Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 20, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40734 | |
Entity Registrant Name | AERWINS TECHNOLOGIES INC. | |
Entity Central Index Key | 0001855631 | |
Entity Tax Identification Number | 86-2049355 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | Shiba Koen Annex 6 f | |
Entity Address, Address Line Two | 1-8, Shiba Koen 3-chome | |
Entity Address, Address Line Three | Minato-ku | |
Entity Address, City or Town | Tokyo | |
Entity Address, Country | JP | |
Entity Address, Postal Zip Code | 105-0011 | |
City Area Code | 813 | |
Local Phone Number | 6409-6761 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 62,688,215 | |
Common Stock, $0.000001 par value per share | ||
Title of 12(b) Security | Common Stock, $0.000001 par value per share | |
Trading Symbol | AWIN | |
Security Exchange Name | NASDAQ | |
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ||
Title of 12(b) Security | Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | AWINW | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheet
Consolidated Balance Sheet | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Current Assets: | |||
Cash and cash equivalents | $ 25,174 | $ 1,278,026 | |
Notes receivable | 3,488 | ||
Accounts receivable, net | 180,193 | 980,688 | |
Others receivable | 778,446 | 2,089,921 | |
Prepaid expenses | 1,827,865 | 611,959 | |
Inventory | 2,687,092 | ||
Escrow deposit | 575,000 | ||
Total current assets | 2,811,678 | 8,226,174 | |
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 | 95,031 | 107,735 | |
Other non-current assets | 129,649 | 213,370 | |
Total long-term assets | 224,680 | 3,553,172 | |
Total Assets | 3,036,358 | 11,779,346 | |
Current Liabilities: | |||
Notes payable | 1,480,000 | ||
Others payable | 710,965 | 230,060 | |
Accrued expenses | 1,079,728 | 402,036 | |
Contract liabilities | 708,810 | 1,104,582 | |
Current portion of long-term loans | 160,811 | 54,624 | |
Finance leases liabilities-current | 82,203 | 102,114 | |
Operating leases liabilities-current | 220,602 | 293,710 | |
Other current liabilities | 380,344 | ||
Total Current Liabilities | 11,675,774 | 5,901,145 | |
Longer-term liabilities | |||
Long-term loans | 2,742,220 | 3,259,237 | |
Long-term convertible promissory note, net | 997,104 | ||
Derivative liability | 1,581,579 | ||
Finance leases liabilities-non-current | 55,617 | 87,056 | |
Operating leases liabilities-non-current | 236,131 | 397,720 | |
Other long-term liabilities | 160,016 | 225,284 | |
Warrant liabilities | 552,032 | ||
Total long-term liabilities | 6,324,699 | 3,969,297 | |
Total Liabilities | 18,000,473 | 9,870,442 | |
Stockholders’ Equity: | |||
Common stock, par value $0.000001, 400,000,000 shares authorized; 62,688,215 and 46,929,065 shares issued and outstanding, respectively in September 30, 2023 and December 31, 2022 | [1] | 62 | 47 |
Preferred stock, par value $0.000001, 20,000,000 shares authorized; No shares issued and outstanding | |||
Additional Paid-in capital | 54,092,576 | 49,299,343 | |
Retained earnings (Accumulated deficiency) | (69,560,075) | (46,472,904) | |
Treasury stock | (575,000) | ||
Accumulated other comprehensive income (loss) | 1,078,322 | (917,582) | |
Stockholders’ Equity (Deficit) | (14,964,115) | 1,908,904 | |
Total Liabilities and Stockholders’ Equity (Deficit) | 3,036,358 | 11,779,346 | |
Nonrelated Party [Member] | |||
Current Liabilities: | |||
Short-term loans payable, related party | 334,604 | ||
Accounts payable, related party | 5,827,219 | 3,333,675 | |
Related Party [Member] | |||
Current Liabilities: | |||
Short-term loans payable, related party | 441,929 | ||
Accounts payable, related party | $ 628,903 | ||
[1]Retrospectively restated for effect of the business combination on February 6, 2023. |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.000001 | $ 0.000001 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Outstanding | 62,688,215 | 46,929,065 |
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||||
Revenues | $ 36,908 | $ 206,753 | $ 494,661 | $ 2,140,871 | |
Cost of revenues | 1,477,845 | 352,179 | 2,078,125 | 2,399,459 | |
Gross loss | (1,440,937) | (145,426) | (1,583,464) | (258,588) | |
Operating expenses: | |||||
Selling expenses | 19,426 | 63,525 | 78,952 | ||
General and administrative expenses | 1,759,644 | 1,582,060 | 11,867,931 | 4,304,138 | |
Research and development expenses (recovery) | (46,402) | 1,905,166 | 6,748,994 | 6,389,268 | |
Total operating expenses | 1,713,242 | 3,506,652 | 18,680,450 | 10,772,358 | |
Loss from operations | (3,154,179) | (3,652,078) | (20,263,914) | (11,030,946) | |
Other income (expenses): | |||||
Interest expenses, net | (660,226) | (5,699) | (1,145,176) | (19,540) | |
Gain (Loss) on foreign currency transaction | 241 | (23,087) | (10,179) | 65,454 | |
Gain (Loss) on disposal of fixed assets | 255 | (936) | |||
Impairment on fixed assets | (34,132) | (1,599,985) | |||
Equity in earnings of investee | (6,610) | (11,640) | 4,126 | ||
Gain (loss) on sale of investment securities | (18,174) | 432,980 | |||
Loss on debt extinguishment | (666,641) | (666,641) | |||
Gain on fair value adjustments of warrant | 703,764 | 1,903,436 | |||
Gain (loss) on fair value adjustments of derivative | (124,938) | 470,735 | |||
Derivative expense | (1,088,477) | ||||
Other income (expenses), net | 78,273 | (222) | 178,828 | 293,641 | |
Total other income (expenses) | (703,404) | (53,792) | (1,970,035) | 776,661 | |
Loss before income tax provision | (3,857,583) | (3,705,870) | (22,233,949) | (10,254,285) | |
Income tax expense | (19,661) | (19,661) | |||
Net loss from continuing operations | (3,857,583) | (3,725,531) | (22,233,949) | (10,273,946) | |
Discontinued operations (Note 25) | |||||
Loss from discontinued operations | (6,724) | (345,601) | (853,223) | (1,025,120) | |
Loss on discontinued operations | (6,724) | (345,601) | (853,223) | (1,025,120) | |
Net loss | (3,864,307) | (4,071,132) | (23,087,172) | (11,299,066) | |
Other comprehensive income: | |||||
Foreign currency translation adjustment | (296,946) | 919,736 | 1,995,904 | (760,659) | |
Total other comprehensive loss | (296,946) | 919,736 | 1,995,904 | (760,659) | |
Total comprehensive loss | $ (4,161,253) | $ (3,151,396) | $ (21,091,268) | $ (12,059,725) | |
Net loss per common share from continuing operations | |||||
Basic | $ (0.06) | $ (0.08) | $ (0.38) | $ (0.23) | |
Anti-Diluted | (0.06) | (0.08) | (0.38) | (0.23) | |
Net Income (loss) per common share from discontinued operations | |||||
Basic | 0 | (0.01) | (0.01) | (0.02) | |
Anti-Diluted | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | |
Weighted average common shares outstanding | |||||
Basic | [1] | 62,547,298 | 46,291,743 | 57,515,446 | 43,917,191 |
Effect of dilutive securities | |||||
Convertible debt | [1] | 3,697,046 | 2,880,633 | ||
Conversion of option warrants | 15,705,700 | 5,215,944 | 12,237,431 | 4,607,744 | |
Diluted | [1] | 81,950,044 | 51,507,687 | 72,633,510 | 48,524,935 |
[1]Retrospectively restated for effect of the business combination on February 6, 2023. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficiency) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2021 | $ 41 | $ 32,288,699 | $ (31,993,085) | $ (238,057) | $ 57,598 | ||
Balance, shares at Dec. 31, 2021 | 41,206,805 | ||||||
Corporate bond conversion | $ 2 | 7,176,346 | 7,176,348 | ||||
Corporate bond conversion, shares | 2,034,611 | ||||||
Net loss | (3,392,003) | (3,392,003) | |||||
Other comprehensive income (loss) | (195,256) | (195,256) | |||||
Balance at Mar. 31, 2022 | $ 43 | 39,465,045 | (35,385,088) | (433,313) | 3,646,687 | ||
Balance, shares at Mar. 31, 2022 | 43,241,416 | ||||||
Balance at Dec. 31, 2021 | $ 41 | 32,288,699 | (31,993,085) | (238,057) | 57,598 | ||
Balance, shares at Dec. 31, 2021 | 41,206,805 | ||||||
Net loss | (11,299,066) | ||||||
Other comprehensive income (loss) | (760,659) | ||||||
Balance at Sep. 30, 2022 | $ 47 | 49,299,343 | (43,292,153) | (998,716) | 5,008,521 | ||
Balance, shares at Sep. 30, 2022 | 46,929,066 | ||||||
Balance at Mar. 31, 2022 | $ 43 | 39,465,045 | (35,385,088) | (433,313) | 3,646,687 | ||
Balance, shares at Mar. 31, 2022 | 43,241,416 | ||||||
Net loss | (3,835,933) | (3,835,933) | |||||
Other comprehensive income (loss) | (1,485,139) | (1,485,139) | |||||
Issuance of common stock | $ 1 | 2,715,195 | 2,715,196 | ||||
Issuance of common stock, shares | 797,474 | ||||||
Issuance of common stock upon exercise of stock options | 367,278 | 367,278 | |||||
Issuance of common stock upon exercise of stock options, shares | 351,309 | ||||||
Balance at Jun. 30, 2022 | $ 44 | 42,547,518 | (39,221,021) | (1,918,452) | 1,408,089 | ||
Balance, shares at Jun. 30, 2022 | 44,390,199 | ||||||
Net loss | (4,071,132) | (4,071,132) | |||||
Other comprehensive income (loss) | 919,736 | 919,736 | |||||
Issuance of common stock | $ 2 | 5,683,985 | 5,683,987 | ||||
Issuance of common stock, shares | 1,852,197 | ||||||
Issuance of common stock upon exercise of stock options | $ 1 | 1,067,708 | 1,067,709 | ||||
Issuance of common stock upon exercise of stock options, shares | 686,670 | ||||||
Stock-based compensation | 132 | 132 | |||||
Balance at Sep. 30, 2022 | $ 47 | 49,299,343 | (43,292,153) | (998,716) | 5,008,521 | ||
Balance, shares at Sep. 30, 2022 | 46,929,066 | ||||||
Balance at Dec. 31, 2022 | $ 47 | 49,299,343 | (46,472,904) | (917,582) | 1,908,904 | ||
Balance, shares at Dec. 31, 2022 | 46,929,065 | ||||||
Net loss | (7,801,544) | (7,801,544) | |||||
Other comprehensive income (loss) | (55,127) | (55,127) | |||||
Issuance of common stock prior to the closing of Business Combination | $ 5 | (1,156,124) | (1,156,119) | ||||
Issuance of common stock prior to the closing of Business Combination, shares | 5,000,000 | ||||||
Reverse recapitalization | $ 4 | (878,120) | (878,116) | ||||
Reverse recapitalization, shares | 3,740,187 | ||||||
Issuance of common stock warrants for services | $ 0 | 4,338,298 | 4,338,298 | ||||
Issuance of common stock warrants for services, shares | 413,103 | ||||||
Acquisition of treasury stock | (575,000) | (575,000) | |||||
Acquisition of treasury stock, shares | 57,500 | ||||||
Balance at Mar. 31, 2023 | $ 56 | 51,603,397 | (54,274,448) | (575,000) | (972,709) | (4,218,704) | |
Balance, shares at Mar. 31, 2023 | 56,139,855 | ||||||
Balance at Dec. 31, 2022 | $ 47 | 49,299,343 | (46,472,904) | (917,582) | 1,908,904 | ||
Balance, shares at Dec. 31, 2022 | 46,929,065 | ||||||
Net loss | (23,087,172) | ||||||
Other comprehensive income (loss) | 1,995,904 | ||||||
Balance at Sep. 30, 2023 | $ 62 | 54,092,576 | (69,560,075) | (575,000) | 1,078,322 | (14,964,115) | |
Balance, shares at Sep. 30, 2023 | 62,688,215 | ||||||
Balance at Mar. 31, 2023 | $ 56 | 51,603,397 | (54,274,448) | (575,000) | (972,709) | (4,218,704) | |
Balance, shares at Mar. 31, 2023 | 56,139,855 | ||||||
Net loss | (11,421,320) | (11,421,320) | |||||
Other comprehensive income (loss) | 2,347,977 | 2,347,977 | |||||
Issuance of common stock for services | $ 5 | 1,919,995 | 1,920,000 | ||||
Issuance of common stock for services,shares | 5,269,291 | ||||||
Balance at Jun. 30, 2023 | $ 61 | 53,523,392 | (65,695,768) | (575,000) | 1,375,268 | (11,372,047) | |
Balance, shares at Jun. 30, 2023 | 61,409,146 | ||||||
Net loss | (3,864,307) | (3,864,307) | |||||
Other comprehensive income (loss) | (296,946) | (296,946) | |||||
Issuance of common stock for services | $ 1 | 569,184 | $ 569,185 | ||||
Issuance of common stock for services,shares | 1,279,069 | 1,279,069 | |||||
Balance at Sep. 30, 2023 | $ 62 | $ 54,092,576 | $ (69,560,075) | $ (575,000) | $ 1,078,322 | $ (14,964,115) | |
Balance, shares at Sep. 30, 2023 | 62,688,215 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (23,087,172) | $ (11,299,066) |
Net loss from discontinued operations | (853,223) | (1,025,120) |
Net loss from continuing operations | (22,233,949) | (10,273,946) |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||
Depreciation expenses | 182,689 | 186,337 |
Amortization expenses | 22,934 | 31,989 |
Interest expense | 1,145,165 | |
Non-cash lease expense | 189,295 | 247,006 |
Share-based compensation | 5,190,773 | |
Gain on fair value adjustments of warrant | (1,903,436) | |
Change in fair value of derivative liability | (470,735) | |
Revert of bad debt expenses | 7,088 | (664) |
Impairment loss | 1,599,985 | |
Loss on disposal of fixed assets | 936 | 2,894 |
Gain on sale of investment securities | (432,980) | |
Loss on debt extinguishment | 666,641 | |
Equity in earnings of investee | 11,640 | (4,126) |
Derivative expense | 1,088,477 | |
Write-off of inventory | 1,487,493 | |
Decrease (Increase) in operating assets: | ||
Accounts receivable | (45,768) | (49,447) |
Others Receivable | 1,152,107 | (39,557) |
Prepaid expenses | 126,564 | (92,653) |
Advances and prepayments to suppliers | 142,528 | (67,060) |
Inventory | 924,661 | (1,000,412) |
Other current assets, | (68,114) | |
Other non current assets | 29,217 | |
Increase (Decrease) in operating liabilities: | ||
Accounts payable | 2,783,347 | 106,281 |
Notes payable | 20,987 | |
Others payable | 599,867 | (134,215) |
Accrued expenses | 380,623 | 73,739 |
Deferred revenue | (286,453) | 616,204 |
Operating lease liabilities-current | (9,426) | (64,115) |
Other current liabilities | (362,922) | (31,042) |
Operating lease liabilities-Non-current | (144,733) | (173,252) |
Other non-current liabilities | (41,867) | (135,276) |
Net cash used by continuing operations | (7,746,272) | (11,302,409) |
Net cash used by discontinued operations | (44,011) | (790,652) |
Net cash used by operating activities | (7,790,283) | (12,093,061) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | (20,757) | (41,416) |
Purchase of intangible assets | (36,186) | (17,464) |
Proceeds from disposal of investments | 467,791 | |
Repayment of loans receivable | 15,593 | |
Net cash provided (used) by continuing operations | (56,943) | 424,504 |
Net cash provided (used) by discontinued operations | (5,123) | (137,798) |
Net cash (used) by investing activities | (62,066) | 286,706 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from capital contribution | 9,834,301 | |
Proceeds from bond | 2,797,698 | |
Proceeds from loans | 3,706,344 | |
Repayments to loans | (2,663,142) | (166,299) |
Payments for finance leases | (40,709) | (69,288) |
Proceeds from reverse recapitalization with AERWINS Inc., net | 1,595,837 | |
Net cash provided by continuing operations | 5,396,028 | 9,598,714 |
Net cash provided by discontinued operations | ||
Net cash provided by financing activities | 5,396,028 | 9,598,714 |
Net decrease in cash and cash equivalents | (2,456,321) | (2,207,641) |
Effects of exchange rates change on cash | 1,203,469 | (1,434,644) |
Cash and cash equivalents at beginning of period | 1,278,026 | 10,020,459 |
Cash and cash equivalents at beginning of period held by discontinued operation | ||
Cash and cash equivalents at ending of period held by discontinued operation | ||
Cash and cash equivalents at end of period | 25,174 | 6,378,174 |
Cash paid (received) during period for: | ||
Interest | 14,094 | 20,025 |
Income taxes | $ 31,136 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS AERWINS Technologies Inc., a Delaware corporation (the “Company,” “we,” “us,” or “AERWINS”) together with its wholly owned subsidiary AERWINS, Inc., a Delaware corporation and its wholly owned subsidiary, A.L.I. Technologies Inc., a Japanese corporation (“ALI”) is the developer and manufacturer of air mobility platform, COSMOS (Centralized Operating System for Managing Open Sky), and the XTURISMO Limited Edition Hoverbike. All refences in this report on Form 10-Q to the “Company,” “we,” “us,” or “AERWINS” include both AERWINS and ALI. Pono Capital Corp Merger On February 3, 2023, we consummated a merger (the “Merger”) with Pono Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of the Company, then called Pono Capital Corp., a Delaware corporation (“Pono”) with and into AERWINS, Inc. (formerly named AERWINS Technologies Inc.), a Delaware corporation pursuant to an agreement and plan of merger, dated as of September 7, 2022 (as amended on January 19, 2023, the “Merger Agreement”), by and among Pono, Merger Sub, AERWINS, Mehana Equity LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of Pono, and Shuhei Komatsu in his capacity as the representative of the stockholders of AERWINS, Inc. (“Seller Representative”). The Merger and other transactions contemplated thereby (collectively, the “Business Combination”) closed on February 3, 2023 when pursuant to the Merger Agreement, Merger Sub merged with and into AERWINS, Inc. with AERWINS, Inc. surviving the Merger as a wholly-owned subsidiary of Pono, and Pono changed its name to “AERWINS Technologies Inc.” and the business of the Company became the business of AERWINS, Inc., and this business section primarily includes information regarding the AERWINS’, Inc. business. The Business Combination was accounted for as a reverse recapitalization under the accounting principles generally accepted in the United States of America (“U.S. GAAP”). AERWINS was determined to be the accounting acquirer and Pono was treated as the acquired company for financial reporting purposes. Accordingly, the financial statements of the combined company represent a continuation of the financial statements of AERWINS. On February 2, 2023, the Company entered into a Subscription Agreement (the “Agreement”) with AERWINS, Inc., and certain investors (collectively referred to herein as the “Purchasers”). Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate 3,196,311 5,000,000 5,000,000 On February 3, the Company received from the Business Combination with Pono net cash of $ 1,595,831 25,750 1,432,603 1,580,000 1,480,000 643,213 1,595,831 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 $ 1,480,000 110,157 |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 - GOING CONCERN The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the period ended September 30, 2023, the Company has incurred net loss from continuing operations of $ 22,233,949 69,560,075 Although the Company is attempting to commence operations and generate sufficient revenue, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of debt, or a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of debt, or a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Unaudited Interim Consolidated Financial Information The accompanying interim consolidated balance sheet as of September 30, 2023, the interim consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in shareholders’ equity (deficiency), and cash flows for the nine months ended September 30, 2023 and 2022 and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2023 and the Company’s consolidated results of operations and cash flows for the nine months ended September 30, 2023 and 2022. The consolidated results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. Use of Estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long-lived assets, and valuation allowance of deferred tax assets. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and deposits in banks that are unrestricted as to withdrawal or use, and which have original maturities of three months or less. Accounts Receivable, net Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt. Inventories Inventories consist principally of raw materials used for rendering computing sharing services and for manufacturing hoverbikes. Work in progress represents the costs incurred to date on unfinished products or services. The costs recognized as work in progress include direct materials, direct labor, and overhead costs that are directly attributable to the production of the unfinished product or service. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method for merchandise. Net realizable value is calculated at estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Loss from inventories written down to net realizable value should be recognized whenever the utility of goods is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes. When inventories have been written down below cost, the reduced amount is to be considered the cost for subsequent accounting purposes. During the nine months ended September 30, 2023, inventory write-downs of $ 1,487,493 Fixed assets Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow: SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS Depreciation Method Useful Life Building and building accessories Straight-line method 8 38 Office equipment and furniture Straight-line method 2 10 Software Straight-line method 5 Design right Straight-line method 7 Patent right Straight-line method 8 Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss). Lease-Lessee In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less. Impairment of Long-Lived Assets Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. Equity Method We apply the equity method to an investment in unconsolidated entities over which we have the ability to exercise significant influence. We initially record our investments based on the acquisition cost. Under the equity method, the carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the investment. SCHEDULE OF SUBSIDIARIES Percentage of Effective Ownership Name of Subsidiary Place of Organization September 30, 2023 December 31, 2022 ASC TECH Agent Japan 0 % 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 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” , Convertible Promissory Notes and Derivative Instruments The Company accounts for the fair value of the conversion feature in accordance with the guidance contained in ASC 815, which requires the Company to bifurcate and separately account for the conversion feature as an embedded derivative contained in the Company’s convertible promissory note. Accordingly, we account for the conversion option as an embedded derivative contained in the Company’s promissory note at fair value. The derivative liability is required to be remeasured at each reporting date and the change in fair value is recognized in our consolidated statements of operations. Foreign Currency Translation The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes in shareholders’ deficit. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES 2023 2022 2022 Nine months ended September 30, (unaudited) Year ended December 31, 2023 2022 2022 Current JPY: US$1 exchange rate 149.43 144.71 131.81 Average JPY: US$1 exchange rate 138.14 128.26 131.46 Foreign exchange rate 138.14 128.26 131.46 Consolidated Statements of Cash Flows In accordance with FASB ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”. To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales. When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Cost of Revenues Cost of revenues primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenues also includes royalty/license payments to vendors, 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”. The advertising expenses for nine months ended September 30, 2023 and 2022 (unaudited) were $ 63,525 78,952 Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. For the nine months ended September 30, 2023, Customer A accounts for 27.7 For the nine months ended September 30, 2022, Customer C and Customer D accounts for respectively 14.8 12 As of September 30, 2023, Customer A accounts for 19.6 70.2 15.1 16.2 12.8 For the nine months ended September 30, 2023, Vendor A and Vendor B accounts for respectively 39.4 16.4 For the nine months ended September 30, 2022, Vendor B accounts for respectively 30.8 As of December 31, 2022, Vendor A accounts for 31.2 20.1 Comprehensive Income or Loss ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying consolidated statements of changes in shareholders’ deficit, consists of changes in unrealized gains and losses on foreign currency translation. Earnings (Loss) Per Share The Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share Related Parties and Transactions The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards. Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. Income Taxes Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. The Company follows ASC 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations. Fair Value Measurements The Company performs fair value measurements in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value: ● Level 1: quoted prices in active markets for identical assets or liabilities; ● Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or ● Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 4 — ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE, NET September 30, 2023 (unaudited) December 31, 2022 Accounts receivable $ 186,745 $ 980,688 Less: allowance for doubtful accounts (6,552 ) - Accounts receivable, net $ 180,193 $ 980,688 Allowance for doubtful accounts movement is as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS September 30, 2023 (unaudited) December 31, 2022 Beginning balance $ - $ (739 ) Change during the period 6,552 739 Ending balance $ 6,552 $ - Other receivable movement is as follows: SCHEDULE OF OTHER RECEIVABLE September 30, 2023 (unaudited) December 31, 2022 Beginning balance $ 2,089,921 $ 1,034,690 Change during the period (1,296,676 ) 1,189,020 Foreign currency translation adjustment (14,799 ) (133,789 ) Ending balance $ 778,446 $ 2,089,921 The change during the year in 2022 is mainly from increase of consumption tax receivable that has been refunded in 2023. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | NOTE 5 — PREPAID EXPENSES SCHEDULE OF PREPAID EXPENSES September 30, 2023 (unaudited) December 31, Prepaid expenses $ 1,800,826 $ 431,935 Advances to Suppliers 27,039 180,024 Total $ 1,827,865 $ 611,959 1,636,703 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6 — INVENTORY Inventory consists of the following: SCHEDULE OF INVENTORY September 30, 2023 (unaudited) December 31, Raw materials $ 202,381 $ 1,533,784 Work in progress 1,245,274 1,135,852 Product 30,614 - Stored item 9,224 17,456 Write-off of inventory (1,487,493 ) - Total $ - $ 2,687,092 During the nine months ended September 30, 2023, inventory write-downs of $ 1,487,493 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 7 — SEGMENT INFORMATION Management determined the Company’s operations constituted one reportable segment in accordance with ASC 280—Air mobility segment. Revenue by each service line can be found in Note 8 below. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 8 — REVENUE RECOGNITION The Company currently generates its revenue from the following main sources: Revenue from Computing Power Sharing services with Equipment Installation The Company provides customers with computing power sharing services with equipment installation, which includes a one-time equipment installation and a certain period of time technology service. The Company recognizes revenue from one-time equipment installation at the point in time when the installation is completed and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Computing Power Sharing services without Equipment Installation The Company also provides customers with computing power sharing services without equipment installation, which includes a one-time platform set up without equipment installation, and a certain period of time technology service. The Company recognizes revenue from one-time platform set up at the point in time when the platform is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Air Mobility Drone Solution The Company provides customers with air mobility drone solution, which includes UAS (Unmanned Aircraft Systems) main equipment, laser scanner, software package, camera system, etc. The solution includes a one-time system set up and a certain period of time technology service. The Company recognizes revenue from one-time system set up at the point in time when the system is set up to function and accepted by the customer. The Company recognizes revenue from technology service over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Air Mobility Drone Solution is included in income from discontinued operations. Revenue from Project Management The Company provides customers with project management, which includes project planning and implementation, and providing needed technology human resources, such as construction engineers and software engineers for various projects. The Company recognizes revenue from project management over time when the service is rendered and accepted by the customer, normally monthly. Revenue from Project Management is included in income from discontinued operations. Revenue from Consulting Service The Company provided a customer with consulting service related to IPO. The company recognizes revenue from the service over time as the service is rendered. Disaggregation of Revenue The Company disaggregates its revenues from contracts by service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the nine months and three months ended September 30, 2023 and 2022 is as following (unaudited): SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Nine months ended September 30, (unaudited) 2023 2022 Revenue from sales of Computing Equipment $ - $ 499,758 Revenue from Computing Power Sharing services 138,508 1,077,061 Revenue from Project Management for Computing Share 6,153 564,052 Consulting service 350,000 - Total Revenue $ 494,661 $ 2,140,871 2023 2022 Three months ended September 30, (unaudited) 2023 2022 Revenue from Computing Power Sharing services $ 36,908 $ 206,753 Total Revenue $ 36,908 $ 206,753 For the nine months ended September 30 in 2023 and 2022 (unaudited), almost all of the revenue generated are attributed to the Company’s operation in Japan. Revenue from Air Mobility Drone Solution and Project Management are included in income from discontinued operations. Contract Liability As of September 30, 2023 (unaudited) and December 31, 2022, the Company recognizes contract liability of $ 708,810 1,104,582 |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
LOANS PAYABLE | NOTE 9 – LOANS PAYABLE Notes payable On January 31, 2023, the Company promised to pay to Mahana Equity LLC, the principal sum of $ 1,130,000 24 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) $ 300,000 300,000 300,000 230,000 On January 31, 2023, the Company promised to pay to a third party lender the principal sum of $ 450,000 24% The principal amount of this Note and any accrued interest shall be payable (the “Maturity date”) as follows (i) $ 100,000 100,000 100,000 100,000 50,000 As at September 30, 2023, the notes payable balance was $ 1,480,000 110,156 Short-term loan payable During the nine months ended September 30, 2023, the Company received loans totaling $ 334,604 50,000,000 133,842 8 200,762 8 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 — RELATED PARTY TRANSACTIONS Guarantee provided by a director of A.L.I. For the nine months ended September 30, 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 $ 129,598 Loan from a former director of Aerwins On February 27, 2023, the Company’s wholly owned subsidiary in Japan, A.L.I. Technologies, entered into a loan agreement with Shuhei Komatsu, the Company’s Chief Executive Officer. Pursuant to the Agreement, Mr. Komatsu agreed to lend A.L.I. 200,000,000 1,384,370 0.0066921 1 April 15, 2023 June 30, 2023 2.475 The Company recognizes $ 46,580 48.81 227,281 666,641 441,929 Payable to Directors of Aerwins In the third quarter of 2023, two directors of Aerwins, Kiran Sidhu and Daisuke Katano paid some payable on behalf of the Company. Mr. Sidhu paid $ 425,464 203,439 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 11 — PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2023 (unaudited) December 31, 2022 Building $ 13,315 $ 233,869 Accessory equipment 41,107 211,879 Structures 5,245 47,568 Vehicles 3,980 4,512 Tools, furniture and fixtures 457,701 1,751,969 Lease assets 164,836 186,871 Property and equipment, gross 164,836 186,871 Accumulated depreciation (686,184 ) (534,426 ) Impairment - (511,695 ) Property and equipment, net $ - $ 1,390,547 Depreciation expense for nine months ended September 30, 2023 and 2022, were respectively $ 182,689 186,337 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 12 — INTANGIBLE ASSETS, NET The components of intangible assets as of September 30, 2023 and December 31, 2022 are as follows: SCHEDULE OF INTANGIBLE ASSETS September 30, 2023 (unaudited) December 31, 2022 Software $ 662,075 $ 706,320 Design right 101,578 111,334 Patent right 22,842 - Intangible assets, gross 22,842 - Accumulated amortization (217,828 ) (191,813 ) Impairment (568,667 ) (475,265 ) Intangible assets, net $ - $ 150,576 Amortization expense for nine months ended September 30, 2023 and 2022, were respectively $ 22,934 31,989 |
IMPAIRMENT LOSS
IMPAIRMENT LOSS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
IMPAIRMENT LOSS | NOTE 13 — IMPAIRMENT LOSS For the nine months ended September 30, 2023, the Company recognized impairment losses for the following assets: SCHEDULE OF IMPAIRMENT LOSS Type Impairment loss Building $ 199,601 Accessory equipment 146,334 Structures 37,975 Tools, furniture and fixtures 562,650 Operating Lease right-of-use assets 472,414 Software 71,095 Suspense payments 54,370 Design right 34,132 Patent right 21,414 Total $ 1,599,985 Because the Company continues to recognize operating losses, and the future cash flows from these assets for its business in Japan are uncertain, so it has decided to write down fixed assets in Japan, the Company recognizes impairment loss for all fixed assets in Japan. The Company recognized the reduction as impairment in the line item of impairment on fixed assets. The Company reduces the book value to zero and recognizes the amount as impairment because the future cash flows from these assets were uncertain at the end of this quarter. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 14 — LEASES The components of lease costs are as follows: SCHEDULE OF LEASE COSTS 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Short-term lease costs $ 38,318 $ 686 Finance lease costs 46,305 67,941 Operating lease costs 173,026 99,635 Total lease costs $ 257,649 $ 168,262 As of September 30, 2023, the future maturity of lease liabilities is as follows: SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES Year ending December 31, Finance Operating 2023 (nine months) $ 68,778 $ 120,549 2024 44,488 202,050 2025 9,135 138,568 2026 9,135 - Thereafter 11,419 - Total lease payments 142,955 461,167 Less: imputed interest (5,135 ) (4,434 ) Total lease liabilities 137,820 456,733 Less: current portion (82,203 ) (220,602 ) Non-current lease liabilities $ 55,617 $ 236,131 The following table presents supplemental information related to the Company’s leases: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 154,159 $ 237,367 Financing cash flows from finance lease $ 40,709 $ 69,288 Weighted average remaining lease term (years) Finance leases 1.1 1.1 Operating leases 0.85 1.9 Weighted-average discount rate: (per annum) Finance leases 2.66 % 1.71 % Operating leases 0.94 0.94 Pursuant to the operating lease agreements, the Company made security deposits to the lessors. The amount of security deposits as of September 30, 2023 and as of December 31, 2022 is $ 129,598 174,111 |
LONG-TERM DEBTS
LONG-TERM DEBTS | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBTS | NOTE 15 — LONG-TERM DEBTS The Company’s long-term loans borrowed from banks and other financial institutions, which consist of the following: SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Name of Lender Original Loan Annual Balance as of (unaudited) Balance as of Mizuho Bank, Ltd. 40,000,000 1/22/2021 1/22/2028 0.00 % $ 267,684 $ 303,467 Mizuho Bank, Ltd. 60,000,000 1/22/2021 1/22/2028 0.00 % 401,526 455,201 Mizuho Bank, Ltd. 50,000,000 1/22/2021 1/22/2028 1.70 % 334,605 379,334 Japan Finance Corporation 50,000,000 12/29/2020 12/31/2027 1.11 % 334,605 279,190 Japan Finance Corporation 226,600,000 12/29/2020 1/31/2026 0.50 % 1,564,611 1,896,669 Aggregate outstanding principal balances 2,903,031 3,313,861 Less: current portion (160,811 ) (54,624 ) Non-current portion $ 2,742,220 $ 3,259,237 Interest expense for long-term debts was $ 14,093 and $ 19,728 for the nine months ended September 30, 2023 and 2022 (unaudited), respectively. |
CONVERTIBLE PROMISSORY NOTES, N
CONVERTIBLE PROMISSORY NOTES, NET | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES, NET | NOTE 16 – CONVERTIBLE PROMISSORY NOTES, NET On April 12, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with Lind Global Fund II LP (the “Investor”). Pursuant to the SPA, the Company agreed to issue to the Investor up to three secured convertible promissory notes in the aggregate principal amount of $ 6,000,000 5,000,000 5,601,613 5,601,613 On April 12, 2023, the Company issued first tranche of convertible promissory note of $ 2,520,000 April 12, 2025 2,532,678 0.8926 The conversion price is the lesser of: (i) $ 0.90 20 0.18176 457,304 420,000 1,642,696 On May 23, 2023, the Company issued second tranche of convertible promissory note of $ 1,680,000 May 23, 2025 1,568,542 0.7316 The conversion price is the lesser of: (i) $ 0.90 20 0.18176 245,000 280,000 1,133,395 The notes consist of the following components as of September 30, 2023: SCHEDULE OF DEBT NOTES Principal $ 4,200,000 Debt discount (4,178,395 ) Interest expense 975,499 Net Carrying Balance at September 30, 2023 $ 997,104 As of the period ended September 30, 2023, debt discount of the convertible notes consisted of following: SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES Start Date End Date Debt Discount At Debt Issuance Amortization Debt Discount As April 12, 2023 April 12, 2025 $ 2,520,000 $ 630,000 $ 1,890,000 May 23, 2023 May 23, 2025 1,658,395 345,499 1,312,896 Total $ 4,178,395 $ 975,499 $ 3,202,896 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liability | |
DERIVATIVE LIABILITY | NOTE 17 – DERIVATIVE LIABILITY The derivative liability is derived from the debt conversion option features in Note 14. They were valued using Monte Carlo simulation model using assumptions detailed below. As of September 30, 2023, the derivative liability was $ 1,581,579 470,735 1,088,477 SCHEDULE OF DERIVATIVE LIABILITY Volatility 124 % Risk-free rate 5.182 5.230 % Stock price $ 0.12 Dividend Yield - Expected life 1.53 – 1.65 years Fair value of the derivative is summarized as below: SCHEDULE OF FAIR VALUE OF THE DERIVATIVE Derivative Liability Balance at January 1, 2023 $ - Additions 2,052,314 Change in fair value (470,735 ) Ending Balance, September 30, 2023 $ 1,581,579 |
WARRANT LIABILITY
WARRANT LIABILITY | 9 Months Ended |
Sep. 30, 2023 | |
Warrant Liability | |
WARRANT LIABILITY | NOTE 18 – WARRANT LIABILITY The warrant liability is derived from warrants issued as debt warrants in Note 14, public warrants and placement warrants. As of September 30, 2023, the total fair value of the warrant liability was $ 552,032 The following table provides a reconciliation of the warrants measured at fair value using Level 1 inputs: SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS Public warrants Balance at January 1, 2023 $ - Additions - Transfer from Level 2 603,750 Change in fair value (362,250 ) Ending Balance, September 30, 2023 $ 241,500 The Black-Scholes model with the following assumptions inputs: SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS Volatility 124.00 % Risk-free rate 5.18 % Stock price 0.12 Expected life 4.35 4.65 The following table provides a reconciliation of the warrants measured at fair value using Level 2 inputs: SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS Public warrants Placement warrants Debt warrants Balance at January 1, 2023 $ - - - Additions 603,750 39,463 1,812,253 Transfer to Level 1 (603,750 ) - - Change in fair value - (23,310 ) (1,517,874 ) Ending Balance, September 30, 2023 $ - 16,153 294,379 Number of Shares Weighted Average Exercise Price Weighted Average Remaining contractual life Outstanding at December 31, 2022 - $ - - Granted 13,109,969 8.31 4.68 Outstanding at September 30, 2023 13,109,969 $ 8.31 4.68 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 19 — INCOME TAXES United States Aerwins Technologies Inc. is a holding company registered in the State of Delaware incorporated in June 2022. The U.S. federal income tax rate is 21 Japan The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. During the three months periods ended September 30, 2023 and 2022, all taxable income (loss) of the Company is generated in Japan. Income taxes in Japan applicable to the Company are imposed by the national, prefectural, and municipal governments, and in the aggregate resulted in an effective statutory rate of approximately 34.59 For the nine months ended September 30, 2023 and 2022, the Company’s income tax expenses are as follows: SCHEDULE OF COMPANY' S INCOME TAX EXPENSES 2023 2022 For the Nine months Ended September 30, 2023 2022 Current $ - $ 19,661 Deferred - - Total $ - $ 19,661 A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the nine months ended September 30, 2023 and 2022 is as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE 2023 2022 For the Nine months Ended September 30, 2023 2022 Japanese statutory tax rate 34.59 % 34.59 % Change in valuation allowance (34.59 )% (34.76 )% Effective tax rate (0.00 )% (0.17 )% For the Nine months ended September 30, 2023 and 2022 (unaudited) The Company’s provision for income taxes for interim periods was determined using an estimate of its annual effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company recognized income tax expense for the nine months ended September 30, 2023 and 2022, both of which were estimated corporate inhabitant taxes. |
EQUITY METHOD
EQUITY METHOD | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD | NOTE 20 — EQUITY METHOD As of September 30, 2022 and 2021, the Company holds 48.81 11,640 4,126 During the nine months ended September 30, 2023, the Company derecognized investment in ASC Tech agent and derecognized the debt to Shuhei. Accordingly, the Company recognized loss on sale of investment securities of $ 666,641 |
SHAREHOLDERS_ DEFICIT
SHAREHOLDERS’ DEFICIT | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS’ DEFICIT | NOTE 21 – SHAREHOLDERS’ DEFICIT Aerwins was authorized to issue 400,000,000 0.000001 20,000,000 0.000001 Business combination with Pono Capital Corp On February 3, 2023, the Company consummated the Merger with Pono. On February 2, 2023, the Company entered into a Subscription Agreement with the Purchasers. In total, the number of Public Shares increased by 8,797,687 Shares issued to service providers The Company agreed with service providers to pay the service fees by issuing common stocks subject to the closing of the business combination. After the closing of the Business Combination, the Company issued 413,103 5,269,291 1,279,069 6,827,477 1,636,703 The Company’s outstanding shares increased by 15,759,150 15 4,793,233 62,688,215 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 22 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is calculated on the basis of weighted-average outstanding common shares. Diluted earnings (loss) per share is computed on the basis of basic weighted-average outstanding common shares adjusted for the dilutive effect of stock options. Dilutive common shares are determined by applying the treasury stock method to the assumed conversion of share repurchase liability to common shares related to the early exercised stock options. The computation of basic and diluted earnings (loss) per share for the nine months and three months ended September 30, 2023 and 2022 is as follows: SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Loss per share – basic Numerator: Net loss from continuing operations $ (22,233,949 ) $ (10,273,946 ) Net loss from discontinued operation (853,223 ) (1,025,120 ) Denominator: Weighted average number of common shares outstanding used in calculating basic loss per share 57,515,446 43,917,191 Denominator used for loss per share Loss per share from continuing operations (basic) $ (0.38 ) $ (0.23 ) Loss per share from continuing operations (anti-diluted) $ (0.38 ) $ (0.23 ) Loss per share from discontinued operation (basic) $ (0.01 ) $ (0.02 ) Loss per share from discontinued operation (anti-diluted) $ (0.01 ) $ (0.02 ) 2023 2022 For the Three months Ended September 30, (unaudited) 2023 2022 Loss per share – basic Numerator: Net loss from continuing operations $ (3,857,583 ) $ (3,725,529 ) Net loss from discontinued operation (6,724 ) (345,601 ) Denominator: Weighted average number of common shares outstanding used in calculating basic loss per share 62,547,298 46,291,743 Denominator used for loss per share Loss per share from continuing operations (basic) $ (0.06 ) $ (0.08 ) Loss per share from continuing operations (anti-diluted) $ (0.06 ) $ (0.08 ) Loss per share from discontinued operation (basic) $ (0.00 ) $ (0.01 ) Loss per share from discontinued operation (anti-diluted) $ (0.00 ) $ (0.01 ) Basic loss per share equals diluted loss per share because the calculation of diluted loss per share would be anti-dilutive. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 23 – STOCK-BASED COMPENSATION On July 27, 2022, Aerwins issued stock options to certain directors of the Company which can be exercised for a total of 2,648,000 0.00015 9.08 SCHEDULE OF STOCK BASED COMPENSATION Grant date July 27, 2022 Number of shares at grant date 4,142,277 Outstanding at January 31, 2023 4,142,277 Forfeiture (2,969,049 ) Outstanding at September 30, 2023 1,173,228 Exercise price $ 0.00015 Consideration paid to the Company at the grant date $ 132 The number of shares is retrospectively presented to reflect the Business Combination with Pono. The Company estimated the fair value of the stock-based compensation at $ 0.00005 SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION Exercise period 5 Share price on the issuance date $ 0.0001 Volatility 64.22 % Expected dividend rate 0 % Risk-free interest rate 2.88 % |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 24 – FAIR VALUE MEASUREMENT The estimated fair value of the Company’s financial instrument at September 30, 2023 and December 31, 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts. SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT Amount at Fair Value Level 1 Level 2 Level 3 September 30, 2023 Liabilities Public Warrants $ 241,500 $ 241,500 $ - $ - Placement Warrants $ 16,153 $ - $ 16,153 $ - Debt Warrants $ 294,379 $ - $ 294,379 $ - Subtotal: Warrant liabilities $ 552,032 $ 241,500 $ 310,532 - Derivative Liability $ 1,581,579 $ - $ 1,581,579 $ - Liabilities fair value $ 1,581,579 $ - $ 1,581,579 $ - 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 25 – DISCONTINUED OPERATIONS As at September 30, 2023, to facilitate cost reduction plan, the Company has made the strategic decision to discontinue drone solution service. The results of operations in relation to the Company’s Drone solution service have been classified by the Company as discontinued operations for the nine months ended September 30, 2023 and 2022 and are shown below: SCHEDULE OF DISCONTINUED OPERATIONS 2023 2022 2023 2022 For the nine months ended September 30, For the three months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Revenues $ 928,388 $ 1,213,695 $ 3,183 $ 356,392 Cost of revenues 745,007 971,657 9,045 246,095 Gross profit 183,381 242,039 (5,862 ) 110,298 Operating expenses: Selling expenses 4,099 5,986 - 82 General and administrative expenses 752,243 884,381 36,696 308,246 Research and development expenses 167,053 402,296 - 172,560 Total operating expenses 923,395 1,292,663 36,696 480,888 Loss from operations (740,014 ) (1,050,624 ) (42,558 ) (370,590 ) Other income (expenses): Interest expenses, net (1,164 ) - - - Loss on disposal of fixed assets (9,761 ) (2,894 ) - (2,718 ) Impairment of fixed asset (229,600 ) - - - Other income, net 127,316 28,398 35,834 27,707 Total other income (expenses) (113,209 ) 25,504 35,834 24,989 Loss before income tax provision $ (853,223 ) $ (1,025,120 ) $ (6,724 ) $ (345,601 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 26 – SUBSEQUENT EVENTS Management has performed an evaluation of subsequent events through the date of issuance of the unaudited financial statements, noting no items which require adjustment or disclosure other than those set forth in the preceding notes to the unaudited condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Unaudited Interim Consolidated Financial Information | Unaudited Interim Consolidated Financial Information The accompanying interim consolidated balance sheet as of September 30, 2023, the interim consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in shareholders’ equity (deficiency), and cash flows for the nine months ended September 30, 2023 and 2022 and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2023 and the Company’s consolidated results of operations and cash flows for the nine months ended September 30, 2023 and 2022. The consolidated results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. |
Use of Estimates | Use of Estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for doubtful accounts, useful lives of property and equipment, the impairment of long-lived assets, and valuation allowance of deferred tax assets. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and deposits in banks that are unrestricted as to withdrawal or use, and which have original maturities of three months or less. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt. |
Inventories | Inventories Inventories consist principally of raw materials used for rendering computing sharing services and for manufacturing hoverbikes. Work in progress represents the costs incurred to date on unfinished products or services. The costs recognized as work in progress include direct materials, direct labor, and overhead costs that are directly attributable to the production of the unfinished product or service. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method for merchandise. Net realizable value is calculated at estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Loss from inventories written down to net realizable value should be recognized whenever the utility of goods is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes. When inventories have been written down below cost, the reduced amount is to be considered the cost for subsequent accounting purposes. During the nine months ended September 30, 2023, inventory write-downs of $ 1,487,493 |
Fixed assets | Fixed assets Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow: SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS Depreciation Method Useful Life Building and building accessories Straight-line method 8 38 Office equipment and furniture Straight-line method 2 10 Software Straight-line method 5 Design right Straight-line method 7 Patent right Straight-line method 8 Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss). |
Lease-Lessee | Lease-Lessee In accordance with the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) the Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Lease terms of certain operating leases include the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. The Company leases office facilities, office equipment and furniture, and a vehicle, which are classified as operating leases and leases containers, which are classified as a finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. |
Equity Method | Equity Method We apply the equity method to an investment in unconsolidated entities over which we have the ability to exercise significant influence. We initially record our investments based on the acquisition cost. Under the equity method, the carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the investment. SCHEDULE OF SUBSIDIARIES Percentage of Effective Ownership Name of Subsidiary Place of Organization September 30, 2023 December 31, 2022 ASC TECH Agent Japan 0 % 48.81 % |
Warrant Liabilities | Warrant Liabilities We account for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 — Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815), under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The Placement Warrants, Public Warrants, and Debt Warrants for periods where no observable traded price was available are valued using a Black Scholes model. |
Share-based Compensation | 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” , |
Convertible Promissory Notes and Derivative Instruments | Convertible Promissory Notes and Derivative Instruments The Company accounts for the fair value of the conversion feature in accordance with the guidance contained in ASC 815, which requires the Company to bifurcate and separately account for the conversion feature as an embedded derivative contained in the Company’s convertible promissory note. Accordingly, we account for the conversion option as an embedded derivative contained in the Company’s promissory note at fair value. The derivative liability is required to be remeasured at each reporting date and the change in fair value is recognized in our consolidated statements of operations. |
Foreign Currency Translation | Foreign Currency Translation The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is the United States Dollars (“US$”), and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive loss within the statements of changes in shareholders’ deficit. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES 2023 2022 2022 Nine months ended September 30, (unaudited) Year ended December 31, 2023 2022 2022 Current JPY: US$1 exchange rate 149.43 144.71 131.81 Average JPY: US$1 exchange rate 138.14 128.26 131.46 Foreign exchange rate 138.14 128.26 131.46 |
Consolidated Statements of Cash Flows | Consolidated Statements of Cash Flows In accordance with FASB ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”. To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenue amount represents the invoiced value and net of a value-added tax (“Consumption Tax”). The Consumption Tax on sales is calculated at 10% of gross sales. When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. |
Cost of Revenues | Cost of Revenues Cost of revenues primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenues also includes royalty/license payments to vendors, hosting and infrastructure costs related to the delivery of the Company’s products and services, and inventory write-down. |
Advertising Expenses | Advertising Expenses Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses advertising costs as incurred, in accordance with the ASC 720-35, “Advertising Costs”. The advertising expenses for nine months ended September 30, 2023 and 2022 (unaudited) were $ 63,525 78,952 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. For the nine months ended September 30, 2023, Customer A accounts for 27.7 For the nine months ended September 30, 2022, Customer C and Customer D accounts for respectively 14.8 12 As of September 30, 2023, Customer A accounts for 19.6 70.2 15.1 16.2 12.8 For the nine months ended September 30, 2023, Vendor A and Vendor B accounts for respectively 39.4 16.4 For the nine months ended September 30, 2022, Vendor B accounts for respectively 30.8 As of December 31, 2022, Vendor A accounts for 31.2 20.1 |
Comprehensive Income or Loss | Comprehensive Income or Loss ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying consolidated statements of changes in shareholders’ deficit, consists of changes in unrealized gains and losses on foreign currency translation. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share |
Related Parties and Transactions | Related Parties and Transactions The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards. Parties, which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be related if they are subject to common control or common significant influence. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. The Company follows ASC 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations. |
Fair Value Measurements | Fair Value Measurements The Company performs fair value measurements in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value: ● Level 1: quoted prices in active markets for identical assets or liabilities; ● Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or ● Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF BUSINESS COMBINATION | SCHEDULE OF BUSINESS COMBINATION Cash—Pono trust and working capital cash $ 1,802,594 Cash—Subscription agreement made immediately before the closing 5,000,000 Less: transaction costs and advisory fees 5,206,763 Total funds from the Business Combination $ 1,595,831 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS | Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives, as more details follow: SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS Depreciation Method Useful Life Building and building accessories Straight-line method 8 38 Office equipment and furniture Straight-line method 2 10 Software Straight-line method 5 Design right Straight-line method 7 Patent right Straight-line method 8 |
SCHEDULE OF SUBSIDIARIES | SCHEDULE OF SUBSIDIARIES Percentage of Effective Ownership Name of Subsidiary Place of Organization September 30, 2023 December 31, 2022 ASC TECH Agent Japan 0 % 48.81 % |
SCHEDULE OF FOREIGN EXCHANGE RATES | Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: SCHEDULE OF FOREIGN EXCHANGE RATES 2023 2022 2022 Nine months ended September 30, (unaudited) Year ended December 31, 2023 2022 2022 Current JPY: US$1 exchange rate 149.43 144.71 131.81 Average JPY: US$1 exchange rate 138.14 128.26 131.46 Foreign exchange rate 138.14 128.26 131.46 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE, NET | Accounts receivable, net consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE, NET September 30, 2023 (unaudited) December 31, 2022 Accounts receivable $ 186,745 $ 980,688 Less: allowance for doubtful accounts (6,552 ) - Accounts receivable, net $ 180,193 $ 980,688 |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | Allowance for doubtful accounts movement is as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS September 30, 2023 (unaudited) December 31, 2022 Beginning balance $ - $ (739 ) Change during the period 6,552 739 Ending balance $ 6,552 $ - |
SCHEDULE OF OTHER RECEIVABLE | Other receivable movement is as follows: SCHEDULE OF OTHER RECEIVABLE September 30, 2023 (unaudited) December 31, 2022 Beginning balance $ 2,089,921 $ 1,034,690 Change during the period (1,296,676 ) 1,189,020 Foreign currency translation adjustment (14,799 ) (133,789 ) Ending balance $ 778,446 $ 2,089,921 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES | SCHEDULE OF PREPAID EXPENSES September 30, 2023 (unaudited) December 31, Prepaid expenses $ 1,800,826 $ 431,935 Advances to Suppliers 27,039 180,024 Total $ 1,827,865 $ 611,959 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventory consists of the following: SCHEDULE OF INVENTORY September 30, 2023 (unaudited) December 31, Raw materials $ 202,381 $ 1,533,784 Work in progress 1,245,274 1,135,852 Product 30,614 - Stored item 9,224 17,456 Write-off of inventory (1,487,493 ) - Total $ - $ 2,687,092 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Nine months ended September 30, (unaudited) 2023 2022 Revenue from sales of Computing Equipment $ - $ 499,758 Revenue from Computing Power Sharing services 138,508 1,077,061 Revenue from Project Management for Computing Share 6,153 564,052 Consulting service 350,000 - Total Revenue $ 494,661 $ 2,140,871 2023 2022 Three months ended September 30, (unaudited) 2023 2022 Revenue from Computing Power Sharing services $ 36,908 $ 206,753 Total Revenue $ 36,908 $ 206,753 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2023 (unaudited) December 31, 2022 Building $ 13,315 $ 233,869 Accessory equipment 41,107 211,879 Structures 5,245 47,568 Vehicles 3,980 4,512 Tools, furniture and fixtures 457,701 1,751,969 Lease assets 164,836 186,871 Property and equipment, gross 164,836 186,871 Accumulated depreciation (686,184 ) (534,426 ) Impairment - (511,695 ) Property and equipment, net $ - $ 1,390,547 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | The components of intangible assets as of September 30, 2023 and December 31, 2022 are as follows: SCHEDULE OF INTANGIBLE ASSETS September 30, 2023 (unaudited) December 31, 2022 Software $ 662,075 $ 706,320 Design right 101,578 111,334 Patent right 22,842 - Intangible assets, gross 22,842 - Accumulated amortization (217,828 ) (191,813 ) Impairment (568,667 ) (475,265 ) Intangible assets, net $ - $ 150,576 |
IMPAIRMENT LOSS (Tables)
IMPAIRMENT LOSS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF IMPAIRMENT LOSS | For the nine months ended September 30, 2023, the Company recognized impairment losses for the following assets: SCHEDULE OF IMPAIRMENT LOSS Type Impairment loss Building $ 199,601 Accessory equipment 146,334 Structures 37,975 Tools, furniture and fixtures 562,650 Operating Lease right-of-use assets 472,414 Software 71,095 Suspense payments 54,370 Design right 34,132 Patent right 21,414 Total $ 1,599,985 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
SCHEDULE OF LEASE COSTS | The components of lease costs are as follows: SCHEDULE OF LEASE COSTS 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Short-term lease costs $ 38,318 $ 686 Finance lease costs 46,305 67,941 Operating lease costs 173,026 99,635 Total lease costs $ 257,649 $ 168,262 |
SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES | As of September 30, 2023, the future maturity of lease liabilities is as follows: SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES Year ending December 31, Finance Operating 2023 (nine months) $ 68,778 $ 120,549 2024 44,488 202,050 2025 9,135 138,568 2026 9,135 - Thereafter 11,419 - Total lease payments 142,955 461,167 Less: imputed interest (5,135 ) (4,434 ) Total lease liabilities 137,820 456,733 Less: current portion (82,203 ) (220,602 ) Non-current lease liabilities $ 55,617 $ 236,131 |
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE | The following table presents supplemental information related to the Company’s leases: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 154,159 $ 237,367 Financing cash flows from finance lease $ 40,709 $ 69,288 Weighted average remaining lease term (years) Finance leases 1.1 1.1 Operating leases 0.85 1.9 Weighted-average discount rate: (per annum) Finance leases 2.66 % 1.71 % Operating leases 0.94 0.94 |
LONG-TERM DEBTS (Tables)
LONG-TERM DEBTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS | The Company’s long-term loans borrowed from banks and other financial institutions, which consist of the following: SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Name of Lender Original Loan Annual Balance as of (unaudited) Balance as of Mizuho Bank, Ltd. 40,000,000 1/22/2021 1/22/2028 0.00 % $ 267,684 $ 303,467 Mizuho Bank, Ltd. 60,000,000 1/22/2021 1/22/2028 0.00 % 401,526 455,201 Mizuho Bank, Ltd. 50,000,000 1/22/2021 1/22/2028 1.70 % 334,605 379,334 Japan Finance Corporation 50,000,000 12/29/2020 12/31/2027 1.11 % 334,605 279,190 Japan Finance Corporation 226,600,000 12/29/2020 1/31/2026 0.50 % 1,564,611 1,896,669 Aggregate outstanding principal balances 2,903,031 3,313,861 Less: current portion (160,811 ) (54,624 ) Non-current portion $ 2,742,220 $ 3,259,237 |
CONVERTIBLE PROMISSORY NOTES,_2
CONVERTIBLE PROMISSORY NOTES, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT NOTES | The notes consist of the following components as of September 30, 2023: SCHEDULE OF DEBT NOTES Principal $ 4,200,000 Debt discount (4,178,395 ) Interest expense 975,499 Net Carrying Balance at September 30, 2023 $ 997,104 |
SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES | As of the period ended September 30, 2023, debt discount of the convertible notes consisted of following: SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES Start Date End Date Debt Discount At Debt Issuance Amortization Debt Discount As April 12, 2023 April 12, 2025 $ 2,520,000 $ 630,000 $ 1,890,000 May 23, 2023 May 23, 2025 1,658,395 345,499 1,312,896 Total $ 4,178,395 $ 975,499 $ 3,202,896 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liability | |
SCHEDULE OF DERIVATIVE LIABILITY | SCHEDULE OF DERIVATIVE LIABILITY Volatility 124 % Risk-free rate 5.182 5.230 % Stock price $ 0.12 Dividend Yield - Expected life 1.53 – 1.65 years |
SCHEDULE OF FAIR VALUE OF THE DERIVATIVE | Fair value of the derivative is summarized as below: SCHEDULE OF FAIR VALUE OF THE DERIVATIVE Derivative Liability Balance at January 1, 2023 $ - Additions 2,052,314 Change in fair value (470,735 ) Ending Balance, September 30, 2023 $ 1,581,579 |
WARRANT LIABILITY (Tables)
WARRANT LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Warrant Liability | |
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS | The following table provides a reconciliation of the warrants measured at fair value using Level 1 inputs: SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS Public warrants Balance at January 1, 2023 $ - Additions - Transfer from Level 2 603,750 Change in fair value (362,250 ) Ending Balance, September 30, 2023 $ 241,500 |
SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS | The Black-Scholes model with the following assumptions inputs: SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS Volatility 124.00 % Risk-free rate 5.18 % Stock price 0.12 Expected life 4.35 4.65 |
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS | The following table provides a reconciliation of the warrants measured at fair value using Level 2 inputs: SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS Public warrants Placement warrants Debt warrants Balance at January 1, 2023 $ - - - Additions 603,750 39,463 1,812,253 Transfer to Level 1 (603,750 ) - - Change in fair value - (23,310 ) (1,517,874 ) Ending Balance, September 30, 2023 $ - 16,153 294,379 Number of Shares Weighted Average Exercise Price Weighted Average Remaining contractual life Outstanding at December 31, 2022 - $ - - Granted 13,109,969 8.31 4.68 Outstanding at September 30, 2023 13,109,969 $ 8.31 4.68 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF COMPANY' S INCOME TAX EXPENSES | For the nine months ended September 30, 2023 and 2022, the Company’s income tax expenses are as follows: SCHEDULE OF COMPANY' S INCOME TAX EXPENSES 2023 2022 For the Nine months Ended September 30, 2023 2022 Current $ - $ 19,661 Deferred - - Total $ - $ 19,661 |
SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE | A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the nine months ended September 30, 2023 and 2022 is as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE 2023 2022 For the Nine months Ended September 30, 2023 2022 Japanese statutory tax rate 34.59 % 34.59 % Change in valuation allowance (34.59 )% (34.76 )% Effective tax rate (0.00 )% (0.17 )% |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE | The computation of basic and diluted earnings (loss) per share for the nine months and three months ended September 30, 2023 and 2022 is as follows: SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE 2023 2022 For the Nine months Ended September 30, (unaudited) 2023 2022 Loss per share – basic Numerator: Net loss from continuing operations $ (22,233,949 ) $ (10,273,946 ) Net loss from discontinued operation (853,223 ) (1,025,120 ) Denominator: Weighted average number of common shares outstanding used in calculating basic loss per share 57,515,446 43,917,191 Denominator used for loss per share Loss per share from continuing operations (basic) $ (0.38 ) $ (0.23 ) Loss per share from continuing operations (anti-diluted) $ (0.38 ) $ (0.23 ) Loss per share from discontinued operation (basic) $ (0.01 ) $ (0.02 ) Loss per share from discontinued operation (anti-diluted) $ (0.01 ) $ (0.02 ) 2023 2022 For the Three months Ended September 30, (unaudited) 2023 2022 Loss per share – basic Numerator: Net loss from continuing operations $ (3,857,583 ) $ (3,725,529 ) Net loss from discontinued operation (6,724 ) (345,601 ) Denominator: Weighted average number of common shares outstanding used in calculating basic loss per share 62,547,298 46,291,743 Denominator used for loss per share Loss per share from continuing operations (basic) $ (0.06 ) $ (0.08 ) Loss per share from continuing operations (anti-diluted) $ (0.06 ) $ (0.08 ) Loss per share from discontinued operation (basic) $ (0.00 ) $ (0.01 ) Loss per share from discontinued operation (anti-diluted) $ (0.00 ) $ (0.01 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK BASED COMPENSATION | SCHEDULE OF STOCK BASED COMPENSATION Grant date July 27, 2022 Number of shares at grant date 4,142,277 Outstanding at January 31, 2023 4,142,277 Forfeiture (2,969,049 ) Outstanding at September 30, 2023 1,173,228 Exercise price $ 0.00015 Consideration paid to the Company at the grant date $ 132 |
SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION | SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION Exercise period 5 Share price on the issuance date $ 0.0001 Volatility 64.22 % Expected dividend rate 0 % Risk-free interest rate 2.88 % |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT | The estimated fair value of the Company’s financial instrument at September 30, 2023 and December 31, 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts. SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT Amount at Fair Value Level 1 Level 2 Level 3 September 30, 2023 Liabilities Public Warrants $ 241,500 $ 241,500 $ - $ - Placement Warrants $ 16,153 $ - $ 16,153 $ - Debt Warrants $ 294,379 $ - $ 294,379 $ - Subtotal: Warrant liabilities $ 552,032 $ 241,500 $ 310,532 - Derivative Liability $ 1,581,579 $ - $ 1,581,579 $ - Liabilities fair value $ 1,581,579 $ - $ 1,581,579 $ - |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF DISCONTINUED OPERATIONS | SCHEDULE OF DISCONTINUED OPERATIONS 2023 2022 2023 2022 For the nine months ended September 30, For the three months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Revenues $ 928,388 $ 1,213,695 $ 3,183 $ 356,392 Cost of revenues 745,007 971,657 9,045 246,095 Gross profit 183,381 242,039 (5,862 ) 110,298 Operating expenses: Selling expenses 4,099 5,986 - 82 General and administrative expenses 752,243 884,381 36,696 308,246 Research and development expenses 167,053 402,296 - 172,560 Total operating expenses 923,395 1,292,663 36,696 480,888 Loss from operations (740,014 ) (1,050,624 ) (42,558 ) (370,590 ) Other income (expenses): Interest expenses, net (1,164 ) - - - Loss on disposal of fixed assets (9,761 ) (2,894 ) - (2,718 ) Impairment of fixed asset (229,600 ) - - - Other income, net 127,316 28,398 35,834 27,707 Total other income (expenses) (113,209 ) 25,504 35,834 24,989 Loss before income tax provision $ (853,223 ) $ (1,025,120 ) $ (6,724 ) $ (345,601 ) |
SCHEDULE OF BUSINESS COMBINATIO
SCHEDULE OF BUSINESS COMBINATION (Details) - Pono Capital Corp [Member] | Feb. 03, 2023 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Cash—Pono trust and working capital cash | $ 1,802,594 |
Cash—Subscription agreement made immediately before the closing | 5,000,000 |
Less: transaction costs and advisory fees | 5,206,763 |
Total funds from the Business Combination | $ 1,595,831 |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | 3 Months Ended | |||
Feb. 03, 2023 | Feb. 02, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Purchase price | $ 1,156,119 | |||
Pono Capital Corp [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Net cash | $ 1,595,831 | |||
Prepaid expenses | 25,750 | |||
Other payable | 1,432,603 | |||
Notes payable | 1,580,000 | $ 1,480,000 | ||
Warrant liabilities | 643,213 | |||
Total funds from business ccmbination | $ 1,595,831 | |||
Accrued expenses | $ 110,157 | |||
Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Number of purchase of shares | 5,000,000 | |||
Purchase price | $ (5) | |||
Subscription Agreement [Member] | Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Number of purchase of shares | 3,196,311 | |||
Subscription Agreement [Member] | Public Shares [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Number of purchase of shares | 8,797,687 | 5,000,000 | ||
Purchase price | $ 5,000,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Operating losses | $ 3,857,583 | $ 3,725,529 | $ 22,233,949 | $ 10,273,946 | |
Accumulated deficit | $ 69,560,075 | $ 69,560,075 | $ 46,472,904 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIVES OF FIXED ASSETS (Details) | Sep. 30, 2023 |
Building and Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 8 years |
Building and Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 38 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Software Development [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Design Right [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Patents [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 8 years |
SCHEDULE OF SUBSIDIARIES (Detai
SCHEDULE OF SUBSIDIARIES (Details) - ASC TECH Agent [Member] | 9 Months Ended | ||||
Sep. 30, 2023 | Jul. 19, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Name of Subsidiary | ASC TECH Agent | ||||
Place of Organization | Japan | ||||
Percentage of Effective Ownership | 0% | 48.81% | 48.81% | 48.81% | 48.81% |
SCHEDULE OF FOREIGN EXCHANGE RA
SCHEDULE OF FOREIGN EXCHANGE RATES (Details) | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Current JPY: US$1 Exchange Rate [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Foreign exchange rate | 149.43 | 131.81 | 144.71 |
Average JPY: US$1 Exchange Rate [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Foreign exchange rate | 138.14 | 131.46 | 128.26 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||
Inventory write-downs | $ 1,487,493 | ||
Advertising expenses | $ 63,525 | $ 78,952 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer A [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 27.70% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer C [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 14.80% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer D [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 12% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer A [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 19.60% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer B [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 70.20% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer E [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 15.10% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer F [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 16.20% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer G [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 12.80% | ||
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor A [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 39.40% | ||
Supplier Concentration Risk [Member] | Purchase [Member] | Vendor B [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 16.40% | 30.80% | |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Vendor A [Member] | |||
Product Information [Line Items] | |||
Concentration of credit risk | 20.10% | 31.20% |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 186,745 | $ 980,688 |
Less: allowance for doubtful accounts | (6,552) | |
Accounts receivable, net | $ 180,193 | $ 980,688 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Credit Loss [Abstract] | ||
Beginning balance | $ (739) | |
Change during the period | 6,552 | 739 |
Ending balance | $ 6,552 |
SCHEDULE OF OTHER RECEIVABLE (D
SCHEDULE OF OTHER RECEIVABLE (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Credit Loss [Abstract] | ||
Beginning balance | $ 2,089,921 | $ 1,034,690 |
Change during the period | (1,296,676) | 1,189,020 |
Foreign currency translation adjustment | (14,799) | (133,789) |
Ending balance | $ 778,446 | $ 2,089,921 |
SCHEDULE OF PREPAID EXPENSES (D
SCHEDULE OF PREPAID EXPENSES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 1,800,826 | $ 431,935 |
Advances to Suppliers | 27,039 | 180,024 |
Total | $ 1,827,865 | $ 611,959 |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) | Sep. 30, 2023 USD ($) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid stock-based compensation | $ 1,636,703 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 202,381 | $ 1,533,784 |
Work in progress | 1,245,274 | 1,135,852 |
Product | 30,614 | |
Stored item | 9,224 | 17,456 |
Write-off of inventory | (1,487,493) | |
Total | $ 2,687,092 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | ||
Inventory write-downs | $ 1,487,493 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 36,908 | $ 206,753 | $ 494,661 | $ 2,140,871 |
Sales Of Computing Equipment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 499,758 | |||
Computing Power Sharing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 36,908 | $ 206,753 | 138,508 | 1,077,061 |
Project Management For Computing Share [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,153 | 564,052 | ||
Consulting Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 350,000 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract liability | $ 708,810 | $ 1,104,582 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) | Aug. 31, 2023 USD ($) | Jul. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | May 10, 2023 USD ($) | Apr. 10, 2023 USD ($) | Jan. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 JPY (¥) | Dec. 31, 2022 USD ($) |
Principal sum | $ 4,200,000 | ||||||||
Notes payable | 1,480,000 | ||||||||
Interest expenses | $ 110,156 | ||||||||
Due Twelve Months [Member] | |||||||||
Interest payable | 8% | 8% | |||||||
Short term loans, interest payable | $ 133,842 | ||||||||
Due Seventy Days [Member] | |||||||||
Interest payable | 8% | 8% | |||||||
Short term loans, interest payable | $ 200,762 | ||||||||
Nonrelated Party [Member] | |||||||||
Short term loans | $ 334,604 | ¥ 50,000,000 | |||||||
Third Party Lender [Member] | |||||||||
Principal sum | $ 450,000 | ||||||||
Interest payable | 24% | ||||||||
Debt instrument description | 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. | ||||||||
Repayments of debt | $ 50,000 | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | ||||
Mahana Equity L L C [Member] | |||||||||
Principal sum | $ 1,130,000 | ||||||||
Interest payable | 24% | ||||||||
Debt instrument description | 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. | ||||||||
Repayments of debt | $ 230,000 | $ 300,000 | $ 300,000 | $ 300,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 9 Months Ended | |||||||
Feb. 27, 2023 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2023 ¥ / shares | Jul. 19, 2023 | Feb. 27, 2023 JPY (¥) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Loans from a former director | $ 3,488 | |||||||
ASC TECH Agent [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity interest | 0% | 48.81% | 48.81% | 48.81% | 48.81% | |||
Loan Agreement [Member] | Chief Executive Officer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans from a former director | $ 1,384,370 | ¥ 200,000,000 | ||||||
Conversion rate | (per share) | $ 0.0066921 | ¥ 1 | ||||||
Maturity date | Apr. 15, 2023 | |||||||
Interest rate | 2.475% | 2.475% | ||||||
Accrued expense | $ 46,580 | |||||||
Derecognized debt | $ 227,281 | |||||||
Recognized loss | 666,641 | |||||||
Loan Agreement [Member] | Chief Executive Officer [Member] | Extended Maturity [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maturity date | Jun. 30, 2023 | |||||||
Representative Director of A.L.I. [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Transaction amount | 129,598 | |||||||
Related Party [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Short-term loans payable, related party | 441,929 | |||||||
Related Party [Member] | Mr.Sidhu [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans payable | 425,464 | |||||||
Related Party [Member] | Mr.Katano [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans payable | $ 203,439 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | $ (686,184) | $ (534,426) |
Impairment | (511,695) | |
Property and equipment, net | 1,390,547 | |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,315 | 233,869 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 41,107 | 211,879 |
Structures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,245 | 47,568 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,980 | 4,512 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 457,701 | 1,751,969 |
Lease Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 164,836 | $ 186,871 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 182,689 | $ 186,337 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Accumulated amortization | $ (217,828) | $ (191,813) |
Impairment | (568,667) | (475,265) |
Intangible assets, net | 150,576 | |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, gross | 662,075 | 706,320 |
Design Right [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, gross | 101,578 | 111,334 |
Patents [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, gross | $ 22,842 |
SCHEDULE OF IMPAIRMENT LOSS (De
SCHEDULE OF IMPAIRMENT LOSS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Total | $ 34,132 | $ 1,599,985 | ||
Building [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 199,601 | |||
Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 146,334 | |||
Structures [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 37,975 | |||
Furniture and Fixtures [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 562,650 | |||
Operating Lease Right-of-Use Assets [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 472,414 | |||
Software Development [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 71,095 | |||
Suspense Payments [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 54,370 | |||
Design Right [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 34,132 | |||
Patents [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | $ 21,414 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 22,934 | $ 31,989 |
SCHEDULE OF LEASE COSTS (Detail
SCHEDULE OF LEASE COSTS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Short-term lease costs | $ 38,318 | $ 686 |
Finance lease costs | 46,305 | 67,941 |
Operating lease costs | 173,026 | 99,635 |
Total lease costs | $ 257,649 | $ 168,262 |
SCHEDULE OF FUTURE MATURITY OF
SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Finance lease, 2023 | $ 68,778 | |
Operating lease, 2023 | 120,549 | |
Finance lease, 2024 | 44,488 | |
Operating lease, 2024 | 202,050 | |
Finance lease, 2025 | 9,135 | |
Operating lease, 2025 | 138,568 | |
Finance lease, 2026 | 9,135 | |
Operating lease, 2026 | ||
Finance lease, Thereafter | 11,419 | |
Operating lease, Thereafter | ||
Finance lease, Total lease payments | 142,955 | |
Operating lease, Total lease payments | 461,167 | |
Finance lease, Less: imputed interest | (5,135) | |
Operating lease, Less: imputed interest | (4,434) | |
Finance lease, Total lease liabilities | 137,820 | |
Operating lease, Total lease liabilities | 456,733 | |
Finance lease, Less: current portion | (82,203) | $ (102,114) |
Operating lease, Less: current portion | (220,602) | (293,710) |
Finance lease, Non-current lease liabilities | 55,617 | 87,056 |
Operating lease, Non-current lease liabilities | $ 236,131 | $ 397,720 |
SCHEDULE OF SUPPLEMENTAL INFORM
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 154,159 | $ 237,367 |
Financing cash flows from finance lease | $ 40,709 | $ 69,288 |
Weighted average remaining lease term (years), Finance leases | 1 year 1 month 6 days | 1 year 1 month 6 days |
Weighted average remaining lease term (years), Operating leases | 10 months 6 days | 1 year 10 months 24 days |
Weighted-average discount rate: (per annum), Finance leases | 2.66% | 1.71% |
Weighted-average discount rate: (per annum), Operating leases | 0.94% | 0.94% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Security deposits | $ 129,598 | $ 174,111 |
SCHEDULE OF LONG-TERM LOANS BOR
SCHEDULE OF LONG-TERM LOANS BORROWED FROM BANKS AND OTHER FINANCIAL INSTITUTIONS (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 JPY (¥) | |
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | $ 4,200,000 | ||
Aggregate outstanding principal balances | 2,903,031 | $ 3,313,861 | |
Less: current portion | (160,811) | (54,624) | |
Non-current portion | $ 2,742,220 | 3,259,237 | |
Mizuho Bank Ltd [Member] | Debt One [Member] | |||
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | ¥ | ¥ 40,000,000 | ||
Loan Duration, start date | Jan. 22, 2021 | ||
Loan Duration, end date | Jan. 22, 2028 | ||
Annual Interest Rate | 0% | 0% | |
Aggregate outstanding principal balances | $ 267,684 | 303,467 | |
Mizuho Bank Ltd [Member] | Debt Two [Member] | |||
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | ¥ | ¥ 60,000,000 | ||
Loan Duration, start date | Jan. 22, 2021 | ||
Loan Duration, end date | Jan. 22, 2028 | ||
Annual Interest Rate | 0% | 0% | |
Aggregate outstanding principal balances | $ 401,526 | 455,201 | |
Mizuho Bank Ltd [Member] | Debt Three [Member] | |||
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | ¥ | ¥ 50,000,000 | ||
Loan Duration, start date | Jan. 22, 2021 | ||
Loan Duration, end date | Jan. 22, 2028 | ||
Annual Interest Rate | 1.70% | 1.70% | |
Aggregate outstanding principal balances | $ 334,605 | 379,334 | |
Japan Finance Corporation [Member] | Debt One [Member] | |||
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | ¥ | ¥ 50,000,000 | ||
Loan Duration, start date | Dec. 29, 2020 | ||
Loan Duration, end date | Dec. 31, 2027 | ||
Annual Interest Rate | 1.11% | 1.11% | |
Aggregate outstanding principal balances | $ 334,605 | 279,190 | |
Japan Finance Corporation [Member] | Debt Two [Member] | |||
Line of Credit Facility [Line Items] | |||
Original Amount Borrowed | ¥ | ¥ 226,600,000 | ||
Loan Duration, start date | Dec. 29, 2020 | ||
Loan Duration, end date | Jan. 31, 2026 | ||
Annual Interest Rate | 0.50% | 0.50% | |
Aggregate outstanding principal balances | $ 1,564,611 | $ 1,896,669 |
LONG-TERM DEBTS (Details Narrat
LONG-TERM DEBTS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 14,093 | $ 19,728 |
SCHEDULE OF DEBT NOTES (Details
SCHEDULE OF DEBT NOTES (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Debt Disclosure [Abstract] | |
Principal | $ 4,200,000 |
Debt discount | (4,178,395) |
Interest expense | 975,499 |
Net carrying balance | $ 997,104 |
SCHEDULE OF DEBT DISCOUNT OF TH
SCHEDULE OF DEBT DISCOUNT OF THE CONVERTIBLE NOTES (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Short-Term Debt [Line Items] | |
Amortization | $ 4,178,395 |
Convertible Debt [Member] | |
Short-Term Debt [Line Items] | |
Debt Discount | 4,178,395 |
Amortization | 975,499 |
Debt Discount | $ 3,202,896 |
Convertible Note One [Member] | |
Short-Term Debt [Line Items] | |
Start Date | Apr. 12, 2023 |
End Date | Apr. 12, 2025 |
Debt Discount | $ 2,520,000 |
Amortization | 630,000 |
Debt Discount | $ 1,890,000 |
Convertible Note Two [Member] | |
Short-Term Debt [Line Items] | |
Start Date | May 23, 2023 |
End Date | May 23, 2025 |
Debt Discount | $ 1,658,395 |
Amortization | 345,499 |
Debt Discount | $ 1,312,896 |
CONVERTIBLE PROMISSORY NOTES,_3
CONVERTIBLE PROMISSORY NOTES, NET (Details Narrative) | 3 Months Ended | ||||
May 23, 2023 USD ($) Integer $ / shares shares | Apr. 12, 2023 USD ($) Integer $ / shares shares | Sep. 30, 2022 USD ($) shares | Jun. 30, 2022 USD ($) shares | Sep. 30, 2023 USD ($) | |
Short-Term Debt [Line Items] | |||||
Principal sum | $ 4,200,000 | ||||
Stock issued during period value new issues | $ 5,683,987 | $ 2,715,196 | |||
Debt instrument convertible terms of conversion feature | The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note; provided that in no event shall the conversion price be less than $0.18176 (the “Floor Price”) | The conversion price is the lesser of: (i) $0.90; or (ii) 90% of the lowest single VWAP during the 20 Trading Days prior to conversion of the note; provided that in no event shall the conversion price be less than $0.18176 (the “Floor Price”) | |||
Common Stock [Member] | |||||
Short-Term Debt [Line Items] | |||||
Stock issued during period shares new issues | shares | 1,852,197 | 797,474 | |||
Stock issued during period value new issues | $ 2 | $ 1 | |||
Common Stock [Member] | Convertible Promissory Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Principal sum | $ 1,133,395 | $ 1,642,696 | |||
Stock issued during period shares new issues | shares | 1,568,542 | 2,532,678 | |||
Stock issued during period value new issues | $ 1,680,000 | $ 2,520,000 | |||
Debt instrument maturity date | May 23, 2025 | Apr. 12, 2025 | |||
Share issued price per share | $ / shares | $ 0.7316 | $ 0.8926 | |||
Conversion price | $ / shares | $ 0.90 | $ 0.90 | |||
Trading days | Integer | 20 | 20 | |||
Floor price | $ / shares | $ 0.18176 | $ 0.18176 | |||
Debt instrument unamortized discount | $ 280,000 | $ 420,000 | |||
Common Stock [Member] | Convertible Promissory Note Payable [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt issuance cost | $ 245,000 | 457,304 | |||
Securities Purchase Agreement [Member] | |||||
Short-Term Debt [Line Items] | |||||
Principal sum | 6,000,000 | ||||
Debt issuance cost | 5,000,000 | ||||
Securities Purchase Agreement [Member] | Warrant [Member] | |||||
Short-Term Debt [Line Items] | |||||
Proceeds from issuance of warrants | $ 5,601,613 | ||||
Securities Purchase Agreement [Member] | Common Stock [Member] | |||||
Short-Term Debt [Line Items] | |||||
Stock issued during period shares new issues | shares | 5,601,613 |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITY (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares | |
Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Dividend yield | 124 |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Dividend yield | 5.182 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Dividend yield | 5.230 |
Measurement Input, Share Price [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Dividend yield | 0.12 |
Measurement Input, Expected Dividend Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Dividend yield | |
Measurement Input, Expected Term [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
[custom:DerivativeLiabilityMeasurementInputExpectedTerm] | 1 year 6 months 10 days |
Measurement Input, Expected Term [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
[custom:DerivativeLiabilityMeasurementInputExpectedTerm] | 1 year 7 months 24 days |
SCHEDULE OF FAIR VALUE OF THE D
SCHEDULE OF FAIR VALUE OF THE DERIVATIVE (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Derivative Liability | |
Beginning balance | |
Additions | 2,052,314 |
Change in fair value | (470,735) |
Ending balance | $ 1,581,579 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Derivative Liability | |||||
Derivative liability | $ 1,581,579 | $ 1,581,579 | |||
Derivative gain | 470,735 | ||||
Derivative expense | $ 1,088,477 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 1 INPUTS (Details) - Public Warrants [Member] - Fair Value, Inputs, Level 1 [Member] | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Class of Warrant or Right [Line Items] | |
Beginning balance | |
Additions | |
Transfer from level 2 | 603,750 |
Change in fair value | (362,250) |
Ending balance | $ 241,500 |
SCHEDULE OF BLACK-SCHOLES MODEL
SCHEDULE OF BLACK-SCHOLES MODEL ASSUMPTIONS INPUTS (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares | |
Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 124 |
Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 5.18 |
Measurement Input, Share Price [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.12 |
Measurement Input, Expected Term [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term | 4 years 4 months 6 days |
Measurement Input, Expected Term [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term | 4 years 7 months 24 days |
SCHEDULE OF RECONCILIATION OF_2
SCHEDULE OF RECONCILIATION OF THE WARRANTS MEASURED AT FAIR VALUE USING LEVEL 2 INPUTS (Details) - USD ($) | 9 Months Ended | |
Jul. 27, 2022 | Sep. 30, 2023 | |
Class of Warrant or Right [Line Items] | ||
Number of shares, beginning balance | 4,142,277 | |
Weighted average exercise price, granted | $ 0.00015 | |
Weighted average remaining contractual life, granted | 4 years 8 months 4 days | |
Number of shares, ending balance | 1,173,228 | |
Weighted average remaining contractual life | 4 years 8 months 4 days | |
Fair Value, Inputs, Level 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of shares, granted | 13,109,969 | |
Weighted average exercise price, granted | $ 8.31 | |
Number of shares, ending balance | 13,109,969 | |
Weighted average exercise price, ending balance | $ 8.31 | |
Public Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Beginning balance | ||
Additions | 603,750 | |
Transfer to level 1 | (603,750) | |
Change in fair value | ||
Ending balance | ||
Number of shares, beginning balance | ||
Weighted average exercise price, beginning balance | ||
Placement Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Beginning balance | ||
Additions | 39,463 | |
Transfer to level 1 | ||
Change in fair value | (23,310) | |
Ending balance | 16,153 | |
Debt Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Beginning balance | ||
Additions | 1,812,253 | |
Transfer to level 1 | ||
Change in fair value | (1,517,874) | |
Ending balance | $ 294,379 |
WARRANT LIABILITY (Details Narr
WARRANT LIABILITY (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Warrant Liability | ||
Warrant liability non current | $ 552,032 |
SCHEDULE OF COMPANY' S INCOME T
SCHEDULE OF COMPANY' S INCOME TAX EXPENSES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 19,661 | |||
Deferred | ||||
Total | $ 19,661 | $ 19,661 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATES OF OPERATIONS TO THE JAPANESE STATUTORY TAX RATE (Details) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Japanese statutory tax rate | 34.59% | 34.59% |
Change in valuation allowance | (34.59%) | (34.76%) |
Effective tax rate | (0.00%) | (0.17%) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21% | |
Effective income tax percentage | 34.59% | 34.59% |
EQUITY METHOD (Details Narrativ
EQUITY METHOD (Details Narrative) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Jul. 19, 2023 | Dec. 31, 2022 | Sep. 30, 2021 | |
Equity earnings | $ 11,640 | $ 4,126 | |||
Loss on sale of investment securities | $ 666,641 | ||||
ASC TECH Agent [Member] | |||||
Equity interest | 0% | 48.81% | 48.81% | 48.81% | 48.81% |
SHAREHOLDERS_ DEFICIT (Details
SHAREHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Feb. 03, 2023 | Feb. 02, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | ||||||
Common stock, par value | $ 0.000001 | $ 0.000001 | $ 0.000001 | ||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||
Preferred stock, par value | $ 0.000001 | $ 0.000001 | $ 0.000001 | ||||||
Shares issued to consultants | 1,279,069 | ||||||||
Number of shares issued, value | $ 5,683,987 | $ 2,715,196 | |||||||
Prepaid expenses | $ 1,827,865 | $ 1,827,865 | $ 611,959 | ||||||
Common Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Public Shares increased | 5,000,000 | ||||||||
Number of shares issued | 1,852,197 | 797,474 | |||||||
Shares issued to consultants | 1,279,069 | 5,269,291 | |||||||
Number of shares issued, value | $ 2 | $ 1 | |||||||
Additional Paid-in Capital [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Number of shares issued, value | $ 5,683,985 | $ 2,715,195 | |||||||
Outstanding shares increased | 15,759,150 | ||||||||
Adjustments to additional paid in capital, stock issued, issuance costs | $ 15 | ||||||||
Additional paid-in capital | $ 4,793,233 | ||||||||
Shares, issued | 62,688,215 | 62,688,215 | |||||||
Subscription Agreement [Member] | Public Shares [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Public Shares increased | 8,797,687 | 5,000,000 | |||||||
Subscription Agreement [Member] | Common Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Public Shares increased | 3,196,311 | ||||||||
Number of shares issued | 413,103 | ||||||||
Shares issued to consultants | 5,269,291 | ||||||||
Number of shares issued, value | $ 6,827,477 | ||||||||
Prepaid expenses | $ 1,636,703 | $ 1,636,703 |
SCHEDULE OF COMPUTATION OF BASI
SCHEDULE OF COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Loss per share – basic | |||||
Net loss from continuing operations | $ (3,857,583) | $ (3,725,529) | $ (22,233,949) | $ (10,273,946) | |
Net loss from discontinued operation | $ (6,724) | $ (345,601) | $ (853,223) | $ (1,025,120) | |
Weighted average number of common shares outstanding used in calculating basic loss per share | [1] | 62,547,298 | 46,291,743 | 57,515,446 | 43,917,191 |
Loss per share from continuing operations (basic) | $ (0.06) | $ (0.08) | $ (0.38) | $ (0.23) | |
Loss per share from continuing operations (anti-diluted) | (0.06) | (0.08) | (0.38) | (0.23) | |
Loss per share from discontinued operation (basic) | 0 | (0.01) | (0.01) | (0.02) | |
Loss per share from discontinued operation (anti-diluted) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | |
[1]Retrospectively restated for effect of the business combination on February 6, 2023. |
SCHEDULE OF STOCK BASED COMPENS
SCHEDULE OF STOCK BASED COMPENSATION (Details) - USD ($) | 9 Months Ended | |
Jul. 27, 2022 | Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of shares at grant date | 4,142,277 | |
Number of shares, beginning balance | 4,142,277 | |
Forfeiture | (2,969,049) | |
Number of shares, ending balance | 1,173,228 | |
Exercise price | $ 0.00015 | |
Consideration paid to the Company at the grant date | $ 132 |
SCHEDULE OF FAIR VALUE OF THE S
SCHEDULE OF FAIR VALUE OF THE STOCK BASED COMPENSATION (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Exercise period | 5 years |
Share price on the issuance date | $ 0.0001 |
Volatility | 64.22% |
Expected dividend rate | 0% |
Risk-free interest rate | 2.88% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - $ / shares | 9 Months Ended | |
Jul. 27, 2022 | Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Issuance of stock option exercised | 2,648,000 | |
Common stock exercise price | $ 0.00015 | |
Weighted average contractual term | 9 years 29 days | |
Fair value of stock based compensation | $ 0.00005 |
SCHEDULE OF ESTIMATED FAIR VALU
SCHEDULE OF ESTIMATED FAIR VALUE OF THE FINANCIAL INSTRUMENT (Details) | Sep. 30, 2023 USD ($) |
Public Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | $ 241,500 |
Public Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 241,500 |
Public Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Public Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Placement Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 16,153 |
Placement Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Placement Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 16,153 |
Placement Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Debt Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 294,379 |
Debt Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Debt Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 294,379 |
Debt Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Subtotal: Warrant Liabilities [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 552,032 |
Subtotal: Warrant Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 241,500 |
Subtotal: Warrant Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 310,532 |
Subtotal: Warrant Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Derivative Liability [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 1,581,579 |
Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | |
Derivative Liability [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value | 1,581,579 |
Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities fair value |
SCHEDULE OF DISCONTINUED OPERAT
SCHEDULE OF DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | $ 3,183 | $ 356,392 | $ 928,388 | $ 1,213,695 |
Cost of revenues | 9,045 | 246,095 | 745,007 | 971,657 |
Gross profit | (5,862) | 110,298 | 183,381 | 242,039 |
Operating expenses: | ||||
Total operating expenses | 36,696 | 480,888 | 923,395 | 1,292,663 |
Loss from operations | (42,558) | (370,590) | (740,014) | (1,050,624) |
Other income (expenses): | ||||
Interest expenses, net | (1,164) | |||
Loss on disposal of fixed assets | (2,718) | (9,761) | (2,894) | |
Impairment of fixed asset | (229,600) | |||
Other income, net | 35,834 | 27,707 | 127,316 | 28,398 |
Total other income (expenses) | 35,834 | 24,989 | (113,209) | 25,504 |
Loss before income tax provision | (6,724) | (345,601) | (853,223) | (1,025,120) |
Selling and Marketing Expense [Member] | ||||
Operating expenses: | ||||
Total operating expenses | 82 | 4,099 | 5,986 | |
General and Administrative Expense [Member] | ||||
Operating expenses: | ||||
Total operating expenses | 36,696 | 308,246 | 752,243 | 884,381 |
Research and Development Expense [Member] | ||||
Operating expenses: | ||||
Total operating expenses | $ 172,560 | $ 167,053 | $ 402,296 |