PONO CAPITAL(US:PONO)2023-11-28 22:27Financial Performance - Total revenue decreased by $1,646,210 or 76.9% to $494,661 for the nine months ended September 30, 2023, compared to $2,140,871 for the same period in 2022, primarily due to a decline in sales from the shared computing business[158]. - Total revenue for the nine months ended September 30, 2023, decreased by $1,646,210 or 76.9% to $494,661 compared to $2,140,871 in 2022[161]. - Total revenue for the three months ended September 30, 2023, decreased by $169,845 or 82.1% to $36,908 compared to $206,753 in 2022, primarily due to a decline in sales from the shared computing business[172]. - Net loss for the nine months ended September 30, 2023, was $(23,087,172), a 102.9% increase from $(11,299,066) in the same period of 2022[157]. - The company reported a net loss of $23,087,172 for the nine months ended September 30, 2023, compared to a net loss of $11,299,066 for the same period in 2022[209]. Expenses - Total cost of revenue decreased by $321,334 or 13.4% to $2,078,125 for the nine months ended September 30, 2023, from $2,399,459 in the same period of 2022, attributed to decreased sales and inventory write-downs[159]. - Gross loss increased by $1,324,876 or 512.4% to $1,583,464 for the nine months ended September 30, 2023, from $258,588 in the same period of 2022, including $1,487,493 of inventory write-down in the current period[160]. - Total operating expenses rose to $18,680,450 for the nine months ended September 30, 2023, an increase of $7,745,411 or 71.9% from $10,772,358 in the same period of 2022[156]. - General and administrative expenses surged to $11,867,931, representing a 175.7% increase from $4,304,138 in the prior year[156]. - General and administrative expenses increased by $7,563,793 or 175.7% to $11,867,931 for the nine months ended September 30, 2023, primarily due to consulting and professional service fees related to the business combination with Pono[164]. - Research and development expenses increased by $359,726 or 3.1% to $6,748,994 for the nine months ended September 30, 2023, compared to $6,389,268 in the same period of 2022[156]. - Research and development expenses rose by $197,045 or 3.1% to $6,748,994 for the nine months ended September 30, 2023, mainly driven by increased raw materials costs for the development of XTURISMO[167]. - Total costs of revenues increased by $1,125,666 or 319.6% to $1,477,845 for the three months ended September 30, 2023, attributed to an inventory write-down of $1,487,493[173]. - Total gross loss for the three months ended September 30, 2023, increased by $1,295,511 or 890.8% to $1,440,937 compared to a loss of $145,426 in 2022[174]. - General and administrative expenses for the three months ended September 30, 2023, increased by $177,584 or 11.2% to $1,759,644, mainly due to share-based payments and consulting fees related to the business combination with Pono[178]. Operational Loss - Loss from operations for the nine months ended September 30, 2023, was $(20,263,914), an increase of $9,070,287 or 82.2% from $(11,030,946) in the same period of 2022[157]. - Net loss from continuing operations for the nine months ended September 30, 2023, was $22,233,949, representing an increase of $11,797,322 or 114.8% from a net loss of $10,273,946 in 2022[169]. - The company reported a loss from continuing operations of $3,857,583 for the three months ended September 30, 2023, compared to a loss of $3,725,531 in 2022, representing a variance of $132,052 or 3.5%[171]. - The net loss from continuing operations was $3,857,583 for the three months ended September 30, 2023, representing a $30,627, or 0.8%, increase from a net loss of $3,725,529 for the same period in 2022[183]. Cash Flow and Financing - As of September 30, 2023, the company had $25,174 in cash, a significant decrease from $1,278,026 as of December 31, 2022[186]. - The working capital deficit was $8,864,096 as of September 30, 2023[186]. - The company incurred a net loss from continuing operations of $22,233,949 and an accumulated deficit of $69,560,075 as of September 30, 2023, raising substantial doubt about its ability to continue as a going concern[189]. - The company plans to raise additional funds through debt or equity offerings to support operations and growth strategies[190]. - The company sold two Convertible Notes to Lind Global for an aggregate principal amount of $4,200,000, with an aggregate purchase price of $3,500,000[187]. - The company entered into a Standby Equity Purchase Agreement allowing it to sell up to $100 million in shares over 36 months[195]. - The company entered into a Purchase Agreement with Lind Global Fund II LP to issue up to three Convertible Notes totaling $6,000,000 for a purchase price of $5,000,000[199]. - The first tranche of the Convertible Note issuance was completed on April 12, 2023, with a purchase price of $2,100,000 and a principal amount of $2,520,000[200]. - The company has future minimum loan payments totaling $3,045,886 as of September 30, 2023[212]. - The company has future minimum lease payments under non-cancelable lease agreements totaling $600,688 as of September 30, 2023[208]. - The company has no off-balance sheet arrangements as of September 30, 2023[213]. Strategic Initiatives - The company is considering strategic alternatives for non-core operations, including potential sale or disposition of assets related to the COSMOS unmanned traffic management system[150]. - The company plans to establish a U.S. subsidiary in Los Angeles to pursue the redesign of the XTURISMO hoverbike, aiming for wider market appeal and FAA certification[145]. - The company discontinued drone photography services and joint research and development services to facilitate a cost reduction plan[184]. Currency and Revenue Recognition - The Company reports its financial statements in United States Dollars (US$) and follows ASC Topic 830-30 for translation of financial statements[223]. - The current exchange rate for JPY to US$ as of September 30, 2023, is 149.43, compared to 144.71 in 2022[224]. - The average exchange rate for JPY to US$ for the nine months ended September 30, 2023, is 138.14, up from 128.26 in 2022[224]. - Revenue is recognized in accordance with ASC Topic 606, which includes five steps to determine revenue recognition[225][226]. - The Consumption Tax on sales is calculated at 10% of gross sales, which affects the net revenue reported[226]. - Revenue is reported gross when the Company controls the specified goods or services before transfer, and net when acting as an agent[227]. - There are no applicable quantitative and qualitative disclosures about market risk for the Company[228].