FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2023

NOTE 15 – FAIR VALUE MEASUREMENT

The estimated fair value of the Company’s financial instrument at December 31, 2023 and 2022 are set forth below. The following summary excludes cash and cash equivalents, accounts receivable, other receivable, short-term loans payable, accounts payable, accrued expenses, contract liability, current portion of long-term debts, current operating and finance lease liabilities and other current liabilities for which fair values approximate their carrying amounts.

	Amount at Fair Value		Level 1		Level 2		Level 3
December 31, 2023
Liabilities
Public Warrants	$	117,300	$	117,300	$	-	$	-
Placement Warrants	$	7,648	$	-	$	7,648	$	-
Debt Warrants	$	275,976	$	-	$	275,976	$	-
Subtotal: Warrant liabilities	$	400,924	$	117,300	$	283,624	$	-
Derivative Liability	$	1,367,140	$	-	$	1,367,140	$	-
Liabilities fair value	$	1,367,140	$	-	$	1,367,140	$	-

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.

AERWINS Technologies Inc. 10-K