PONO CAPITAL(PONO) - 2022 Q4 - Annual Report

Merger and Business Combination - The merger between Pono Capital Corp and AERWINS, Inc. was completed on February 3, 2023, resulting in Pono changing its name to AERWINS Technologies Inc.[9] - The Company entered into a Merger Agreement on September 7, 2022, with AERWINS Technologies Inc., which was completed on February 3, 2023, marking a significant business combination[614][615]. - The Merger Consideration for AERWINS stockholders was set at $600 million, subject to adjustments based on net indebtedness and working capital at closing[616]. - Following the Business Combination, public stockholders own approximately 0.3% of AERWINS common stock, while former security holders own about 93.0%[736]. - The Company approved the issuance of up to 60,000,000 newly issued shares of common stock in the Business Combination[712]. - AERWINS Technologies Inc. issued 469,291 shares of common stock as Merger Consideration to a warrant holder, subject to a post-Closing true-up[734]. Financial Performance - The company reported a net income of $2.73 million for the year ended December 31, 2022, compared to a net income of $4.59 million for the period from February 12, 2021, through December 31, 2021[584]. - The loss from operations for the year ended December 31, 2022, was $2.30 million, compared to a loss of $533,877 for the previous period[584]. - The company reported a net income of $2,732,973 for the year ended December 31, 2022, compared to $4,585,547 for the year ended December 31, 2021[593]. - The effective tax rate from continuing operations was 9.6% for the year ended December 31, 2022, compared to 0.0% for the period from inception through December 31, 2021, indicating a shift in tax obligations[634]. - The income tax provision for the year ended December 31, 2022, was $289,122, compared to $0 for the period from February 12, 2021, through December 31, 2021[688]. Assets and Liabilities - Total assets as of December 31, 2022, were $120.82 million, an increase from $117.24 million as of December 31, 2021[582]. - The total current liabilities increased to $1.62 million as of December 31, 2022, from $246,468 as of December 31, 2021[582]. - The company had cash of $193,829 as of December 31, 2022, down from $337,595 as of December 31, 2021[582]. - The total stockholders' deficit decreased to $(5.03) million as of December 31, 2022, from $(7.43) million as of December 31, 2021[582]. - As of December 31, 2022, the redeemable Class A Common Stock amounted to $120,141,615, reflecting a remeasurement increase of $16,815,322 from the previous year[638]. Cash Flows - Cash flows from operating activities resulted in a net cash used of $1,233,766 for the year ended December 31, 2022, compared to $459,012 for the year ended December 31, 2021[593]. - The Company had cash of $193,829 at the end of the period on December 31, 2022, down from $337,595 at the end of the previous year[604]. - The Company generated non-operating income from investment income derived from the proceeds of the Initial Public Offering[597]. Initial Public Offering (IPO) - The total gross proceeds from the Initial Public Offering amounted to $100,000,000, with an additional $15,000,000 from the over-allotment option[598][600]. - The company incurred transaction costs of $6,168,893 related to the Initial Public Offering, including $1,950,000 in underwriting fees[603]. - The Company sold 11,500,000 Units at a purchase price of $10.00 per Unit during the Initial Public Offering, generating gross proceeds of $115,000,000[652]. Corporate Governance and Management - The Company appointed Taiji Ito as the new Chief Executive Officer following Mr. Komatsu's resignation[751]. - AERWINS Technologies Inc. appointed Marehiko Yamada as Chairman, Mike Sayama as Vice-Chair, and Kensuke Okabe as Secretary and CFO on March 22, 2023[753]. - Indemnification agreements were entered into with AERWINS directors to cover certain liabilities and advance expenses[719]. - Non-competition and non-solicitation agreements were established for significant stockholders for a two-year period following the merger[720]. Joint Ventures and Agreements - The Joint Venture Agreement with Vault Investments LLC aims to develop ALI business solutions in the U.A.E. and GCC region, establishing a new joint venture company[737]. - ALI will receive 5% of total sales from the joint venture as a software license fee, while VAULT will receive 5% as consulting fees[743]. - AERWINS Technologies Inc. entered into a Memorandum of Understanding with Outsourcing Inc. for a joint venture, with OSI agreeing to invest up to 300,000,000 yen (approximately $2.3 million USD)[754]. Internal Controls and Compliance - AERWINS Technologies Inc. conducted an evaluation of its disclosure controls and procedures, concluding they were effective at the reasonable assurance level as of December 31, 2022[758]. - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, determining it was effective based on COSO criteria[760]. - There have been no changes in internal control over financial reporting during the quarter ended December 31, 2022, that materially affected the company's internal controls[762].