversely affect our operating results and
financial condition.

 If
we fail to successfully develop and commercialize new products, services and technologies that are well received by customers, our operating
results may be materially and adversely affected.

 Our
future growth depends on whether we can complete the redesign of our planned MAV and develop and introduce new generations of our currently
planned MAV and update our operating systems and infrastructure with enhanced functionalities and value-added services. This is particularly
important in the current industry landscape where technologies and consumer preferences evolve rapidly, which may shorten the lifecycles
of our existing products. We plan to upgrade our current MAV model and introduce new models in order to continue to provide MAVs with
the latest technologies. As technological advancements can be complex and costly, we could experience delays in the development and introduction
of new products and services in the future.

 Our
ability to roll out new and innovative products and services depends on a number of factors, including significant investments in research
and development, quality control of our products and services and effective management of our supply chain. We may need to devote more
resources to the research and development of new or enhanced products, services and technologies, which may reduce our profitability.
In addition, our research and development efforts may not yield the benefits we expect to achieve in a timely manner, or at all. To the
extent that we are unable to execute our strategy of continuously introducing new and innovative products, diversifying our product portfolio
and satisfying consumers' changing preferences, we may not be able to grow our user base, and our competitive position and results
of operations may be adversely affected. Even if we are able to keep up with technological changes and develop new models, our prior
models may as a result become obsolete sooner than expected, potentially reducing our return on investment.

 We
have no experience in managing sales to multiple countries and we are subject to a variety of costs and risks due to our continued international
expansion.

 One
of our core strategies is international expansion. We generally have less experience in marketing, selling and deploying our MAVs in
markets outside the U.S. and Japan. International expansion will require us to invest significant capital and other resources, and our
efforts may not be successful. International sales and operations are subject to risks such as:

 limited
 brand recognition;

 costs
 associated with establishing new distribution networks;

 difficulty
 in finding qualified partners for overseas distribution;

 inability
 to anticipate changes in local market conditions, economic landscapes, and consumers' preferences and customs;

 difficulties
 in staffing and managing foreign operations;

 lack
 of familiarity with and understanding of the local legal, regulatory and policy frameworks, as well as burdens of complying with
 a wide variety of local laws and regulations, including those governing personal data protection and safety control;

 political
 and economic instability;

 trade
 restrictions;

 differing
 employment laws and practices, as well as potential labor disruptions;

 the
 imposition of government controls;

 lesser
 degrees of intellectual property protection;

 tariffs
 and customs duties and the classifications of our goods by applicable governmental bodies; and

 a
 legal system subject to undue influence or corruption.

 Additionally,
to export our MAVs to certain jurisdictions, we may face challenges in coordinating with the U.S., Japanese and the applicable foreign
governments and regulatory authorities. If we cannot export our MAVs to such jurisdictions, our business, prospects, financial condition
and operating results may be materially and adversely impacted.

 The
failure to manage any of these risks could negatively affect our international business and consequently our overall business and operating
results. In addition, the concern over these risks may also prevent us from entering into, or marketing, selling or releasing our MAVs
in, certain markets.

 Our
operations may be interrupted by production difficulties or delays due to mechanical failures, utility shortages or stoppages, fire,
natural disaster or other calamities at or near our facilities.

 Production
difficulties, such as capacity constraints, mechanical and systems failures and the need for equipment upgrades, may suspend our production
and/or reduce our output. There can be no assurance that Helicopter Technology will not experience problems with its production facilities
in the future or that it will be able to address any such problems in a timely manner. Problems with key equipment in one or more of
Helicopter Technology's production facilities may affect its ability to produce our MAVs or cause us to incur significant expenses
to repair or replace such equipment. Scheduled and unscheduled maintenance programs may affect our production output. Any of these could
have a material adverse effect on our business, financial condition, results of operations and prospects.

 We
depend on a continuous supply of utilities, such as electricity and water, to operate the production facilities operated by Helicopter
Technology. Any disruption to the supply of electricity or other utilities may disrupt its production, or cause the deterioration or
loss of inventory. This could adversely affect our ability to fulfill our sales orders and consequently may have an adverse effect on
our business and results of operations. In addition, fire, natural disasters, pandemics or extreme weather, including droughts, floods
or other storms, or excessive cold or heat, could cause power outages, fuel shortages, water shortages, damage to Helicopter Technology's
production, processing or distribution facilities or disruption of transportation channels, any of which could impair or interfere with
our planned future operations. We cannot assure you that such events will not happen in the future or that we will be able to take adequate
measures to mitigate the likelihood or potential impact of such events, or to effectively respond to such events if they occur.

 Weather
and seasonality may have a material adverse effect on our operations.

 Future
sales of our MAVs may be affected by weather and seasonality. Potential customers may choose alternative transportation instead of our
MAVs in severe weather conditions in consideration of safety factors, even if our MAVs are able to endure such conditions. As a result,
our business, financial condition and operating results may be materially and adversely impacted by the weather conditions. Our operating
results may vary from period to period due to many factors, including seasonal factors that may have an effect on the demand for our
MAVs in the future. As a result, our quarterly results of operations and financial position at the end of a particular quarter may not
necessarily be representative of the results we expect at year-end or in other quarters of a year. Our operating results would suffer
if we did not achieve revenues consistent with our expectations due to seasonal demand and weather changes because many of our expenses
are based on anticipated levels of annual revenues.

 Any
decline in the business of our business partners or the deterioration of our relationship with them could have a material adverse effect
on our operating results.

 We
collaborate with various business partners to promote our MAVs. There can be no guarantee that those business partners will continue
to collaborate with us in the future. If we are unable to maintain good relationships with our business partners, or the business of
our business partners declines, the reach of our products may be adversely affected and our ability to maintain and expand our user base
may decrease.

 Most
of the agreements with our business partners do not prohibit them from working with our competitors or from offering competing services.
If our partners change their standard terms and conditions in a manner that is detrimental to our business, or if our business partners
decide not to continue working with us, or choose to devote more resources to supporting our competitors or their own competing products,
we may not be able to find a substitute on commercially favorable terms, or at all, and our competitive advantages may diminish.

 If
we fail to comply with environmental and work safety laws and regulations, we could become subject to fines or penalties or incur costs
that could harm our business.

 We
are subject to numerous environmental and work safety laws and regulations. We also could incur significant costs associated with civil
or criminal fines and penalties for failure to comply with such laws and regulations. Environmental and social laws and regulations have
tended to become increasingly stringent. There has been increased global focus on environmental and social issues and it is possible
that countries may potentially adopt more stringent standards or new regulations in these areas. To the extent regulatory changes occur
in the future, they could result in, among other things, increased costs to our company. In addition, we may incur substantial costs
in order to comply with current or future environmental and work safety laws and regulations. These current or future laws and regulations
may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in
substantial fines, penalties or other sanctions.

 If
our current or future business partners, contractors, suppliers, sales agents, dealers or third-party logistics services providers fail
to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity
beyond our own control.

 Our
reputation is sensitive to allegations of unethical business practices. We do not control the business practices of our current or future
business partners, independent contractors and suppliers, sales agents, dealers or third-party logistics services providers. Accordingly,
we cannot guarantee their compliance with ethical business practices, such as environmental responsibilities, fair wage practices, and
compliance with child labor laws, among others. A lack of demonstrated compliance could lead us to seek alternative suppliers, sales
agents or dealers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions
of our operations. Violation of labor or other laws by our suppliers, business partners, sales agent, dealers or third-party logistics
services suppliers or the divergence of their labor or other practices from those generally accepted as ethical in the markets in which
we do business could also attract negative publicity, diminish our brand image and reduce demand for our MAVs.

 If
customers modify our MAVs or operating systems, the MAVs may not operate properly, which may cause damage, create negative publicity
and harm our business.

 Our
future customers may try to modify our MAVs or operating systems for various reasons, which could compromise the performance and safety
of our MAVs, as well as the safety of their passengers. During such modifications, they may use third-party parts that may not be compatible
with our products. We do not plan to test, nor do we plan to endorse, such modification. In addition, the use of improper external cabling
can expose our customers to injury from MAV malfunctioning. Any injuries or damages resulting from such modifications or misuses could
result in adverse publicity, which would negatively affect our brand and harm our business, prospects, financial condition and operating
results.

 Failure
to safeguard personal information could subject us to penalties, damage our reputation and brand, and harm our business and results of

 We
may log information about each MAV's use, such as mileage and location information, in order to aid us in vehicle diagnostics,
repair and maintenance, as well as to help us customize and optimize the flying experience. Images and videos captured by cameras attached
to our MAVs may be stored on our servers, servers of third-party cloud storage providers or other servers designated by our customers.
We, therefore, process, including but not limited to collect, store, process, use, transfer, provide, disclose and delete, personal data
from our users in order to better understand our users and their needs for the purpose of our content feeds recommendation. Possession
and use of our users' flying behavior and data in conducting our business may subject us to legislative and regulatory oversight
in Japan and other jurisdictions, such as the European Union and the United States. For example, in January 2018, the European Union
promulgated the General Data Protection Regulation to further protect fundamental rights in privacy and personal information so that
members of the general public have more control over their personal information. Regulations in relevant jurisdictions may require us
to obtain user consent for the collection of personal information, restrict our use of such personal information and hinder our ability
to expand our user base. In the event of a data breach or other unauthorized access to our user data, we may have obligations to notify
users about the incident and we may need to provide some form of remedy for the individuals affected by the incident.

 Concerns
or claims about our practices with regard to the processing of personal information or other privacy-related matters, even if unfounded,
could damage our reputation and results of operations. In the Japanese, governmental authorities have enacted a series of laws and regulations
to enhance the protection of privacy and data. We may need to adjust our business to comply with data security requirements and other
laws and regulations from time to time.

 As
laws and regulations in Japan on the protection of privacy and data are constantly evolving, complying with new laws and regulations
could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business.

 Despite
our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security,
it is possible that our practices, offerings or platform could fail to meet all of the requirements imposed on us by such laws, regulations
or obligations. Any failure on our part to comply with applicable laws or regulations or any other obligations relating to privacy, data
protection or information security, or any compromise of security that results in unauthorized access, collection, transfer, use or release
of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of failure or compromise
has occurred, could damage our reputation, discourage new and existing users from using our platform or result in investigations, fines,
suspension of our app, or other penalties by government authorities and private claims or litigation, any of which could materially adversely
affect our business, financial condition and results of operations. In addition, the interpretation and application of the aforementioned
laws and regulations are often uncertain and in flux. Our practice may become inconsistent with these laws and regulations.

 Our
platform and internal systems depend on the ability of software and hardware developed and maintained internally and/or by third parties
to store, retrieve, process and manage immense amounts of data, including personal information or other privacy-related matters. The
software and hardware on which we rely may now or in the future contain, undetected programming errors, bugs, or vulnerabilities which
may result in errors or compromise our ability to protect the data of our users and in turn adversely affect our business, financial
condition and operation results. Any systems failure or compromise of security that results in the unauthorized access to or release
of the data, photo or messaging history of our users could significantly limit the adoption of our services, as well as harm our reputation
and brand, result in litigation against us, liquidation and other damages, regulatory investigations and penalties, and we could be subject
to material liability. Additionally, we connect our platform with software development kit provided by third parties who may also process
users' data. The integrity of our user data also depends on their ability to secure and protect the data they process. The risk
that these types of events could seriously harm our business is likely to increase as we expand the scope of services we offer and as
we increase the size of our user base.

 We
may also become subject to laws and regulations affecting data protection, data privacy and/or information security in other jurisdictions
by virtue of having users who reside in these jurisdictions, even if we do not have a physical presence there. Many jurisdictions have
in the past adopted, and may in the future adopt, new laws and regulations, or amendments to existing laws and regulations, affecting
data protection, data privacy and/or information security, such as the General Data Protection Regulation, or the GDPR, adopted by the
European Union that became fully effective on May 25, 2018. The interpretation and application of these laws or regulations are often
uncertain and in flux. We cannot guarantee you that our practice is consistent with these laws and regulations and our practice may become
inconsistent with these laws and regulations, if so, we could be subject to fines and orders requiring that we change our practices,
which could have an adverse effect on our business and results of operations. Complying with new data laws and regulations could cause
us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business.

 If
users allege that we have improperly used, released or disclosed their personal information, we could face legal claims and reputational
damage. We may incur significant expenses to comply with privacy, consumer protection and security standards and protocols imposed by
law, regulation, industry standards or contractual obligations. A major breach of our network security and systems could create serious
negative consequences for our business and future prospects, including possible fines, penalties, reduced customer demand for our MAVs,
and harm to our reputation and brand.

 The
execution of our business plans requires a significant amount of capital. In addition, our future capital needs may require us to sell
additional equity or debt securities that may dilute the equity interests of our shareholders or introduce covenants that may restrict
our operations or our ability to pay dividends.

 We
will need significant capital to, among other things, complete the design, development and manufacturing of the MAV and roll out new
products and solutions. We may also need significant capital to maintain our existing property and equipment. Our expected sources of
capital include both equity and debt financing. However, financing might not be available to us in a timely manner or on acceptable terms,
or at all.

 Our
ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market
conditions and investor acceptance of our business plans. These factors may make the timing, amount, terms and conditions of such financing
unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay
or cancel our planned activities, substantially change our current corporate structure, or even curtail or discontinue our operations.

 In
addition, our future capital needs and other business concerns could require us to sell additional equity or debt securities or obtain
a credit facility. The sale of additional equity or equity-linked securities could dilute the equity interests of our shareholders. Additional
indebtedness would increase our debt-service obligations and may be accompanied by covenants that would restrict our operations or our
ability to pay dividends to our shareholders.

 We
are subject to risks associated with strategic alliances or acquisitions. If we cannot manage the growth of our business or execute our
strategies effectively, our business and prospects may be materially and adversely affected.

 We
have entered into strategic alliances with various business partners, and may in the future enter into joint research and development
agreements or co-branding agreements with third parties to further our business purpose from time to time. These alliances could subject
us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third parties and increased
expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited
ability to monitor or control the actions of these third parties. If any of these strategic third parties suffers negative publicity
or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by
virtue of our association with any such third party.

 Although
we currently do not have any specific acquisition plans, if appropriate opportunities arise, we may acquire additional assets, products,
technologies or businesses that are complementary to our existing business. In addition to any required shareholders' approval,
we may also have to obtain approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable
Japanese laws and regulations, which could result in delays and increased costs, and may derail our business strategy if we fail to do
so. Furthermore, past and future acquisitions and the subsequent integration of new assets and businesses into our own require significant
attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse
effect on our business operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could
result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant
goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired
business. Moreover, the costs of identifying and consummating acquisitions may be significant.

 We
and our operating subsidiary have no insurance coverage, which could subject us to significant costs and business disruption.

 We
and our operating subsidiary have no liability insurance coverage for our products and business operations because our business is still
in the early development stage. We may not be able to secure additional product liability insurance coverage on acceptable terms or at
reasonable costs when needed. A successful liability claim against us, our subsidiaries or its subsidiaries due to injuries or damages
suffered by our users could materially and adversely affect our financial condition, results of operations and reputation. Even if unsuccessful,
such a claim could cause us adverse publicity, require substantial costs to defend, and divert the time and attention of our management.
In addition, we do not have any business disruption insurance. Any business disruption could result in substantial cost to us and diversion
of our resources. Furthermore, Japan, the United States or any other jurisdiction relevant to our business may impose requirements for
maintaining certain minimum liability or other insurance relating to the operation of MAVs. Such insurance policies could be costly,
which would reduce the demand for our MAVs. Alternatively, certain insurance products that would be desirable to MAV operators may not
be commercially available, which would increase the risks of operating our MAVs and also reduce the demand for them.

 We
are involved in litigation from time to time and, as a result, we could incur substantial judgments, fines, legal fees or other costs.

 We
may be the subject of complaints or litigation from customers, suppliers, employees, creditors of A.L.I. stemming from its bankruptcy
proceedings or other third parties for various actions. The damages sought against us in some of these litigation proceedings could be
substantial. We cannot assure you that we will always have meritorious defenses to the plaintiffs' claims. While the ultimate effect
of these legal actions cannot be predicted with certainty, our reputation and the result of operations could be negatively impacted.
The proceedings we may be involved in from time to time, including the A.L.I. Bankruptcy proceedings, could incur substantial judgments,
fines, legal fees or other costs and have a material adverse effect on our business, financial condition, results of operations and cash
flows. In addition, see "Item 3 – Legal Proceedings" and the discussion regarding the A.L.I. Bankruptcy.

 Any
financial or economic crisis or perceived threat of such a crisis may materially and adversely affect our business, financial condition
and results of operations.

 We
are subject to risks inherent in economic volatility and disruptions that may arise. For example, the global financial markets experienced
significant disruptions in 2008. The recovery since then has been geographically uneven. New challenges have also emerged, including
the escalation of the European sovereign debt crisis since 2011, the hostilities in the Ukraine, the end of quantitative easing by the
U.S. Federal Reserve and the economic slowdown in the Eurozone in 2014. More recently, in response to inflation, central bank interest
rate increases, slowing of economic growth and other factors, stock markets across the world have experienced significant volatility
and downward price pressure in 2022. It is unclear whether these challenges will be contained and what effects they each may have. There
is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the
central banks and financial authorities of some of the world's leading economies, including Japan's. Economic conditions
in Japan are sensitive to global economic conditions. Any prolonged slowdown in Japan's economic development might lead to tighter
credit markets, increased market volatility, sudden drops in business and customer confidence and dramatic changes in business and customer
behaviors.

 We
face risks related to natural disasters, which could significantly disrupt our operations.

 We
are vulnerable to natural disasters and other calamities such as typhoons, tornadoes, floods, earthquakes and other adverse weather and
climate conditions. Although we may have in the future servers that are hosted in an offsite location, future backup systems may not
capture data on a real-time basis, and we may be unable to recover certain data in the event of a server failure. We cannot assure you
that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications
failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns,
system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions
of software or hardware as well as adversely affect our ability to design, develop and produce the MAVs.

 If
the landlords of our and our subsidiaries' leased properties fail to properly maintain and renovate such premises, buildings or
facilities in a timely manner or at all, the operation of our offices could be materially and adversely affected.

 We
and our subsidiaries lease all the premises used in our operations from third parties. We and our subsidiaries require the landlords'
cooperation to effectively manage the condition of such premises, buildings and facilities. In the event that the condition of the office
premises, buildings and facilities deteriorates, or if any or all of our and our subsidiaries' landlords fail to properly maintain
and renovate such premises, buildings or facilities in a timely manner or at all, the operation of our offices could be materially and
adversely affected.

 Because
our long-term growth strategy involves expansion of our sales to customers outside the United States, our business will be susceptible
to risks associated with international operations.

 A
component of our growth strategy involves the expansion of our operations and customer base worldwide. We plan to establish locally owned,
independent dealers and distributors in international offices in the future. These international dealers and distributors will focus
primarily on sales, professional services and support. Our future international operations and future initiatives will involve a variety
of risks, including:

 difficulties
 in maintaining our company culture with a dispersed and distant workforce;

 more
 stringent regulations relating to data security and the unauthorized use of, or access to, commercial and personal information;

 the
 timing of our sales with our international clients and related revenue recognition is difficult to predict because of the length
 and unpredictability of the sales cycle for these clients;

 unexpected
 changes in regulatory requirements, taxes or trade laws;

 differing
 labor regulations where labor laws are generally more advantageous to employees as compared to Japan, including deemed hourly wage
 and overtime regulations in these locations;

 challenges
 inherent in efficiently managing an increased number of employees, including remote employees, over large geographic distances, including
 the need to implement appropriate systems, policies, benefits and compliance programs;

 difficulties
 in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory
 systems;

 currency
 exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions
 if we chose to do so in the future;

 global
 economic uncertainty caused by global political events;

 limitations
 on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;

 limited
 or insufficient intellectual property protection;

 political
 instability or terrorist activities;

 likelihood
 of potential or actual violations of domestic and international anticorruption laws, such as the U.S. Foreign Corrupt Practices Act
 and the U.K. Bribery Act, or of U.S. and international export control and sanctions regulations, which likelihood may increase with
 an increase of sales or operations in foreign jurisdictions and operations in certain industries; and

 adverse
 tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

 Our
inexperience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake
will not be successful. If we invest substantial time and resources to establish our international operations and are unable to do so
successfully and in a timely manner, our business and operating results will suffer. We continue to implement policies and procedures
to facilitate our compliance with U.S. laws and regulations applicable to or arising from our international business. Inadequacies in
our past or current compliance practices may increase the risk of inadvertent violations of such laws and regulations, which could lead
to financial and other penalties that could damage our reputation and impose costs on us.

 Our
customers may fail to pay us in accordance with the terms of their agreements, at times necessitating action by us to attempt to compel
payment.

 If
our customers fail to pay us in accordance with the terms of our agreements, we may be adversely affected both from the inability to
collect amounts due and the cost of enforcing the terms of our agreements, including litigation and arbitration costs. The risk of these
issues increases with the term length of our customer arrangements. Furthermore, some of our customers may seek bankruptcy protection
or other similar relief and fail to pay amounts due to us, or pay those amounts more slowly, either of which could adversely affect our
results of operations, financial condition and cash flow.

 We
believe our success depends on investing in the growth of our plans to expand sales to markets outside the United States. If our investments
in these markets are greater than anticipated, or if our customer growth or sales in these markets do not meet our expectations, our
results of operations and financial condition may be adversely affected.

 We
believe our success depends on expanding our business into new geographic markets and attracting customers in countries other than the
United States. We anticipate continuing to expand our sales operations worldwide by establishing locally owned, independent dealers and
distributors once we begin to commercialize the MAVs in 2027. This includes entering into distribution agreements with companies who
have existing operations in these markets. We currently do not have any dealer or distributor agreements in place. If we are unable to
enter into dealer or distributor agreements in these markets or if our customer growth or sales in these markets do not meet our expectations
or justify the cost of the initial investments, our results of operations and financial condition may be adverse affected.

 Risks
Related to Our Dependence on Third Parties

 We
will rely on Helicopter Technology to redesign and produce our planned MAV. Inadequate design and manufacturing services or failure to
mitigate the risks of damage or disruption to our development and manufacturing process could adversely affect our business.

 Our
ability to redesign and manufacture our MAVs is critical to our success across our operations. We expect to rely on Helicopter Technology
to redesign and produce our planned MAV. Inadequate design and manufacturing services due to disputes, inadequate design or unexpected
design or manufacturing defects could impair our ability to sell our MAVs. Inadequate design and manufacturing services could also potentially
disrupt our sales and compromise our business reputation. Failure to take adequate steps to mitigate the likelihood or potential impact
of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results
of operations, as well as require additional resources to complete the redesign of our planned MAV and its production.

 We
expect to rely on third-party distributors for sales, marketing and distribution activities relating to our MAVs.

 Currently
we do not rely on any third-party distributors for sales, marketing and distribution activities relating to our MAVs as are in the process
of redesigning our MAV. However, some of our business partners may act as third-party distributors that sell, market and distribute our
MAVs to their customers in the future. Accordingly, we may be subject to a number of risks associated with third-party distributors,
including a lack of day-to-day control over the activities of third-party distributors selling or using our products and solutions; third-party
distributors may terminate their arrangements with us on limited or no notice, or may change the terms of these arrangements in a manner
that is unfavorable to us for reasons outside of our control; and any disagreements with our third-party distributors could lead to costly
and time-consuming litigation or arbitration. If we fail to establish and maintain satisfactory relationships with our third-party distributors,
we may not be able to sell, market and distribute our MAVs according to our internal budget and plans, our future revenues and market
share may not grow at a pace that we expect, and we could be subject to increases in sales and marketing and other costs which would
harm our results of operations and financial condition.

 We
will rely on external suppliers for raw materials and certain key externally sourced components and parts used in the assembly of our
MAVs, and have limited control over the quality of these components and parts.

 We
plan to purchase certain key externally sourced components and raw materials, such as computers chips, batteries, motors and electronic
displays, from external suppliers for use in our assembly, production and operations of MAVs. A continuous and stable supply of components
and raw materials that meet our standards is crucial to our assembly, production and operations. We cannot assure you that we will be
able to establish or maintain relationships with suppliers and be able to stably source key components and raw materials at reasonable
prices, or at all. Since our MAV is currently under development, we have not identified all of the inputs needed to manufacture it. Consequently,
we have not identified the suppliers we will needed until we further along with our development work. Further, once suppliers have been
identified, the supply of key components could be interrupted for any reason, or there could be significant increases in the prices of
these key components. Additionally, changes in business conditions, force majeure, governmental changes and other factors beyond our
control, or that we do not presently anticipate, could also affect our prospective suppliers' ability to deliver components to
us on a timely basis. If any of these events occurs, our business, financial condition, results of operations and prospects may be materially
and adversely affected.

 We
cannot guarantee that the quality of components and parts manufactured by prospective suppliers will be consistent and maintained at
a high standard. Any defects of or quality issues with these components or any noncompliance incidents associated with these third-party
suppliers could result in quality issues with our MAVs and hence compromise our brand image and results of operations. In extreme situations,
we may be exposed to liabilities as a result of significant damages caused by certain components from external suppliers and we cannot
assure you that we will be able to obtain sufficient insurance coverage at an acceptable cost in the future. A successful claim brought
against us in excess of our available insurance coverage may have a material adverse effect on our business, financial condition and
operating results.

 We
expect to rely on third-party logistics providers to deliver our domestic sales orders and overseas orders. Inadequate third-party logistics
services or failure to mitigate the risks of damage or disruption to our distribution logistics could adversely affect our business.

 Our
ability to transport and sell our MAVs is critical to our success across our operations. We expect to rely on third-party logistics service
providers to deliver our domestic sales orders and overseas orders. Damage or disruption to our distribution logistics due to disputes,
weather, natural disasters, fire, explosions, terrorism, pandemics or labor strikes could impair our ability to distribute or sell our
MAVs. Inadequate third-party logistics services could also potentially disrupt our distribution and sales and compromise our business
reputation. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such
events if they occur, could adversely affect our business, financial condition and results of operations, as well as require additional
resources to restore our supply chain.

 Risks
Related to Employee Matters

 Our
success depends on the continuing efforts of our key employees, including our senior management members, directors and other key personnel.
If we fail to hire, retain and motivate our key employees and directors, we could lose the innovation, collaboration and focus that contribute
to our business.

 We
believe that our success depends substantially on the continued efforts of our key employees, including our senior management members,
directors and other qualified and key personnel. We rely on our executive officers, senior management, directors and key employees to
generate business, execute programs successfully and provide strategic oversight of our business. In addition, the relationships and
reputation that members of our management and key employees have established and maintain with key partners contribute to our ability
to implement our initiative to redesign, develop and manufacture the MAVs. The loss of any key personnel or our failure to attract additional
talent could reduce our employee retention, disrupt these initiatives and operations, increase our costs of development and impair our
revenue growth and competitiveness.

 As
previously disclosed by us in Form 8-K's filed with the SEC, in March 2023 and May 2023, four of our directors resigned, one of
whom was our former Chief Executive Officer (Shubei Komatsu, Steve Iwamura, Dr. Sayama and Marehiko Yamada) who were appointed on February
9, 2023 upon completion of our merger with AERWINS. In addition, on March 27, 2023, our former Chief Product Officer, Kazuo Miura was
removed from his position by the Board, on July 17, 2023 Daisuke Katano resigned as a director and on July 25, 2023 he resigned as our
Chief Operating Officer. The resignations and removal of these officers were not the result of any disagreement with our company on any
matter relating to our operations, policies or practices. Our board of directors appointed four new directors (Kiran Sidhu on May 15,
2023 and Katharyn (Katie) Field and Pavanveer (Pavan) Gill on May 22, 2023 and Robert Lim on July 18, 2023) and promoted Taiji Ito from
his position as our Global Markets Executive Officer to Chief Executive Officer on March 20, 2023. The duties of Messrs. Miura and Katano
were assumed by other members of our management team and on August 24, 2023, we appointed Yinshun (Sue) He as our Chief Financial Officer
following the resignation of Kensuke Okabe. As previously disclosed by us in a Form 8-K filed with the SEC on July 20, 2023, on July
18, 2023 Kiran Sidhu, the chairman of our board of directors and audit committee was appointed as Executive Chairman of the Board and
President, Katharyn Field was appointed as the chairperson of our audit committee and as its audit committee financial expert and Robert
Lim was appointed as a member of the board of directors. In addition, on July 18, 2023, the board of directors changed the composition
of the Company's Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee were changed. See "DESCRIPTION
OF BUSINESS–Officer and Director Changes." On December 12, 2023, Kiran Sidhu was appointed as our Chief Executive Officer
following the resignation of Taiji Ito as our Chief Executive Officer. As part of this change, the Board appointed Ms. Field as the Chairman
of the Board to take on the role formerly held by Mr. Sidhu who will remain as a director of the Company in addition to his role as its
CEO. Mr. Ito remains as a director of the Company.

 While
we were able to either reassign duties or timely identify and appoint qualified individuals to replace members of our management team
upon their resignation or removal, if one or more of our other executive officers or key employees were unable or unwilling to continue
their services with us, we might not be able to replace them easily, in a timely manner, or at all, and we might lose the innovation,
collaboration and focus that they contribute to our business.

 The
failure to attract and retain additional qualified personnel could prevent us from executing our business strategy.

 To
execute our business strategy, we must attract and retain highly qualified personnel. In particular, we compete with many other companies
for developers with high levels of experience in designing, developing and manufacturing MAVs, as well as for skilled information technology,
marketing, sales and operations professionals, and we may not be successful in attracting and retaining the professionals we need. Also,
inbound sales, marketing, services, and content management domain experts are very important to our success and are difficult to replace.
We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and difficulty
in retaining highly skilled employees with appropriate qualifications. In particular, we expect to experience a competitive hiring environment
in the United States, where we are headquartered. Many of the companies with which we compete for experienced personnel have greater
resources than we do. In addition, in making employment decisions, particularly in the MAVs industry, job candidates often consider the
value of the stock options or other equity incentives they are to receive in connection with their employment. If the price of our stock
declines, or experiences significant volatility, our ability to attract or retain key employees will be adversely affected. If we fail
to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed.

 Risks
Related to Intellectual Property

 We
and our subsidiaries may need to defend ourselves against claims of intellectual property infringement, which may be time-consuming and
costly.

 Companies,
organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would
prevent, limit or interfere with our ability to make, use, develop, sell or market our MAVs, MAV operating systems and infrastructure
or their components, which could make it more difficult for us to operate our business. Companies holding patents or other intellectual
property rights may bring suits alleging infringement of such rights by us and our subsidiaries or otherwise assert their rights against
us and our subsidiaries. Moreover, our and our subsidiaries' applications and uses of trademarks relating to our and our subsidiaries'
design, software or artificial intelligence technologies could be found to infringe upon existing trademark ownership and rights. We
or our subsidiaries may also fail to apply for key trademarks in a timely manner. We or our subsidiaries may continue to face intellectual
property infringement claims in the future.

 If
we or our subsidiaries are determined to have infringed upon a third party's intellectual property rights, we or our subsidiaries
may be required to do one or more of the following:

 cease
 selling, incorporating certain components into, or using MAVs or offering goods or services that incorporate or use the challenged
 intellectual property;

 pay
 substantial damages;

 seek
 a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or
 at all;

 redesign
 our, our subsidiaries or its subsidiaries' MAVs, MAV operating systems and infrastructure, components or services; or

 establish
 and maintain alternative branding for our, our subsidiaries or its subsidiaries' products and services.

 In
the event of a successful claim of infringement against us or our subsidiaries and our or our subsidiaries' failure or inability
to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and
financial condition could be materially and adversely affected. In addition, any litigation or claims, even if frivolous, could result
in substantial costs, negative publicity and diversion of resources and management attention.

 If
we fail to protect, or incur significant costs in defending or enforcing our intellectual property and other proprietary rights, our
business, financial condition and results of operations could be materially harmed.

 Our
success depends, in large part, on our ability to protect our intellectual property and other proprietary rights. We expect to rely primarily
on patents, trademarks, copyrights, trade secrets, design rights and unfair competition laws, as well as license agreements and other
contractual provisions, to protect our intellectual property and other proprietary rights. However, existing U.S. legal standards relating
to the validity, enforceability and scope of protection of intellectual property rights offer only limited protection, may not provide
us with any competitive advantages, and our rights may be challenged by third parties. The laws of countries other than the United States
may be even less protective of our intellectual property rights. Accordingly, despite our efforts, we may be unable to prevent third
parties from infringing upon or misappropriating our intellectual property or otherwise gaining access to our technology we expect to
develop in the future. Unauthorized third parties may try to copy or reverse engineer our planned products or portions of our products
or otherwise obtain and use our intellectual property. Moreover, our employees contractors have or will have access to our trade secrets
and other intellectual property. If one or more of these contractors cease working with us and work for one of our competitors, then
they may disseminate this proprietary information, which may as a result damage our competitive position. If we fail to protect our intellectual
property and other proprietary rights, then our business, results of operations or financial condition could be materially harmed. From
time to time, we have initiated lawsuits to protect our intellectual property and other proprietary rights. Pursuing these claims is
time consuming and expensive and could adversely impact our results of operations.

 In
addition, affirmatively defending our intellectual property rights and investigating whether any of our products or services violate
the rights of others may entail significant expense. Our intellectual property rights may be challenged by others or invalidated through
administrative processes or litigation. If we resort to legal proceedings to enforce our intellectual property rights or to determine
the validity and scope of the intellectual property or other proprietary rights of others, then the proceedings could result in significant
expense to us and divert the attention and efforts of our management and technical employees, even if we prevail.

 Risks
Related to Government Regulation

 Failure
to comply with laws and regulations could harm our business.

 Our
business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible
for monitoring and enforcing employment and labor laws, workplace safety, environmental laws, consumer protection laws, anti-bribery
laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements
may be more stringent than those in the United States.

 Although
we expect to operate under the ultralight aircraft exceptions of Federal Aviation Regulation Part 103, aircraft, including the MAVs,
are subject to substantial regulation and changes to those regulations under international, federal, state, local and foreign laws regarding
safety, performance, and import regulations. Our planned vehicles will need to comply with many governmental standards and regulations
relating to vehicle safety, fuel economy, emissions control, noise control, and vehicle recycling, among others. Compliance with all
of these requirements may delay our production launch or require substantially higher compliance costs than anticipated, thereby adversely
affecting our business and financial condition.

 We
are subject to FAA regulations and changes to FAA regulations requiring certifications for flight operations or sales could negatively
impact operations.

 We
plan to design the MAV to conform with Federal Aviation Regulation Part 103 requirements for ultralight aircraft. We do not believe we
need to achieve FAA Certification for domestic MAV flight operations and sales as long as we continue to conform to FAR Part 103 in terms
of aircraft specifications and flight operations. Changes in FAA regulations requiring certification for flight operations or sales might
result in us incurring significantly increased costs to comply with those new regulations and in attempting to correct any issues causing
such delays. Also, the impact of new or changed laws or regulations on the planned MAV compliance or the costs of complying with such
laws and regulations cannot be predicted.

 Further,
as we sell our MAV products internationally, we face challenges in quickly and sufficiently familiarizing ourselves with foreign regulatory
environments and policy frameworks. If any new regulation is put in place, or a different interpretation of existing regulation is adopted,
our ability to manufacture, market, sell or operate our MAVs may be limited or otherwise affected. Failure to comply with applicable
regulations or to obtain, maintain or renew the necessary permits, licenses, registrations or certificates could cause delays in, or
prevent us from, manufacturing, marketing, selling and operating our MAVs products, meeting product demand and expectations, introducing
new products or expanding our service coverage, and could materially and adversely affect our operation results. If we are found to be
in violation of applicable laws or regulations, we could be subject to administrative punishment, including fines, injunctions, recalls
or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on our business, financial
condition, results of operations and prospects.

 We
are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance
with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and
legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

 We
are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations
in the United States, including the U.S. Foreign Corrupt Practices Act, or the FCPA and other anti-corruption laws and regulations. The
FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly
offering, promising, authorizing or providing anything of value to a "foreign official" for the purposes of influencing official
decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and
keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate
internal accounting controls. A violation of these laws or regulations could adversely affect our business, results of operations, financial
condition and reputation.

 We
expect to have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities
in the ordinary course of business. We may also enter into joint ventures and/or other business partnerships with government agencies
and state-owned or affiliated entities. These interactions subject us to an increased level of compliance-related concerns. We are in
the process of implementing policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives,
consultants, agents and business partners with applicable anti-corruption, anti-bribery, anti-money laundering, financial and economic
sanctions and similar laws and regulations. However, our policies and procedures may not be sufficient, and our directors, officers,
employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

 Non-compliance
with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower
complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences,
remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial
condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments
in our shares.

 Risks
Related to Indebtedness

 Our
substantial indebtedness could have important adverse consequences and adversely affect our financial condition.

 We
have a significant amount of indebtedness. As of December 31, 2023 and December 31, 2022, we had total liabilities of $19,547,304 and
$9,870,442, respectively. In addition, A.L.I.'s December 27, 2023 bankruptcy filing constituted an event of default pursuant to
the secured convertible notes in the aggregate principal amount of $4,200,000 issued by us to Lind Global on April 12, 2023 and May 23,
2023 and as amended on August 25, 2023 (the "Lind Notes"). Pursuant to the terms of the January Note Amendments
and the SPA Amendment, if we complete a Public Offering of our securities and make the Mandatory Prepayment no later than April 15, 2024, as
provided for in the January Note Amendments, Lind Global has agreed to forbear enforcement of its rights due to the event of default.
If, however, we are unable to fulfill these obligations, Lind Global may, at its option, (1) demand payment of an amount equal to 120%
of the outstanding principal amount of the Notes and (2) exercise all other rights and remedies available to it under the Notes and other
agreements entered into among the Company and Lind in connection with the issuance of the Notes (collectively, the "Transaction
Documents"), subject to the Floor Price and cash payment as discussed elsewhere in this Form 10-K.

 Our
level of debt could have important consequences, including making it more difficult for us to satisfy our obligations with respect to
our debt, limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions,
or other general corporate requirements, requiring a substantial portion of our cash flows to be dedicated to debt service payments instead
of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions
and other general corporate purposes, increasing our vulnerability to adverse changes in general economic, industry and competitive conditions,
exposing us to the risk of increased interest rates, limiting our flexibility in planning for and reacting to changes in the industries
in which we compete, placing us at a disadvantage compared to other, less leveraged competitors, increasing our cost of borrowing and
hampering our ability to execute on our growth strategy.

 We
are unable to generate sufficient cash flow to satisfy our significant debt service obligations, which could have a material adverse
effect on our business, financial condition results of operations, and cash flows.

 Our
ability to make principal and interest payments on and to refinance the indebtedness of our subsidiaries will depend on our ability to
raise funds from debt and/or equity financing as we no longer believe we will be able to generate a sufficient amount of cash flow from
operations prior to the due dates for our outstanding indebtedness in light to our discontinuance of A.L.I.'s business, the inability
to achieve the projected revenues from A.L.I and its bankruptcy filing in December 2023. Consequently, we need to refinance all or a
portion of our indebtedness and the indebtedness of our subsidiaries on or before maturity, sell assets, delay capital expenditures or
seek additional equity. The terms of our existing or future debt agreements may also restrict us from affecting any of these alternatives.
Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further
restrict our business operations. Further, changes in the credit and capital markets, including market disruptions and interest rate
fluctuations, may increase the cost of financing, make it more difficult to obtain favorable terms, or restrict our access to these sources
of future liquidity. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would
likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on commercially reasonable
terms or at all. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure
our obligations on commercially reasonable terms or at all, could have a material adverse effect on our business, financial condition
and results of operations, as well as on our ability to satisfy our obligations in respect of our indebtedness.

 Despite
our level of indebtedness, we and our operating subsidiary may still be able to incur substantially more debt, including off-balance
sheet financing, contractual obligations and general and commercial liabilities. This could further exacerbate the risks to our financial
condition described above.

 We
and our subsidiary Aerwin Development, may be able to incur significant additional indebtedness in the future, including off-balance
sheet financings, contractual obligations and general and commercial liabilities. If new debt is added to our current debt levels, the
related risks that we now face could intensify.

Risks

 Weakened
global economic conditions may harm our industry, business and results of operations.

 Our
overall performance depends in part on worldwide economic conditions. Global financial developments and downturns seemingly unrelated
to us or the MAV industry may harm us. The United States and other key international economies have been affected from time to time by
falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in
credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy, including with respect
to tariff and trade issues. In particular, the economies of countries in Europe have been experiencing weakness associated with high
sovereign debt levels, weakness in the banking sector, uncertainty over the future of the Euro zone and volatility in the value of the
pound sterling and the Euro, including instability surrounding Brexit. If economic conditions in key markets for our MAVs continue to
remain uncertain or deteriorate further, it could adversely affect our customers' ability or willingness to purchase our MAVs and
delay prospective customers' purchasing decisions, all of which could harm our operating results.

 We
are exposed to fluctuations in currency exchange rates.

 We
face exposure to movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations.
As exchange rates vary, revenue, cost of revenue, operating expenses and other operating results, when re-measured, may differ materially
from expectations. In addition, our operating results are subject to fluctuation if our mix of U.S. and foreign currency denominated
transactions and expenses changes in the future. Furthermore, global political events, including Brexit and similar geopolitical developments,
fluctuating commodity prices and trade tariff developments, have caused global economic uncertainty, which could amplify the volatility
of currency fluctuations. Such volatility, even when it increases our revenues or decreases our expenses, impacts our ability to predict
our future results and earnings accurately. Although we may apply certain strategies to mitigate foreign currency risk, these strategies
might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as ongoing
management time and expertise, external costs to implement the strategies and potential accounting implications. Additionally, as we
anticipate growing our business further outside of the United States, the effects of movements in currency exchange rates will increase
as our transaction volume outside of the United States increases.

 Our
actual operating results may differ significantly from our guidance and projections.

 From
time to time, we may provide forward looking estimates regarding our future performance that represent management's estimates as
of a point in time. These forward-looking statements are based on projections prepared by our management.

 Projections
are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific
assumptions with respect to future business decisions and conditions, some of which will change. The principal reason that we provide
forward looking information is to provide a basis for our management to discuss its business outlook with stakeholders. Forward looking
statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions of its forward-looking statements
will not materialize or will vary significantly from actual results. Accordingly, our forward-looking statements are only an estimate
of what management believes is realizable as of the date of release. Actual results will vary from our forward-looking statements and
the variations may be material. In particular, we no longer expect to achieve the projected revenues from A.L.I.'s businesses we
expected when we completed the Business Combination with Aerwins, Inc. In light of the foregoing, investors are urged not to rely upon,
or otherwise consider, our guidance or projections in making investment decisions.

 Risks
Related to Ownership of Our Securities

 Our
management will have broad discretion over the use of any net proceeds from future offerings and you may not agree with how we use the
proceeds, and the proceeds may not be invested successfully.

 Our
management will have broad discretion as to the use of any net proceeds from future offerings of our securities and could use them for
purposes other than those contemplated at the time of the offering. As of the date of this Form 10-K, we will use the net proceeds of
future offerings for general corporate purposes, including working capital, the payment of the Mandatory Prepayment portion of the Lind
Notes, the expected costs to redesign, build and commercialize our planned MAV and the personnel costs, capital
expenditures and the costs of operating as a public company. We have not allocated any specific portion of the net proceeds of any future
offering to any particular purpose and our management will have the discretion to allocate the proceeds as it determines except as it
relates to the Mandatory Prepayment portion of the Lind Notes. We will have significant flexibility and broad discretion in applying
the net proceeds of this offering, and we may not apply these proceeds effectively. Our management might not be able to yield a significant
return, if any, on any investment of these net proceeds, and you will not have the opportunity to influence our decisions on how to use
our net proceeds from this offering.

 Nasdaq
may delist the Company's securities from trading on its exchange, which could limit investors' ability to make transactions
in our securities and subject the Company to additional trading restrictions.

 Our
securities are currently listed on the Nasdaq Capital Market. However, we cannot assure you that our securities will continue to be listed
on the Nasdaq Capital Market in the future. In order to continue listing its securities on the Nasdaq Capital Market, we must maintain
certain financial, distribution and stock price levels and minimum market value of listed securities. Generally, we must maintain a minimum
number of holders of its securities (generally 400 public holders).

 As
previously disclosed in the Current Report on Form 8-K filed on April 21, 2023 by the Company, on April 20, 2023, Nasdaq Listing Qualifications
staff ("Staff") notified the Company that it no longer complied with the minimum bid price requirement under Listing Rule
5450(a)(1). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until October 17, 2023, to
regain compliance with Rule 5450(a)(1) (the "Bid Price Rule"). As previously disclosed on a Form 8-K filed with the SEC on
October 23, 2023, on October 18, 2023, Staff notified the Company that it had determined to delist the Company as it did not comply with
the requirements for continued listing on the Exchange. As previously disclosed in the Current Report on Form 8-K filed with the SEC
on November 28, 2023, the Company appealed Nasdaq's determination in accordance with the procedures set forth in the Nasdaq Listing
Rules and requested a hearing (the "Hearing Request") before the Nasdaq Hearings Panel (the "Panel"). As previously
disclosed on a Form 8-K filed with the SEC on November 28, 2023, on November 21, 2023, Staff issued an additional delist determination
letter after the Company failed to file its Form 10-Q for the period ended September 30, 2023 (the "Delinquent Report"),
as required by Listing Rule 5250(c)(1) (the "Periodic Filing Rule"). On November 28, 2023, the Company filed its Delinquent
Report and, thus, regained compliance with the Periodic Filing Rule. As previously disclosed on a Form 8-K filed with the SEC on December
12, 2023, on December 6, 2023, Staff issued an additional delist determination letter as the Company's no longer complied with
the $50,000,000 minimum market value of listed securities requirement set forth in Listing Rule 5450(b)(2)(A) (the "MVLS Rule"),
which served as an additional and separate basis for delisting.

 A
hearing before the Panel was conducted on January 4, 2024. The Panel conditionally granted the Company's request to transfer its
shares from The Nasdaq Global Market to The Nasdaq Capital Market, effective at the open of trading on January 18, 2024 and the Company's
request for an exception to the Exchange's listing rules until April 15, 2024, to demonstrate compliance, subject to the satisfaction
of the conditions set forth in the Panel Decision. The Panel Decision indicates that the Company may request that the Nasdaq Listing
and Hearing Review Council (the "Council") review the Panel Decision, in which case a written request for review would need
to be received within 15 days from the date of the Panel Decision. The Council may also on its own motion determine to review the Panel
Decision. The Panel Decision has no immediate effect on the listing of the Company's common stock on the Nasdaq Global Market.
The Company plans to fulfil each of the conditions as stated in the Panel Decision; however, no assurance can be given as to the definitive
date on which such conditions will be achieved.

 Following a request submitted
by the Company on April 12, 2024, the Panel granted a further extension to the exception granted on January 16, 2024, to the Company,
as amended on January 17, 2024 (the "Decision"), to extend the Company's deadline to regain compliance with Listing
Rule 5550(b)(1) (the "Equity Requirement"). In granting the extension, the Panel noted that as of April 15, 2024, the Company
has regained compliance with Nasdaq Listing Rule 5550(b)(1). Based on the information presented, the Panel determined to grant the Company's
request for an exception extension to regain compliance with the Equity Requirement until May 31, 2024, subject to the Company demonstrating
compliance with all applicable continued listing requirements for The Nasdaq Capital Market under Rule 5550.

 On April 17, 2024, the Company
received an Additional Staff Delisting Determination (the "Additional Staff Determination") from Nasdaq. The Additional Staff
Determination noted that the Company is now delinquent in filing its Form 10-K for the period ended December 31, 2023 (the "Form
10-K"), which additional delinquency may serve as a separate basis for the delisting of the Company's securities from Nasdaq.
The Additional Staff Determination notified the Company that the Nasdaq Hearings Panel (the "Panel") will consider this matter
in their decision regarding the Company's continued listing on The Nasdaq Capital Market and that it should present its views with
respect to this additional deficiency to the Panel in writing no later than April 24, 2024. On April 30, 2024, the Company filed its delinquent
Form 10-K for the period ended December 31, 2023.

 If
Nasdaq delists our securities from trading on the Nasdaq Capital Market and we are not able to list our securities another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, the Company could face significant
material adverse consequences, including:

 a
 limited availability of market quotations for its securities;

 reduced
 liquidity for its securities;

 a
 determination that the Company's common stock is a "penny stock" which will require brokers trading in the common
 stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market
 for the Company's securities;

 a
 limited amount of news and analyst coverage; and

 a
 decreased ability to issue additional securities or obtain additional financing in the future.

 In
the event of a delisting, we anticipate that we would take actions to restore our compliance with the Nasdaq Capital Market or another
national exchange's listing requirements, but we can provide no assurance that any such action taken by us would allow our common
stock to remain listed on the Nasdaq Capital Market or the Nasdaq Capital Market, stabilize our market price, improve the liquidity of
our common stock, prevent our common stock from dropping below the Nasdaq Capital Market's minimum bid price requirement, or prevent
future non-compliance with the Nasdaq Capital Market or another national exchange's listing requirements.

 A
large number of shares of our common stock issuable upon conversion of the Convertible Notes may be sold in the market, which may depress
the market price of our common stock and substantially dilute stockholders' voting power.

 Lind
Global is obligated to convert at least an aggregate of $1,750,000 of the principal amount of the Closing Notes at an exercise price
of $18.176 per share resulting in the issuance of a total of 96,281 shares of common stock, subject to the limitation that the
holder may not convert those securities to the extent that the holder would own more than 4.99% of our outstanding common stock
immediately after conversion. However, this limitation does not prevent the holder from selling shares of our common stock and then
receive additional shares of our common stock through a subsequent conversion. In this way, Lind Global could acquire and sell more
than 4.99% of the outstanding common stock in a relatively short time frame while never holding more than 4.99% at one time. Further
since the exercise price under the Convertible Notes is based on market prices of our common stock during the ten trading days prior
to each conversion, declines in the market price of our common stock down to the conversion floor price ($18.176 per share) result
in, subject to the floor price, higher conversion rates and consequently higher rates of dilution to stockholders for each dollar of
principal of a Convertible Debenture being converted during such declines. As of January 22, 2024 there were 626,890 shares of
common stock outstanding and 396,244 shares of common stock owned by non-affiliates. Sales of a substantial number of shares of our
common stock in the public markets could depress the market price of our common stock, cause substantial dilution to
stockholders' voting power and impair our ability to raise capital through the sale of additional equity securities. If all
96,281 shares of common stock that could potentially be issued underlying the Convertible Notes that Lind Global is obligated to
convert are issued, the percentage of our common stock held by the existing non-affiliate stockholders would be reduced from
approximately 63.2% to approximately 54.8%. We cannot predict the effect that future sales of our common stock by the holders or
others would have on the market price of our common stock.

 An
Event of Default under a Convertible Notes has occurred and could lead to increased amounts payable under the Convertible Notes and an
acceleration of the Convertible Notes will materially and adversely affect our operations.

 The
A.L.I. Bankruptcy constitutes an event of default pursuant to the Convertible Notes. Pursuant to the terms of the January Note Amendments
and the SPA Amendment, if we complete this offering and make the Mandatory Prepayment no later than April 15, as provided for in the
January Note Amendments, Lind Global has agreed to forbear enforcement of its rights due to the event of default. If, however, we are
unable to fulfill these obligations, Lind Global may, at its option, (1) demand payment of an amount equal to 120% of the outstanding
principal amount of the Convertible Notes and (2) exercise all other rights and remedies available to it under the Convertible Notes
and the Transaction Documents; provided, however, that (x) upon the occurrence of the event of default described above, Lind Global,
in its sole and absolute discretion (without the obligation to provide notice of such event of default), may: (a) from time-to-time demand
that all or a portion of the outstanding principal amount of the Convertible Notes be converted into shares of the Company's common
stock at the lower of (i) the then-current Conversion Price (that price being $18.176 per share (the "Floor Price")) and
(ii) eighty-percent (80%) of the average of the three (3) lowest daily volume weighted average prices ("VWAPs") during the
20 trading days prior to the delivery by Lind Global of the applicable notice of conversion or (b) exercise or otherwise enforce any
one or more of Lind Global's rights, powers, privileges, remedies and interests under the Convertible Notes, the Transaction Documents
or applicable law. Consequently, if we are unable to complete the Public Offering and fulfill our other obligations under the January
Note Amendments and the SPA Amendment, our costs related to the Convertible Notes could substantially increase and we may not have the
funds required to repay Lind Global the accelerated amounts due under the Convertible Notes, which could lead Lind Global to take action
against the Company such as commencing litigation which could have material adverse effects on our business and prospects.

 The
market price of our common stock may be volatile, and you could lose all or part of your investment.

 The
trading price of our common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility
often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your
shares of common stock at an attractive price due to a number of factors such as those listed in this Risk Factors section and the following:

 results
 of operations that vary from the expectations of securities analysts and investors;

 results
 of operations that vary from those of the Company's competitors;

 changes
 in expectations as to the Company's future financial performance, including financial estimates and investment recommendations
 by securities analysts and investors;

 declines
 in the market prices of stocks generally;

 strategic
 actions by the Company or its competitors;

 announcements
 by the Company or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital
 commitments;

 announcements
 of estimates by third parties of actual or anticipated changes in the size of the Company's customer base or the level of customer
 engagement;

 any
 significant change in the Company's management;

 changes
 in general economic or market conditions or trends in the Company's industry or markets;

 changes
 in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable
 to the Company's business;

 additional
 shares of the Company's securities being sold or issued into the market by the Company or any of the existing stockholders
 or the anticipation of such sales, including if the Company issues shares to satisfy conversions under the Convertible Notes, exercises
 of Warrants or restricted stock unit related tax obligations or if existing stockholders sell shares into the market when applicable
 "lock-up" periods end;

 investor
 perceptions of the investment opportunity associated with the Company's common stock relative to other investment alternatives;

 the
 public's response to press releases or other public announcements by the Company or third parties, including the Company's
 filings with the SEC;

 litigation
 involving the Company, the Company's industry, or both, or investigations by regulators into the Company's operations
 or those of the Company's competitors;

 guidance,
 if any, that the Company provides to the public, any changes in this guidance or the Company's failure to meet this guidance;

 the
 development and sustainability of an active trading market for the Company's common stock;

 actions
 by institutional or activist stockholders;

 developments
 in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies;

 changes
 in accounting standards, policies, guidelines, interpretations or principles; and

 other
 events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.

 These
broad market and industry fluctuations may adversely affect the market price of the Company's common stock, regardless of the Company's
actual operating performance. In addition, price volatility may be greater if the public float and trading volume of the Company's
common stock is low.

 In
the past, following periods of market volatility, stockholders have instituted securities class action litigation. If the Company was
involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from
the Company's business regardless of the outcome of such litigation.

 Because
there are no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment
unless you sell your shares of the Company's common stock at a price greater than what you paid for it.

 The
Company intends to retain future earnings, if any, for future operations, expansion and debt repayment, and there are no current plans
to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of the Company's
common stock will be at the sole discretion of the Company's board of directors. The Company's board of directors may take
into account general and economic conditions, the Company's financial condition and results of operations the Company's available
cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications
of the payment of dividends by the Company to its stockholders or by its subsidiaries to it and such other factors as the Company's
board of directors may deem relevant. As a result, you may not receive any return on an investment in the Company's common stock
unless you sell your common stock for a price greater than that which you paid for it.

 The
Company's stockholders may experience dilution in the future.

 The
percentage of shares of the Company's common stock owned by current stockholders may be diluted in the future because of equity
issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that the Company may
grant to its directors, officers and employees, exercise of the Company's warrants. Such issuances may have a dilutive effect on
the Company's earnings per share, which could adversely affect the market price of the Company's common stock.

 We
have no committed source of financing. Wherever possible, we may attempt to use non-cash consideration to satisfy obligations or obtain
financing. Our board of directors has authority, without action or vote of the stockholders, to issue all or part of the authorized but
unissued. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common
stock, possibly at a discount to market. These actions would result in dilution of the ownership interests of existing stockholders and
may further dilute the common stock book value, and that dilution may be material.

 If
securities or industry analysts do not publish research or reports about our business, or they publish negative reports about our business,
our share price and trading volume could decline.

 The
trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about
us or our business, our market, and our competitors. We do not have any control over these analysts. If one or more of the analysts who
cover us downgrade our shares or publish negative views on us or our shares, our share price would likely decline. If one or more of
these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets,
which could cause our share price or trading volume to decline.

 As
an "emerging growth company" under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements.

 We
qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions
from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

 have
 an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 comply
 with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
 or a supplement to the auditors' report providing additional information about the audit and the consolidated financial statements
 (i.e., an auditor discussion and analysis);

 submit
 certain executive compensation matters to stockholder advisory votes, such as "say-on-pay" and "say-on-frequency";
 and

 disclose
 certain executive compensation related items such as the correlation between executive compensation and performance and comparisons
 of the chief executive officer's compensation to median employee compensation.

 In
addition, Section 102 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore
not be comparable to those of companies that comply with such new or revised accounting standards.

 We
will remain an emerging growth company until the earliest to occur of: (i) the end of the first fiscal year in which our annual gross
revenue is $1.235 billion or more; (ii) the date on which we have, during the previous three-year period, issued more than $1.0 billion
in non-convertible debt; and (iii) the end of the fiscal year during which the fifth anniversary of our initial public offering (which
closed on August 13, 2021) occurs.

 Until
such time, however, we cannot predict if investors will find our securities less attractive because we may rely on these exemptions.
If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the
price of our securities may be more volatile.

 The
company may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous for the Company's warrant
holders.

 The
company will have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration,
at a price of $0.01 per warrant, provided that the last reported sales price of the Company's common stock equals or exceeds $1,800
per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
a 30 trading-day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.
If and when the public warrants become redeemable by the Company, the Company may exercise its redemption right if there is a current
registration statement in effect with respect to the shares of the Company's common stock underlying such warrants. Redemption
of the outstanding public warrants could force you to: (i) exercise your warrants and pay the related exercise price at a time when it
may be disadvantageous for you to do so; (ii) sell your warrants at the then-current market price when you might otherwise wish to hold
your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption,
is likely to be substantially less than the market value of your warrants.

 Our
securities holders may face significant restrictions on the resale of our securities due to state "Blue Sky" laws.

 Each
state has its own securities laws, often called "blue sky" laws, which (i) limit sales of securities to a state's residents
unless the securities are registered in that state or qualify for an exemption from registration, and (ii) govern the reporting requirements
for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration
in place to cover the transaction, or the transaction must be exempt from registration. The applicable broker must be registered in that
state. We do not know whether our common stock will be registered or exempt from registration under the laws of any state. There may
be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our common stock. You should
therefore consider the resale market for our common stock to be limited, as you may be unable to resell your common stock without the
significant expense of state registration or qualification.

 Substantial
future sales of shares of our common stock could cause the market price of our common stock to decline.

 The
market price of shares of our common stock could decline as a result of substantial sales of our common stock, particularly sales by
Lind Global, our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available
for sale or the perception in the market that holders of a large number of shares intend to sell their shares.

 If
we fail to maintain effective internal control over financial reporting, the price of our securities may be adversely affected.

 We
conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended December 31, 2023. Based on this evaluation, our principal executive officer and principal financial and accounting officer concluded that during
the period ended December 31, 2023, 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. Consequently, our internal control over financial reporting has weaknesses
and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common
stock. We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls,
or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial
condition or results of operations. In addition, management's assessment of internal control over financial reporting may identify
additional weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that
may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control
over financial reporting or disclosure of management's assessment of our internal control over financial reporting may have an
adverse impact on the price of our common stock.

 As
an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.

 Our
independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting
while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies
in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal
controls over financial reporting and we are not. While our management will be required to attest to internal control over financial
reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the
independent registered public accounting firm's audit process in assessing the effectiveness of our internal controls over financial
reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging
growth company and cease to be a smaller reporting company (as described below), we will be subject to independent registered public
accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such
controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal
controls and issue a qualified report.

 If
the benefits of any proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price
of our common stock may decline.

 If
the benefits of any proposed acquisition do not meet the expectations of investors or securities analysts, the market price of our common
stock prior to the closing of the proposed acquisition may decline. The market values of our common stock at the time of the proposed
acquisition may vary significantly from their prices on the date the acquisition target was identified.

 In
addition, broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance.
The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating
performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be
predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive
to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability
to obtain additional financing in the future.

 Our
common stock may be subject to the "penny stock" rules in the future. It may be more difficult to resell securities classified
as "penny stock."

 Our
common stock may be subject to "penny stock" rules (generally defined as non-exchange traded stock with a per-share price
below $5.00) in the future. While our common stock is not currently considered "penny stock" since it is listed on Nasdaq,
if we are unable to maintain that listing and our common stock is no longer listed on Nasdaq, unless we maintain a per-share price above
$5.00, our common stock will become "penny stock." These rules impose additional sales practice requirements on broker-dealers
that recommend the purchase or sale of penny stocks to persons other than those who qualify as "established customers" or
"accredited investors." For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments
in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized
risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and
its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer's
account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser's
written agreement to the transaction.

 Legal
remedies available to an investor in "penny stocks" may include the following:

 If
 a "penny stock" is sold to the investor in violation of the requirements listed above, or other federal or states securities
 laws, the investor may be able to cancel the purchase and receive a refund of the investment.

 If
 a "penny stock" is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms
 that committed the fraud for damages.

 These
requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers
from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements
may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

 Many
brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest
in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial
risk generally associated with these investments.

 For
these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if
ever, our common stock will not be classified as a "penny stock" in the future.

 We
believe we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our
common stock less attractive to potential investors.

 Rule
12b-2 of the Exchange Act defines a "smaller reporting company" as an issuer that is not an investment company, an asset-backed
issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

 had
 a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed
 by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the
 price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market
 for the common equity; or

 in
 the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a
 public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed
 by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of
 a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public
 offering price of the shares; or

 in
 the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float
 was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which
 audited financial statements are available.

 As
a smaller reporting company, we are not required to, and may not, include a Compensation Discussion and Analysis section in our proxy
statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We
also will have other "scaled" disclosure requirements that are less comprehensive than issuers that are not smaller reporting
companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders
to sell their shares.

 We
incur significant costs as a result of operating as a public company, our management is required to devote substantial time to new compliance
initiatives and our management has limited experience in operating a public company.

 As
a public company, we incur significant legal, accounting and other expenses that we did not previously incur as a private company. In
addition, the Sarbanes-Oxley Act has imposed various requirements on public companies, including requiring establishment and maintenance
of effective disclosure and financial controls. Our management and other personnel need to devote a substantial amount of time to these
compliance initiatives. Moreover, these rules and regulations have increased and will continue to increase our legal and financial compliance
costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will
incur as a public company or the timing of such costs.

 The
Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure
controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial
reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section
404 of the Sarbanes-Oxley Act. In addition, we will be required to have our independent registered public accounting firm attest to the
effectiveness of our internal control over financial reporting the later of our second annual report on Form 10-K or the first annual
report on Form 10-K following the date on which we are no longer an emerging growth company or a smaller reporting company. Our compliance
with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial expense and expend significant management efforts.
We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate
public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a
timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial
reporting that are deemed to be material weaknesses, the value of our securities could decline and we could be subject to sanctions or
investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

 Our
ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate
financial statements. We expect that we will need to continue to improve existing, and implement new operational and financial systems,
procedures and controls to manage our business effectively. Any delay in the implementation of, or disruption in the transition to, new
or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control
over financial reporting is effective and to obtain an unqualified report on internal controls from our auditors as required under Section
404 of the Sarbanes-Oxley Act. This, in turn, could have an adverse impact on value of our securities, and could adversely affect our
ability to access the capital markets.

 Further,
our executive officers have limited experience in the management of a publicly traded company. Their limited experience in dealing with
the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing
amount of their time may be devoted to these activities, which will result in less time being devoted to the management and growth of
the post-combination company. We may not have adequate personnel with the appropriate level of knowledge, experience and training in
the accounting policies, practices or internal control over financial reporting required of public companies. Our management will need
to continually assess our staffing and training procedures to improve our internal control over financial reporting. For example, we
did not timely file our Form 10-Qs for the quarters ended March 31, 2023 and September 30, 2023 and unless the matters discussed in this
risk factor and elsewhere in this Form 10-K are mitigated, the risk exists that we may not be able to file timely in the future. Further,
the development, implementation, documentation and assessment of appropriate processes, in addition to the need to remediate any potential
deficiencies, will require substantial time and attention from management. The development and implementation of the standards and controls
necessary for us to achieve the level of accounting standards required of a public company may require costs greater than expected. It
is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public
company which will increase our operating costs in future periods.

 Anti-takeover
provisions contained in our Amended Charter and Amended Bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

 The
Company's Amended Charter and Amended Bylaws contain provisions that could have the effect of delaying or preventing changes in
control or changes in our management without the consent of our board of directors. These provisions include:

 no
 cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 the
 exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors
 or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of
 directors;

 the
 ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other
 terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly
 dilute the ownership of a hostile acquirer;

 limiting
 the liability of, and providing indemnification to, our directors and officers;

 providing
 that a special meeting of the stockholders may only be called by a majority of the board of directors;

 providing
 that directors may be removed prior to the expiration of their terms by the affirmative vote of the holders of not less than 2/3
 of the voting power of the issued and outstanding stock entitled to vote; and

 advance
 notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters
 to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation
 of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of the Company.

 These
provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors
and management.

 Any
provision of our Amended Charter or Amended Bylaws or Delaware law that has the effect of delaying or deterring a change in control could
limit the opportunity for our security holders to receive a premium for their securities and could also affect the price that some investors
are willing to pay for our securities.

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 Not
Applicable.

 ITEM
1C. CYBERSECURITY.

 Cybersecurity
Risk Management and Strategy

 We
recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is
defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud,
extortion, harm to employees or customers and violation of data privacy or security laws.

 We
do not presently have any general processes for assessing, identifying, and managing material risks from cybersecurity threats. As we
expand our business operations, we plan to develop processes that will allow for the identification and assessment of cybersecurity risk
that will be integrated into an overall risk management system, which will be managed by senior management and overseen by the Board
of Directors. As part of this development, we plan to identify and address cybersecurity risks related to our business, privacy and compliance
issues through a multi-faceted approach that is expected to include third party assessments, internal information technology (IT) audit,
IT security, governance, risk and compliance reviews. In connection with these planned approaches, and to defend, detect and respond
to cybersecurity incidents, we, among other things, will consider: conducting proactive privacy and cybersecurity reviews of systems
and applications, audits of applicable data policies, performing penetration testing using external third-party tools and techniques
to test security controls, conducting employee training, monitoring emerging laws and regulations related to data protection and information
security, and implementing appropriate changes.

 As
part of the above planned processes, we may engage external auditors and consultants with expertise in cybersecurity to assess our internal
cybersecurity programs and compliance with applicable practices and standards.

 We
plan to design our risk management program to also assesses third party risks, and we plan to perform third-party risk management to
identify and mitigate risks from third parties, such as vendors, suppliers, and other business partners associated with our use of third-party
service providers. In addition to new vendor onboarding, we plan to perform risk management during third-party cybersecurity compromise
incidents to identify and mitigate risks to us from third-party incidents.

 Cybersecurity
Governance

 We
expect that cybersecurity will become an important part of our risk management processes and an area of focus for our Board of Directors
and management. We expect that our Board of Directors will be responsible for the oversight of risks from cybersecurity threats. We expect
our senior management will provide our Board of Directors updates on a quarterly basis regarding matters of cybersecurity. This is expected
to include existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity
and data privacy incidents (if any) and status on key information security initiatives. We expect that our Board members will also engage
in periodic conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management
and strategy programs.

 Currently,
our Chief Executive Officer is expected to lead our cybersecurity risk assessment and management processes and oversees their implementation
and maintenance. Our Chief Executive Officer will be tasked with staying informed about, and monitoring the prevention, mitigation, detection
and remediation of cybersecurity incidents through his management of, and participation in, the cybersecurity risk management and strategy
processes we plan to develop and as described above, including the operation of an incident response plan, and report to the Board of
Directors on any appropriate items.

 ITEM
2. PROPERTIES

 Prior
to the December 27, 2023 discontinuation of A.L.I., our headquarters were located at Shiba Koen Annex 6 f, 1-8, Shiba Koen 3-chome, Minato-ku,
Tokyo, Japan 105-0011, where we leased and occupied office space with an aggregate floor area of approximately 340 square meters from
unrelated third parties under operating lease agreements. Our manufacturing and shipping facility was located at 1-2-11 Fukamidai, Yamato-shi,
Kanagawa. Our testing facilities was located at 72 Misawa, Minobu-cho, Minami Koma-gun, Yamanashi. We no longer occupy any of these offices
or facilities and following the discontinuance of ALI's operations and bankruptcy filing on December 27, 2023, we moved our principal
executive offices to The Walnut Building, 691 Mill St, Suite 240, Los Angeles, California 90021 where we lease this this office pursuant
to a lease that extends until February 28, 2025 when the term becomes a month-to-month tenancy.

 ITEM
3. 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, other than as described below,
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.

 On
December 27, 2023, A.L.I. filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai
Kakari" [Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu) (the "A.L.I. Bankruptcy"). On January 10, 2024,
the Court entered an order (the "January 10 Order") confirming that bankruptcy proceedings are commenced against the debtor
A.L.I., that A.L.I. is found to be insolvent, the appointment of Gaku Iida, Attorney-at-Law, of Abe, Ikubo & Katayama be appointed
as the trustee in the bankruptcy proceedings (the "Trustee") and setting the date and place of the meeting to report on the
status of property, to report on calculations and hear opinions regarding the disposition of the bankruptcy proceedings on May 14, 2024,
at 10:00 a.m. local time in the Court (the "Status Report Meeting"). The Trustee's address is Fukuoka Bldg. 9F, 2-8-7
Yaesu, Chuo-ku, Tokyo.

 As
a result of the filing of the Bankruptcy Proceedings and the January 10 Order, the Company concluded that it no longer controls A.L.I.
for accounting purposes as of January 10, 2024, in accordance with U.S. GAAP Accounting Standards Codification 810, and, therefore, A.L.I.
will be deconsolidated from the Company's consolidated financial statements prospectively, commencing in the first quarter of 2024.
See, however, "Risk Factors – We are involved in litigation from time to time and, as a result, we could incur substantial
judgments, fines, legal fees or other costs."

 ITEM
4. MINE SAFETY DISCLOSURES

 Not
Applicable.

 PART
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our
common stock and Public Warrants are listed on the Nasdaq Capital Market under the symbols "AWIN" and "AWINW,"
respectively. On April 12, 2024, the closing price of our common stock was $3.4828 per share and the closing price of our Public Warrants
was $0.02.

 Holders

 As of April 15, 2024 we had approximately 80 holders of record of our common
stock and 924,890 shares issued and outstanding and four holders of record of our Public Warrants and 8,624,993 public warrants issued,
563,756 placement warrants issued and outstanding and one holder of warrants to purchase 39,213 shares of common stock issuable upon
exercise of warrants issued to Lind Global in connection with the Purchase Agreement. Each Public warrant and placement warrant are exercisable
for one-hundredth of a share at $1,150 per share. The number of record holders does not include beneficial owners of common stock or warrants
whose shares are held in the names of banks, brokers, nominees or other fiduciaries.

 Transfer
Agent and Registrar

 The
Company's transfer agent and registrar for our common stock and Public Warrants is Continental Stock Transfer & Trust Company
located at 1 State Street, New York, NY 10004 and their telephone is (212) 509-4000.

 Dividends,
Common Stock and Unregistered Stock Issuances

 We
have not paid any cash dividends on our common or preferred stock and do not anticipate paying any such cash dividends in the foreseeable
future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business.

 Equity
Compensation Plans

 The
following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well
as any equity compensation plans not approved by our stockholders as of December 31, 2023.

 Plan category

 Number of

securities to be
 issued upon exercise of
 outstanding options,
 warrants and rights
 (Column A)

average

exercise price of

outstanding options,

warrants and rights

 Number of

securities
 remaining available
 for
 future issuance
 under equity
 compensation plans
 (excluding securities
 reflected in Column A)

 Plans approved by our stockholders

 11,732

 $
 0.015

 28,372

 Plans not approved by our stockholders

 N/A

 N/A

 N/A

 Unregistered
Sales of Securities

 None.

 Purchases
of Equity Securities by the Registrant and Affiliated Purchasers

 We
have not repurchased any shares of our common stock during the fiscal year ended December 31, 2023.

 ITEM
6. [RESERVED]

 ITEM
7. 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 8. Financial Statements and Supplementary
Data" of this Annual Report on Form 10-K. 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," "Item
1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.

 Overview

Technologies Inc., a Delaware corporation (the "Company," "we," "us," or "AERWINS") through
its subsidiaries is redesigning our single-seat optionally Manned Air Vehicle ("MAV" or "Manned Air Vehicle").
We aim to align this vehicle with the stringent requirements of the Federal Aviation Administration's ("FAA") Powered
Ultra-Light Air Vehicle Category, setting a new standard for safe low-altitude manned flight. Following an evaluation of the viability
of other areas of the Company's business which AWIN considered non-core and our desire to focus solely on our core business of
developing an FAA compliant MAV in the United States, we discontinued our non-core operations formerly carried out by our wholly owned
indirect subsidiary, A.L.I. Technologies Inc., a Japanese corporation ("ALI"). Following the discontinuation, on December
27, 2023, ALI filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari"
[Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed on January 10, 2024, and proceedings
have commenced. All references in this Annual Report on Form 10-K 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
Annual Report on Form 10-K. For additional information on the corporate history of our Company please see the section titled " Corporate
History " on page 20 of our Annual Report.

 Business
Overview

 We
were incorporated in the State of Delaware on June 9, 2022. Through our U.S.-based subsidiary, Aerwin Development, we are redesigning
our single-seat optionally Manned Air Vehicle ("MAV" or "Manned Air Vehicle") in the United States. We aim to
align this vehicle with the stringent requirements of the Federal Aviation Administration's ("FAA") Powered Ultra-Light
Air Vehicle Category, setting a new standard for safe low-altitude manned flight. Following an evaluation of the viability of other areas
of the Company's business which AWIN considered non-core and our desire to focus solely on our core business of developing an FAA-compliant
MAV in the United States, we discontinued our non-core operations formerly carried out by our wholly owned indirect subsidiary, A.L.I.
Technologies Inc., a Japanese corporation ("ALI"). Following the discontinuation, on December 27, 2023, ALI filed a voluntary
bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari" [Special Trusteeship Section],
Case ID: No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed on January 10, 2024, and proceedings have commenced.

 A.L.I.
was established in Japan in September 2016 and was acquired by us in August, 2022. The acquisition of A.L.I. was accounted for as a recapitalization
among entities under common control since the same controlling shareholders controlled all these entities before and after the transaction.
The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the transaction
had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

 With
the mission of "Transforming society from the sky down," we aim to realize an "Air Mobility Society" in which
cars, specialized crafts, and drones can fly freely. To this end, we are redesigning our single-seat optionally Manned Air Vehicle ("MAV").
We aim to align this vehicle with the stringent requirements of the Federal Aviation Administration's ("FAA") Powered
Ultra-Light Air Vehicle Category, setting a new standard for safe low-altitude manned flight.

 To
achieve this goal, we have established AERWIN Development Company LLC, a California subsidiary with offices in Los Angeles, California,
and entered into the Letter of Intent with Helicopter Technology discussed above.

 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.

 On
December 27, 2023, we discontinued the operations of A.L.I. as part of our operations, moved to Los Angeles, California, and continued
the development of a line of FAA-compliant manned and unmanned crafts for low-altitude. Following the discontinuation, on December 27,
2023, A.L.I. filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari"
[Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed on January 10, 2024, and proceedings
have commenced.

 ALI's
discontinued operations include the manned air mobility business, including the further development of the XTURISMO limited edition hoverbike,
the air mobility platform COSMOS (Centralized Operating System for Managing Open Sky), the computing power-sharing business, drone photography
business and drone and artificial intelligence research and development business.

 For
accounting purpose, the results of operations in relation to the Company's Drone solution service have been classified by the Company
as discontinued operations for the years ended December 31, 2023 and 2022.

 Key
Factors that Affect Our Results of Operations

 Our
business is affected by many factors which we discuss under the heading " Risk Factors " included elsewhere in this
Annual Report on Form 10-K. The following are a few of those key factors that may affect our financial condition and results of operations:

 Our
Ability to Complete Development of and Manufacture our planned Manned Air Vehicle ("MAV")

 Our
results of operations rely on our ability to redesign our single-seat optionally Manned Air Vehicle ("MAV" or "Manned
Air Vehicle") and commence production pursuant to the stringent requirements of the Federal Aviation Administration's ("FAA")
Powered Ultra-Light Air Vehicle Category, setting a new standard for safe low altitude manned flight. We plan to do this in conjunction
with Helicopter Technology Company ("Helicopter Technology") pursuant to the terms of the Letter of Intent we entered with
them effective as of December 19, 2023 described elsewhere in this Form 10-K.

 Our
Ability to Develop a Dealer Distribution Network and Market and Sell MAV's in Sufficient Quantities to Achieve Profitability

to the Letter of Intent, we have agreed to provide marketing and support services that includes marketing, sales, advertising, development
of a dealer distribution network, online marketplace, and other distribution channels in order to sell sufficient quantities of the MAVs.
We plan to sell our MAV's primarily in the United States, China and Europe beginning in 2027.

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

 We
are aiming to establish a highly profitable structure for a mass production of MAV's which focuses on design and supply chain control.
We plan to select subcontractors and suppliers appropriately based on cost, quality, and delivery date, and seek to build an efficient
production system.

 Results
of Operations

 Comparison
of Results of Operations for the Years Ended December 31, 2023, and 2022

 The
following table summarizes our operating results as reflected in our statements of income during the years ended December 31, 2023 and
2022, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

 For the years ended December 31,

 2023

 2022

 Variance

 % of

 % of

 % of

 REVENUE

 $
 -

 -
 %

 $
 -

 -
 %

 $
 -

 -
 %

 COST OF REVENUE

 -

 -
 %

 -

 -
 %

 -

 -
 %

 GROSS LOSS

 -

 -
 %

 -

 -
 %

 -

 -
 %

 Operating expenses

 Selling expenses

 -

 -
 %

 -

 -
 %

 -

 -
 %

 General and administrative expenses

 -
 %

 -
 %

 %

 Research and development expenses

 -

 -
 %

 -

 -
 %

 -

 -
 %

 Total operating expenses

 -
 %

 -
 %

 %

 Loss from operations

 (9,464,905
)

 -
 %

 (927
)

 -
 %

 (9,463,978
)

 %

 Other expenses

 (51,127
)

 -
 %

 -

 -
 %

 (51,127
)

 -

 %

 Loss before income tax provision

 (9,516,032
)

 -
 %

 (927
)

 -
 %

 (9,515,105
)

 1,026,440.7

 %

 Income taxes expense

 -

 -
 %

 (1,543
)

 -
 %

 1,543

 (100
)%

 Loss from continuing operations

 (9,516,032
)

 -
 %

 (2,470
)

 -
 %

 (9,513,562
)

 385,164.5

 %

 Loss from discounted operations

 (16,422,439
)

 -
 %

 (14,477,349
)

 -
 %

 (1,945,090
)

 13.4
 %

 Net loss

 $
 (25,938,471
)

 -
 %

 $
 (14,479,819
)

 -
 %

 $
 (11,458,652
)

 79.14
 %

Expenses

 The
following table sets forth the breakdown of our operating expenses for the years ended December 31 2023 and 2022:

 For
 the years ended December 31,

 2023

 2022

 Variance

 %
 of

 %
 of

 %
 of

 REVENUE

 $

 -

 n/a

 %

 $

 -

 -

 %

 $

 -

 -

 %

 Selling

 -

 -

 %

 -

 -

 %

 -

 -

 %

 and administrative expenses

 -

 %

 -

 %

 %

 Research
 and development expenses

 -

 -

 %

 -

 -

 %

 -

 -

 %

 Total
 operating expenses

 $

 -

 %

 $

 -

 %

 $

 %

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 years ended December 31,

 2023

 2022

 Variance

 % of

 % of

 % of

 Salaries and welfare

 $
 256,996

 2.7
 %

 $
 -

 -
 %

 $
 256,996

 -
 %

 Consulting and professional service fees

 8,737,980

 92.3
 %

 -

 -
 %

 8,737,980

 -
 %

 Rent expense

 0.00
 %

 -

 -
 %

 -
 %

 Office, utility and other expenses

 314,954

 3.3
 %

 -
 %

 314,027

 33,875.6
 %

 Commission fees expenses

 147,546

 1.6
 %

 -

 -
 %

 147,546

 -
 %

 Other expenses

 7,366

 0.1
 %

 -

 -
 %

 7,366

 -
 %

 Total general and administrative expenses

 $

 %

 $

 -
 %

 $

 1,020,925.3
 %

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

 Our general and administrative expenses increased by $9,463,978 or 1,020,925.3%,
to $9,464,905 for the year ended December 31, 2023 from $927 for the year ended December 31, 2022, primarily attributable to Consulting
and professional service fees relating to the business combination with Pono.

 Other
Income (Expenses), net

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

 Total other expenses, net, increased by $51,127 or Nil% from $Nil for the
year ended December 31, 2022 to $51,127 of expenses for the year ended December 31, 2023.

 Net
Loss from Continuing Operations

 As
a result of the foregoing, we reported a net loss of $9,516,032 for the year ended December 31, 2023 representing a $9,513,562 or 385,164.5%
increase from a net loss of $2,470 for the year ended December 31, 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 has
made the strategic decision to discontinue drone solution service and on December 27, 2023, the Company discontinued the remaining operations
of A.L.I as part of the move of our operations to Los Angeles, California. The results of operations in relation to the Company's
operations in ALI have been classified by the Company as discontinued operations for the years ended December 31, 2023 and 2022 for accounting
purpose and are shown below:

 For the years ended

 2023

 2022

 Revenues

 $
 1,073,049

 $
 5,207,490

 Cost of revenues

 2,823,132

 5,070,507

 Gross profit (loss)

 (1,750,083
)

 136,983

 Operating expenses:

 Selling expenses

 67,624

 90,654

 General and administrative expenses

 4,299,552

 7,211,400

 Research and development expenses

 6,916,047

 8,926,205

 Total operating expenses

 11,283,223

 16,228,259

 Loss from operations

 (13,033,306
)

 (16,091,276
)

 Other income (expenses):

 Interest expenses, net

 (107,640
)

 (25,065
)

 Gain (loss) on foreign currency transaction

 (10,007
)

 60,533

 Loss on disposal of fixed assets

 (10,697
)

 (9,316
)

 Impairment on fixed assets

 (1,829,585
)

 (511,695
)

 Equity in earnings of investee

 (11,640
)

 (16,964
)

 Gain on sale of investment securities

 35,834

 1,801,660

 Loss on debt extinguishment

 (666,641
)

 -

 Other income (expenses)

 255,251

 302,191

 Write-off of assets

 (1,057,591

)

 -

 Reversal of allowance for doubtful accounts

 -

 Reversal of allowance for bonus

 15,126

 11,936

 Total other income (expenses)

 (3,387,590
)

 1,613,927

 Net loss from discontinued operations

 (16,420,896
)

 (14,477,349
)

 Income tax

 (1,543
)

 -

 Net loss from discontinued operations

 $
 (16,422,439
)

 $
 (14,477,349
)

 Liquidity
and Capital Resources

 As
of December 31, 2023, we had $2,072 in cash as compared to $300,943 as of December 31, 2022. As of December 31, 2023, our working capital
deficit was $11,972,171.

 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 expected future revenues which resulted in our discontinuance
as of December 31, 2023 of our drone photography services and joint research and development services previously provided within our
unmanned air mobility business and the discontinuance of our non-core operations formerly carried out by our wholly owned indirect subsidiary,
A.L.I. Consequently, the projected revenues from A.L.I.'s businesses we expected when we completed the Business Combination with
Aerwins, Inc. will not be achieved. 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 December 31, 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 Lind Global 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 39,213 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 the payment of the Mandatory
Prepayment portion of the Lind Notes, the expected costs to redesign, build and commercialize our planned MAV and the personnel costs,
capital expenditures and the expected costs to redesign, build and commercialize our planned MAV and the personnel costs, capital expenditures
and the costs of operating as a public company. The ability to meet these needs 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 year ended December 31, 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 $341,424 in the year 2023 and the same amount is outstanding as of December 31,
2023. Mr. Katano paid $215,725 in the year 2023 and $9,935 is outstanding as of December 31, 2023. The Company will pay to them at an
appropriate timing in light of its financial situation.

 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 year ended December 31, 2023, the Company has incurred net loss from continuing operations
of $9,516,032 and accumulated deficit of $72,411,375. On December 27, 2023, the Company discontinued the operations of A.L.I. Technologies
Inc., a Japanese corporation ("A.L.I.") which is its wholly-owned indirect subsidiary and filed a voluntary bankruptcy petition
with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari" [Special Trusteeship Section], Case ID: No. 8234
of 2023 (Fu). These factors raise substantial doubt on the Company's ability to continue as a going concern.

 Although the Company moved its operations to Los
Angeles, California where it is planning to redesign its MAV and eventually commence production in order to generate sufficient revenue,
the Company's cash position is not 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 production
of the MAV following its redesign in order to 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. In addition, the Company may be the subject of complaints or litigation from customers, suppliers, employees, creditors
of A.L.I. stemming from its bankruptcy proceedings or other third parties for various actions. The damages sought against the Company
in some of these litigation proceedings could be substantial. The Company cannot assure its stockholder that the Company will always have
meritorious defenses to the plaintiffs' claims. While the ultimate effect of these legal actions cannot be predicted with certainty,
the Company's reputation and the result of operations could be negatively impacted. The proceedings the Company may be involved
in from time to time, including the A.L.I. Bankruptcy proceedings, could incur substantial judgments, fines, legal fees or other costs
and have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.

 Further, the Company has a significant amount
of indebtedness. As of December 31, 2023 and December 31, 2022, the Company had total liabilities of $19,547,304 and $9,870,442, respectively.
In addition, A.L.I.'s December 27, 2023 bankruptcy filing constituted an event of default pursuant to the secured convertible notes
in the aggregate principal amount of $4,200,000 issued by us to Lind Global on April 12, 2023 and May 23, 2023 and as amended on August
25, 2023 (the "Lind Notes"). Pursuant to the terms of the January Note Amendments and the SPA Amendment, if the Company completes
a Public Offering of our securities and make the Mandatory Prepayment no later than April 15, 2024, as provided for in the January Note
Amendments, Lind Global has agreed to forbear enforcement of its rights due to the event of default. Since the Company was unable to fulfill
these obligations, Lind Global has, at its option, the right to (1) demand payment of an amount equal to 120% of the outstanding principal
amount of the Notes and (2) exercise all other rights and remedies available to it under the Notes and other agreements entered into among
the Company and Lind in connection with the issuance of the Notes, subject to the Floor Price and cash payment.

 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 of Future Sales of our Common Stock May Have on the Exercise of the Warrants

 Sales
of a substantial number of shares of our Common Stock in the public market by Lind Global 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 shares of our common stock issuable upon conversion of the convertible notes held by Lind Global
and upon exercise of warrants it holds would represent a substantial percentage of our total outstanding Common Stock as of the date
of this report, assuming the sale of all of the Convertible Notes and exercises of all Warrants. Consequently, the sale of all securities
that Lind has the right to acquire could result in a significant decline in the public trading price of our Common Stock.

 In
the event of the exercise of any 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 $12.80 per share on November 27, 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.

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 31,963 shares of common stock (the "Shares") of AERWINS, Inc. which was immediately
exchanged for 50,000 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.

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 Form 10-K included in the Registration
Statement (and any post-effective amendment thereto) and any Form 10-K 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 Lind Global
pursuant to which we issued to Lind Global two Convertible Notes in the aggregate principal amount of $4,200,000 for an aggregate purchase
price of $3,500,000 and Warrants to purchase up to 39,213 shares of the Company's Common Stock (the "Transaction").

 The
closings of the Transaction (the "Closings and each a "Closing") occurred 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 23,527 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 15,685 shares of common stock. 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. As provided for in the January Note Amendments discussed below, neither party to the Purchase Agreement is obligated to complete the previously
agreed on third Tranche (the "Third Closing), which would have consisted of the issuance and sale to Lind Global of a Convertible
Note with a purchase price of $1,500,000 with a principal amount of $1,800,000, and the issuance to Lind Global of 16,805 Warrants
to acquire 16,805 shares of common stock. The Third Closing would have closed upon the effectiveness of the Registration Statement
discussed below in addition to completion of other conditions by us, but the Registration Statement was never declared effective by the
SEC and we did not fulfill the required conditions to closing.

 The
Convertible Note issued in the First Closing has a maturity date of April 12, 2025 and the Convertible Note issued in the Second Closing
has a maturity date of May 23, 2025 (the "Maturity Date"). Each Convertible Note has a conversion price equal to the lesser
of: (i) US$9.00 ("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 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 $89.26 per share
and $73.16 per share, respectively, subject to adjustments as set forth in the Warrant.

 In
the event that there is no effective registration statement registering the shares underlying the Warrants or upon the occurrence of
a Fundamental Transaction as defined in the Purchase Agreement, then the Warrants may be exercised by means of a "cashless exercise"
at the holder's option, such that the holder may use the appreciated value of the Warrants (the difference between the market price
of the underlying shares of common stock and the exercise price of the underlying warrants) to exercise the warrants without the payment
of any cash.

 In
accordance with our obligations under the Purchase Agreement, we filed a registration statement on Form S-1 on May 12, 2023 (the "May
2023 Registration Statement") with the SEC to register under the Securities Act the resale by Lind Global of up to 112,224 shares
of common stock issuable by us upon partial conversion of the Convertible Notes and exercise of the Warrants issued by us in connection
with the Purchase Agreement. We plan to withdraw the May 2023 Registration Statement as permitted pursuant to the SPA Amendment No. 2
discussed below.

 The
Purchase Agreement contains customary registration rights, representations, warranties, conditions and indemnification obligations by
each party, including our agreement to refrain from engaging in certain "Prohibited Transactions" as defined in the Purchase
Agreement, to hold a special meeting of shareholders for the purpose of obtaining shareholder approval of the Transactions, certain events
giving rise to a default under the Convertible Notes, obligations to use the proceeds from certain future financings to repay a portion
of the principal amount of the Convertible Notes, our pledge to Lind Global of the ownership interests in our subsidiaries, a grant by
us and our subsidiaries of a security interest in all of their respective assets and rights as collateral for the obligations due under
the Convertible Notes, and a guaranty by our subsidiaries of our obligations under the Convertible Notes.

 The
A.L.I. Bankruptcy constitutes an event of default pursuant to the Closing Notes in the aggregate principal amount of $4,200,000. Consequently,
Lind Global may at any time, at its option, (1) demand payment of an amount equal to 120% of the outstanding principal amount of the
Closing Notes and (2) exercise all other rights and remedies available to it under the Closing Notes and other agreements entered into
among the Company and Lind in connection with the issuance of the Closing Notes (collectively, the "Transaction Documents");
provided, however, that (x) upon the occurrence of the event of default described above, Lind Global, in its sole and absolute discretion
(without the obligation to provide notice of such event of default), may: (a) from time-to-time demand that all or a portion of the outstanding
principal amount of the Closing Notes be converted into shares of the Company's common stock at the lower of (i) the then-current
Conversion Price (that price being $18.176 per share (the "Floor Price")) and (ii) eighty-percent (80%) of the average of
the three (3) lowest daily volume weighted average prices ("VWAPs") during the 20 trading days prior to the delivery by Lind
Global of the applicable notice of conversion or (b) exercise or otherwise enforce any one or more of Lind Global's rights, powers,
privileges, remedies and interests under the Closing Notes, the Transaction Documents or applicable law.

 The
Closing Notes also provide that at the option of Lind Global, if in connection with a conversion under the Closing Notes, the Conversion
Price is deemed to be the Floor Price, then in addition to issuing the Conversion Shares (as defined in the Closing Notes) at the Floor
Price, the Company will also pay to Lind Global a cash amount equal to (i) the number of shares of common stock that would be issued
to Lind Global upon a conversion determined by dividing the dollar amount to be converted being paid in shares of common stock by ninety
percent (90%) of the lowest single VWAP during the twenty (20) trading days prior to the applicable date of conversion (notwithstanding
the Floor Price) less (ii) the number of shares of the Company's common stock issued to Lind Global in connection with the conversion;
and (iii) multiplying the result thereof by the VWAP on the date of conversion.

 On
January 23, 2024, the Company and Lind Global entered into an Amendment No. 2 to Senior Convertible Promissory Note First Closing
Note and an Amendment No. 2 to the Senior Convertible Promissory Note Second Closing Note (collectively, the "January Note
Amendments") which amended the Closing Notes to, subject to the conditions discussed below, (i) reduce the aggregate principal
amount of the Closing Notes from $4,200,000 to $3,500,000, (ii) require the Company to repay an aggregate of $1,750,000 of the
principal amount of the Closing Notes no later than the closing date of a public offering of the Company's common stock where
it receives gross proceeds of at least $13,500,000 (the "Public Offering") by April 15, 2024 and (iii) requires Lind
Global to convert no less than an aggregate of $1,750,000 of the Closing Notes no later than 11 months after the closing of the
Public Offering, provided that at the time of such conversion Lind Global receives shares of common stock that may be disposed of
without restrictive legend at their issuance pursuant to an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act (the "Mandatory Conversion Amount").

 In addition, on January 23, 2024, the Company and Lind Global entered into Amendment No. 2 to Securities Purchase Agreement (the "SPA
Amendment No. 2") to, subject to the conditions discussed below, (i) eliminate the obligation of the Company and Lind Global to
complete the Third Closing, (ii) delete the clause obligating the Company to register the shares of common stock issuable upon conversion
of the Closing Notes and exercise of the Warrants (collectively, the "Closing Securities") or pay Lind Global any delay payments
as a result of the Company's failure to register the Closing Securities, (iii) eliminate certain restrictions on the Company's
right to issue equity and debt in future transactions and (iv) eliminate Lind Global's right to participate in future offerings
of the Company's securities, other than its rights to participate in the Public Offering.

 The January Note Amendments and the SPA Amendment are subject to the Company completing the Public Offering and making the Mandatory Prepayment
as discussed above.

 In as much as the Company
failed to complete the Public Offering by April 15, 2024, Lind Global is not obligated to fulfill the terms of the January Note Amendments.
The Company plans to enter into discussions with Lind Global to extend the time period in which it is obligated to complete the Public
Offering.

Sale of Unregistered Securities

 On February 27, 2024 and March 22, 2024, we entered into and completed the sale to two unrelated accredited investors (the "Investors"),
of 100,000 shares and 35,500 shares, respectively, of our unregistered Common Stock at a price of $4.00 per share for an aggregate
of $542,000 in cash (the "Offerings"). The Offerings were made pursuant to the terms of a Subscription Agreement. In connection
with the Offerings, the Company entered into a Piggyback Registration Rights Agreement with each Investor whereby the Company agreed to
register the Common Stock acquired by the Investor in the Offering if at any time while the Investor remains the holder of such shares,
the Company proposes to file any registration statement under the Securities Act of 1933, as amended (the "Securities Act")
with respect to its Common Stock for its own account or for shareholders of the Company for their account, subject to certain customary
exceptions.

 Cash
Flows for the Years Ended December 31, 2023 and 2022

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

 For the years ended

 2023

 2022

 Net cash used in operating activities

 $
 (741,247
)

 $
 (200
)

 Net cash used in investing activities

 -

 -

 Net cash provided by financing activities

 4,572,147

 -

 Net cash used in discontinued operations

 (4,898, 802
)

 (7,630,919
)

 Net decrease in cash and cash equivalents

 (1,067,902
)

 (7,631,119
)

 Effect of exchange rate changes

 (126,720
)

 (1,111,314
)

 Cash and cash equivalents, beginning of the year

 -

 Cash and cash equivalents at beginning of year held by discontinued operation

 10,020,459

 Cash and cash equivalents at ending of the year held by discontinued operation

 Cash and cash equivalents, end of the year

 $
 2,072

 $

Activities

 Net
cash used in operating activities was $6,577,441 for the year ended December 31, 2023, primarily consisting of the
following:

Net loss of $9,516,032 for the year ended December 31, 2023;

Increase in Accounts payable of $827,626.

 Net
cash used in operating activities was $16,865,274 for the year ended December 31, 2022, primarily consisting of cash used in discontinued

 Investing
Activity

 Net
cash used in investing activities amounted to $62,066 for the year ended December 31, 2023, 2023, which is the net cash used by discontinued
operations of $62,066.

 Net
cash used in investing activities was $344,964 for the year ended December 31, 2022, primarily consisting of cash used in discontinued

 Financing
Activities

 Net
cash provided by financing activities amounted to $5,571,605, for the year ended December 31, 2023 and primarily consisted of proceeds
from bond of $2,797,698, proceeds from reverse recapitalization of $1,595,831, and net cash provided by discounted operations of $999,458.

 Net
cash used in investing activities was $9,579,119 for the year ended December 31, 2022, primarily consisting of cash used in discontinued

 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.

 Off-Balance
Sheet Arrangements

 We
did not have any off-balance sheet arrangements as of December 31, 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 warrant liabilities and derivative liabilities, 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 Form 10-K 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.

Receivable

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.

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

 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:

 Year ended
 December 31

 Year ended

 2023

 2022

 Current JPY: US$1 exchange rate

 140.92

 131.81

 Average JPY: US$1 exchange rate

 140.50

 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.

 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.

 Share-based Compensation

 We account for the share-based compensation
in accordance with the guidance contained in Accounting Standards Codification ("ASC") 718 — "Compensation
– Stock Compensation" and ASC 505, "Equity Based Payments to Non-Employees", using
the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument
issued, whichever is more reliably measurable.

 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 c hange in fair value is recognized in our consolidated statements
of operations.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Not
Applicable.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 Our
financial statements for the fiscal years ended December 31, 2023 and 2022 are attached hereto.

 TABLE
OF CONTENTS

 Report of Independent Registered Public Accounting Firm (PCAOB ID 5854)

 Consolidated
 Financial Statements

 Consolidated Balance Sheets at December 31, 2023 and 2022

 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Shareholders' Equity (Deficiency) for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 F- 1

 Report
of Independent Registered Public Accounting Firm

 To
the Stockholders and the Board of Directors of AERWINS Technologies, Inc.

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying balance sheets of AERWINS Technologies, Inc. and subsidiaries (the "Company") as of December
31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficit) and
cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period
ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 Substantial
Doubt About the Company's Ability to Continue as a Going Concern

 The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has suffered recurring losses from operations and negative cash flows from operating activities,
which raise substantial doubt about its ability to continue as a going concern. On December 27, 2023, the Company also discontinued the
operations of A.L.I. Technologies Inc., ("A.L.I") a Japanese corporation which is the wholly-owned indirect subsidiary of
the Company and filed a voluntary bankruptcy petition with the Tokyo District Court. These factors raise substantial doubt on the Company's
ability to continue as a going concern. Management's plans with respect to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Emphasis
of a Matter - Bankruptcy Proceedings

 Without
qualifying our opinion, we draw attention to Note 17 to the financial statements (Subsequent events). As a result of the filing of the
Bankruptcy Proceedings and the January 10, 2024 Order, the Company concluded that it no longer controls A.L.I. for accounting purposes
as of January 10, 2024, in accordance with ASC 810, and, therefore, A.L.I. will be deconsolidated prospectively commencing in the first
quarter of 2024 from the Company's consolidated financial statements. In addition, the A.L.I. Bankruptcy constitutes an event of
default pursuant to the Closing Notes in the aggregate principal amount of $4,200,000. Refer to Note 17 for details of subsequent amendments
to the Closing Notes.

 /s/
 TAAD, LLP

 We
have served as the Company's auditor since 2022.

 Diamond
Bar, California

 April

 F- 2

 CONSOLIDATED
BALANCE SHEETS

 31,

 31,

 2023

 2022

 ASSETS

 Assets:

 Cash
 and cash equivalents

 $
 2,072

 $

 Prepaid

 983,255

 -

 Assets of discontinued operations

 7,925,231

 Total
 current assets

 1,066,659

 8,226,174

 Long-term
 Asset

 Non-current
 assets of discontinued operations

 -

 3,553,172

 Total
 long-term assets

 -

 3,553,172

 Total
 Assets

 $
 1,066,659

 $
 11,779,346

 LIABILITIES
 AND STOCKHOLDERS' EQUITY

 Liabilities:

 Short-term
 loans payable

 $
 278,618

 $
 -

 1,918,803

 -

 payable, related party

 341,424

 -

 341,424

 -

 Accrued

 496,265

 2,270

 Accrued expenses, related party

 146,255

 -

 Accrued expenses

 146,255

 -

 Notes

 1,480,000

 -

 Others

 132,980

 -

 Liabilities of discontinued operations

 8,244,485

 5,898,875

 Total
 Current Liabilities

 13,038,830

 5,901,145

 Longer-term
 liabilities:

 Long-term
 convertible promissory note, net

 1,519,403

 -

 liability

 -

 Warrant
 liability

 400,924

 -

 Non-current liabilities of discontinued operations

 3,221,007

 3,969,297

 Total
 long-term liabilities

 6,508,474

 3,969,297

 Total
 Liabilities

 19,547,304

 9,870,442

 Stockholders'
 Equity (Deficit):

 Common stock, par value $ 0.000001, 400,000,000 shares
 authorized; 626,890
 and 469,297 shares
 issued and outstanding, respectively in December 31, 2023 and 2022 *

 Preferred stock, par value $ 0.000001,
 20,000,000 shares authorized; No
 shares issued and outstanding *

 -

 -

 Additional
 Paid-in capital

 55,549,976

 49,299,343

 Accumulated
 deficit

 ( 72,411,375
)

 ( 46,472,904
)

 Treasury
 stock

)

 -

 Accumulated
 other comprehensive loss

 ( 1,044,308
)

 ( 917,582
)

 Stockholders'
 Equity (Deficit)

 ( 18,480,645
)

 1,908,904

 Total
 Liabilities and Stockholders' Equity (Deficit)

 $
 1,066,659

 $
 11,779,346

 *

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

 *

 Retrospectively adjusted for effect of share consolidation on a basis of
1 post-consolidation share for each 100 pre-consolidation on April 2, 2024.

 See
notes to consolidated financial statements.

 F- 3

 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 For
 the year
 ended
 31,

 For
 the year
 ended
 31,

 2023

 2022

 expenses:

 Selling

 $
 -

 $
 -

 and administrative expenses

 Research
 and development expenses

 -

 -

 Total
 operating expenses

 Loss
 from operations

 ( 9,464,905
)

 ( 927
)

 Other expenses:

 Interest expense

 ( 204,570

)

 -

 Amortization of debt discount

 ( 1,497,798

)

 Gain
 on fair value adjustments of warrant

 2,054,544

 -

 Gain
 on fair value adjustments of derivative

 685,174

 -

 expense

 ( 1,088,477
)

 -

 Total
 other expenses

 ( 51,127
)

 -

 Loss before income tax provision

 ( 9,516,032
)

 ( 927
)

 Income tax expense

 -

 ( 1,543
)

 Net
 loss from continuing operations

 ( 9,516,032
)

 ( 2,470
)

 Discontinued
 operations (Note 16)

 Loss
 from discontinued operations

 ( 16,422,439
)

)

 Net
 Loss

 ( 25,938,471
)

 ( 14,479,819
)

 Other
 Comprehensive loss:

 currency translation adjustment

 ( 126,726
)

 ( 679,525
)

 Total
 Comprehensive loss

 ( 26,065,197
)

 ( 15,159,344
)

 Net
 loss per common share from continuing operations

 Basic

 ( 16.18
)

 ( 0.01
)

 Diluted

 ( 16.18
)

 ( 0.01
)

 Net
 loss per common share from discontinuing operations

 Basic

 ( 27.93
)

 ( 32.40
)

 Diluted

 ( 27.93
)

 ( 32.40
)

 average common shares outstanding *

 Basic *

 588,055

 446,788

 Effect
 of dilutive securities

 Convertible
 debt *

 34,451

 -

 Conversion
 of option warrants *

 127,531

 44,902

 Diluted *

 750,037

 491,690

 *

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

 *

 Retrospectively adjusted for effect of share consolidation on a basis of
1 post-consolidation share for each 100 pre-consolidation on April 2, 2024.

 See
Notes to Consolidated Financial Statements

 F- 4

 CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)

 Capital

 Deficit)

 Stock

 (Loss)

 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

 Capital

 Deficit)

 Stock

 (Loss)

 Totals

 Balance
 at January 1, 2022

 412,069

 $

 -

 $
 -

 $
 32,288,699

 $
 ( 31,993,085
)

 $
 -

 $
 ( 238,057
)

 $
 57,598

 Corporate
 bond conversion

 20,347

 -

 -

 7,176,346

 -

 -

 -

 7,176,348

 of common stock

 26,499

 -

 -

 8,399,180

 -

 -

 -

 8,399,183

 of common stock upon exercise of stock options

 10,382

 -

 -

 1,434,986

 -

 -

 -

 1,434,987

 Share-based compensation

 -

 -

 -

 -

 -

 -

 -

 Net
 loss

 -

 -

 -

 -

 -

 ( 14,479,819
)

 -

 -

 ( 14,479,819
)

 Other
 comprehensive loss

 -

 -

 -

 -

 -

 -

 -

 ( 679,525
)

 ( 679,525
)

 Balance
 at December 31, 2022

 469,297

 $

 $
 -

 $
 -

 $
 49,299,343

 $
 ( 46,472,904
)

 $
 -

 $
 ( 917,582
)

 $
 1,908,904

 F- 5

 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

 Capital

 Deficit)

 Stock

 Totals

 Balance
 at January 1, 2023

 469,297

 $

 -

 $
 -

 $
 49,299,343

 $
 ( 46,472,904
)

 $
 -

 $
 ( 917,582
)

 $
 1,908,904

 of common stock prior to the closing of Business Combination

 50,000

 -

 -

 ( 1,156,124
)

 -

 -

 -

 ( 1,156,119
)

 Reverse
 recapitalization

 37,402

 -

 -

 ( 878,120
)

 -

 -

 -

 ( 878,116
)

 of common stock warrants for services

 4,132

 -

 -

 -

 4,338,298

 -

 -

 -

 4,338,298

 Acquisition
 of treasury stock

 -

 -

 -

 -

 -

)

 -

)

 of common stock for services

 65,484

 -

 -

 2,489,179

 -

 -

 -

 2,489,185

 Obligation
 to issue shares for services

 -

 -

 -

 -

 1,457,400

 -

 -

 -

 1,457,400

 Net loss

 -

 -

 -

 -

 -

 ( 25,938,471
)

 -

 -

 ( 25,938,471
)

 Other
 comprehensive loss

 -

 -

 -

 -

 -

 -

 -

 ( 126,726
)

 ( 126,726
)

 Balances
 at December 31, 2023

 626,890

 $

 $
 -

 $
 -

 $
 55,549,976

 $
 ( 72,411,375
)

 $
)

 $
 ( 1,044,308
)

 $
 ( 18,480,645
)

 Balance

 626,890

 $

 $
 -

 $
 -

 $
 55,549,976

 $
 ( 72,411,375
)

 $
)

 $
 ( 1,044,308
)

 $
 ( 18,480,645
)

 *

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

 *

 Retrospectively adjusted for effect of share consolidation on a basis of
1 post-consolidation share for each 100 pre-consolidation on April 2, 2024.

 See Notes to Consolidated Financial Statements

 F- 6

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2023

 2022

 For
 the years ended

 31,

 31,

 2023

 2022

 CASH
 FLOWS FROM OPERATING ACTIVITIES

 Net
 loss

 $
 ( 25,938,471
)

 $
 ( 14,479,819
)

 Net
 loss from discontinued operations

 ( 16,422,439
)

)

 Net
 loss from continuing operations

 ( 9,516,032
)

 ( 2,470
)

 Adjustments
 to reconcile net loss to net cash provided (used) by operating activities:

 Interest
 expense

 204,570

 -

 Amortization of debt discount

 1,497,798

 -

 Share-based
 compensation

 7,304,259

 -

 Gain
 on fair value adjustments of warrant

 ( 2,054,544
)

 -

 Change
 in fair value of derivative liability

 ( 685,174
)

 -

 1,088,477

 -

 Decrease
 in operating assets:

 Prepaid

 23,113

 -

 Increase
 (Decrease) in operating liabilities:

 486,202

 -

 Accounts payable, related party

 341,424

 -

 Others

 132,980

 -

 Accrued

 289,425

 2,270

 Accrued expenses, related party

 146,255

 -

 Net
 cash used by continuing operations

 ( 741,247
)

 ( 200
)

 Net
 cash used by discontinued operations

 ( 5,836,194
)

 ( 16,865,074
)

 Net
 cash used by operating activities

 ( 6,577,441
)

 ( 16,865,274

)

 CASH
 FLOWS FROM INVESTING ACTIVITY

 Net
 cash used by continuing operations

 -

 -

 Net
 cash used by discontinued operations

 ( 62,066
)

 ( 344,964
)

 Net
 cash used by investing activity

 ( 62,066
)

 ( 344,964
)

 CASH
 FLOWS FROM FINANCING ACTIVITIES

 Proceeds
 from bond

 2,797,698

 -

 Proceeds
 from loans

 278,618

 -

 Repayments to loans

 ( 100,000

)

 Proceeds
 from reverse recapitalization with AERWINS Inc., net

 1,595,831

 -

 Net
 cash provided by continuing operations

 4,572,147

 -

 Net
 cash provided by discontinued operations

 999,458

 9,579,119

 Net
 cash provided by financing activities

 5,571,605

 9,579,119

 Net
 decrease in cash and cash equivalents

 ( 1,067,902
)

 ( 7,631,119
)

 Effects
 of exchange rates change on cash

 ( 126,720
)

 ( 1,111,314
)

 Cash
 and cash equivalents at beginning of year

 -

 Cash
 and cash equivalents at beginning of year held by discontinued operation

 10,020,459

 Cash
 and cash equivalents at ending of the year held by discontinued operation

 Cash
 and cash equivalents at end of year

 $
 2,072

 $

 Supplemental
 Disclosures of Cash Flow Information:

 Cash
 paid during year for:

 Interest

 $
 15,615

 $
 25,539

 taxes

 $
 -

 $
 31,136

 See
Notes to Consolidated Financial Statements

 F- 7

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER

 NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Technologies Inc., a Delaware corporation (the "Company," "we," "us," or "AERWINS") together
with its wholly owned subsidiary Aerwin Development CA LLC, a California limited liability company ("Aerwin Development"),
is redesigning its single-seat optionally Manned Air Vehicle ("MAV" or "Manned Air Vehicle"). Aerwin Development was incorporated under the laws of the State of California
on October 18, 2023. All refences in
this report on Form 10-K to the "Company," "we," "us," or "AERWINS" include both AERWINS
and Aerwin Development.

 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
 31,963 shares of common stock (the "Shares") of AERWINS, Inc. which was immediately exchanged for 50,000 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, 2023, 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 December 31, 2023), $ 643,213 in warrant
liabilities. The total funds from the Business Combination were $ 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 $ 199,687 as accrued expenses.

 F- 8

 On
December 27, 2023, A.L.I. Technologies Inc., a Japanese corporation ("A.L.I.") which is our wholly-owned indirect
subsidiary, filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai
Kakari" [Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed on January 10, 2024,
and proceedings have commenced.

 On April 2, 2024, the Company consolidated its
issued and outstanding share on the basis of one post-consolidation share for each 100 pre-consolidation common shares. All share figures
and references have been retrospectively adjusted.

 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 year ended December
31, 2023, the Company has incurred net loss from continuing operations of $ 9,516,032
 and accumulated deficit of $ 72,411,375.
On December 27, 2023, the Company discontinued the operations of A.L.I. Technologies Inc., a Japanese corporation ("A.L.I.")
which is its wholly-owned indirect subsidiary and filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division
20, "Tokutei Kanzai Kakari" [Special Trusteeship Section], Case ID: No. 8234 of 2023 (Fu). These factors raise substantial
doubt on the Company's ability to continue as a going concern.

 Although the Company moved its operations to Los Angeles,
California where it is planning to redesign its MAV and eventually commence production in order to generate sufficient revenue, the Company's
cash position is not 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 production of the MAV following
its redesign in order to 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.
In addition, the Company may be the subject of complaints or litigation from customers, suppliers, employees, creditors of A.L.I. stemming
from its bankruptcy proceedings or other third parties for various actions. The damages sought against the Company in some of these litigation
proceedings could be substantial. The Company cannot assure its stockholder that the Company will always have meritorious defenses to
the plaintiffs' claims. While the ultimate effect of these legal actions cannot be predicted with certainty, the Company's
reputation and the result of operations could be negatively impacted. The proceedings the Company may be involved in from time to time,
including the A.L.I. Bankruptcy proceedings, could incur substantial judgments, fines, legal fees or other costs and have a material adverse
effect on the Company's business, financial condition, results of operations and cash flows.

 F- 9

 Further, the Company has a significant amount of indebtedness.
As of December 31, 2023 and December 31, 2022, the Company had total liabilities of $ 19,547,304 and $ 9,870,442, respectively. In addition,
A.L.I.'s December 27, 2023 bankruptcy filing constituted an event of default pursuant to the secured convertible notes in the aggregate
principal amount of $ 4,200,000 issued by us to Lind Global on April 12, 2023 and May 23, 2023 and as amended on August 25, 2023 (the "Lind
Notes"). Pursuant to the terms of the January Note Amendments and the SPA Amendment, if the Company completes a Public Offering
of our securities and make the Mandatory Prepayment no later than April 15, 2024, as provided for in the January Note Amendments, Lind
Global has agreed to forbear enforcement of its rights due to the event of default. Since the Company was unable to fulfill these obligations,
Lind Global has, at its option, the right to (1) demand payment of an amount equal to 120% of the outstanding principal amount of the
Notes and (2) exercise all other rights and remedies available to it under the Notes and other agreements entered into among the Company
and Lind in connection with the issuance of the Notes, subject to the Floor Price and cash payment.

 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.

 Consolidated
Financial Information

 The
consolidated balance sheet as of December 31, 2023, the consolidated statements of operations and comprehensive income (loss), consolidated
statements of changes in shareholders' equity (deficiency), and consolidated statements of cash flows for the years ended December
31, 2023 and 2022 and the related notes to such consolidated financial statements are audited. These audited consolidated financial statements
have been prepared in accordance with U.S. GAAP.

 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.

 F- 10

Receivable, net

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. During the year ended December 31, 2023, inventory
write-downs of $ 1,487,493 were recorded to reflect the decrease in anticipated net realizable value as the Company is pursuing the redesign
of its hoverbike and considering strategic alternatives for the non-core operations.

 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

 8 - 38
 years

 Office
 equipment and furniture

 2 - 10
 years

 Software

 years

 Design
 right

 years

 Patent
 right

 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.

 F- 11

 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

 31,

2023

 31,

2022

 ASC
 TECH Agent

 Japan

 %

 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.

 Share-based

 We
account for the share-based compensation in accordance with the guidance contained in Accounting Standards Codification ("ASC")
718 — "Compensation – Stock Compensation" and ASC 505, "Equity Based Payments to Non-Employees",
 using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.

 F- 12

 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.

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

 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

 Year
 ended

 Year
 ended

 2023

 2022

 JPY: US$1 exchange rate

 140.92

 131.81

 Average
 JPY: US$1 exchange rate

 140.50

 131.46

 exchange rate

 140.50

 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.

 F- 13

 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,
hosting and infrastructure costs related to the delivery of the Company's products and services, and inventory write-down.

 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".

 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.

 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.

 F- 14

 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.

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.

Taxes

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.

 F- 15

 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.

 Contingencies

 Certain conditions may exist as of the date financial
statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur
or fail to occur. The Company is subject to potential liabilities generally incidental to our business arising out of present and future
lawsuits and claims related to product liability, personal injury, contract, commercial, intellectual property, tax, employment, compliance
and other matters that arise in the ordinary course of business. When a loss is considered probable and reasonably estimable, we record
a liability in the amount of our best estimate for the ultimate loss.

 Discontinued
Operations

 AS C
205-20 provides guidance on discontinued operation presentation requirements. In determining whether a group should be presented
as discontinued operations, the company makes a determination of whether such a group being disposed of comprises a component of the
entity, or a group of components of the entity, that represents a strategic shift that has, or will have, a major effect on the company's
operations and financial results. If these determinations are made affirmatively, the results of operations of the group being disposed
of are aggregated for separate presentation apart from the continuing operations of the company for all periods presented in the consolidated
financial statements.

 Recent Accounting Pronouncements

 We did not implement any new accounting pronouncements
during 2023. However, we are evaluating the impact of the future disclosures that may arise under recent SEC and other promulgators'
recently finalized rules and outstanding proposals.

 NOTE 4 – PREPAID EXPENSES

 SCHEDULE OF PREPAID EXPENSES

 31,
 2023

 31,
 2022

 Prepaid

 $
 983,255

 $
 -

 Total

 $
 983,255

 $
 -

 Of
the total prepaid expenses as at December 31, 2023, $ 983,255 is attributable to prepaid stock-based compensation.

 NOTE
5 – LOANS PAYABLE

 Notes

 On
January 31, 2023, the Company promised to pay to Mahana Equity LLC, the principal sum of $ 1,130,000. In the case of an event of default,
this note bear interest at a rate of 24 % per annum until such event of default is cured. The principal amount of this Note and any accrued
interest shall be payable on the earlier of raising more than $5,000,000 from Pono's SEPA with Yorkville or as follows: (i) $ 300,000
on April 10, 2023 (ii) $ 300,000 on May 10, 2023; (iii) $ 300,000 on June 30, 2023; and (iv) $ 230,000 on July 31, 2023.

 On
January 31, 2023, the Company promised to pay to a third party lender the principal sum of $ 450,000. In the case of an event of default,
this note bear interest at a rate of 24 % per annum until such event of default is cured. The principal amount of this Note and any accrued
interest shall be payable (the "Maturity date") as follows (i) $ 100,000 on April 10, 2023 (ii) $ 100,000 on May 10, 2023;
(iii) $ 100,000 on June 30, 2023; (iv) $ 100,000 on July 31, 2023; and (v) $ 50,000 on August 31, 2023.

 As
at December 31, 2023, the notes payable balance was $ 1,480,000 in default and recognized interest expenses of $ 199,687
 as accrued expenses.

 The
Company also received loans totaling $ 278,618 from third parties. These loans bears interest of 15 % per annum and due 12 months from
issue date. As at December 31, 2023, the loan balance including the accrued interest expense of $ 5,521 is $ 283,896.

 NOTE
6 — RELATED PARTY TRANSACTIONS

 In
the year 2023, Kiran Sidhu, director of Aerwins, paid some payables on behalf of the Company. Mr. Sidhu paid $ 341,424 in the year 2023
and the same amount is outstanding as of December 31, 2023. The Company will repay at an appropriate timing in light of its financial
situation.

 As at December 31, 2023, an amount of $ 25,924 was payable to previous executive
officer and $ 120,331 was payable to previous and current directors of the Company in accrued fees.

 F- 16

 NOTE
7 – 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"). 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 25,327 shares
of common stock at $ 89.26 per
share. The note may convert into common shares at the option of the Holder. The
conversion price is the lesser of: (i) $ 9.00;
or (ii) 90% of the lowest single VWAP during the 20 Trading
Days prior to conversion of the note. On August 25, 2023, the Company entered into an Amendment which amended the conversion price
to include a floor price of $ 18.176.
In addition to inclusion of a Floor Price, the Floor Note Amendments also provide that at the option of Selling Security holder, if
in connection with a conversion under the Closing Notes, as amended, the Conversion Price is deemed to be the Floor Price, then in
addition to issuing the Conversion Shares at the Floor Price, the Company agreed to pay to Selling Securityholder a cash amount
equal to (i) the number of shares of common stock that would be issued to Selling Securityholder upon a conversion determined by
dividing the dollar amount to be converted being paid in shares of common stock by ninety percent (90%) of the lowest single VWAP
during the twenty (20) Trading Days prior to the applicable date of conversion (notwithstanding the Floor Price) less (ii) the
number of Conversion Shares issued to Selling Securityholder in connection with the conversion; and (iii) multiplying the result
thereof by the VWAP on the Conversion Date. 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 15,685
shares of common stock at $ 73.16
per share. The note may convert into common shares at the option of the Holder. The
conversion price is the lesser of: (i) $ 9.00;
or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note. On August 25, 2023, the Company
entered into an Amendment which amended the conversion price to include a floor price of $ 18.176.
In addition to inclusion of a Floor Price, the Floor Note Amendments also provide that at the option of Selling Securityholder, if
in connection with a conversion under the Closing Notes, as amended, the Conversion Price is deemed to be the Floor Price, then in
addition to issuing the Conversion Shares at the Floor Price, the Company agreed to pay to Selling Securityholder a cash amount
equal to (i) the number of shares of common stock that would be issued to Selling Securityholder upon a conversion determined by
dividing the dollar amount to be converted being paid in shares of common stock by ninety percent (90%) of the lowest single VWAP
during the twenty (20) Trading Days prior to the applicable date of conversion (notwithstanding the Floor Price) less (ii) the
number of Conversion Shares issued to Selling Securityholder in connection with the conversion; and (iii) multiplying the result
thereof by the VWAP on the Conversion Date. 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 December 31, 2023:

OF DEBT NOTES

 Principal

 $
 4,200,000

 Debt
 discount

 ( 4,178,395
)

 Interest
 expense

 1,497,798

 Net
 Carrying Balance at December 31, 2023

 $
 1,519,403

 As
at December 31, 2023, debt discount of the convertible notes consisted of following:

OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES

 Start
 Date

 End
 Date

 Debt

 Discount At
 Debt

 Amortization

 Debt
 Discount

 As of

 31,
 2023

 April
 12, 2023

 April
 12, 2025

 $
 2,520,000

 $
 945,000

 $
 1,575,000

 May
 23, 2023

 May
 23, 2025

 1,658,395

 552,798

 1,105,597

 Total

 $
 4,178,395

 $
 1,497,798

 $
 2,680,597

 NOTE
8 – DERIVATIVE LIABILITY

 The
derivative liability is derived from the debt conversion option features in Note 7. They were valued using Monte Carlo simulation model
using assumptions detailed below. As of December 31, 2023, the derivative liability was $ 1,367,140. The Company recorded $ 685,174 gain
from changes in derivative liability during the year ended December 31, 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:

OF DERIVATIVE LIABILITY

 Volatility

 %

 Risk-free
 rate

 4.569 %
 - 4.632
 %

 Stock price (pre-consolidated)

 $
 0.15

 Dividend
 Yield

 -

 Expected
 life

 1.28
 – 1.39 years

 F- 17

 Fair
value of the derivative is summarized as below:

OF FAIR VALUE OF THE DERIVATIVE

 Liability

 Balance at January
 1, 2023

 $
 -

 Additions

 2,052,314

 Change
 in fair value

 ( 685,174
)

 Ending
 Balance, December 31, 2023

 $

 NOTE
9 – WARRANT LIABILITY

 The
warrant liability is derived from warrants issued as debt warrants in Note 7, public warrants and placement warrants.

 As
of December 31, 2023, the total fair value of the warrant liability was $ 400,924.

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

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

 ( 486,450
)

 Ending Balance, December

 $
 117,300

 The
Black-Scholes model with the following assumptions inputs:

OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS

 Volatility

 %

 Risk-free
 rate

 3.92 %
 - 4.632
 %

 Stock price (pre-consolidated)

 $
 0.15

 Expected
 life

 4.10
 – 4.40 years

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

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

 -

 ( 31,815
)

 ( 1,536,277
)

 Ending
 Balance, December 31, 2023

 $
 -

 $
 7,648

 $
 275,976

 The following table summarizes information regarding warrants by term,
granted and exercise price for the years ended December 31, 2023 and 2022.

OF WARRANTS BY TERM GRANTED AND EXERCISE PRICE

 of Shares

 Average

 Exercise Price

 Average

 Remaining

 contractual life

 Aggregate

Intrinsic

 Value

 Outstanding
 at December 31, 2022

 -

 $
 -

 -

 Granted

 131,101

 4.17

 Outstanding
 at December 31, 2023

 131,101

 $

 4.17

 $

 -

 Exercisable at December 31, 2023

 131,101

 $

 4.17

 $

 -

 The intrinsic value is the amount by which the fair value of the underlying share exceeds the exercise price of the warrants. As of December
31, 2023, the share price of the Company was less than the exercise price for all outstanding warrants. Therefore, the intrinsic value
for warrants outstanding was zero.

OF INTRINSIC FAIR VALUE EXCEEDS BY EXERCISE PRICE

 December 31, 2023

 December 31, 2022

 Grant Date

 Expiry Date

 Number of shares

 Exercise price

 Number of shares

 Exercise price

 Public warrants

 February 3, 2023

 February 3, 2028

 86,250

 1,150

 -

 -

 Placement warrants

 February 3, 2023

 February 3, 2028

 5,638

 1,150

 -

 -

 Debt warrants

 April 12, 2023

 April 12, 2028

 23,527

 -

 -

 Debt warrants

 May 23, 2023

 May 23, 2028

 15,686

 -

 -

 131,101

 -

 -

 F- 18

 NOTE
10 — INCOME TAXES

 The
income tax provision for the year ended December 31, 2023 and the December 31, 2022 consists of the following:

OF INCOME TAX PROVISION

 2023

 2022

 For the years ended

 2023

 2022

 Federal

 $
 -

 $
 -

 Deferred

 -

 -

 State

 -

 -

 Deferred

 -

 -

 -

 1,543

 Deferred

 -

 -

 Income Tax Provision

 $
 -

 $
 1,543

 The
Company's net deferred assets (liabilities) as of December 31, 2023 and December 31, 2022 are as follows:

OF NET DEFERRED ASSETS (LIABILITIES)

 Deferred tax assets:

 Bonus allowance

 -

 131,209

 FA & Impairment loss

 351,934

 321,764

 Bad debt allowance

 95,911

 102,587

 Start-up costs

 291,676

 -

 Others

 23,096

 26,589

 Net operating loss carryforwards

 $
 19,873,558

 $
 14,041,559

 Total deferred tax assets

 $
 20,636,175

 $
 14,623,708

 Valuation allowance

 $
 ( 20,318,210
)

 $
 ( 14,623,708
)

 Deferred tax liabilities:

 Convertible notes basis differences

 $
 ( 317,965
)

 $
 -

 Total deferred tax liabilities

 $
 ( 317,965
)

 $
 -

 Deferred tax assets, net of allowance

 $
 -

 $
 -

 A
reconciliation of the federal statutory income tax rate to the Company's effective income tax rate is as follows:

OF FEDERAL STATUTORY INCOME TAX RATE

 US Federal statutory tax rate

 21.00
 %

 0.00
 %

 State taxes, net of federal tax benefit

 1.84
 %

 0.00
 %

 Japanese statutory tax rate

 0.00
 %

 34.59
 %

 Foreign Tax Rate Differential

 8.63
 %

 0.00
 %

 Change in fair value of derivative warrant liabilities/promissory notes

 - 1.13
 %

 0.00
 %

 Non-deductible transaction costs

 - 5.40
 %

 0.00
 %

 Others

 0.19
 %

 - 0.01
 %

 Change in valuation allowance

 - 25.14
 %

 - 34.59
 %

 Income tax provision

 0.00
 %

 - 0.01
 %

 In
assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will be realized. Generally, the ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences become deductible. Based on historical performance and
future expectations, management has determined a valuation allowance is needed in respect to its ending deferred tax assets. As of December
31, 2023, the valuation allowances against deferred tax assets totaled $ 20,318,210.
The change in the valuation allowance from the year end December 31, 2022 was $ 5,694,502.

 There
is no valuation allowance for deferred tax assets for which subsequently recognized tax benefits would be credited directly to contributed
capital.

 As
of December 31, 2023, the Company has accumulated federal, Hawaii state, and Japan net operating loss carryforwards of $ 4,192,455, $ 4,521,319,
and $ 54,249,624 respectively. The federal and Hawaii state net operating loss carryforwards indefinitely. The Japan net operating loss
will expire on various dates from 2027 through 2033 as follows:

OF NET OPERATING LOSS

 2027

 146,662

 2029-2033

 54,102,962

 Total

 54,249,624

 F- 19

 The
Company has not completed an Internal Revenue Code ("IRC") Section 382 study to assess whether an ownership change has occurred
or whether there have been multiple ownership changes since the Company's formation.

 As
at December 31, 2023, the Company evaluates each uncertain tax position (including the potential application of interest and penalties)
based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2023 and
2022, the management considered the Company did not have any significant unrecognized uncertain tax positions. Accordingly, the Company
has not incurred any interest or penalties as of the current reporting date with respect to income tax matters. There were no accrued
interest and penalties associated with uncertain tax positions as of December 31, 2023.

 The
Company does not expect that there will be unrecognized tax benefits of a significant nature that will increase or decrease within 12
months of the reporting date.

 The
Company is subject to U.S. Federal income tax as well as income tax in Hawaii and Japan. As of December 31, 2023, the Company's
tax years from 2021 are subject to examination by the federal and Hawaii tax authorities. As of December 31, 2023, the returns from 2018
for the Japan subsidiary remain open to examination.

 The
Tax Cuts and Jobs Act subjects a US shareholder to tax on Global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries.
The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting
policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to
provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only.

 The
Company has elected to account for GILTI in the year the tax is incurred.

 No
deferred taxes have been provided on the accumulated unremitted earnings, if any, of the Company's foreign subsidiary that is not
subject to United States income tax. The Company periodically evaluates its foreign investment opportunities and plans, as well as its
foreign working capital needs, to determine the level of investment required and, accordingly, determines the level of foreign earnings
that are considered indefinitely reinvested. Based upon that evaluation, earnings, if any, of the Company's foreign subsidiary
that is not otherwise subject to United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes
have not been provided. If changes occur in future investment opportunities and plans, those changes will be reflected when known
and may result in providing residual United States deferred taxes on unremitted foreign earnings.

 NOTE 11 –
 CONTINGENCIES

 The Company is subject to potential
liabilities generally incidental to our business arising out of present and future lawsuits and claims related to product liability, personal
injury, contract, commercial, intellectual property, tax, employment, compliance and other matters that arise in the ordinary course of
business. The Company accrues for potential liabilities when it is probable that future costs (including legal fees and expenses) will
be incurred and such costs can be reasonably estimated.

 Upon the commencement of the voluntary bankruptcy
proceedings of A.L.I., all creditors' actions are automatically stayed and any new litigation against A.L.I. is barred. In an action
relating to the bankruptcy estate, a bankruptcy trustee shall stand as a plaintiff or defendant, as the case may be.

 NOTE
 12 – 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. Before the Business Combination, the Company was authorized to issue 200,000,000 shares of common stock,
par value of $ 0.0001 per share, and 20,000,000 shares of preferred shares, par value of $ 0.0001 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 87,402 at the closing of the Business Combination.

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 4,132 shares
of common stock with fair value of $ 4,338,298 for the year ended December 31, 2023.

 The
Company issued 65,484
 shares to consultants with fair value of $ 2,489,179
who provide the Company with several services for the year ended December 31, 2023. These share issuances are recognized as expense at
the fair value of the shares at the issuance date.

 During
the year ended December 31, 2023 the Company also recognized expenses with a fair value of
$ 1,457,400 as
obligation to issue shares pursuant to the terms of an
engagement agreement between the Company and Boustead dated April 18, 2022, as amended on February 1, 2023 related to services
provided in connection with the Business Combination. 51,317 shares
were issued on March 11, 2024, subsequent to the year ended December 31, 2023.

 The
total amount of fair value of shares issued for the year ended December 31, 2023 was $ 6,827,477 and $ 980,618 is recognized as prepaid
expenses and obligation to issue shares of $ 1,457,400.

 The Company's outstanding shares increased by 157,593 for the year ended December 31, 2023, and recognized Common stock of $ 15 and
Additional Paid-in Capital of $ 6,250,633. As of December 31, 2023, there were 626,890 of common shares issued. The numbers of common
stocks are retrospectively presented to reflect the legal capital of post-merger AERWINS and share consolidation 1 post-consolidation share for each 100 pre-consolidation share.

 Shares issued in the year ended December 31, 2022

 During the year ended December
31, 2022, a total of 26,499 shares were issued for aggregate proceeds of $ 8,399,181 in private placements, net of share issuance costs
of $ 279,868.

 During the year ended December
31, 2022, 10,382 shares were issued on exercise of options for cash proceeds of $ 1,434,985.

 During the year ended December
31, 2022, 20,347 shares were issued, valued at $ 7,176,346 on conversion of convertible debt previously issued on December 28, 2021.

 F- 20

 NOTE
13 – LOSS PER SHARE

 Basic loss per share is calculated on the basis of
weighted-average outstanding common shares. Diluted 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 loss per share
for the years ended December 31, 2023 and 2022 is as follows:

OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

 2023

 2022

 For
 the years Ended

 31,

 2023

 2022

 Loss
 per share – basic

 Numerator:

 Net
 loss from continuing operations

 $
 ( 9,516,032
)

 $
 ( 2,470

)

 Net
 loss from discontinued operation

 ( 16,422,439
)

)

 Denominator:

 average number of common shares outstanding used in calculating basic loss per share

 588,055

 446,788

 Denominator
 used for loss per share

 Loss
 per share from continuing operations (basic)

 $
 ( 16.18
)

 $
 ( 0.01
)

 Loss
 per share from continuing operations (anti-diluted)

 $
 ( 16.18
)

 $
 ( 0.01
)

 Loss
 per share from discontinued operation (basic)

 $
 ( 27.93
)

 $
 ( 32.40
)

 Loss
 per share from discontinued operation (anti-diluted)

 $
 ( 27.93
)

 $
 ( 32.40
)

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

 NOTE
14 – STOCK-BASED COMPENSATION

 On
July 27, 2022, Aerwin issued stock options to certain directors of the Company which can be exercised for a total of 41,424 shares
of the Company's common stock with an exercise price of $ 0.015 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 December 31, 2023, is 8.58 years.

OF STOCK BASED COMPENSATION

 Grant date

 July
 27, 2022

 of shares at grant date

 41,424

 Outstanding at January

 41,424

 Forfeiture

 ( 29,692
)

 Outstanding at December

 11,732

 Exercise price

 $
 0.015

 Consideration
 paid to the Company at the grant date

 $

 The
number of shares is retrospectively presented to reflect the Business Combination with Pono and share consolidation 1 post-consolidation share for each 100 pre-consolidation share.

 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.

OF FAIR VALUE OF THE STOCK BASED COMPENSATION

 Exercise period

 years

 Share
 price on the issuance date (pre-consolidated)

 $
 0.0001

 Volatility

 64.22
 %

 Expected
 dividend rate

 %

 Risk-free
 interest rate

 2.88
 %

 F- 21

 NOTE
15 – FAIR VALUE MEASUREMENT

 The
estimated fair value of the Company's financial instrument at December 31, 2023 and 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.

OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT

 at
Fair Value

 Level

 Level

 Level

 Liabilities

 Public
 Warrants

 $
 117,300

 $
 117,300

 $
 -

 $
 -

 Placement
 Warrants

 $
 7,648

 $
 -

 $
 7,648

 $
 -

 Debt
 Warrants

 $
 275,976

 $
 -

 $
 275,976

 $
 -

 Subtotal:
 Warrant liabilities

 $
 400,924

 $
 117,300

 $
 283,624

 $
 -

 Liability

 $

 $
 -

 $

 $
 -

 Liabilities
 fair value

 $

 $
 -

 $

 $
 -

 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.

 NOTE
16 – DISCONTINUED OPERATIONS

 As
at June 30, 2023, to facilitate cost reduction plan, the Company has made the strategic decision to discontinue drone solution service
and on December 27, 2023, the Company discontinued the remaining operations of A.L.I as part of the move of our operations to Los Angeles,
California.

 The carrying value
of the assets and liabilities of the discontinued operations in relation to the Company's operations in A.L.I. have been classified
by the Company as discontinued operations for the years ended December 31, 2023 and 2022 for accounting purpose and are shown below:

 SCHEDULE OF DISCONTINUED OPERATIONS

 2023

 2022

 ASSETS

 Current Assets:

 Cash and cash equivalents

 $

 $

 Notes receivable

 -

 3,488

 Accounts receivable, net

 -

 980,688

 Others receivable

 -

 2,089,921

 Prepaid expenses

 -

 611,959

 Inventory

 -

 2,687,092

 Escrow deposit

 -

 575,000

 Total current assets

 7,925,231

 Long-term Assets

 Property and equipment, net

 -

 1,390,547

 Intangible assets, net

 -

 150,576

 Investment-equity method

 -

 997,470

 Operating lease right-of-use assets

 -

 693,474

 Long-term loans receivable

 -

 107,735

 Other non-current assets

 -

 213,370

 Total long-term assets

 -

 3,553,172

 Total Assets

 $

 $
 11,478,403

 LIABILITIES

 Current Liabilities:

 Short-term loans payable

 $
 354,569

 $
 -

 Short-term loans payable, related party

 482,341

 -

 Short-term loans payable

 482,341

 -

 Accounts payable

 4,403,030

 3,333,675

 Accrued expenses

 1,244,885

 399,766

 Accrued expenses, related party

 9,935

 -

 Accrued expenses

 9,935

 -

 Others payable

 101,651

 230,060

 Contract liabilities

 1,101,614

 1,104,582

 Current portion of long-term loans

 204,584

 54,624

 Finance leases liabilities-current

 116,002

 102,114

 Operating leases liabilities-current

 225,874

 293,710

 Other current liabilities

 -

 380,344

 Total Current Liabilities

 8,244,485

 5,898,875

 Longer-term liabilities:

 Long-term loans

 2,873,758

 3,259,237

 Finance leases liabilities-non-current

 31,893

 87,056

 Operating leases liabilities-non-current

 145,677

 397,720

 Other long-term liabilities

 169,679

 225,284

 Total long-term liabilities

 3,221,007

 3,969,297

 Total Liabilities

 $
 11,465,492

 $
 9,868,172

 F- 22

 The results of operations in relation to the Company's
operations in ALI have been classified by the Company as discontinued operations for the years ended December 31, 2023 and 2022 for accounting
purpose and are shown below:

 2023

 2022

 For
 the years ended
 31,

 2023

 2022

 Revenues

 $
 1,073,049

 $
 5,207,490

 Cost
 of revenues

 2,823,132

 5,070,507

 Gross
 profit (loss)

 ( 1,750,083
)

 136,983

 expenses:

 Selling

 67,624

 90,654

 and administrative expenses

 4,299,552

 7,211,400

 Research
 and development expenses

 6,916,047

 8,926,205

 Total
 operating expenses

 11,283,223

 16,228,259

 Loss
 from operations

 ( 13,033,306
)

 ( 16,091,276
)

 Other
 income (expenses):

 Interest
 expenses, net

 ( 107,640
)

 ( 25,065
)

 Gain (loss) on foreign currency transaction

 ( 10,007

)

 60,533

 Loss
 on disposal of fixed assets

 ( 10,697
)

 ( 9,316
)

 Impairment on fixed assets

 ( 1,829,585
)

 ( 511,695
)

 Equity in earnings of investee

 ( 11,640

)

 ( 16,964

)

 Gain on sale of investment securities

 35,834

 1,801,660

 Loss on debt extinguishment

 ( 666,641

)

 -

 Other income

 255,251

 302,191

 Write-off of assets

 ( 1,057,591
)

 -

 Reversal of allowance for doubtful accounts

 -

 Reversal of allowance for bonus

 15,126

 11,936

 Total
 other income (expenses)

 ( 3,387,590
)

 1,613,927

 Net loss from discontinued operations

 ( 16,420,896

)

)

 tax

 ( 1,543
)

 -

 Net loss from
 discontinued operations

 $
 ( 16,422,439

)

 $

)

 F- 23

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

 For
the year ended December 31, 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 $ 5,961 which is calculated by the total unpaid rental fees for the contracts
for which guarantees were provided as of December 31, 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 previous 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 0.0066921 US Dollar for each 1 yen as of December 31, 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 $ 72,285 of accrued expenses. On July 19, 2023, Shuhei enforced the pledge and gained control of ASC investment (approximately
 48.81 % of ASC TECH Agent) due to default status. During the year ended December 31, 2023, the Company derecognized investment in ASC
Tech agent in full, derecognized the debt to Shuhei for $ 227,281, and recognized loss of $ 666,641. As of December 31, 2023, loan balance
is $ 482,341 (JPY 66,037,376).

 Payable
to Directors of Aerwins

 In the year 2023, Daisuke Katano, previous
director of Aerwins, paid some payables on behalf of the Company. Katano paid $ 215,725 in the year 2023 and $ 9,935 is outstanding
as of December 31, 2023. The Company will repay at an appropriate timing in light of its financial situation.

 NOTE
17 – SUBSEQUENT EVENTS

 The subsequent events were evaluated through April 30, 2024, the date the financial statements were issued.

 A.L.I. Bankruptcy

 On December 27, 2023, A.L.I.
filed a voluntary bankruptcy petition with the Tokyo District Court, Civil Division 20, "Tokutei Kanzai Kakari" [Special Trusteeship
Section], Case ID: No. 8234 of 2023 (Fu) (the "A.L.I. Bankruptcy"). On January 10, 2024, the Court entered an order (the "January
10 Order") confirming that bankruptcy proceedings are commenced against the debtor A.L.I., that A.L.I. is found to be insolvent,
the appointment of Gaku Iida, Attorney-at-Law, of Abe, Ikubo & Katayama be appointed as the trustee in the bankruptcy proceedings
(the "Trustee") and setting the date and place of the meeting to report on the status of property, to report on calculations
and hear opinions regarding the disposition of the bankruptcy proceedings on May 14, 2024, at 10:00 a.m. local time in the Court (the
"Status Report Meeting"). The Trustee's address is Fukuoka Bldg. 9F, 2-8-7 Yaesu, Chuo-ku, Tokyo. A trustee has been appointed by the Bankruptcy Court and the trustee has assumed and will continue to exercise control
over all assets and liabilities of A.L.I. The assets of A.L.I. will be liquidated for distribution in accordance with the priorities established
by the Bankruptcy Act. The Company expects that no distributions will be available in A.L.I's liquidation.

 As a result of the filing of the Bankruptcy Proceedings and the January
10 Order, the Company concluded that it no longer controls A.L.I. for accounting purposes as of January 10, 2024, in accordance with U.S.
GAAP Accounting Standards Codification 810, and, therefore, A.L.I. will be deconsolidated prospectively commencing in the first quarter
of 2024 from the Company's consolidated financial statements. See, however, "Risk Factors – We are involved in litigation
from time to time and, as a result, we could incur substantial judgments, fines, legal fees or other costs."

 The A.L.I. Bankruptcy constitutes an event of default
pursuant to the Closing Notes in the aggregate principal amount of $ 4,200,000. Consequently, Lind Global may at any time, at its option,
(1) demand payment of an amount equal to 120 % of the outstanding principal amount of the Closing Notes and (2) exercise all other rights
and remedies available to it under the Closing Notes and other agreements entered into among the Company and Lind in connection with the
issuance of the Closing Notes (collectively, the "Transaction Documents"); provided, however, that (x) upon the occurrence
of the event of default described above, Lind Global, in its sole and absolute discretion (without the obligation to provide notice of
such event of default), may: (a) from time-to-time demand that all or a portion of the outstanding principal amount of the Closing Notes
be converted into shares of the Company's common stock at the lower of (i) the then-current Conversion Price (that price being $18.176
per share (the "Floor Price")) and (ii) eighty-percent ( 80 %) of the average of the three (3) lowest daily volume weighted
average prices ("VWAPs") during the 20 trading days prior to the delivery by Lind Global of the applicable notice of conversion
or (b) exercise or otherwise enforce any one or more of Lind Global's rights, powers, privileges, remedies and interests under the
Closing Notes, the Transaction Documents or applicable law.

 On
January 23, 2024, the Company and Lind Global entered into an Amendment No. 2 to Senior Convertible Promissory Note First Closing Note
and an Amendment No. 2 to the Senior Convertible Promissory Note Second Closing Note (collectively, the "January Note Amendments")
which amended the Closing Notes to, subject to the conditions discussed below:

 reduce
 the aggregate principal amount of the Closing Notes from $ 4,200,000 to $ 3,500,000,

 require
 the Company to repay an aggregate of $ 1,750,000
 of the principal amount of the Closing Notes no later than the closing date of a public offering of the Company's Common Stock
 where it receives gross proceeds of at least $ 13,500,000
 (the "Public Offering") by April 15, 2024 and

 requires
 Lind Global to convert no less than an aggregate of $ 1,750,000 of the Closing Notes no later
 than 11 months after the closing of the Public Offering, provided that at the time of such
 conversion Lind Global receives shares of Common Stock that may be disposed of without restrictive
 legend at their issuance pursuant to an effective registration statement under the Securities
 Act of 1933, as amended (the "Securities Act") or pursuant to an available exemption
 from or in a transaction not subject to the registration requirements of the Securities Act
 (the "Mandatory Conversion Amount").

 In
addition, on January 23, 2024, the Company and Lind Global entered into Amendment No. 2 to Securities Purchase Agreement, subject to
the conditions discussed below:

 eliminate
 the obligation of the Company and Lind Global to complete the third closing,

 delete
 the clause obligating the Company to register the shares of common stock issuable upon conversion
 of the Closing Notes and exercise of the Warrants (collectively, the "Closing Securities")
 or pay Lind Global any delay payments as a result of the Company's failure to register
 the Closing Securities,

 eliminate
 certain restrictions on the Company's right to issue equity and debt in future transactions
 and

 eliminate
 Lind Global' right to participate in future offerings of the Company's securities,
 other than its rights to participate in the Public Offering.

 In as much as the Company failed to complete the Public
Offering by April 15, 2024, Lind Global is not obligated to fulfill the terms of the January Note Amendments. The Company plans to enter
into discussions with Lind Global to extend the time period in which it is obligated to complete the Public Offering.

Sale of Unregistered Securities

 On
February 27, 2024 and March 22, 2024, we entered into and completed the sale to two unrelated accredited investors (the "Investors"),
of 100,000 shares and 35,500 unregistered shares, respectively, of our Common Stock at a price of $ 4.00 per share for an aggregate
of $ 542,000 in cash (the "Offerings"). The Offerings were made pursuant to the terms of a Subscription Agreement. In connection
with the Offerings, the Company entered into a Piggyback Registration Rights Agreement with each Investor whereby the Company agreed
to register the Common Stock acquired by the Investor in the Offering if at any time while the Investor remains the holder of such shares,
the Company proposes to file any registration statement under the Securities Act of 1933, as amended (the "Securities Act")
with respect to its Common Stock for its own account or for shareholders of the Company for their account, subject to certain customary
exceptions.

 Effective
as of March 11, 2024, we authorized the issuance of 51,317 shares of our unregistered common stock to Boustead Securities LLC ("Boustead")
pursuant to the terms of an engagement agreement between the Company and Boustead dated April 18, 2022, as amended on February 1, 2023
related to services provided in connection with the Business Combination.

 Effective as of April 2, 2024, the Company completed
100 old to 1 new share consolidation. All share figures and references have been retrospectively adjusted.

 Effective as of April 8, 2024, we authorized the issuance of 38,878 shares to consultants with fair value of $ 218,494
who provide the Company with several services after the year ended December 31, 2023.

 F- 24

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A. CONTROLS AND PROCEDURES

 Kiran
Sidhu, our President and Chief Executive Officer, is our principal executive officer and Yinshun (Sue) He, our Chief Financial Officer,
is our principal financial officer.

 Evaluation
of Disclosure Controls and Procedures

 Under
the supervision and with the participation of our management, including our principal executive officer and principal financial officer,
we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act, as of December 31, 2023. Based on this evaluation, our principal executive officer and our principal
financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not
effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such
information was accumulated and communicated to our principal executive officer and principal financial officer, in a manner that allowed
for timely decisions regarding disclosure. Management has determined that a material weakness exists
due to administrative delays and other issues stemming from the bankruptcy filing of A.L.I. and the appointment of a bankruptcy trustee
that led to our late filing with the SEC of this Form 10-K.

 Management's
Annual Report on Internal Control over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures
that:

 (i)

 pertain
 to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our
 assets;

 (ii)

 provide
 reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements; and

 (iii)

 provide
 reasonable assurance regarding prevention or timely detection of unauthorized transactions.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with policies or procedures may deteriorate.

 In
making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control – Integrated Framework and Internal Control over Financial Reporting – Guidance for Smaller
Public Companies.

 Our
management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023. Based on this evaluation,
our management concluded that, as of December 31, 2023, we did not maintain effective internal control over financial reporting. Management
has determined that a material weakness exists due to administrative delays and other issues stemming from the bankruptcy filing of A.L.I.
and the appointment of a bankruptcy trustee that led to our late filing with the SEC of this Form 10-K.

 This
annual report does not include an attestation report of the company's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation by the company's registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's
report in this annual report.

 Changes
in internal control over financial reporting

 There
were no changes in our internal control over financial reporting during the year ended December 31, 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 its disclosure controls or
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's override
of the control. The design of any systems of controls 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. Over
time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur
and not be detected. Individual persons perform multiple tasks which normally would be allocated to separate persons and therefore extra
diligence must be exercised during the period these tasks are combined.

 ITEM
9B. OTHER INFORMATION

 None.

 Item
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Board
of Directors and Executive Officers

 Our
directors hold office until his or her term expires at the next annual meeting of stockholders for such director's class or until
his or her death, resignation, removal or the earlier termination of his or her term of office. Biographical information concerning our
directors and executive officers listed above is set forth below.

 Our
directors and executive officers, their ages, positions held, and durations of such are as follows:

 Name

 Age

 Position(s)

 Kiran
 Sidhu

 Chief
 Executive Officer and Director

 (Sue) He

 Chief
 Financial Officer

 Katharyn
 (Katie) Field

 Chairman
 of the Board of Directors

 Pavanveer
 (Pavan) Gill

 Robert
 Lim

 Taiji
 Ito

 Executive
Officers and Directors

 Kiran
Sidhu. On May 15, 2023, the Board of Directors appointed Mr. Sidhu as a member of the Board and as Chairman of the Board. Following
his appointment, Mike Sayama and Marehiko Yamada resigned as members of the Board of Directors. Mr. Sidhu is the Managing Member of Catalyst
Capital LLC, founded in January 1999. Catalyst invests in early-stage companies, including technology, biotechnology, and cannabis. Mr.
Sidhu served as the CEO and a Director of Halo Collective (NEO: HALO), a multi-state cannabis operator, from September 2018 to June 2022.
He has also been the CEO of ANM, Inc. ("ANM"), a wholly owned subsidiary of Halo Collective, since April 2016.

 Mr.
Sidhu was previously a non-executive director and audit committee chairman of Namaste Technologies Inc. (TSX-V: N), a technology company
that provided cannabis-related marketplaces for products and services in 20 countries from October 2016 to February 2019. Additionally,
Mr. Sidhu was the Chairman and CEO of Transact Network Ltd., a leading EU electronic money institution, which was later sold to The Bancorp,
Inc. (NYSE: TBBK) in 2011. Before founding Transact Network Ltd., he held the position of Managing Director of Aspen Communications,
an Indian outsourcing company provides e-commerce fraud detection, accounting, customer support, systems support, and data analytics
services to e-commerce companies. Mr. Sidhu currently serves as a non-executive director of Aspen Communications.

 Earlier
in his career, Mr. Sidhu served as the CFO of On Stage Entertainment (NASDAQ: ONST) and oversaw its initial public offering. He also
co-founded Nano Universe PLC (LSE-AIM: NANO) and served as the Finance Director, overseeing the company's listing on the LSE-AIM.
In addition, Mr. Sidhu worked as a Manager in Price Waterhouse's strategic consulting group in Los Angeles and a Senior Associate
in mergers and acquisitions at Merrill Lynch Capital Markets in New York. He graduated with honors in Computer Science from Brown University
in 1985, and earned an MBA in Finance from the Wharton School of Business in 1987.

(Sue) He. Ms. He was appointed as the Company's Chief Financial Officer on August 24, 2023. Previously she had been providing
accounting services to the Company since June 2023 and will continue to provide such services to the Company in addition to her role
as its CFO. In addition to her work for the Company, since November 2020, Ms. He has been the Chief Financial Officer and a director
of The Yumy Candy Company Inc., a Canadian Securities Exchange listed company that develops gelatin-free, low sugar plant-based confectionery.
Since November 2019, Ms. He has been an accountant at Global Health Clinics Ltd., a telehealth care company that connects patients with
an online network of health care providers. Previously, Ms. He served as the controller for a private accounting firm that specialized
in full cycle accounting and assurance services. Ms. He earned her bachelor of business administration degree in accounting from Kwantlen
Polytechnic University and holds the professional designation of chartered professional accountant (CPA) in Canada.

 Katharyn
(Katie) Field. On May 22, 2023, the Board of Directors appointed Katharyn (Katie) Field as an independent member of the Board
of Directors. Following the appointment of Ms. Field and Mr. Gill, Mike Sayama and Marehiko Yamada resigned as members of the Board of
Directors. Ms. Field's background includes positions spanning both the private and public sectors and brings a wealth of experience
and expertise in strategy consulting and executive leadership. She has held prominent positions at renowned organizations such as The
White House in the office of the public liaison, The Brookings Institution as a manager of operations, and Bain & Company as a consultant.
In 2014, Ms. Field entered the cannabis industry and played a pivotal role in the procurement, build-out, and sale of one of the original
vertically integrated licensed medical marijuana treatment centers in Florida. Subsequently, she operated a strategy consulting practice
focused on cannabis and served as Executive Vice President of Corporate Development at MariMed in 2018. Ms. Field holds an MBA from Columbia
Business School and a BA with honors from Stanford University.

 Pavanveer
(Pavan) Gill. On May 22, 2023, the Board of Directors appointed Pavanveer (Pavan) Gill as independent member of the Board of
Directors. Mr. Gill brings a wealth of experience and expertise in civil construction, environmental management, and innovative product
implementation to AERWINS. Since August 2015, Mr. Gill has been a civil engineer and project manager at Secure Energy, an environmental
and energy infrastructure consulting company. Mr. Gill has managed numerous high-value projects, demonstrating his strong project management
skills and ability to deliver exceptional results. Throughout his career, Pavanveer (Pavan) Gill has been involved in various key projects,
including the Shell Waterton butte sump reclamation project, the TC Energy Station 92 compressor station demolition and remediation,
the City of Calgary Kensington Manor demolition, the TC Energy Buffalo Creek compressor station installation and remediation, and the
TC Energy Wolf Lake compressor station demolition. His extensive experience in managing multi-disciplinary teams, overseeing project
schedules and budgets, and ensuring regulatory compliance has contributed to the success of these projects. Additionally, Mr. Gill's
keen understanding of emerging technologies and their practical applications will be invaluable in driving AERWINS' commitment
to innovation and further advancing its position as a leader in the industry. Mr. Gill earned a bachelor's degree in civil engineering
from the University of British Columbia.

 Robert
Lim. On July 18, 2023, the Board of Directors appointed Mr. Lim as independent member of the Board of Directors. Mr. Lim is the
principal and cofounder of a law firm, De Novo Law Corporation, located in Vancouver, BC Canada that primarily practices corporate/commercial
law and civil litigation. Mr. Lim co-founded De Novo Law Corporation in March 2023 after he ended his term as the founder and principal
of Robert Bradley Lim Law Corporation - his legal practice which he started in June 2021. Before being called to the bar as a lawyer,
he worked as an articling student/lawyer from Sept 2021 - May 2022 and a legal assistant from Sept 2020 - August 2021 at a real estate
and business law focused law firm called Winright Law Corporation. Prior to becoming a lawyer, he came from a marketing background -
having previously worked as a marketing coordinator for an environmental consulting firm in 2017 called NEXT Environmental. In 2018,
he began his own digital marketing agency and provided digital marketing services to clients throughout British Columbia. Mr. Kim earned
a Bachelor of Commerce degree from the University of British Columbia and a Juris Doctor from Thompson Rivers University.

 Taiji
Ito. Mr. Ito was appointed as the Company's Chief Executive Officer on March 20, 2023 and resigned on December 12, 2023.
Mr. Ito was appointed as the Company's Global Markets Executive Officer and as a member of the Company's Board of Directors
on February 3, 2023. Mr. Ito has served as AERWINS Inc.'s Global Markets - Investor Relations and a member of AERWINS Inc.'s
Board of Directors since June 15, 2022. Mr. Ito is also a member of the Board of Directors of A. L. I. Technologies since April 2022.
From April 1999 to 2002, Mr. Ito served as Associate at Deutsche Bank in Tokyo. From May 2002 to July, 2008, Mr. Ito served as Vice President
and thereafter Director at Credit Suisse in Japan and the United States. From August 2008 to April 2022, Mr. Ito served as a founder
and CEO at Meta Capital. Mr. Ito has extensive experience in the financial field. Mr. Ito graduated with a bachelor's degree in
Economics from Keio University, Japan. Mr. Ito does not hold, and has not previously held, any directorships in any reporting companies.

 Family
Relationships

 There
are no family relationships among any of our directors or executive officers.

 Involvement
in Certain Legal Proceedings

 No
director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in
Item 401(f) of Regulation S-K in the past 10 years.

Independence

 Under
the listing requirements and rules of Nasdaq, independent directors must comprise a majority of a listed company's board of directors
and of certain board committees. There are currently three independent directors on the Company's Board of Directors who constitute
a majority of the Board of Directors. These independent directors are Katharyn (Katie) Field, Pavanveer (Pavan) Gill and Robert Lim.
For a discussion of the independent directors on the Company's board committees please see below section titled "Committees
of the Board of Directors."

 Board
Diversity Matrix as of March 31, 2024

 Total
Number of Directors

 Female

 Male

 Non-Binary

 Did
 Not Disclose Gender

 Part
 I: Gender Identity

 Directors

 Part
 II: Demographic Background

 African
 American or Black

 Alaskan
 Native or American Indian

 Asian

 Hispanic
 or Latinx

 Native
 Hawaiian or Pacific Islander

 White

 Two
 or More Races or Ethnicities

 LGBTQ+

 Did
 Not Disclose Demographic Background

 Committees
of the Board of Directors

 Audit
Committee

 The
Company's audit committee of the board of directors consists of Ms. Field (Chairperson) and Messrs. Lim and Gill. The board of
directors has determined each member is independent under the Nasdaq listing standards and Rule 10A-3(b)(1) under the Exchange Act. The
chairperson of the audit committee is Ms. Field. Ms. Field also qualifies as an "audit committee financial expert" as such
term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of Nasdaq.

 The
primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting,
financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities
of our audit committee include:

 selecting
 a qualified firm to serve as the independent registered public accounting firm to audit the Company's financial statements;

 helping
 to ensure the independence and performance of the independent registered public accounting firm;

 discussing
 the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the
 independent accountants, our interim and year-end operating results;

 developing
 procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

 policies on risk assessment and risk management;

 related party transactions;

 obtaining
 and reviewing a report by the independent registered public accounting firm at least annually, that describes the Company's
 internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when
 required by applicable law; and

 approving
 (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public
 accounting firm.

Committee

 The
Company's compensation committee consists of Messrs. Gill (Chairman) and Lim and Ms. Field. The board of directors has determined
each proposed member is a "non-employee director" as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson
of the compensation committee is Mr. Gill. The primary purpose of the compensation committee is to discharge the responsibilities of
the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid
to its executive officers, directors and other senior management, as appropriate.

 Specific
responsibilities of the compensation committee include:

 and approving on an annual basis the corporate goals and objectives relevant to the Company's Chief Executive Officer's
 compensation, evaluating the Company's Chief Executive Officer's performance in light of such goals and objectives and
 determining and approving the remuneration (if any) of the Company's Chief Executive Officer based on such evaluation;

 and approving the compensation of the Company's other executive officers;

 and recommending to the Company's board of directors the compensation of the Company's directors;

 the Company's executive compensation policies and plans;

 and approving, or recommending that the Company's board of directors approve, incentive compensation and equity plans, severance
 agreements, change-of-control protections and any other compensatory arrangements for the Company's executive officers and
 other senior management, as appropriate;

 administering
 the Company's incentive compensation equity-based incentive plans;

 selecting
 independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee's
 compensation advisors;

 assisting
 management in complying with the Company's proxy statement and annual report disclosure requirements;

 if
 required, producing a report on executive compensation to be included in the Company's annual proxy statement;

 and establishing general policies relating to compensation and benefits of the Company's employees; and

 the Company's overall compensation philosophy.

 Nominating
and Corporate Governance Committee

 The
Company's nominating and corporate governance committee consists of Messrs. Lim (Chairman) and Gill and Ms. Field. The board of
directors has determined each proposed member is independent under Nasdaq listing standards. The chairperson of the nominating and corporate
governance committee is Mr. Lim.

 The
primary function of the corporate governance and nominating committee include:

identifying individuals qualified to become members of the board of directors and making recommendations to the board of directors regarding
nominees for election;

reviewing the independence of each director and making a recommendation to the board of directors with respect to each director's
independence;

developing and recommending to the board of directors the corporate governance principles applicable to us and reviewing our corporate
governance guidelines at least annually;

making recommendations to the board of directors with respect to the membership of the audit, compensation and corporate governance and
nominating committees;

overseeing the evaluation of the performance of the board of directors and its committees on a continuing basis, including an annual
self-evaluation of the performance of the corporate governance and nominating committee;

considering the adequacy of our governance structures and policies, including as they relate to our environmental sustainability and
governance practices;

considering director nominees recommended by stockholders; and

reviewing our overall corporate governance and reporting to the board of directors on its findings and any recommendations.

 Guidelines
for Selecting Director Nominees

 The
guidelines for selecting nominees, which is specified in the charter adopted by us, generally provides that person to be nominated:

should possess personal qualities and characteristics, accomplishments and reputation in the business community;

should have current knowledge and contacts in the communities in which we do business and, in our industry, or other industries relevant
to our business;

should have the ability and willingness to commit adequate time to the board of directors and committee matters;

should demonstrate ability and willingness to commit adequate time to the board of directors and committee matters;

should possess the fit of the individual's skills and personality with those of other directors and potential directors in building
a board of directors that is effective, collegial and responsive to our needs; and

should demonstrate diversity of viewpoints, background, experience, and other demographics, and all aspects of diversity in order to
enable the board of directors to perform its duties and responsibilities effectively, including candidates with a diversity of age, gender,
nationality, race, ethnicity, and sexual orientation.

 Each
year in connection with the nomination of candidates for election to the board of directors, the corporate governance and nominating
committee will evaluate the background of each candidate, including candidates that may be submitted by our stockholders.

Committee Interlocks and Insider Participation

 No
member of the Company's compensation committee has ever been an officer or employee of the Company. None of the Company's
executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other
board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors
or on the Company's compensation committee.

 Code
of Business Conduct and Ethics

 On
February 3, 2023, the Company adopted a new Code of Business Conduct and Ethics that applies to all of its employees, officers and directors,
including its Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers including those officers
responsible for financial reporting. The adoption of the Code of Business Conduct and Ethics did not relate to or result in any waiver,
explicit or implicit, of any provision of the previous Code of Conduct. Any waivers under the Code of Business Conduct and Ethics will
be disclosed on a Current Report on Form 8-K or as otherwise permitted by the rules of the SEC and Nasdaq.

 ITEM
11. EXECUTIVE COMPENSATION

 The
following table summarizes all compensation recorded by us in the past two fiscal years for:

 our
 principal executive officer or other individual acting in a similar capacity during the fiscal year ended December 31, 2023,

 our
 two most highly compensated executive officers, other than our principal executive officers, who were serving as executive officers
 at December 31, 2023, and

 up
 to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as
 an executive officer at December 31, 2023.

 For
definitional purposes, these individuals are sometimes referred to as the "named executive officers."

 2023
Summary Executive Compensation Table

 Name
 and Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards
 ($)

 Awards
 ($)

 Non-
 Equity
 Incentive
 Plan
 ($)

 Non-
 qualified
 Deferred
 Earnings
 ($)

 All
 Other
 ($)

 Total
 ($)

 Kiran
 Sidhu (1)

 2023

 -

 -

 -

 -

 -

 -

 -

 -

 Taiji
 Ito, former CEO (2)

 2023

 141,738

 -

 -

 -

 -

 -

 -

 141,738

 2022

 156,727

 -

 -

 -

 -

 -

 -

 156,727

 He (3)

 2023

 250,000

 -

 -

 -

 -

 -

 -

 250,000

 (1)
 Appointed
 as Executive Chairman of the Board and President on July 18, 2023 and appointed as Chief
 Executive Officer on December 20, 2023.

 (2)
 Appointed
 as Chief Executive Officer on March 20, 2023 and resigned on December 20, 2023.

 (3)
 Appointed
 as Chief Financial Officer on August 24, 2023.

Agreements

 On
February 3, 2023, the Company entered into employment agreements (the "Employment Agreements") with executive officers: Shuhei
Komatsu (former Chief Executive Officer), Taiji Ito (Global Markets Executive Officer), Kazuo Miura (former Chief Product Officer) and
Kensuke Okabe (former Chief Financial Officer). The Employment Agreements all provide for at-will employment that may be terminated by
the Company for death or disability and with or without cause, by the executive with or without good reason, or mutually terminated by
the parties. The Employment Agreements for Mr. Komatsu, Mr. Ito, Mr. Miura, and Mr. Okabe provide for a severance payment equal to the
remaining base salary for the remaining period of the respective term of employment (each term is one (1) year) upon termination by the
Company without cause or termination by such executive for good reason. The executive agreements provide for a base salary of $200,000,
$200,000, $200,000 and $200,000 for Mr. Komatsu, Mr. Ito, Mr. Miura and Mr. Okabe, respectively, as well as possible annual performance
bonuses and equity grants under the equity incentive plan if and when determined by the Company's Compensation Committee.

 The
Company has agreed to pay Ms. He $250,000 for services provided to the Company pursuant to an Independent Contractor Agreement entered
into between Ms. He and the Company dated June 16, 2023 and expiring on December 16, 2023. The agreement may be terminated by either
party without cause on 30 days prior written notice to the other party.

Award Agreements

 On
February 3, 2023, the Company entered into Option Award Agreements (the "Option Award Agreements") with executive officers:
Shuhei Komatsu (former Chief Executive Officer), Taiji Ito (Global Markets Executive Officer), Kazuo Miura (former Chief Product Officer)
and Kensuke Okabe (former Chief Financial Officer).

 The
Option Award Agreements grants to each of the following persons options to acquire shares of the Company's common stock, to vest
as set forth in the Option Award Agreements, as follows:

 Shuhei
 Komatsu – 15,256 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr. Komatsu's
 resignation.

 Taiji
 Ito – 7,039 options at an exercise price of $0.015 per share of common stock

 Kazuo
 Miura – 7,399 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr.
 Miura's resignation.

 Kensuke
 Okabe – 4,693 options at an exercise price of $0.015 per share of common stock

 Equity
Incentive Compensation Plan

 At
the Special Meeting of stockholders on January 27, 2023, our shareholders approved the AERWINS Technologies Inc. 2022 Equity Incentive
Plan (the "Equity Incentive Plan"). Under the Equity Incentive Plan, 100,894 shares of common stock (the "Initial
Limit") are authorized under the Equity Incentive Plan for issuance to officers, directors, employees and consultants of the Company.
As of December 31, 2023, there were no shares issued under the Equity Incentive Plan.

 The
Equity Incentive Plan allows the Company to make equity and equity-based incentive awards to officers, employees, directors and consultants
of the Company. The Board anticipates that providing such persons with a direct stake in the Company will assure a closer alignment of
the interests of such individuals with those of the Company and its stockholders, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.

 The
Initial Limit is subject to adjustment in the event of a reorganization, recapitalization, reclassification, stock split, stock dividend,
reverse stock split or other similar change in the Company's capitalization. The maximum aggregate number of shares of common stock
of the Company that may be issued upon exercise of incentive stock options under the Equity Incentive Plan shall not exceed the Initial
Limit, as adjusted. Shares underlying any awards under the Equity Incentive Plan that are forfeited, cancelled, held back upon exercise
of an option or settlement of an award to cover the exercise price or tax withholding, satisfied without the issuance of stock or otherwise
terminated (other than by exercise) will be added back to the shares available for issuance under the Equity Incentive Plan and, to the
extent permitted under Section 422 of the Code and the regulations promulgated thereunder, the shares that may be issued as incentive
stock options.

 The
Equity Incentive Plan contains a limitation whereby the value of all awards under the Equity Incentive Plan and all other cash compensation
paid by the Company to any non-employee director may not exceed $1,000,000 for the first calendar year a non-employee director is initially
appointed to the Company's board of directors, and $750,000 in any other calendar year.

 The
Equity Incentive Plan will be administered by the Company's compensation committee pursuant to the terms of the Equity Incentive
Plan. The plan administrator, which initially will be the compensation committee of the Company, will have full power to select, from
among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants,
and to determine the specific terms and conditions of each award, subject to the provisions of the Equity Incentive Plan. The plan administrator
may delegate to a committee consisting of one or more officers of the Company, including the Chief Executive Officer of the Company,
the authority to awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act and
not members of the delegated committee, subject to certain limitations and guidelines.

 Persons
eligible to participate in the Equity Incentive Plan will be officers, employees, non-employee directors and consultants of the Company
and its subsidiaries as selected from time to time by the plan administrator in its discretion.

 The
Equity Incentive Plan permits the granting of both options to purchase common stock of the Company intended to qualify as incentive stock
options under Section 422 of the Code and options that do not so qualify. Options granted under the Equity Incentive Plan will be non-qualified
options if they fail to qualify as incentive stock options or exceed the annual limit on incentive stock options. Incentive stock options
may only be granted to employees of the Company and its subsidiaries. Non-qualified options may be granted to any persons eligible to
receive awards under the Equity Incentive Plan. The option exercise price of each option will be determined by the plan administrator
but generally may not be less than 100% of the fair market value of the common stock of the Company on the date of grant or, in the case
of an incentive stock option granted to a ten percent stockholder, 110% of such share's fair market value. The term of each option
will be fixed by the plan administrator and may not exceed ten years from the date of grant. The plan administrator will determine at
what time or times each option may be exercised, including the ability to accelerate the vesting of such options.

 Upon
exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable
to the plan administrator or by delivery (or attestation to the ownership) of shares of common stock of the Company that are beneficially
owned by the optionee free of restrictions or were purchased in the open market. Subject to applicable law, the exercise price may also
be delivered by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, the plan administrator may
permit non-qualified options to be exercised using a "net exercise" arrangement that reduces the number of shares issued
to the optionee by the largest whole number of shares with fair market value that does not exceed the aggregate exercise price.

 The
plan administrator may award stock appreciation rights subject to such conditions and restrictions as it may determine. Stock appreciation
rights entitle the recipient to shares of common stock of the Company, or cash, equal to the value of the appreciation in the Company's
stock price over the exercise price. The exercise price generally may not be less than 100% of the fair market value of common stock
of the Company on the date of grant. The term of each stock appreciation right will be fixed by the plan administrator and may not exceed
ten years from the date of grant. The plan administrator will determine at what time or times each stock appreciation right may be exercised,
including the ability to accelerate the vesting of such stock appreciation rights.

 The
plan administrator may award restricted shares of common stock of the Company and restricted stock units to participants subject to such
conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance
goals and/or continued employment with the Company through a specified vesting period. The plan administrator may also grant shares of
common stock of the Company that are free from any restrictions under the Equity Incentive Plan. Unrestricted stock may be granted to
participants in recognition of past services or for other valid consideration and may be issued in lieu of cash compensation due to such
participant. The plan administrator may grant dividend equivalent rights to participants that entitle the recipient to receive credits
for dividends that would be paid if the recipient had held a specified number of shares of common stock of the Company.

 The
plan administrator may grant cash-based awards under the Equity Incentive Plan to participants, subject to the achievement of certain
performance goals, including continued employment with the Company.

 The
Equity Incentive Plan requires the plan administrator to make appropriate adjustments to the number of shares of common stock that are
subject to the Equity Incentive Plan, to certain limits in the Equity Incentive Plan, and to any outstanding awards to reflect stock
dividends, stock splits, extraordinary cash dividends and similar events.

 Except
as set forth in a stock award agreement issued under the Equity Incentive Plan, in the event of (i) a transfer of all or substantially
all of the Company's assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction of
the Company with or into another corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions,
in which any person becomes the beneficial owner directly or indirectly, of more than 50% of Company's then outstanding capital
stock, each outstanding stock award (vested or unvested) will be treated as the plan administrator determines, which may include (a)
the Company's continuation of such outstanding stock awards (if the Company is the surviving corporation); (b) the assumption of
such outstanding stock awards by the surviving corporation or its parent; (c) the substitution by the surviving corporation or its parent
of new stock options or other equity awards for such stock awards; (d) the cancellation of such stock awards in exchange for a payment
to the participants equal to the excess of (1) the fair market value of the shares subject to such stock awards as of the closing date
of such corporate transaction over (2) the exercise price or purchase price paid or to be paid (if any) for the shares subject to the
stock awards (which payment may be subject to the same conditions that apply to the consideration that will be paid to holders of shares
in connection with the transaction, subject to applicable law); or (e) the opportunity for participants to exercise the stock options
prior to the occurrence of the corporate transaction and the termination (for no consideration) upon the consummation of such corporate
transaction of any stock options not exercised prior thereto.

 The
Equity Incentive Plan provides that a stock award may be subject to additional acceleration of vesting and exercisability upon or after
a "Change in Control" (as defined in the Equity Incentive Plan) as may be provided in the award agreement for such stock
award or as may be provided in any other written agreement between the Company or any affiliate and the participant, but in the absence
of such provision, no such acceleration will occur.

 Participants
in the Equity Incentive Plan are responsible for the payment of any federal, state or local taxes that the Company or its subsidiaries
are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The plan administrator
may cause any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or in part, by the applicable entity
withholding from shares of common stock of the Company to be issued pursuant to an award a number of shares with an aggregate fair market
value that would satisfy the withholding amount due. The plan administrator may also require any tax withholding obligation of the Company
or its subsidiaries to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to any
award are immediately sold and proceeds from such sale are remitted to the Company or its subsidiaries in an amount that would satisfy
the withholding amount due.

 The
Equity Incentive Plan generally does not allow for the transfer or assignment of awards, other than by will or by the laws of descent
and distribution or pursuant to a domestic relations order; however, the plan administrator may permit the transfer of non-qualified
stock options by gift to an immediate family member, to trusts for the benefit of family members, or to partnerships in which such family
members are the only partners.

 The
plan administrator may amend or discontinue the Equity Incentive Plan and the plan administrator may amend or cancel outstanding awards
for purposes of satisfying changes in law or any other lawful purpose, but no such action may materially and adversely affect rights
under an award without the holder's consent. Certain amendments to the Equity Incentive Plan will require the approval of the Company's
stockholders. Generally, without shareholder approval, (i) no amendment or modification of the Equity Incentive Plan may reduce the exercise
price of any stock option or the strike price of any stock appreciation right, (ii) the plan administrator may not cancel any outstanding
stock option or stock appreciation right where the fair market value of the common stock underlying such stock option or stock appreciation
right is less than its exercise price and replace it with a new option or stock appreciation right, another award or cash and (iii) the
plan administrator may not take any other action that is considered a "repricing" for purposes of the shareholder approval
rules of the applicable securities exchange.

 All
stock awards granted under the Equity Incentive Plan will be subject to recoupment in accordance with any clawback policy that Company
is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company's
securities are listed or as is otherwise required by the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law. In addition, the Company's board may impose such other clawback, recovery or recoupment provisions in a stock award agreement
as the Company's board determines necessary or appropriate. No recovery of compensation under such a clawback policy will be an
event giving rise to a right to resign for "good reason" or "constructive termination" (or similar term) under
any agreement with the Company.

 No
awards may be granted under the Equity Incentive Plan after the date that is ten years from the Equity Incentive Plan effective fate.

 Outstanding
Equity Awards at Fiscal Year End

 2023
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

 The
following table sets forth information with respect to the options outstanding by the Named Executive Officers held at fiscal year-end.

 Awards

 Stock
 Awards

 Name

 of
 securities
 underlying
 unexercised
 options
 (#) exercisable

 of
 securities
 underlying
 unexercised
 options
 (#) unexercisable

 exercise
 price
 ($)

 expiration

 date (1)

 of
 shares
 that

 have
 not vested (#)

 Market
value of shares that

 have not

 vested ($)

 Kiran
 Sidhu, CEO

 -

 -

 $
 -

 -

 -

 $
 -

 Taiji
 Ito, former CEO

 4,693

 2,346
 (2)

 0.015

 July
 27, 2032

 -

 $
 -

 (1)

 The
 expiration date of each option occurs on the earlier of (i) ten years after the date of grant of each option or (ii) five years after
 the termination as a member of the board of directors.

 (2)

 The
 unvested options vest on October 27, 2024.

 Currently,
non-employee directors do not receive any compensation for their services as directors. In the future, the Company expects to develop
and adopt a compensation plan for all directors.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth information, as of April 15, 2024, concerning, except as indicated by the footnotes below, (i) each
person whom we know beneficially owns more than 5% of our common stock, (ii) each of our directors, (iii) each of our named
executive officers and (iv) all of our directors and executive officers as a group. We have determined beneficial ownership in
accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to
us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of
common stock that they beneficially own, subject to applicable community property laws. Applicable percentage ownership is based on
924,890 shares of common stock outstanding at April 15, 2024. In computing the number of shares of common stock beneficially owned
by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to stock options or
warrants held by that person that are currently exercisable or exercisable within 60 days of April 15, 2024. We did not deem these
shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise noted,
stock options and warrants referenced in the footnotes below are currently fully vested and exercisable.

 Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them. Unless otherwise noted, the business address of each of the following entities or individuals
is c/o of the Company at The Walnut Building, 691 Mill St., Suite 240, Los Angeles, CA 90021.

 Name
 and Address of Beneficial Owners

 of
 Beneficially
 Owned

 %
 of Class

 Directors
 and Executive Officers

 (Sue) He

 -

 -

 Taiji
 Ito (1)

 7,040

 *
 %

 Kiran
 Sidhu

 -

 -

 Katharyn
 (Katie) Field

 -

 -

 Pavanveer
 (Pavan) Gill

 -

 -

 Robert
 Lim

 -

 -

 All
 named executive officers and directors as a group 6 persons

 7,040

 *
 %

 Greater
 than 5% Holders:

 Shuhei
 Komatsu (2)

 140,848

 15.23
 %

 Catalyst Investment Group Co., Ltd (3)

 100,000

 10.81
 %

 *

 Less
 than 1.0%

 (1)

 Includes
 7,040 shares of common stock underlying options held by Taiji Ito.

 (2)

 The address Shuhei Komatsu is Shiba Koen Annex 6 F, 1-8, Shiba Koen 3-Chome, Minato-Ku, Tokyo M0 105-0011.

 (3)

 The address of Catalyst Investment Co., Ltd. is Level 3, Sanno Park Tower,
2-11-1, Nagata-Cho, Chiyoda-Ku Tokyo 100-6162.

 Securities
Authorized for Issuance under Equity Compensation Plans

 The
following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well
as any equity compensation plans not approved by our stockholders as of December 31, 2023.

 Plan
 category

 Number of

 securities to be
 issued upon

 exercise of
 outstanding

 options, warrants

 and rights

 (Column A)

 average

 exercise price of

 outstanding
 options, warrants
 and rights

 of securities
 remaining

 available
 for
 future

 issuance
 under equity
 compensation plans (excluding

 securities
 reflected
 in
 Column A)

 Plans
 approved by our stockholders

 11,732

 $
 0.015

 28,372

 Plans
 not approved by our stockholders

 N/A

 N/A

 N/A

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE

 Policies
and Procedures for Related Party Transactions

 Under
Item 404 of SEC Regulation S-K, a related person transaction is any actual or proposed transaction, arrangement or relationship or series
of similar transactions, arrangements or relationships, including those involving indebtedness not in the ordinary course of business,
to which we or our subsidiary were or are a party, or in which we or our subsidiary were or are a participant, in which the amount involved
exceeded or exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years
and in which any of our directors, nominees for director, executive officers, beneficial owners of more than 5% of any class of our voting
securities (a "significant shareholder"), or any member of the immediate family of any of the foregoing persons, had or will
have a direct or indirect material interest.

 We
recognize that transactions between us and any of our directors or executives or with a third party in which one of our officers, directors
or significant shareholders has an interest can present potential or actual conflicts of interest and create the appearance that our
decisions are based on considerations other than the best interests of our Company and stockholders.

 The
Audit Committee of the Board of Directors is charged with responsibility for reviewing, approving and overseeing any transaction between
the Company and any related person (as defined in Item 404 of Regulation S-K), including the propriety and ethical implications of any
such transactions, as reported or disclosed to the Audit Committee, and to determine whether the terms of the transaction are not less
favorable to us than could be obtained from an unaffiliated party.

Party Transactions

 The
following sets forth all transactions since the beginning of the Company's last fiscal year, January 1, 2023 as well as any currently
proposed transaction in which the Company was or is to be a participant and the amount involved exceeds $120,000 and in which any related
person had or will have a direct or indirect material interest:

Party Transactions Prior to the Business Combination

 Founder

 On
March 22, 2021, the Company issued an aggregate of 28,750 shares of Class B common stock to the Sponsor for an aggregate purchase
price of $25,000 in cash. Such Class B common stock included an aggregate of up to 3,750 shares that were subject to forfeiture by
the Sponsor to the extent that the underwriters' over-allotment was not exercised in full or in part, so that the Sponsor would
collectively own at least 20% of the Company's issued and outstanding shares after the Initial Public Offering (assuming the initial
stockholders do not purchase any Public Shares in the Initial Public Offering and excluding the Placement Units and underlying securities).
The underwriters exercised the over-allotment option in full, so those shares are no longer subject to forfeiture.

 The
initial stockholders have agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees)
until, with respect to any of the Class B common stock, the earlier of (i) six months after the date of the consummation of a business
combination, or (ii) the date on which the closing price of the Company's common stock equals or exceeds $1,200 per share (as adjusted
for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing
after a business combination, with respect to the remaining any of the Class B common stock, upon six months after the date of the consummation
of a business combination, or earlier, in each case, if, subsequent to a business combination, the Company consummated a subsequent liquidation,
merger, stock exchange or other similar transaction which results in all of the Company's stockholders having the right to exchange
their common stock for cash, securities or other property.

 Promissory
Note - Related Party

 On
March 22, 2021, the Sponsor committed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the "Note"). The Note was non-interest bearing and was payable on the earlier of
July 31, 2021 or the completion of the Initial Public Offering. Upon IPO, the Company had borrowed $186,542 under the Note. On August
17, 2021, the outstanding balance owed under the Note was repaid in full. The Company no longer has the ability to borrow under the Note.

Party Loans

 In
order to finance transaction costs in connection with a business combination, the Sponsor agreed to provide the Company with a loan
up to $1,500,000 as may be required ("Sponsor Working Capital Loans"). Such Sponsor Working Capital Loans would either
be repaid upon consummation of a business combination, without interest, or, at the lender's discretion, up to $1,500,000 of
such loans may have been converted upon consummation of a business combination into additional Placement Units at a pre-consolidated
price of $10.00 per Unit. In the event that a business combination dis not close, the Company may have used a portion of proceeds
held outside the Trust Account to repay the Sponsor Working Capital Loans, but no proceeds held in the Trust Account would be used
to repay the Sponsor Working Capital Loans.

 On
September 23, 2021, the Company entered into a Sponsor Working Capital Loan in the amount of up to $1,500,000. During the year ended
December 31, 2022, the Company received proceeds of $960,000. The Sponsor Working Capital Loan is non-interest bearing and payable
upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective.
The unpaid principal balance on the Sponsor Working Capital Loan may have been convertible into units at the option of the Sponsor
at a pre-consolidated price of $10.00 per unit. The unit would have been identical to the Placement Units. Using the fair value
option, the Sponsor Working Capital Loan is required to be recorded at its' initial fair value on the date of issuance, and
each reporting period thereafter. Differences between the face value of the Sponsor Working Capital Loan and fair value at issuance
are recognized as either an expense in the consolidated statement of operations (if issued at a premium) or as a capital
contribution (if issued at a discount). Changes in the estimated fair value of the Sponsor Working Capital Loan are recognized as a
non-cash gain or loss in the consolidated statement of operations. The aggregate fair value of the Sponsor Working Capital Loan was
estimated to be $92,000 at initial measurement. It was restructured to a promissory note in the principal sum of $1,130,000 on
January 31, 2023. In the case of an event of default, this note bear interest at a rate of 24% per annum until such event of default
is cured. The principal amount of this Note and any accrued interest shall be payable on the earlier of raising more than $5,000,000
from Pono's SEPA with Yorkville or as follows: (i) $300,000 on April 10, 2023 (ii) $300,000 on May 10, 2023; (iii) $300,000 on
June 30, 2023; and (iv) $230,000 on July 31, 2023.

 Extension
Private Placements

 If
the Company anticipated that it may have not been able to consummate the initial business combination within 12 months from the date
of the Initial Public Offering, the Company may, by resolution of the board if requested by the Sponsor, extend the period of time
to consummate a business combination up to two times, each by an additional three months (for a total of up to 18 months to complete
a business combination), subject to the Sponsor depositing additional funds into the Trust Account as set out below. Pursuant to the
terms of the third amended and restated certificate of incorporation and the trust agreement entered into between the Company and
Continental Stock Transfer & Trust Company, in order for the time available for the Company to consummate the initial business
combination to be extended, the Sponsor or its affiliates or designees, must deposit into the Trust Account $1,150,000
(pre-consolidated price of $0.10 per Unit in either case), on or prior to the date of the applicable deadline, for each of the
available three month extensions, providing a total possible business combination period of 18 months at a total payment value of
$2,300,000 (pre-consolidated price of $0.10 per Unit).

 On
August 10, 2022, the Company received $1,150,000 in funding from Mehana Capital, from the August Extension. Mehana Capital purchased
an aggregate of 115,000 pre-cosnolidated Placement Units of the Company, each unit consists of one pre-consolidated share of Class A
common stock, $0.000001 par value per share, and three-quarters of one warrant, each whole Placement Warrant entitling the holder
thereof to purchase one-hundredth of a share of our common stock at an exercise price of $1,150 per share, creating proceeds to the Company of
$1,150,000 which was deposited into the trust account as further described in the Form 8-K filed with the SEC on August 10,
2022.

 On
November 9, 2022, the Company received an additional $1,150,000 in funding, of which $575,000 was from Mehana Capital and $575,000
was from AERWINS, Inc. from the November Extension. Mehana Capital purchased an additional 57,500 pre-consolidated Placement Units
and AERWINS, Inc. purchased 57,500 pre-consolidated Placement Units, creating proceeds to the Company of $1,150,000 which was
deposited into the trust account as further described in the Form 8-K filed with the SEC on November 10, 2022.

 The
proceeds from the sale of the Placement Units from both the August Extension and the November Extension were added to the net proceeds
from the Initial Public Offering held in the Trust Account. The Placement Units are identical to the Units sold in the Initial Public
Offering, except for the Placement Warrants.

 Administrative
Support Agreement

 The
Company's Sponsor had agreed, commencing from the date that the Company's securities are first listed on NASDAQ through the
earlier of the Company's consummation of a business combination and its liquidation, to make available to the Company certain general
and administrative services, including office space, utilities and administrative services, as the Company may require from time to time.
The Company has agreed to pay to Mehana Equity LLC, the Sponsor, $10,000 per month for these services during the 18-month period to complete
a business combination.

Party Transactions After the Business Combination

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

 For
the nine months ended September 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 $5,961 which is calculated by the total unpaid
rental fees for the contracts for which guarantees were provided as of December 31, 2023. No warranty fees are paid.

 Payable
to Directors of Aerwins

 As at March 28, 2024, Kiran Sidhu, our Chief
Executive Officer and a director, and Daisuke Katano, a former director, paid some payables on behalf of the Company. Mr. Sidhu paid
$341,424 during such period and $286,424 is outstanding as of March 28, 2024. Mr. Katano paid $215,725 during the year of 2023 and $9,935
is outstanding as of March 28, 2024. The Company will pay to them at an appropriate timing in light of its financial situation.

 In addition, Mr. Sidhu had previously agreed to provide
the Company with up to $300,000 in working capital to launch the initial phase of its planned redesign of the XTURISMO by way of an interest
free demand loan.

Agreements

 On
February 3, 2023, the Company entered into employment agreements (the "Employment Agreements") with executive officers: Shuhei
Komatsu (former Chief Executive Officer), Taiji Ito (Global Markets Executive Officer), Kazuo Miura (Chief Product Officer) and Kensuke
Okabe (former Chief Financial Officer). The Employment Agreements all provide for at-will employment that may be terminated by the Company
for death or disability and with or without cause, by the executive with or without good reason, or mutually terminated by the parties.
The Employment Agreements for Mr. Komatsu, Mr. Ito, Mr. Miura, and Mr. Okabe provide for a severance payment equal to the remaining base
salary for the remaining period of the respective term of employment (each term is one (1) year) upon termination by the Company without
cause or termination by such executive for good reason. The executive agreements provide for a base salary of $200,000, $200,000, $200,000
and $200,000 for Mr. Komatsu, Mr. Ito, Mr. Miura and Mr. Okabe, respectively, as well as possible annual performance bonuses and equity
grants under the equity incentive plan if and when determined by the Company's Compensation Committee.

Award Agreements

 On
February 3, 2023, the Company entered into Option Award Agreements (the "Option Award Agreements") with executive officers:
Shuhei Komatsu (former Chief Executive Officer), Taiji Ito (Global Markets Executive Officer), Kazuo Miura (former Chief Product Officer)
and Kensuke Okabe (Chief Financial Officer).

 The
Option Award Agreements grants to each of the following persons options to acquire shares of the Company's common stock, to vest
as set forth in the Option Award Agreements, as follows:

 Shuhei
 Komatsu – 15,256 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr. Komatsu's
 resignation.

 Taiji
 Ito – 7,039 options at an exercise price of $0.015 per share of common stock

 Kazuo
 Miura – 7,399 options at an exercise price of $0.015 per share of common stock. These options were forfeited upon Mr. Miura's
 resignation.

 Kensuke
 Okabe – 4,693 options at an exercise price of $0.015 per share of common stock

 Loan
Agreement

 On
February 27, 2023, A.L.I. entered into a Loan Agreement with Shuhei Komatsu, the Company's former Chief Executive Officer (the
"Agreement"). The Agreement was approved by the Company's Board of Directors on February 26, 2023 and by the Company's
Compensation Committee on February 26, 2023. Pursuant to the Agreement, Mr. Komatsu agreed to lend A.L.I. 200,000,000 yen (approximately
$1,469,400 US Dollars based on a conversion rate of $0.007347 US Dollar for each $1 yen as of February 27, 2023) (the "Loan").
The original maturity date of the Loan under the Agreement was April 15, 2023, and was extended to June 30, 2023 (the "Maturity
Date") pursuant to the terms of a memorandum agreement signed on May 15, 2023 (the "Memorandum"). 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 April 21, 2023. Pursuant to the terms of the Memorandum, the Company paid 100,000,000 yen (approximately US$753,266),
the interest rate was increased to 14.6% per annum as of April 22, 2023 and A.L.I. agreed to delay damages in the amount of 480,000 yen
(approximately US$3,616). In addition, A.L.I pledged as collateral for the Loan shares of ASC Tech Agent Co., Ltd. held by A.L.I. and
the equity interest in any entity in which A.L.I. may transfer its drone service business in the future. We are in discussions with Mr.
Komatsu regarding further extension of the maturity date of the Loan and other alternatives regarding settlement of this debt.

 If
any of the following events occur while the Loan is outstanding, the Loan will become immediately due and payable together with all interest
thereon: (i) if payment is suspended or bankruptcy proceedings are initiated against A.L.I., (ii) if A.L.I. initiates legal proceedings
related to debt reorganization involving court intervention or when facts are recognized as having occurred that payment has been suspended,
(iii) if provisional seizure, preservation seizure, seizure order, or delinquent disposition is received by A.L.I., (iv) if A.L.I. is
delayed in make any payments under the Agreement, (v) if A.L.I. violates any provisions of the Agreement or (vi) upon the occurrence
of any equivalent reasons requiring the preservation of the right to claim arise in addition to the foregoing. Pursuant to the Agreement,
if A.L.I. does not timely repay the Loan in accordance with the terms of the Agreement, the interest rate on the Loan will increase to
14.6% per annum until the full payment is made. Under the Agreement, for any litigation arising under the Agreement, regardless of the
amount or claim, the exclusive court of jurisdiction will be the Tokyo District Court.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The
following table sets forth the fees paid or accrued by us for the audit and other services provided or to be provided by TAAD, LLP for
the year ended December 31, 2023 and by Marcum LLP for the year ended December 31, 2022.

 2023

 2022

 Audit
 Fees(1)

 $
 335,807

 $
 118,000

 Audit
 Related Fees(2)

 11,873

 -

 Tax
 Fees(3)

 -

 6,000

 Total
 Fees

 $
 347,680

 $
 124,000

 (1)

 Audit
 Fees: This category represents the aggregate fees billed for professional services rendered by the principal independent accountant
 for the audit of our annual financial statements and review of financial statements included in our Form 10-Q and Form 10-K and services
 that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years.

 (2)

 Audit
 Related Fees: This category consists of the aggregate fees billed for assurance and related services by the principal independent
 accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported
 under "Audit Fees."

 (3)

 Tax
 Fees: This category consists of the aggregate fees billed for professional services rendered by the principal independent accountant
 for tax compliance, tax advice, and tax planning.

 Pre-Approval
of Audit and Non-Audit Services

 All
above audit services, audit-related services and tax services, for the fiscal years ended December 31, 2023 and 2022, were pre-approved
by our Audit Committee, which concluded that the provision of such services was compatible with the maintenance of that firm's
independence in the conduct of its auditing functions. The Audit Committee's outside auditor independence policy provides for pre-approval
of all services performed by the outside auditors.

 PART
IV

 ITEM
15. 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).

 3.3

 Amended and Restated Bylaws of AERWINS Technologies Inc. adopted on September 26, 2023 (incorporated by reference to Exhibit 3.1 to Form 8-K filed by AERWINS Technologies Inc. on September 29, 2023).

 3.4

 Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation, as amended filed with the Delaware Secretary of State on March 28, 2024 (incorporated by reference to Exhibit 3.1 to Form 8-K filed by AERWINS Technologies Inc. on March 28, 2024).

 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).

 4.5

 Form of Piggyback Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by AERWINS Technologies, Inc. with the SEC on February 28, 2024).

 10.1+

 Form
 of AERWINS Technologies Inc. 2022 Equity Incentive Plan (incorporated by reference to Annex C to the proxy statement/Form 10-K 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/Form
 10-K 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/Form 10-K 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+

 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+

 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+

 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+

 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/Form 10-K 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+

 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+

 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+

 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+

 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).

 10.30

 Memorandum between A.L.I Technologies Inc. and Shuhei Komatsu signed on May 15, 2023 (incorporated by reference to Exhibit 10.30 to Form S-1 filed by AERWINS Technologies Inc. on January 24, 2024).

 10.31+

 Independent Contractor Agreement between AERWINS Technologies Inc. and Yinshun He dated as of June 16, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on August 30, 2023).

 10.32

 Amendment to Senior Convertible Promissory Note First Closing Note between AERWINS Technologies, Inc. and Lind Global Fund II LP dated August 25, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on August 28, 2023).

 10.33

 Amendment to Senior Convertible Promissory Note Second Closing Note between AERWINS Technologies, Inc. and Lind Global Fund II LP dated August 25, 2023 (incorporated by reference to Exhibit 10.2 to Form 8-K filed by AERWINS Technologies Inc. on August 28, 2023).

 10.34

 Letter of Intent between AERWINS Technologies, Inc. and Helicopter Technology Company effective as of December 19, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on December 22, 2023).

 10.35

 Amendment to Senior Convertible Promissory Note First Closing Note between AERWINS Technologies, Inc. and Lind Global Fund II LP dated August 25, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed by AERWINS Technologies Inc. on August 28, 2023).

 10.36

 Amendment to Senior Convertible Promissory Note Second Closing Note between AERWINS Technologies, Inc. and Lind Global Fund II LP dated August 25, 2023 (incorporated by reference to Exhibit 10.2 to Form 8-K filed by AERWINS Technologies Inc. on August 28, 2023).

 10.37

 Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by AERWINS Technologies, Inc. with the SEC on February 28, 2024).

 10.38*

 Form of Promissory Note.

 14.1

 Code of Ethics (incorporated by reference to Exhibit 14.1 to the Form 8-K filed by AERWINS Technologies, Inc. with the SEC on February 9, 2023).

 21.1

 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Form S-1 filed by AERWINS Technologies, Inc. with the SEC on January 24, 2024).

 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*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 Cover

 *

 Filed
 or furnished herewith.

 +

 Management
 contract or compensatory plan or arrangement.

 ITEM
16. FORM 10-K SUMMARY

 None.

 SIGNATURES

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.

 Dated:
 April 30, 2024

 By:

 /s/
 Kiran Sidhu

 Name:

 Kiran
 Sidhu

 Title:

 Chief
 Executive Officer (Principal Executive Officer)

 Dated:
 April 30, 2024

 By:

 /s/
 Yinshun (Sue) He

 Name:

 (Sue) He

 Title:

 Chief
 Financial Officer (Principal Financial Officer and Principal Accounting Officer)

to the requirements of the Exchange Act, this report has been signed by the following persons in the capacities and on the dated indicated:

 Name

 Title

 Date

 /s/
 Kiran Sidhu

 Chief
 Executive Officer and Director

 April

 Kiran
 Sidhu

 (Principal
 Executive Officer)

 /s/
 Yinshun (Sue) He

 Chief
 Financial Officer

 April

 (Sue) He

 (Principal
 Financial Officer and Principal Accounting Officer)

 /s/
 Katharyn Field

 Chairman
 of the Board of Directors

 April

 Katharyn
 Field

 /s/
 Taiji Ito

 April

 Taiji
 Ito

 /s/
 Pavanveer Gill

 April

 Pavanveer
 Gill

 /s/
 Robert Lim

 April

 Robert
 Lim