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March 13, 2024
Surendra Ajjarapu
Chief Executive Officer
AIRO Group, Inc.
515 Madison Avenue, 8th Floor, Suite 8078
New York, NY 10022
Re:AIRO Group, Inc.
Amendment No. 4 to Registration Statement on Form S-4
Filed February 12, 2024
File No. 333-272402
Dear Surendra Ajjarapu:
            We have reviewed your amended registration statement and have the following
comment(s).
            Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe a comment applies to your facts and circumstances
or do not believe an amendment is appropriate, please tell us why in your response.
            After reviewing any amendment to your registration statement and the information you
provide in response to this letter, we may have additional comments. Unless we note otherwise,
any references to prior comments are to comments in our December 8, 2023 letter.
Amendment No. 4 to Registration Statement on Form S-4 filed February 12, 2024
General
1.We note your disclosure that Kernel intends to timely request a hearing before the Nasdaq
Hearings Panel. Please update this disclosure in your next amendment.

 FirstName LastNameSurendra Ajjarapu
 Comapany NameAIRO Group, Inc.
 March 13, 2024 Page 2
 FirstName LastName
Surendra Ajjarapu
AIRO Group, Inc.
March 13, 2024
Page 2
2.We note your disclosure that the NTA Proposal would remove from Kernel’s charter the
requirement that Kernel will not consummate a business combination unless it has net
tangible assets of at least $5,000,001 upon consummation thereof. We also note that the
proposal is conditioned upon the approval of the Business Combination Proposal and your
disclosure that Kernel believes it and the combined entity can rely on the Exchange Act
Rule to avoid being treated as a penny stock. However, if the amount in the trust falls
below $5,000,001 as a result of redemptions, Kernel would likely no longer meet the
Nasdaq listing standards. At that point, it is possible that Kernel would become a penny
stock. Please revise disclosure in your Questions and Answers section and elsewhere as
appropriate to clearly discuss the impact that the trust falling below $5,000,001 would
have upon Kernel's listing on Nasdaq and discuss the consideration given to this
possibility in the Board of Directors' determination to propose to remove this provision
from its charter. Please provide clear disclosure that removal of this provision could result
in Kernel's securities falling within the definition of penny stock and clearly discuss the
related risks to Kernel and its investors. In your discussion, please clarify whether the
NTA Proposal is conditioned solely upon the approval of the business combination or the
business combination's closing.
Risk Factors, page 37
3.Please revise your risk factors section to fully discuss the consequences and related risks
to each of Kernel and the combined entity in the event that the NTA Proposal is adopted
or is not adopted.
Earnout Shares, page 125
4.We note your disclosure on page 126, and your responses to comment 1 to our letter dated
December 8, 2023 and prior comment 1 to our letter dated August 16, 2023 where you
indicate that the earnouts to the equity holders of AIRO Group Holdings, Inc., including
the Sponsor earnouts, are expected to be treated as a deemed dividend. Please respond to
the following:

•Provide a thorough analysis regarding how you concluded the Sponsor earnouts were
not subject to the guidance in ASC 718. As part of your response, tell us whether
any of the Sponsors will be employees or play any role in the combined company
after the closing of the business combination. If so, describe the role the Sponsor may
play and confirm that none of the Sponsor earnouts are subject to any other
contingency or forfeiture provision beyond the revenue target.

•Explain the relevant accounting literature you considered in concluding the Sponsor
earnouts should be treated as deemed dividend, particularly in light of the fact that
they were only some of the original shareholders of the “acquired” company for
financial statement purposes that received the earnouts. As part of your response,
explain any literature that you considered but may have ultimately rejected as part of

 FirstName LastNameSurendra Ajjarapu
 Comapany NameAIRO Group, Inc.
 March 13, 2024 Page 3
 FirstName LastName
Surendra Ajjarapu
AIRO Group, Inc.
March 13, 2024
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your analysis.

•Explain whether the Sponsor will receive the Sponsor earnout shares if the revenue
targets are met, but the Sponsor no longer holds the AIRO Group Holdings, Inc.
shares at the time the target is achieved.

•Explain the business purpose for the Sponsor earnouts and why they were only
granted to some of the SPAC shareholders. As part of your response, explain how
each of the earnouts was negotiated and how the number of shares and revenue
triggers were ultimately determined.

•Given the terms of the earnout provisions have changed several times since their
original issuance, clarify if any the other financial or economic terms were changed
in connection with the business combination agreement. In this regard, we note that
the revenue targets have been significantly lowered in the current amendment, the
EBITDA targets have been eliminated, and the number of shares to be received under
each revenue earnout target has been significantly increased.
AIRO Group Holdings, Inc. - Audited Financial Statements
2. Business Combinations (Restated), page F-109
5.We note your responses to comments 2 and 3 and the related revisions to your filing.
Please address the following comments:

•Pursuant to ASC 805-10-25-4 and ASC 805-10-55-10 through -15, tell us in
sufficient detail how you determined Airo Group Holdings, Inc. ("Holdings")
represented the accounting acquirer in the Jaunt Air Mobility LLC
("Jaunt") acquisition. In doing so, tell us whether Holdings was a shell at the March
10, 2022 acquisition date and the reasons for your determination. Address each of the
relevant factors described in ASC 805-10-55-12 through -13. Notwithstanding the
preceding, also tell us how you determined the 5.3 million shares issued by Holdings
had a value of $135 million given the size of Holdings as of the acquisition date.

•We note that you accounted for the April 1, 2022 Aspen Avionics ("Aspen") and
Holdings merger as a reverse acquisition with Aspen determined to be the accounting
acquirer. Explain how your determination of the fair value of the purchase
consideration contemplated and applied the guidance in ASC 805-40-30-2 and ASC
805-40-55-9 through 55-10. In doing so, tell us the percentage of equity interests that
Holdings retained after exchanging its common shares with Aspen.

 FirstName LastNameSurendra Ajjarapu
 Comapany NameAIRO Group, Inc.
 March 13, 2024 Page 4
 FirstName LastName
Surendra Ajjarapu
AIRO Group, Inc.
March 13, 2024
Page 4
6.We note your response to comment 3 and your disclosure on page F-112 that “in the
absence of a public trading market for the common stock, the Company exercised its
reasonable judgment and considered numerous objective and subjective factors to
determine the best estimate of fair value of the equity issued in the merger transactions on
their respective acquisition dates. These factors included historical and projected operating
and financial performance, the valuation of comparable companies, the industry outlook,
the likelihood and timing of achieving a liquidity event, and the U.S. and global economic
and capital market conditions and outlook.” Please address the following comments
related to the valuation of your common stock:

•For the acquisitions of Jaunt, Sky-Watch A/S, Aspen, and Coastal Defense, Inc.,
clarify whether the fair value of the common stock issued as consideration was
calculated at each specific acquisition date and whether the fair value was determined
based upon the future value of the combined merger entities.

•Explain in sufficient detail the methodologies and key inputs and assumptions used in
the valuations of your common stock. In doing so, tell us if you utilized both the
income and market approaches in your valuations. If so, clarify how you weighted the
results and, if not, explain why you determined application of a second approach was
unnecessary. Ensure you discuss how you determined key assumptions, including,
but not necessarily limited to, discount rates, terminal values, event probabilities,
market multiples, and revenue and income projections. Clarify if the revenue and
income projections utilized were consistent with or directionally mirrored the
financial projections disclosed on page 97.  If your valuations resulted in a range of
possible values, tell us how you determined the final amounts.

 FirstName LastNameSurendra Ajjarapu
 Comapany NameAIRO Group, Inc.
 March 13, 2024 Page 5
 FirstName LastName
Surendra Ajjarapu
AIRO Group, Inc.
March 13, 2024
Page 5
            Please contact Dale Welcome at 202-551-3865 or Andrew Blume at 202-551-3254 if you
have questions regarding comments on the financial statements and related matters. Please
contact Patrick Fullem at 202-551-8337 or Jay Ingram at 202-551-3397 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing
cc:       Kate Bechen