UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

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

For the transition period from ______ to _____

Commission File Number 001-40734

AERWINS TECHNOLOGIES INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		86-2049355
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

The Walnut Building 691 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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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 May 24, 2024.

TABLE OF CONTENTS

Note About Forward-Looking Statements

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3

	Statements of Operations and Comprehensive Income (Loss) for the three ended March 31, 2024 and 2023 (Unaudited)	4

	Statements of Changes in Shareholders’ Deficiency as of March 31, 2024 and 2023 (Unaudited)	5

	Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (Unaudited)	7

	Notes to Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	38

Item 4.	Controls and Procedures	38

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	39

Item 1A.	Risk Factors	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	40

	Signatures	41

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

PART I-FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AERWINS TECHNOLOGIES INC.

BALANCE SHEETS

	March 31,			December 31,
	2024			2023
	(unaudited)			(audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	163,275		$	2,072
Prepaid expenses		835,758			983,255
Assets of discontinued operations		-			81,332
Total current assets		999,033			1,066,659
Total Assets	$	999,033		$	1,066,659
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Short-term loans payable	$	272,835		$	278,618
Accounts payable		2,057,534			1,918,803
Accounts payable, related party		313,428			341,424
Accounts payable		313,428			341,424
Accrued expenses		587,317			496,265
Accrued expenses, related party		110,855			146,255
Accrued expenses		110,855			146,255
Notes payable		1,480,000			1,480,000
Others payable		132,980			132,980
Liabilities of discontinued operations		350,000			8,244,485
Total Current Liabilities		5,304,949			13,038,830
Longer-term liabilities:
Long-term convertible promissory note, net		2,110,850			1,519,403
Derivative liability		1,293,276			1,367,140
Warrant liability		257,764			400,924
Non-current liabilities of discontinued operations		-			3,221,007
Total long-term liabilities		3,661,890			6,508,474
Total Liabilities		8,966,839			19,547,304
Stockholders’ Deficit:
Common stock, par value $0.000001, 400,000,000 shares authorized; 885,987 and 626,890 shares issued and outstanding, respectively in March 31, 2024 and December 31, 2023*		66			62
Preferred stock, par value $0.000001, 20,000,000 shares authorized; No shares issued and outstanding*		-			-
Additional Paid-in capital		56,091,972			55,549,976
Accumulated deficit		(63,484,844	)		(72,411,375	)
Treasury stock		(575,000	)		(575,000	)
Accumulated other comprehensive loss		-			(1,044,308	)
Stockholders’ Deficit		(7,967,806	)		(18,480,645
Total Liabilities and Stockholders’ Deficit	$	999,033		$	1,066,659

*	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 financial statements.

AERWINS TECHNOLOGIES INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the three months ended March 31,			For the three months ended March 31,
	2024			2023

Operating expenses:
Selling expenses	$	-		$	-
General and administrative expenses		620,380			3,574,882
Research and development expenses		-			-
Total operating expenses		620,380			3,574,882

Loss from operations		(620,380	)		(3,574,882	)

Other income (expenses):
Interest expense		(98,811	)		-
Amortization of debt discount		(311,285	)		-
Gain on foreign currency transactions		5,663			-
Gain on fair value adjustments of warrant		143,160			86,251
Loss on fair value adjustments of derivative		(378,685	)		-
Gain on debt modification		172,387			-
Gain on deconsolidation		10,014,482			-

Total other income		9,546,911			86,251

Income (Loss) before income tax provision		8,926,531			(3,488,631	)
Income tax expense		-			-
Net income (loss) from continuing operations		8,926,531			(3,488,631	)

Discontinued operations (Note 17)
Loss from discontinued operations		-			(4,312,913	)

Net Income (Loss)		8,926,531			(7,801,544	)

Other Comprehensive income (loss):
Foreign currency translation adjustment		1,044,308			(55,127	)

Total Comprehensive income (loss)		9,970,839			(7,856,671	)

Net earnings (loss) per common share from continuing operations
Basic		12.12			(6.58	)
Diluted		12.12			(6.58	)

Net earnings (loss) per common share from discontinuing operations
Basic		0.00			(8.14	)
Diluted	$	0.00		$	(8.14	)

Weighted average common shares outstanding*
Basic*		736,765			529,844
Effect of dilutive securities
Convertible debt*		51,766			-
Conversion of option warrants*		144,420			93,758
Diluted*		832,951			623,602

*	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 Financial Statements

AERWINS TECHNOLOGIES INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(Unaudited)

	Shares		Amount		Shares		Amount		Capital			Deficit)			Stock			Income			Totals
	Common Stock				Preferred stock
	400,000,000 authorized				20,000,000 authorized				Additional			Retained						Accumulated
	$0.000001 Par Value				$0.000001 Par Value				Paid-in (Registered)			Earnings (Accumulated			Treasury			Other Comprehensive
	Shares		Amount		Shares		Amount		Capital			Deficit)			Stock			Income			Totals

Balance at January 1, 2023		469,297	$	47		-	$	-	$	49,299,343		$	(46,472,904	)	$	-		$	(917,582	)	$	1,908,904

Issuance of common stock prior to the closing of Business Combination		50,000		5		-		-		(1,156,124	)		-			-			-			(1,156,119	)

Reverse recapitalization		37,402		4		-		-		(878,120	)		-			-			-			(878,116	)

Issuance of common stock warrants for services		4,132		-		-		-		4,338,298			-			-			-			4,338,298

Acquisition of treasury stock		575		-		-		-		-			-			(575,000	)		-			(575,000	)

Net loss		-		-		-		-		-			(7,801,544	)		-			-			(7,801,544	)

Other comprehensive loss		-		-		-		-		-			-			-			(55,127	)		(55,127	)

Balances at March 31, 2023		561,406	$	56	$	-	$	-	$	51,603,397		$	(54,274,448	)	$	(575,000	)	$	(972,709	)	$	(4,218,704	)

	Common Stock				Preferred stock
	400,000,000 authorized				20,000,000 authorized				Additional		Retained						Accumulated
	$0.000001 Par Value				$0.000001 Par Value				Paid-in (Registered)		Earnings (Accumulated			Treasury			Other Comprehensive
	Shares		Amount		Shares		Amount		Capital		Deficit)			Stock			Income			Totals

Balances at January 1, 2024		626,890	$	62	$	-	$	-	$	55,549,976	$	(72,411,375	)	$	(575,000	)	$	(1,044,308	)	$	(18,480,645	)
Balances		626,890	$	62	$	-	$	-	$	55,549,976	$	(72,411,375	)	$	(575,000	)	$	(1,044,308	)	$	(18,480,645	)

Issuance of common shares for services		51,317		-		-		-		-		-			-			-			-

SEC Form 10-Q filed by AERWINS Technologies Inc.