IX Acquisition Corp 10-K for FY2024
IX Acquisition Corp. (IXAQF)
About this 10-K
IX Acquisition Corp filed this 10-K on April 3, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $2.27M
- compared with net income of $4.02M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM________TO_________
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter) |
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(Address of principal executive offices) | | (Zip Code) |
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+44 (0) ( |
(Registrant’s telephone number, including area code) |
Not applicable |
(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer ☐ | Smaller reporting company | |
| | | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes
The aggregate market value of voting common stock held by non-affiliated shareholders as of June 30, 2024 was approximately $
As of March 28, 2025, there were
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:
| ● | our ability to select an appropriate target business or businesses; |
| ● | our ability to complete our initial business combination; |
| ● | our expectations around the performance of the prospective target business or businesses; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
| ● | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
| ● | our potential ability to obtain additional financing to complete our initial business combination; |
| ● | our pool of prospective target businesses; |
| ● | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
| ● | our public securities’ potential liquidity and trading; |
| ● | the lack of a market for our securities; |
| ● | the use of proceeds not held in the Trust Account (as defined below) or available to us from interest income on the Trust Account balance; |
| ● | the Trust Account not being subject to claims of third parties; or |
| ● | our financial performance following the Initial Public Offering (as defined below). |
The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors”. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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PART I
References in this report to “we,” “us”, “our” or the “Company” refer to IX Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to IX Acquisition Services LLC, a Delaware limited liability company. References to “anchor investors” refer to the 16 qualified institutional buyers or institutional accredited investors, each of which is not affiliated with us, our sponsor, our directors or any member of our management, that purchased an aggregate of 1,747,879 Class B ordinary shares.
ITEM 1. BUSINESS.
Introduction
IX Acquisition Corp. (the “Company”) is a blank check company incorporated on March 1, 2021 as a Cayman Islands exempted company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have neither engaged in any operations nor generated any revenue to date. Based on our business activities, the Company is a “shell company” as defined under the Securities Exchange Act of 1934 (the “Exchange Act”) because we have no operations and nominal assets consisting almost entirely of cash.
On October 12, 2021, we consummated our initial public offering (the “Initial Public Offering”) of 23,000,000 units, including the issuance of 3,000,000 units as a result of the underwriters’ full exercise of their over-allotment option. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $230,000,000.
On March 11, 2021, IX Acquisition Services LLC, our sponsor, purchased an aggregate of 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for a purchase price of $25,000, or approximately $0.004 per share. On October 12, 2021, the sponsor sold an aggregate of 1,747,879 Founder Shares to the anchor investors for their purchase of the units in the Initial Public Offering. The number of Founder Shares outstanding was determined based on the Company’s expectation that the total size of the Initial Public Offering would be a maximum of 23,000,000 units if the underwriters’ over-allotment option was exercised in full, and therefore that such Founder Shares would represent 20% of the outstanding shares after the Initial Public Offering. Prior to our sponsor’s initial investment of $25,000, the Company had no assets, tangible or intangible.
Simultaneously with the closing of the Initial Public Offering, pursuant to the Sponsor Private Placement Warrants Purchase Agreement, the Company completed the private sale of an aggregate of 6,150,000 warrants (the “Sponsor Private Placement Warrants”) to the sponsor at a purchase price of $1.00 per Private Placement Warrant, ( as defined below), generating gross proceeds to the Company of $6,150,000, a portion of which was added to the proceeds from the Initial Public Offering held in the Trust Account. Simultaneously with the closing of the Initial Public Offering, pursuant to the Underwriters Private Placement Warrants Purchase Agreement, the Company completed the private sale of an aggregate of 1,000,000 warrants (the “Underwriters Private Placement Warrants,” and together with the Sponsor Private Placement Warrants, the “Private Placement Warrants”) to Cantor Fitzgerald & Co. (“Cantor”) and Odeon Capital Group, LLC (“Odeon”) at a purchase price of $1.00 per Underwriters Private Placement Warrant, generating gross proceeds to the Company of $1,000,000, a portion of which was added to the proceeds from the Initial Public Offering held in the Trust Account. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
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The Private Placement Warrants are identical to the warrants sold in the Initial Public Offering, except that the Private Placement Warrants, so long as they are held by our sponsor, Cantor, Odeon or its or their permitted transferees, (i) are not redeemable by us, (ii) may not (including the Class A ordinary shares issuable upon exercise of such Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by such holders until 30 days after the completion of the Company’s initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) are entitled to registration rights. If the Company does not consummate its initial business combination by May 12, 2023, since first month of extension has been exercised, or, if all extensions are exercised, by October 12, 2025, the Private Placement Warrants will expire worthless. The Underwriters Private Placement Warrants have been deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and are therefore subject to the lock-up restrictions imposed by FINRA Rule 5110(e) pursuant to which these securities will not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of the Initial Public Offering except as permitted under FINRA Rule 5110(e)(2) including to any member who participated in the Initial Public Offering and the officers or partners, registered persons or affiliates thereof. In addition, for as long as the Underwriters Private Placement Warrants are held by Cantor, Odeon, the other underwriters or their designees or affiliates, they may not be exercised after five years from the commencement of sales of the Initial Public Offering. We have granted Cantor and Odeon or their designees or affiliates certain registration rights relating to these securities. The underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement relating to the Initial Public Offering and may not exercise demand rights on more than one occasion.
Upon the closing of the Initial Public Offering and the sale of Private Placement Warrants, $231,150,000 was placed in a Trust Account with Continental Stock Transfer & Trust Company (“Continental”) acting as trustee (the “Trust Account”). We are not permitted to withdraw any of the principal or interest held in the Trust Account, except for the withdrawal of interest to pay our taxes and up to $100,000 of interest to pay dissolution expenses, as applicable, if any, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination by May 12, 2023, since first month of extension has been exercised, or, if all extensions are exercised, by October 12, 2025, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our Amended & Restated Memorandum and Articles of Association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination by May 12, 2023, since first month of extension has been exercised, or, if all extensions are exercised, by October 12, 2025 or (B) with respect to any material provisions relating to shareholders’ rights or pre-initial business combination activity. The proceeds held in the Trust Account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. On November 13, 2023, the Company liquidated the investments held in the Trust Account. As of December 31, 2024, the assets held in the Trust Account were an interest-bearing demand deposit account.
After the payment of underwriting discounts and commissions (excluding the deferred portion of $12,100,000 in underwriting discounts and commissions payable upon consummation of our initial business combination if consummated) and approximately $550,000 in expenses relating to the Initial Public Offering, approximately $1,450,000 of the net proceeds of the Initial Public Offering and Private Placement was not deposited into the Trust Account and was initially available to us for working capital purposes. The net proceeds deposited into the Trust Account remain on deposit in the Trust Account earning interest. As of December 31, 2024, there was approximately $19 million in cash held in the Trust Account.
Proposed Business Combination
The Merger Agreement
On March 29, 2024, the Company entered into a Merger Agreement, by and among the Company, AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and AERKOMM Inc., a Nevada corporation (“AERKOMM”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
AERKOMM is an asset-light satellite communication technology company with proprietary antennas and modems that seeks to provide carrier-neutral and software-defined infrastructure to deliver mission-critical, multi-orbit satellite broadband connectivity where and when it is needed.
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The board of directors of the Company has unanimously approved and declared advisable the Merger Agreement and the business combination and resolved to recommend approval of the Merger Agreement and related matters by the Company’s shareholders. The merger is expected to be consummated after obtaining the required approval by the shareholders of the Company and AERKOMM and the satisfaction of certain other customary closing conditions.
The parties to the Merger Agreement have made customary representations, warranties and covenants.
Agreements Related to the Merger Agreement
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, the Company entered into the Sponsor Support Agreement with the sponsor, pursuant to which the sponsor agreed to, among other things, (i) vote all of its shares in favor of each Company proposal sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby, (ii) vote against any alternative proposal or proposal relating to a business combination transaction, (iii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company (other than the Merger Agreement and transactions relating to the Merger), (iv) vote against any change in the business, management or board of directors of the Company (other than in connection with the merger), (v) vote against any proposal that would impede the merger or that would result in a breach with respect to any obligation or agreement of the Company, Merger Sub or the sponsor under the Merger Agreement or the Sponsor Support Agreement, and (vi) vote in favor of any proposal to extend the period of time the Company is afforded under its organizational documents to consummate an initial business combination, in each case, subject to the terms and conditions of the Sponsor Support Agreement.
In addition, the sponsor agreed to be bound by exclusivity and publicity sections of the Merger Agreement.
AERKOMM Support Agreement
In connection with the execution of the Merger Agreement, the Company, AERKOMM and certain shareholders of AERKOMM entered into the AERKOMM Support Agreement pursuant to which the AERKOMM supporting shareholders agreed to, among other things,(i) vote to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the merger (“AERKOMM Transaction Proposals”); (ii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by AERKOMM (other than the Merger Agreement and the transactions relating to the merger); (iii) vote against any change in the business (to the extent in violation of the Merger Agreement), management or board of directors of AERKOMM (other than in connection with AERKOMM Transaction Proposals and the transactions contemplated thereby); and (iv) vote against any proposal that would impede the merger or that would result in a breach with respect to any obligation or agreement of AERKOMM or the AERKOMM securityholders under the Merger Agreement or AERKOMM Support Agreement.
In addition, AERKOMM Supporting Shareholders agreed to be bound by exclusivity and publicity sections of the Merger Agreement.
The PIPE Investment
Concurrently with the execution of the Merger Agreement, the Company and AERKOMM entered into subscription agreements (the “Subscription Agreements”) with certain accredited investors providing for investments in AERKOMM’s common stock in a private placement for an aggregate cash amount of $35,000,000 at $11.50 per share of AERKOMM’s common stock (the “PIPE Investment”).
AERKOMM will exercise reasonable best efforts to obtain a PIPE Investment Amount of at least $65,000,000 (inclusive of investment amounts under SAFE Agreements (as defined below)) pursuant to PIPE arrangements, and will obtain a minimum PIPE Investment Amount, unless waived by the Company, of at least $45,000,000 minus the investment amount obtained pursuant to SAFE Agreements and will consummate the transactions contemplated by the Subscription Agreements on the terms described therein.
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The SAFE Investment
Pursuant to the Merger Agreement, AERKOMM will enter into simple agreements for future equity, in the form and substance as reasonably agreed upon by the Company and AERKOMM (the “SAFE Agreements”), with certain investors providing for investments in shares of AERKOMM common stock in a private placement in an aggregate amount not less than $15,000,000 (exercising reasonable best efforts to secure $5,000,000 within twenty (20) business days of the date of the Merger Agreement, another $5,000,000 within forty (40) business days of the date of the Merger Agreement, and another $5,000,000 within sixty (60) business days of the date of the Merger Agreement) that will automatically convert upon the closing at $11.50 per share of Company common stock and in accordance with such SAFE Agreements and the Merger Agreement (the “SAFE Investment”).
As of August 12, 2024, an aggregate of $2.6 million of SAFE Investment has been made. The SAFE Investment will initially be placed in an escrow account and may be released from such escrow account to an account of the Company pursuant to the joint written instructions of the Company and AERKOMM.
On December 4, 2024, the Company and AERKOMM entered into one new SAFE Agreement. As a result, as of December 4, 2024, SAFE Agreements for an aggregate of $4,997,200 have been entered into. If the SAFE Agreements automatically convert upon the closing of the merger, in addition to 434,539 of Company common stock, the SAFE Agreements are also convertible into an additional 94% of the number of shares of Company common stock, or 408,466 shares to be held in escrow subject to the same milestone events outlined in the Merger Agreement under the Incentive Merger Consideration section.
The Company analyzed the SAFE agreement under ASC 480 and ASC 815, noting that the Common Stock and Incentive Shares issuable under the SAFE Agreement do not meet the requirements for equity classification. As a result, the Common Stock and Incentive Shares are required to be classified as a liability and measured at fair value with changes in fair value recorded in earnings, the SAFE notes were issued by AERKOMM and as such the liability has been reflected in the consolidated financial statement of AERKOMM at issuance and as of December 31, 2024.
Capital Markets Advisory Agreement
On September 29, 2024, the Company and AERKOMM signed an engagement letter to appoint Benchmark to serve as a non-exclusive PIPE placement agent for a private placement of securities of approximately $30,000,000 or such other amount as will be determined by the parties. Upon successful completion of the private offering, the Company and AERKOMM will pay Benchmark 5% of the gross proceeds of any equity or equity linked securities raised in the private offering plus 2.5% of the gross proceeds of any equity or equity linked securities raised in the private offering from purchasers of securities not introduced by Benchmark, up to a cap of $400,000. Both the $35,000,000 in PIPE subscriptions and the SAFE Agreements will not be assessed with regard to non-Benchmark introductions.
On October 9, 2024, the Company and AERKOMM entered into an amendment with Benchmark that 2.5% of the gross proceeds of any equity or equity linked securities raised in the Offering from purchasers of securities not introduced by Benchmark, up to a cap of $400,000 total in Company Sourced Offering Fees. The Company-sourced Offering Fee shall not be assessed on the issuance of SAFE Agreements by AERKOMM, which represents a separate offering of a separate security. The Company-sourced Offering Fee shall also be assessed on the $35,000,000 in PIPE commitments already signed by the Company and AERKOMM, and subject to the $400,000 if Benchmark acts as a Placement Agent in respect of the transaction.
On November 26, 2024, the Company and AERKOMM entered into a second amendment with Benchmark that Benchmark shall be entitled to engage sub-placement agents in connection with the Offering. The Company and AERKOMM agree that any fees payable to sub-placement agents shall be in addition to the Company Sourced Offering Fee payable to Benchmark.
On December 9, 2024, the Company and AERKOMM entered into Sub Placement Agreement with Yuanta Securities (Hong Kong) Company Limited (“Yuanta”). In connection with its services under the Sub Placement Agreement, Yuanta may solicit potential investors for both the Company and AERKOMM. Benchmark agreed to pay Yuanta a sub-placement fee of an amount equal to three percent (3%) of gross sales proceeds received by the Company and AERKOMM attributed to securities placed by or solicited through Yuanta.
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Amendments to the Merger Agreement
On September 25, 2024, the Company, Merger Sub and AERKOMM entered into an amendment to the Merger Agreement to (1) provide that any lock-up period applicable to the sponsor or any officers, directors or affiliates of the Company will terminate at the closing of the merger, (2) change the percentage of the Founder Shares being treated as escrowed sponsor shares from 50% to 25%, (3) add a provision providing for the Company to pay certain amounts to the Company to cover its working capital and extension expenses, and (4) add a provision that the Company may terminate the Merger Agreement at any time prior to the closing date if AERKOMM or any subsidiary of AERKOMM enters into voluntary bankruptcy or fails to remove within 60 days any petition in bankruptcy filed against it prior to closing.
On February 12, 2025, the Company, Merger Sub and AERKOMM entered into a second amendment to the Merger Agreement to amend and restate the definitions of both “Indebtedness” and “Working Capital”.
Extensions
The (i) final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on October 8, 2021 (File No. 333-2592567) in connection with the Company’s Initial Public Offering that was consummated on October 12, 2021 and (ii) Company’s Amended and Restated Memorandum and Articles of Association provided that the Company initially had until April 12, 2023 (the date that was 18 months after the consummation of the Initial Public Offering) to complete a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (and such period, the “Combination Period”). On April 10, 2023, the Company held an extraordinary general meeting of shareholders (the “April 2023 Extraordinary Meeting”). At the April 2023 Extraordinary Meeting, the Company’s shareholders approved, among other things, a proposal to grant the Company the right to extend the Combination Period, from April 12, 2023 to May 12, 2023 (the “Extended Date”), and to allow the Company, without another shareholder vote, by resolution of the Company’s board of directors, to elect to further extend the Extended Date in one-month increments up to eleven additional times, or a total of up to twelve months total, up to April 12, 2024 (the “Extension Proposal”) by amending the Amended and Restated Memorandum and Articles of Association (the “First Extension”). Under Cayman Islands law, such amendment of the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal. In connection with the vote to approve the Extension Proposal, the holders of 18,336,279 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.31 per share, for an aggregate redemption amount of approximately $189 million. In connection with each monthly extension in accordance with the First Extension, the sponsor deposited $160,000 into the Trust Account every month from April to November 2023.
On November 24, 2023, and as supplemented on December 6, 2023, the Company held an extraordinary general meeting of shareholders in lieu of an annual general meeting of shareholders on December 11, 2023 (the “December 2023 Extraordinary Meeting”). At the December 2023 Extraordinary Meeting, the Second Extension Amendment Proposal (as defined below) to further amend the Amended & Restated Memorandum and Articles of Association (the “Second Extension Amendment”) was approved. The Company filed the Second Extension Amendment with the Cayman Islands Registrar of Companies on December 12, 2023.
At the December 2023 Extraordinary Meeting, the Company’s shareholders were presented with a proposal to approve, by way of special resolution, the Second Extension Amendment to give the board of directors the right to extend the date by which the Company must consummate a business combination from December 12, 2023 on a monthly basis up to ten (10) times until October 12, 2024 (or such earlier date as determined by the board of directors) (the “Second Extension Amendment Proposal”).
In connection with the approval of the Second Extension Amendment Proposal, the sponsor agreed to contribute to the Company, as a loan (the “Contribution”), the lesser of (x) $50,000 or (y) $0.025 for each Class A ordinary share included as part of the units sold in the Initial Public Offering, the public shares, that remains outstanding and was not redeemed for each calendar month (commencing on December 12, 2023 and on the 12th day of each subsequent month) until October 12, 2024, or portion thereof, that is needed to complete a business combination.
In connection with the vote to approve the Second Extension Amendment Proposal, the holders of 1,817,650 public shares properly exercised their right to redeem such shares for cash at a redemption price of approximately $11.00 per share, for an aggregate redemption amount of approximately $19.99 million. Consequently, the Contribution will be $50,000 per month needed for the Company to complete a business combination. The first Contribution was deposited into the Company’s U.S.-based Trust Account on December 12, 2023. Subsequently in 2024, the Company has made additional deposits of $50,000 from January through September, extending the Combination Period.
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On October 9, 2024, the Company held an extraordinary general meeting of its shareholders (the “October 2024 Extraordinary Meeting”). At the October 2024 Extraordinary Meeting, the Third Extension Amendment Proposal (as defined below) to further amend the Second Amended & Restated Memorandum and Articles of Association (the “Third Extension Amendment”) was approved.
In connection with the approval of the Third Extension Amendment Proposal, the sponsor’s Contribution to the Company was the lesser of (x) $50,000 or (y) $0.03 for each Class A ordinary share included as part of the units sold in the Initial Public Offering, the public shares, that remains outstanding and was not redeemed for each calendar month (commencing on October 12, 2024 and on the 12th day of each subsequent month) until October 12, 2025, or portion thereof, that is needed to complete a business combination (the “Third Extension Amendment Proposal”).
In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 1,235,698 public shares properly exercised their right to redeem such shares for cash at a redemption price of approximately $11.58 per share, for an aggregate redemption amount of approximately $14.30 million. Consequently, the Contribution will be $48,311 per month needed for the Company to complete a business combination. The Contribution was deposited into the Company’s U.S.-based Trust Account on October 12, 2024. Subsequently, the Company has made additional deposits of $48,311 from November through March, extending the Combination Period.
Initial Business Combination
In accordance with the rules of Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting discounts held in trust) at the time of signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with our analysis of our satisfaction of the 80% of net assets test, as well as the basis for our determinations. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA, or an independent valuation or appraisal firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to foregoing, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. If our securities are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our
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management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Redemption Rights for Public Shareholders Upon Consummation of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the representative of the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares they hold and any public shares they may acquire during or after the Initial Public Offering in connection with the completion of our initial business combination, and the anchor investors will not be entitled to redemption rights with respect to any Founder Shares held by them, in connection with the completion of our initial business combination.
If a shareholder vote on our initial business combination is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act.
Resources and Competition
Our Amended & Restated Memorandum and Articles of Association provides that we will have until October 12, 2024, or, if all available extensions are exercised, by October 12, 2025. If we are unable to complete our initial business combination within such, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject to our obligations under Cayman Islands law to provide for claims of creditors and requirements of other applicable law.
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
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Facilities
We currently utilize office space at 53 Davies Street, London W1K 5JH United Kingdom from IX Acquisition Services LLC and the members of our management team. We consider our current office space adequate for our current operations. We function largely virtually and remotely.
Employees
We currently have one officer: Noah Aptekar. This individual is not obligated to devote any specific number of hours to our matters but he does intend to devote as much of his time as he deems necessary to our affairs until we have completed our initial business combination. The amount of time he will devote in any time period will vary based on the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Available Information
We are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s internet website is located at http://www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request from us in writing at 53 Davies Street, London W1K 5JH, or by telephone at +44 (0) (203) 983-0450.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is equal to or exceeds $250 million as of the prior June 30th and (2) our annual revenues were equal to or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June 30th.
ITEM 1A. RISK FACTORS.
As a smaller reporting company, we are not required to make disclosures under this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
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ITEM 1C. CYBERSECURITY
We are a special purpose acquisition company with no business operations. Since our Initial Public Offering, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have
As of the date of this Report,
ITEM 2. PROPERTIES.
Our principal executive offices are located at 53 Davies Street, London W1K 5JH United Kingdom. We consider our current office space adequate for our current operations.
ITEM 3. LEGAL PROCEEDINGS.
As of December 31, 2024, to the knowledge of our management, there was no material litigation, arbitration or governmental proceeding pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our units, Class A ordinary shares and warrants are listed on the OTC under the symbols “IXQUF,” “IXAQF” and “IXQWF,” respectively.
Holders
As of March 28, 2025, there was one holder of record of our units, two holders of record of our Class A ordinary shares, 32 holders of record of our Class B ordinary shares and four holders of record of our warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose units, Class A ordinary shares and warrants are held of record by banks, brokers and other financial institutions.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
Unregistered Sales
None
Use of Proceeds
For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 5 of the 2021 Annual Report. There has been no material change in the planned use of proceeds from the Initial Public Offering and Private Placement as described in the Registration Statement. The specific investments in our Trust Account may change from time to time.
On November 13, 2023 we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the Initial Public Offering and Private Placement are no longer invested in U.S. government securities or money market funds.
ITEM 6. [RESERVED].
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and elsewhere in this Annual Report on Form 10-K.
Special Note Regarding Forward-Looking Statements
This Annual Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Annual Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to “Cautionary Note Regarding Forward-Looking Statements,” “Summary of Risk Factors,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on March 1, 2021 as a Cayman Islands exempted company for the purpose of effecting a business combination. We have not selected any business combination target, but we have had substantive discussions with potential business combination targets. We intend to effectuate our initial business combination using cash from the proceeds of our Initial Public Offering and the private placement, the proceeds of the sale of our shares in connection with our initial business combination pursuant to the forward purchase agreements (or backstop agreements we may enter into or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing or other sources.
The registration statement was declared effective on October 6, 2021. On October 12, 2021, we consummated the Initial Public Offering of 23,000,000 Units, including 3,000,000 Units that were issued pursuant to the underwriters’ exercise of their over-allotment option in full, at $10.00 per Unit, generating total gross proceeds of $230,000,000.
Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,150,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in the private placement to our sponsor, Cantor and Odeon generating gross proceeds of $7,150,000.
Upon the closing of the Initial Public Offering on October 12, 2021, an amount of $231,150,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants in the private placement was placed in the Trust Account and was initially invested only in Treasury obligations with maturities of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct Treasury obligations. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, on November 13, 2023 we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, until the earliest of: (i) the completion of the initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association to modify the substance or timing of our obligation to redeem 100% of the public shares if we do not complete the initial business combination within the Combination Period; and (iii) absent an initial business combination within the Combination Period, the return of the funds held in the Trust Account to the Public Shareholders as part of the redemption of the public shares.
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The Merger Agreement
On March 29, 2024, the Company entered into a Merger Agreement, by and among the Company, AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and AERKOMM Inc., a Nevada corporation (“AERKOMM”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
The parties to the Merger Agreement have made customary representations, warranties and covenants.
Amendments to the Merger Agreement
On September 25, 2024, the Company, Merger Sub and AERKOMM entered into an amendment to the Merger Agreement to (1) provide that any lock-up period applicable to the sponsor or any officers, directors or affiliates of the Company will terminate at the closing of the merger, (2) change the percentage of the Founder Shares being treated as escrowed sponsor shares from 50% to 25%, (3) add a provision providing for the Company to pay certain amounts to the Company to cover its working capital and extension expenses, and (4) add a provision that the Company may terminate the Merger Agreement at any time prior to the closing date if AERKOMM or any subsidiary of AERKOMM enters into voluntary bankruptcy or fails to remove within 60 days any petition in bankruptcy filed against it prior to closing.
On February 12, 2025, the Company, Merger Sub and AERKOMM entered into a second amendment to the Merger Agreement to amend and restate the definitions of both “Indebtedness” and “Working Capital” in Section 1.1.
Agreements Related to the Merger Agreement
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, the Company entered into the Sponsor Support Agreement with the sponsor, pursuant to which the sponsor agreed to, among other things, (i) vote all of its shares in favor of each Company proposal sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby, (ii) vote against any alternative proposal or proposal relating to a business combination transaction, (iii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company (other than the Merger Agreement and transactions relating to the Merger), (iv) vote against any change in the business, management or board of directors of the Company (other than in connection with the merger), (v) vote against any proposal that would impede the merger or that would result in a breach with respect to any obligation or agreement of the Company, Merger Sub or the sponsor under the Merger Agreement or the Sponsor Support Agreement, and (vi) vote in favor of any proposal to extend the period of time the Company is afforded under its organizational documents to consummate an initial business combination, in each case, subject to the terms and conditions of the Sponsor Support Agreement.
In addition, the sponsor agreed to be bound by exclusivity and publicity sections of the Merger Agreement.
AERKOMM Support Agreement
In connection with the execution of the Merger Agreement, the Company, AERKOMM and certain shareholders of AERKOMM entered into the AERKOMM Support Agreement pursuant to which the AERKOMM supporting shareholders agreed to, among other things,(i) vote to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the merger (“AERKOMM Transaction Proposals”); (ii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by AERKOMM (other than the Merger Agreement and the transactions relating to the merger); (iii) vote against any change in the business (to the extent in violation of the Merger Agreement), management or board of directors of AERKOMM (other than in connection with AERKOMM Transaction Proposals and the transactions contemplated thereby); and (iv) vote against any proposal that would impede the merger or that would result in a breach with respect to any obligation or agreement of AERKOMM or the AERKOMM securityholders under the Merger Agreement or AERKOMM Support Agreement.
In addition, AERKOMM Supporting Shareholders agreed to be bound by exclusivity and publicity sections of the Merger Agreement.
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The PIPE Investment
Concurrently with the execution of the Merger Agreement, the Company and AERKOMM entered into subscription agreements (the “Subscription Agreements”) with certain accredited investors providing for investments in AERKOMM’s common stock in a private placement for an aggregate cash amount of $35,000,000 at $11.50 per share of AERKOMM’s common stock (the “PIPE Investment”).
AERKOMM will exercise reasonable best efforts to obtain a PIPE Investment Amount of at least $65,000,000 (inclusive of investment amounts under SAFE Agreements (as defined below)) pursuant to PIPE arrangements, and will obtain a minimum PIPE Investment Amount, unless waived by the Company, of at least $ 45,000,000 minus the investment amount obtained pursuant to SAFE Agreements and will consummate the transactions contemplated by the Subscription Agreements on the terms described therein.
The SAFE Investment
Pursuant to the Merger Agreement, AERKOMM will enter into simple agreements for future equity, in the form and substance as reasonably agreed upon by the Company and AERKOMM (the “SAFE Agreements”), with certain investors providing for investments in shares of AERKOMM common stock in a private placement in an aggregate amount not less than $15,000,000 (exercising reasonable best efforts to secure $5,000,000 within twenty (20) business days of the date of the Merger Agreement, another $5,000,000 within forty (40) business days of the date of the Merger Agreement, and another $5,000,000 within sixty (60) business days of the date of the Merger Agreement) that will automatically convert upon the closing at $11.50 per share of Company common stock and in accordance with such SAFE Agreements and the Merger Agreement (the “SAFE Investment”).
As of August 12, 2024, an aggregate of $2.6 million of SAFE Investment has been made. The SAFE Investment will initially be placed in an escrow account and may be released from such escrow account to an account of the Company pursuant to the joint written instructions of the Company and AERKOMM.
On December 4, 2024, the Company and AERKOMM entered into one new SAFE Agreement. As a result, as of December 4, 2024, SAFE Agreements for an aggregate of $4,997,200 have been entered into. If the SAFE Agreements automatically convert upon the closing of the merger, in addition to 434,539 of Company common stock, the SAFE Agreements are also convertible into an additional 94% of the number of shares of Company common stock, or 408,466 shares to be held in escrow subject to the same milestone events outlined in the Merger Agreement under the Incentive Merger Consideration section.
Capital Markets Advisory Agreement
On September 29, 2024, the Company and AERKOMM signed an engagement letter to appoint Benchmark to serve as a non-exclusive PIPE placement agent for a private placement of securities of approximately $30,000,000 or such other amount as will be determined by the parties. Upon successful completion of the private offering, the Company and AERKOMM will pay Benchmark 5% of the gross proceeds of any equity or equity linked securities raised in the private offering plus 2.5% of the gross proceeds of any equity or equity linked securities raised in the private offering from purchasers of securities not introduced by Benchmark, up to a cap of $400,000. Both the $35,000,000 in PIPE subscriptions and the SAFE Agreements will not be assessed with regard to non-Benchmark introductions.
On October 9, 2024, the Company and AERKOMM entered into an amendment with Benchmark that 2.5% of the gross proceeds of any equity or equity linked securities raised in the Offering from purchasers of securities not introduced by Benchmark, up to a cap of $400,000 total in Company Sourced Offering Fees. The Company-sourced Offering Fee shall not be assessed on the issuance of SAFE Agreements by AERKOMM, which represents a separate offering of a separate security. The Company-sourced Offering Fee shall also be assessed on the $35,000,000 in PIPE commitments already signed by the Company and AERKOMM, and subject to the $400,000 if Benchmark acts as a Placement Agent in respect of the transaction.
On November 26, 2024, the Company and AERKOMM entered into a second amendment with Benchmark that Benchmark shall be entitled to engage sub-placement agents in connection with the Offering. The Company and AERKOMM agree that any fees payable to sub-placement agents shall be in addition to the Company Sourced Offering Fee payable to Benchmark.
On December 9, 2024, the Company and AERKOMM entered into Sub Placement Agreement with Yuanta Securities (Hong Kong) Company Limited (“Yuanta”). In connection with its services under the Sub Placement Agreement, Yuanta may solicit potential investors for both the Company and AERKOMM. Benchmark agreed to pay Yuanta a sub-placement fee of an amount equal to three
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percent (3%) of gross sales proceeds received by the Company and AERKOMM attributed to securities placed by or solicited through Yuanta.
Extension of Our Combination Period
On April 10, 2023, we held the April 2023 Extraordinary Meeting, at which, our shareholders approved, among other things: (i) the Extension Proposal; (ii) the Redemption Limitation Amendment Proposal; and (iii) the Founder Share Amendment Proposal. Under Cayman Islands law, the amendments to the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal, Founder Share Amendment Proposal and Redemption Limitation Amendment Proposal.
In connection with the votes to approve the Extension Proposal, the Redemption Limitation Amendment Proposal and the Founder Share Amendment Proposal, the holders of 18,336,279 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.31 per share, for an aggregate redemption amount of approximately $189 million. After the satisfaction of the Redemptions, the balance in the Trust Account was approximately $48 million.
As disclosed in the definitive proxy statement filed by the Company with the SEC on March 23, 2023, relating to the extraordinary general meeting of shareholders, the sponsor agreed that if the Extension Proposal is approved, it or its designee will deposit into the Trust Account established in connection with the Company’s Initial Public Offering as a loan, an amount equal to the lesser of (x) $160,000 or (y) $0.04 per public share multiplied by the number of public shares outstanding, on each of the following dates: (i) April 13, 2023; and (ii) one business day following the public announcement by the Company disclosing that the board of directors of the Company has determined to extend the Deadline Date (as defined below) for an additional month in accordance with the extension. On April 13, 2023, the sponsor advanced $160,000 to the Company for the first month of extension.
On May 9, 2023, the Company issued a press release announcing that the board has elected to extend the date by which the Company has to consummate a business combination (the “Deadline Date”) from May 12, 2023 for an additional month to June 12, 2023. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company the right to extend the Deadline Date twelve times for an additional one month each time, from April 12, 2023, the initial Deadline Date, to up to April 12, 2024. In connection with the second Extension, the board delivered the sponsor a written request to draw down $160,000 under its previously-disclosed promissory note for the second month of the extension. On or before May 12, 2023, the sponsor deposited $160,000 into the Company’s Trust Account in connection with the second extension.
On June 9, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which the Company has to consummate a business combination from June 12, 2023 for an additional month to July 12, 2023. In connection with the third extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed promissory note for the third extension. On or before June 12, 2023, the sponsor deposited $160,000 into the Company’s Trust Account in connection with the third extension.
On July 11, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which the Company has to consummate a business combination from July 12, 2023 for an additional month to August 12, 2023. In connection with the fourth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed promissory note for the fourth extension. On or before July 12, 2023, the sponsor deposited $160,000 into the Company’s Trust Account in connection with the fourth extension.
On August 9, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which the Company has to consummate a business combination from August 12, 2023 for an additional month to September 12, 2023. In connection with the fifth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed promissory note for the fifth extension. On or before August 12, 2023, the sponsor deposited $160,000 into the Company’s Trust Account in connection with the fifth extension.
On September 7, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which the Company has to consummate a business combination from September 12, 2023 for an additional month to October 12, 2023.. In connection with the sixth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed promissory note for the sixth extension. On or before September 12, 2023, the sponsor will deposit $160,000 into the Company’s Trust Account in connection with the sixth extension.
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On October 12, 2023, we issued a press release announcing that the board of directors has elected to extend the Combination Period for an additional month, from October 12, 2023 to November 12, 2023. In connection with the seventh extension of the extended date, the board of directors delivered the sponsor a written request to draw down $160,000 under the extension promissory note. On October 13, 2023, the sponsor deposited $160,000 into the Trust Account in connection with this seventh extension.
On November 13, 2023, we issued a press release announcing that the board of directors has elected to extend the Combination Period for an additional month, from November 12, 2023 to December 12, 2023. In connection with the eighth extension of the extended date, the board of directors delivered the sponsor a written request to draw down $160,000 under the extension promissory note. On November 13, 2023, the sponsor deposited $160,000 into the Trust Account in connection with this eighth extension.
On December 11, 2023, the Second Extension Amendment Proposal to give the board of directors the right to extend the date by which we must consummate a business combination from December 12, 2023 on a monthly basis up to ten (10) times until October 12, 2024 (or such earlier date as determined by the board of directors) (the “Second Extension Amendment”) was approved. We filed the Second Extension Amendment with the Cayman Islands Registrar of Companies on December 12, 2023.
On January 19, 2024, we issued a press release announcing that its board of directors had elected to extend the Deadline Date from January 12, 2024 for an additional month to February 12, 2024. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company with the right to extend the Deadline Date eighteen times for an additional one month each time, from April 12, 2023, the initial Deadline Date, to up to October 12, 2024. The board of directors furthermore confirmed their intention and policy to continue to extend the Deadline Date on a monthly basis, but will not be issuing a press release every month. In the event that the board of directors elects not to extend, they will issue a press release announcing this change in policy.
In connection with the vote to approve the Second Extension Amendment Proposal, the holders of 1,817,650 public shares properly exercised their right to redeem such shares for cash at a redemption price of approximately $11.00 per share, for an aggregate redemption amount of approximately $19.99 million. Consequently, the Contribution will be $50,000 per month needed for us to continue to extend the Combination Period monthly. Subsequently in 2024, we have made additional deposits of $50,000 extending the Combination Period through October 12, 2024.
On October 9, 2024, the Company held the October 2024 Extraordinary Meeting. At the October 2024 Extraordinary Meeting, the Third Extension Amendment Proposal was approved.
In connection with the approval of the Third Extension Amendment Proposal, the sponsor’s Contribution to the Company was the lesser of (x) $50,000 or (y) $ 0.03 for each Class A ordinary share included as part of the units sold in the Initial Public Offering, the public shares, that remains outstanding and was not redeemed for each calendar month (commencing on October 12, 2024 and on the 12th day of each subsequent month) until October 12, 2025, or portion thereof, that is needed to complete a business combination.
In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 1,235,698 public shares properly exercised their right to redeem such shares for cash at a redemption price of approximately $11.58 per share, for an aggregate redemption amount of approximately $14.30 million. Consequently, the Contribution will be $48,311 per month needed for the Company to complete a business combination. The Contribution was deposited into the Company’s U.S.-based Trust Account on October 12, 2024.
On November 13, 2024, December 13, 2024, January 17, 2025, February 12, 2025 and March 12, 2025, the Company made five deposits of $48,311 for December, January, February, March and April extension contributions, respectively, to extend the life until April 12, 2025.
Contribution and Extension Promissory Note
On April 10, 2023, the Company held the April 2023 Extraordinary Meeting. At the April 2023 Extraordinary Meeting, the Company’s shareholders approved, among other things, a proposal to grant the Company the right to extend the Combination Period to the Extended Date, and to allow the Company, without another shareholder vote, by resolution of the Company’s board of directors, to elect to further extend the Extended Date in one-month increments up to eleven additional times, or a total of up to twelve months total, up to April 12, 2024 (the “Extension Proposal”) by amending the Amended and Restated Memorandum and Articles of Association (the “First Extension”). Under Cayman Islands law, such amendment of the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal. In connection with the vote to approve the Extension Proposal, the holders of 18,336,279 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.31 per share, for an aggregate redemption amount of approximately $189 million. In connection with each monthly
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extension in accordance with the First Extension, the sponsor deposited $160,000 into the Trust Account every month from April to November 2023.
Additionally, the sponsor agreed that if the Extension Proposal was approved, it or its designee would deposit into the Trust Account, as a loan, the Contribution on each of the following dates: (i) April 13, 2023; and (ii) one business day following our public announcement disclosing that the board of directors has determined to extend the extended date for an additional month in accordance with the Extension Proposal. Subsequently, the sponsor agreed that if the Extension Proposal was approved, it or its designee would deposit into the Trust Account, as a loan, the Contribution within seven days of the 12th day of each month pursuant to the board of directors determining to extend the extended date for an additional month in accordance with the Second Extension Proposal.
In connection with the Contribution and advances the sponsor may make in the future to us for working capital expenses, on April 13, 2023, the Company issued the original extension promissory note, a convertible promissory note to the sponsor with a principal amount up to $1 million (the “Original Extension Promissory Note”). On September 8, 2023, we issued the amended and restated extension promissory note in the principal amount of up to $2.5 million to the sponsor (the “Amended and Restated Extension Promissory Note”), to amend and restate the Original Extension Promissory Note. The Amended and Restated Extension Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date of the Company’s liquidation. At the election of the sponsor, up to $1,500,000 of the unpaid principal balance under the Amended and Restated Extension Promissory Note may be converted into conversion warrants at the price of $1.00 per warrant. Such conversion warrants will have terms identical to the warrants issued to the sponsor in the private placement.
On December 11, 2023, the Company held the December 2023 Extraordinary Meeting. At the December 2023 Extraordinary Meeting, the Second Extension Amendment Proposal to give the board of directors the right to extend the date by which the Company must consummate a Business Combination from December 12, 2023 on a monthly basis up to ten (10) times until October 12, 2024 (or such earlier date as determined by the Board) (the “Second Extension Amendment”) was approved. Under the law of the Cayman Islands, upon approval of the Second Extension Amendment Proposal by the affirmative vote of at least two-thirds (2/3) of the shareholders entitled to vote, who attended and voted at the December 2023 Extraordinary Meeting (including those who voted online), the Second Extension Amendment became effective. The Company filed the Second Extension Amendment with the Cayman Islands Registrar of Companies on December 12, 2023. Consequently, the Contribution will be $50,000 per month needed for the Company to complete a Business Combination.
On April 18, 2024, we issued the amended and restated promissory note in the principal amount of up to $3.5 million to the sponsor (the “Second Amended and Restated Promissory Note”), to amend and restate the Amended and Restated Extension Promissory Note. The Second Amended and Restated Extension Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date of the Company’s liquidation. At the election of the sponsor, up to $1,500,000 of the unpaid principal balance under the Second Amended and Restated Extension Promissory Note may be converted into conversion warrants at the price of $1.00 per warrant. Such conversion warrants will have terms identical to the warrants issued to the sponsor in the private placement.
On October 9, 2024, the Company held the October 2024 Extraordinary Meeting. At the October 2024 Extraordinary Meeting, the Third Extension Amendment Proposal to give the board of directors the right to extend the date by which the Company must consummate a Business Combination from October 12, 2024 on a monthly basis up to twelve(12) times until October 12, 2025 (or such earlier date as determined by the Board) (the “Third Extension Amendment”) was approved. Under the law of the Cayman Islands, upon approval of the Third Extension Amendment Proposal by the affirmative vote of at least two-thirds (2/3) of the shareholders entitled to vote, who attended and voted at the October 2024 Extraordinary Meeting (including those who voted online), the Third Extension Amendment became effective. Consequently, the Contribution will be $48,311 per month needed for the Company to complete a Business Combination.
In connection with the Contribution and advances the sponsor may make in the future to us for working capital expenses, on September 20, 2024, the Company issued the third amended and restated extension promissory note in the principal amount of up to $4.5 million to the sponsor (the “Third Amended and Restated Extension Promissory Note”), to amend and restate the Second Amended and Restated Promissory Note. The Third Amended and Restated Extension Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date of the liquidation of the Company. At the election of the sponsor, up to a maximum amount of $1,500,000 of the unpaid principal balance under the Notes may be converted into conversion warrants at the price of $1.00 per warrant. Such conversion warrants will have terms identical to the warrants issued to the sponsor in a private placement that closed simultaneously with the Company’s Initial Public Offering.
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On October 12, 2024, November 13, 2024, December 13, 2024, January 17, 2025, February 12, 2025 and March 12, 2025, the Company made six deposits of $48,311 for November, December, January, February, March and April extension contributions, respectively, to extend the life until April 12, 2025.
As of December 31, 2024, the outstanding principal under the Third Amended and Restated Extension Promissory Note was $3,856,641.
Founder Conversion
On May 9, 2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association and the approval of the Founder Share Amendment Proposal, the sponsor, the holder of an aggregate of 4,002,121 of the Class B ordinary shares, elected to convert each outstanding Class B ordinary share held by it on a one-for-one basis into Class A ordinary shares, with immediate effect in the founder conversion. Following this founder conversion and the redemptions, we had an aggregate of 8,665,842 Class A ordinary shares and 1,747,879 Class B ordinary shares issued and outstanding.
Recent Developments
Nasdaq Notice
On October 9, 2023, the Company received a letter (the “Total Shareholders Notice”) from the Listing Qualifications Department of Nasdaq notifying the Company that it was not in compliance with Nasdaq Listing Rule 5450(a)(2), which required the Company to maintain at least 400 total holders for continued listing on the Nasdaq Global Market. The Total Shareholders Notice stated that the Company had until November 24, 2023 to provide Nasdaq with a plan to regain compliance. On November 24, 2023, the Company provided plan to Nasdaq for meeting the requirements under Nasdaq Listing Rule 5450(a)(2), and evaluated available options to regain compliance.
On October 12, 2023, the Company filed a Current Report on Form 8-K with the SEC to disclose its receipt of the Total Shareholders Notice in accordance with Nasdaq Listing Rule 5810(b).
On January 18, 2024 the Company provided an update to Nasdaq of its progress on fulfilling the plan to regain compliance and received a request to provide an additional update to Nasdaq on February 20, 2024.
On February 20, 2024 the Company again updated Nasdaq on its progress in fulfilling the plan to regain compliance and continues to be proactive in regaining compliance. Pursuant to the 180-day deadline from the letter received October 9, 2023, the date for the Company to demonstrate compliance is April 6, 2024.
On April 30, 2024, the Company received a letter from Nasdaq indicating that the Company did not regain compliance with the Nasdaq Listing Rule 5450(a)(2). Pursuant to the letter, unless the Company requested a hearing before the Nasdaq Hearings Panel by May 7, 2024, the Company’s securities would be subject to suspension and delisting from the Nasdaq Global Market at the opening of business on May 9, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s securities from listing and registration on Nasdaq. The Company timely requested a hearing before the Nasdaq Hearings Panel and the hearing was held on June 18, 2024. On August 5, 2024, the Nasdaq Hearing Panel granted the Company’s request for continued listing on the Nasdaq Global Market and confirmed that the Company was in compliance with Nasdaq Listing Rule 5450(a)(2).
On October 7, 2024, the Company received a notice from the staff of the Listing Qualifications Department of Nasdaq stating that as the Company had not completed an initial business combination within 36 months of the effective date of its registration statement in connection with its Initial Public Offering, it was not in compliance with Nasdaq IM 5101-2 and was therefore subject to delisting. The Company had until October 14, 2024 to request a hearing before the Nasdaq Hearings Panel. The Company had until October 14, 2024 to request a hearing before the Nasdaq Hearings Panel. The Company decided to request a hearing before the Nasdaq Hearings Panel. Trading in the Company’s securities was suspended at the opening of business on October 14, 2024. The Company had the hearing on December 10, 2024.
Additionally, on October 7, 2024, the Company submitted its initial listing application for conducting a change of control combination for the combined company on the Nasdaq Global Market—the application used for de-SPAC (special purpose acquisition company) business combinations. On October 11, 2024, Nasdaq provided the Company with a comment letter and required documentation that the Company will need to close the initial business combination.
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On December 10, 2024, the Company received a notice from the Nasdaq Listing Qualifications Hearings acknowledging that the Company had withdrawn its appeal of the October 7, 2024 delist determination issued by the Nasdaq Listings Qualifications Staff. Accordingly, trading in the Company’s securities was suspended at the open of trading on December 12, 2024. Nasdaq will file a Form 25 Notification of Delisting with the SEC. When the Company’s securities are delisted from Nasdaq, its securities are expected to trade over-the-counter.
Results of Operations
Our entire activity since inception up to December 31, 2024 related to our formation, the preparation for the Initial Public Offering, and since the closing of the Initial Public Offering, the search for a prospective initial business combination target and we have been working on the initial business combination since it was entered into. We will not be generating any operating revenues until the closing and completion of our initial business combination, at the earliest. We will generate non-operating income in the form of interest income from the amount held in the Trust Account.
For the year ended December 31, 2024, we had net loss of approximately $2.3 million, which consisted of approximately $1.2 million in income from investments held in the Trust Account, a loss of approximately $746,000 from change in fair value of derivative warrant liability and interest income on an operating account of approximately $68, which were partially offset by approximately $2.7 million in operating and formation expenses.
For the year ended December 31, 2023, we had net income of approximately $4.0 million, which consisted of approximately $4.7 million in income from investments held in the Trust Account and interest income on an operating account and gain on forfeiture deferred underwriting commission of approximately $337,000, which were partially offset by approximately $1.0 million in operating and formation expenses.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an initial business combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, and geopolitical instability, such as the military conflict in Ukraine and the Middle East. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial business combination.
Liquidity, Capital Resources and Going Concern
Our liquidity needs to date have been satisfied through the payment of $25,000 from our sponsor to cover for certain offering expenses on behalf of us in exchange for issuance of Founder Shares, a loan under the Initial Public Offering’s promissory note in the amount of $250,000 and advances from our sponsor to cover for certain expenses on our behalf, and net proceeds from the consummation of the Initial Public Offering and the private placement held outside of the Trust Account. We fully repaid the Initial Public Offering’s promissory note balance on October 12, 2021. We also paid for certain expenses on behalf of a related party. As of December 31, 2021, we had approximately $3,500 in amount due from related party outstanding, which was fully paid in April 2022. Subsequently, we borrowed an additional amount of approximately $2,800 and fully settled the balance in July 2022.
As of December 31, 2024, we had approximately $3,500 in cash held outside of the Trust Account and a working capital deficit of approximately $6.4 million.
For the year ended December 31, 2024, net cash used in operating activities was approximately $1.4 million. Net loss of approximately $2.3 million was affected by income from investments held in the Trust Account of approximately $1.2 million and changes in operating assets and liabilities provided approximately $1.4 million of cash for operating activities. Cash provided by investing activities resulted from the redemption from the Trust Account of approximately $14.3 million and cash deposited into the Trust Account of $590,000. Cash used in financing activities resulted from the proceeds from the Extension Promissory Note of approximately $2 million and redemption of Class A ordinary shares of $14.3 million.
For the year ended December 31, 2023, net cash used in operating activities was approximately $605,000. Net income of approximately $4.0 million was affected by income from investments held in the Trust Account of approximately $4.7 million, gain on
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forfeiture deferred underwriting commission of approximately $337,000 and changes in operating assets and liabilities provided approximately $438,000 of cash for operating activities. Cash provided by investing activities resulted from the redemption from the Trust Account of approximately $209.0 million and cash deposited into the Trust Account of $1.3 million. Cash used in financing activities resulted from the proceeds from the Extension Promissory Note of approximately $1.9 million and redemption of Class A ordinary shares of $209.0 million.
As of December 31, 2024, we had cash held in the Trust Account of approximately $19 million. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable, if applicable, and deferred underwriting commissions) to complete our initial business combination. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. In connection with our assessment of going concern considerations in accordance with ASC 205-40, we have until October 12, 2025, if all extensions of the extended date are exercised, to consummate a business combination. It is uncertain that we will be able to consummate a business combination by this time, and if a business combination is not consummated by this date, then there will be a mandatory liquidation and subsequent dissolution of our Company.
Our management has determined that the liquidity condition and mandatory liquidation, should a business combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the consolidated financial statements included in this Report under “Item 1. Financial Statements” are issued.
We plan to address this uncertainty through the initial business combination. There is no assurance that our plans to consummate the initial business combination will be successful or successful within the Combination Period. The consolidated financial statements and notes thereto included in this Report under “Item 1. Financial Statements” do not include any adjustments that might result from the outcome of this uncertainty.
Contractual Obligations
Registration Rights Agreement
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the registration statement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to consummation of a business combination. We have granted Cantor and Odeon or their designees or affiliates certain registration rights relating to these securities. The underwriters of the Initial Public Offering may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement and may not exercise demand rights on more than one occasion. We bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
In connection with the Initial Public Offering, the underwriters were granted a 45-day option from the date of the prospectus to purchase up to 3,000,000 additional Units to cover over-allotments. On October 12, 2021, the underwriters fully exercised the over-allotment option to purchase an additional 3,000,000 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $30,000,000 to us.
The underwriters were paid a cash underwriting discount of $0.20 per Unit (excluding over-allotment Units) in the Initial Public Offering, or $4,000,000 in the aggregate upon the closing of the Initial Public Offering. In addition, $0.50 per Unit (excluding over-allotment Units), and $0.70 per over-allotment Unit (totaling $12,100,000 in aggregate) is payable to the underwriters for deferred underwriting commission. The deferred fee is payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a business combination, subject to the terms of the Underwriting Agreement.
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On April 12, 2023, we entered into a Fee Reduction Agreement, which amends the Underwriting Agreement. According to the Underwriting Agreement, we previously agreed to pay to the underwriters of the Initial Public Offering an aggregate of $12,100,000 as deferred underwriting commissions, a portion of which fee is payable to each underwriter in proportion to their respective commitments pursuant to the Underwriting Agreement, upon the consummation of a business combination. Pursuant to the Fee Reduction Agreement, the underwriters have agreed to forfeit sixty-six and 94/100 percent (66.94%) of the aggregate deferred underwriting commissions of $12,100,000 for a total reduction of $8,100,000. However, if we enter into a business combination with a target at a pre-money valuation above $100 million, the forfeiture percentage for underwriters will be reduced to no less than fifty percent (50%) to each, an approximate reduction of $6,050,000. On April 4, 2024, we entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Cantor Fitzgerald & Co. (“CF&CO”). Pursuant to the Amended and Restated Fee Reduction Agreement with CF&CO, in the event that we consummates the Business Combination, CF&CO agrees that it will forfeit $6,475,000 of the aggregate original deferred fee that would otherwise be payable by us to CF&CO, resulting in a remainder of $1,995,000. On April 4, 2024, we entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Odeon Capital Group LLC (“Odeon”). Pursuant to the Amended and Restated Fee Reduction Agreement with Odeon, in the event that we consummates the Business Combination with AERKOMM, Odeon agrees that it will forfeit $2,775,000 of the aggregate original deferred fee that would otherwise be payable by us to Odeon, resulting in a remainder of $855,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement.
Administrative Support Agreement
On October 6, 2021, we entered into an agreement with the IX Acquisition Services LLC, to pay up to $10,000 per month for office space, secretarial and administrative services. Upon completion of a Business Combination or the liquidation, we will cease paying these monthly fees; however, the Sponsor waived these fees for the year ended December 31, 2024 and 2023.
Off-Balance Sheet Arrangements
As of December 31, 2024, we did not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of the consolidated financial statements included in this Report under “Item 1. Financial Statements” and related disclosures in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Class A Ordinary Shares Subject to Possible Redemption
All of the 23,000,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering and subsequent full exercise of the underwriters’ over-allotment option contain a redemption feature, which allows for the redemption of such public shares in connection with our liquidation, if there is a shareholder vote or tender offer in connection with the business combination and in connection with certain amendments to the Amended and Restated Memorandum and Articles of Association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480, redemption provisions not solely within the control of our Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all public shares have been classified outside of permanent equity.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations included in this Report under “Item 1. Financial Statements”. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
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or as equity, is re-assessed at the end of each reporting period. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
We evaluated the Public Warrants and Private Placement Warrants in accordance with ASC 480 and ASC 815 and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Public Warrants and Private Placement Warrants from being accounted for as components of equity. As the Public Warrants and Private Placement Warrants meet the definition of a derivative as contemplated in ASC 815, they were recorded as derivative liabilities on the balance sheets included in this Report under “Item 1. Financial Statements” and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with ASC 820, with changes in fair value recognized in the statements of operations included in this Report under “Item 1. Financial Statements” in the period of change. The determination of fair value for the warrant liabilities represents a significant estimate within the financial statements included in this Report under “Item 1. Financial Statements”.
Convertible Instruments
The Company accounts for its promissory notes that feature conversion options in accordance with ASC 815. ASC 815 requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) a promissory note that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Recent Accounting Pronouncements
Adopted in fiscal year 2024
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. At December 31, 2024, the Company adopted the standard, retrospectively. The adoption of ASU 2023-07 had no material impact on the Company’s financial statements.
To be adopted in future periods
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its condensed consolidated financial statements and disclosures.
Management does not believe there are any material recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on our condensed consolidated financial statements included in this Report under “Item 1. Financial Statements”.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
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Item 8. Financial Statements and Supplementary Data
This information appears following Item 15 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Controls Over Financial Reporting
As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
| (1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2024. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
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(COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting as of December 31, 2024.
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (1)
Directors and Executive Officers
Our directors and executive officers are as follows:
Name |
| Age |
| Position |
| | | | |
Noah Aptekar |
| 36 |
| Chief Financial Officer, Chief Operations Officer and Director (2) |
| | | | |
Eduardo Marini |
| 44 |
| Director |
| | | | |
Shannon Grewer |
| 48 |
| Director |
(1) On September 23, 2024, Guy Willner, Karen Bach, Teresa Barger and Andrew Bartley submitted the resignations to the Company’s board of directors, effective upon both of the board of director’s acceptance of such resignations and the shareholders’ approval of the Company’s Third Extension Amendment Proposal of the deadline to consummate its business combination. The shareholders meeting occurred on October 9, 2024 and The Company’s Third Extension Amendment Proposal was approved.
(2) Upon the submission of Karen Bach’s resignation as the Chief Executive Officer, the board of directors appointed Noah Aptekar, as the Company’s Chief Executive Officer, in addition to his positions of Chief Financial Officer, Chief Operations Officer and director, effective upon the effectiveness of resignation of Karen Bach.
Noah Aptekar, Chief Executive Officer, Chief Financial Officer, Chief Operations Officer and Director
Noah Aptekar, our Chief Executive Officer, Chief Financial Officer, Chief Operations Officer and Director, has extensive experience in innovation, finance and operations in high-technology industries, with particular expertise on terrestrial and space-based telecommunications. From August 2016 through March 2020, Mr. Aptekar worked for SpaceX, the largest US-based “unicorn” company, where he brought financial discipline to the production division, which accounted for approximately one-third of the company’s employees actively engaged in the production and manufacturing of vehicles, and was responsible for financial planning, cost analysis and budget management activities for the division’s nine-figure annual operating and capital spend. Most recently, he was the project lead for one of the largest future budget items for SpaceX, the Starlink User Terminal. Furthermore, at SpaceX, Mr. Aptekar identified and implemented operational efficiencies to control cost and reduce risk while overseeing the development of a new consumer electronics manufacturing facility. Between 2012 and 2014, while working for Colorado’s then-Governor John W. Hickenlooper in the Office of Economic Development and International Trade, Mr. Aptekar co-created the $100+ million Advanced Industries fund, which matches private investments with high-tech businesses and entrepreneurs. He also established and managed the due diligence and investment committee processes for the Advanced Industries fund. Currently, Mr. Aptekar is the principal of Next Century Innovations, a global consulting company, and is an officer of Flamingo Investments Sponsor LLC, an independent sponsor entity. Mr. Aptekar has a bachelor’s degree from the University of Pennsylvania, an MBA from Yale University and has taken courses in pursuit of a Master of Science from the Georgia Institute of Technology.
Eduardo Marini, Director
Eduardo Marini, our director, is the Chief Executive Officer and co-founder of green4T, a leading IT infrastructure services provider operating in Brazil, Argentina, Chile, Uruguay, Peru, Colombia, Ecuador and Costa Rica. Prior to co-founding green4T in 2016, Mr. Marini was the Vice President and interim CEO of Aceco TI, a leader in design, construction, and maintenance of high-availability datacenters in Latin America, formerly owned by the global investment firm Kohlberg Kravis Roberts (KKR). Before joining Aceco TI, Mr. Marini was a private equity investor with General Atlantic (GA), a global private equity firm focused on growth investments. While at GA, he held various non-executive director roles and oversaw new investments in Latin America in the technology and financial services sectors, having completed one of the most successful investments by GA to date in XP Inc. (NASDAQ:XP), an investment management company currently valued at more than $20 billion. His experience also includes private equity and investment banking roles at Actis, Lazard, and Bank of America, both in Brazil and in the United States. Mr. Marini is a licensed attorney and holds an LL.B. degree from the Universidade Federal de Minas Gerais (UFMG) and an MBA from the Yale School of Management.
25
Shannon Grewer, Director
Shannon Grewer, our director, is a corporate lawyer with significant experience working with early-stage companies in emerging markets. She spent 15 years working in Washington, D.C. with several major international law firms, where she regularly advised clients across multiple sectors, including power, oil and gas, mining, banking, retail, consumer goods, entertainment and aviation. Ms. Grewer has significant transactional experience in project finance, private equity, corporate acquisitions and divestitures. She is currently the General Counsel for Frontier Tower Associates Philippines and Frontier Towers Bangladesh, subsidiaries of Pinnacle Towers, an Asia-focused digital infrastructure platform backed by leading investment firm KKR. Ms. Grewer served as the General Counsel for Towershare, the largest independent tower company based in the Middle East. Ms. Grewer led Towershare’s raise of the necessary capital to transition from three employees to more than one hundred employees in Dubai and Pakistan, oversaw multiple tower acquisitions, and closed a successful exit for the company’s investors through sales to Edotco and IHS Towers. She has worked as an advisor to Edotco and helped a team of former Edotco executives raise capital from Digital Colony to launch EdgePoint, a telecommunications tower infrastructure company with operations across the ASEAN region. In addition to telecommunications, Ms. Grewer has negotiated infrastructure projects, including mining, power and commercial agriculture in South America, Sub-Saharan Africa and Southeast Asia. Ms. Grewer holds a bachelor’s degree from the University of Connecticut and a juris doctor degree from Fordham University School of Law.
Number and Terms of Office of Officers and Directors
Our board of directors consists of three members and is divided into three classes with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with Nasdaq rules, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors, consisting of Mr. Marini, will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Ms. Grewer, will expire at the second annual general meeting. The term of office of the third class of directors, consisting of Mr. Aptekar, will expire at the third annual general meeting.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint officers as it deems appropriate pursuant to our Amended & Restated Memorandum and Articles of Association.
Director Independence
An “independent director” is defined generally, under Nasdaq listing standards, as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Our board of directors has determined that Eduardo Marini and Shannon Grewer are “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Board Committees
Our board of directors has two standing committees: an audit committee and a compensation committee. Each committee operates under a charter that has been approved by our board and has the composition and responsibilities described below. Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 under the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors. The charter of each committee is available on our website.
Audit Committee
We established an audit committee of the board of directors. The members of our audit committee are Shannon Grewer and Eduardo Marini. Mr. Marini serves as chairman of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Marini qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We have adopted an audit committee charter, which details the principal functions of the audit committee, including:
26
| ● | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
| ● | monitoring the independence of the independent registered public accounting firm; |
| ● | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
| ● | inquiring and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; |
| ● | appointing or replacing the independent registered public accounting firm; |
| ● | determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
| ● | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
| ● | monitoring compliance on a quarterly basis with the terms of the Initial Public Offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of the Initial Public Offering; and |
| ● | reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. |
Compensation Committee
We established a compensation committee of the board of directors. The members of our Compensation Committee are Shannon Grewer and Eduardo Marini. Ms. Grewer serves as chairman of the compensation committee. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| ● | reviewing and approving the compensation of all of our other Section 16 executive officers; |
| ● | reviewing our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; |
| ● | assisting management in complying with our proxy statement and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
| ● | producing a report on executive compensation to be included in our annual proxy statement; and |
| ● | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
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The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Notwithstanding the foregoing, as indicated above, other than the payment to IX Acquisition Services LLC of $10,000 per month, for office space, utilities and secretarial and administrative support and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing shareholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
Director Nominations
We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Nasdaq Rule 5605(e)(2), a majority of the independent directors may recommend a director nominee for selection by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The director who will participate in the consideration and recommendation of director nominee is Ms. Grewer. In accordance with Nasdaq Rule 5605(e)(1)(A), all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
The board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual general meeting of the company (or, if applicable, an extraordinary general meeting of the company). Our shareholders that wish to nominate a director for appointment to our board of directors should follow the procedures set forth in our Amended & Restated Memorandum and Articles of Association.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
Compensation Committee Interlocks and Insider Participation
Our officer does not currently serve, and in the past year has not served, (i) as a member of the compensation committee or board of directors of another entity, one of whose executive officers served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose executive officers served on our board of directors.
Code of Ethics
We adopted a Code of Ethics applicable to our directors, officers and employees. We filed a copy of our form of Code of Ethics and our audit committee charter as exhibits to the registration statement. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Trading Policies
We have
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ITEM 11. EXECUTIVE COMPENSATION.
None of our executive officers or directors has received any cash compensation for services rendered. We pay IX Acquisition Services LLC a total of $10,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease making these payments. Our sponsor, its service providers, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred or such agreed-upon compensation as contracted in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.
It is possible that some or all of our officers and directors may negotiate employment or consulting arrangements with the post-transaction company after our initial business combination. Any such arrangements will be disclosed in the proxy solicitation or tender offer materials, as applicable, furnished to our shareholders in connection with a proposed business combination, to the extent they are known at such time.
The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, but we do not believe that such arrangements will be a determining factor in our decision to proceed with any potential business combination.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
We have no compensation plans under which equity securities are authorized for issuance.
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of April 3, 2025, by:
| ● | each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares; |
| ● | each of our officers and directors; and |
| ● | all our officers and directors as a group. |
The following table is based on 7,360,373 ordinary shares outstanding at April 3, 2025, of which 5,612,494 were Class A ordinary shares and 1,747,879 were Class B ordinary shares. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them.
|
| Number of |
| Percentage of |
|
| | Shares | | Outstanding |
|
| | Beneficially | | Ordinary |
|
Name and Address of Beneficial Owner(1) | | Owned | | Shares |
|
All officers and directors as a group (seven individuals) | | 4,002,121 | | 54 | % |
Noah Aptekar(2) |
| 4,002,121 |
| 54 | % |
Eduardo Marini |
| — |
| — | |
Shannon Grewer |
| — |
| — | |
IX Acquisition Sponsor, LLC(2) |
| 4,002,121 |
| 54 | % |
*Less than one percent
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is 53 Davies Street, London W1K 5JH United Kingdom. |
| (2) | Our sponsor is the record holder of such shares. IX Acquisition Sponsor Manager, LLC is the manager of the sponsor. On May 14, 2023, Noah Aptekar as the sole member of IX Acquisition Sponsor Manager, LLC, appointed two additional officers, delegating to the officers the authority to jointly manage the affairs of the Company by majority resolution, vote, consent or other joint action and the officers collectively have voting and investment discretion with respect to the ordinary shares held of record by the sponsor. The officers disclaim any beneficial ownership of the shares held by the sponsor, except to the extent of his pecuniary interest therein. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
On March 11, 2021, our sponsor purchased an aggregate of 5,750,000 Founder Shares for a purchase price of $25,000, or approximately $0.004 per share. October 12, 2021, the sponsor transferred an aggregate of 1,747,879 Founder Shares to the anchor investors for their purchase of the units in the Initial Public Offering. Our sponsor currently owns approximately 54% of our outstanding ordinary shares.
Our sponsor, Cantor and Odeon purchased an aggregate of 7,150,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $7,150,000 in the aggregate, in a private placement that closed simultaneously with the closing of the Initial Public Offering. The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Founder Shares or Private Placement Warrants, which will expire worthless if we do not consummate a business combination within the allotted 18-month period.
If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us, in accordance with applicable laws.
Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to (except in the case of the Committed Sponsor Loans), loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans (which amount includes the Committed Sponsor Loans) may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the initial holders. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the Trust Account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
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Registration Rights
The holders of Founder Shares and Private Placement Warrants will be entitled to registration rights pursuant to a registration rights agreement signed on October 6, 2021. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion the Company’s initial business combination. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, on the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, and (ii) in the case of the Private Placement Warrants, and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our initial business combination. We have granted Cantor and Odeon or their designees or affiliates certain registration rights relating to the Underwriters Private Placement Warrants. The underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement relating to the Initial Public Offering and may not exercise demand rights on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Administrative Services
We will reimburse our IX Acquisition Services LLC for office space, secretarial and administrative services provided to members of the Company’s management team in an amount not to exceed $10,000 per month in the event such space and/or services are utilized and the Company does not pay a third party directly for such services, from the date of closing of the Initial Public Offering. Upon completion of a business combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.
Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end consolidated financial statements, reviews of our quarterly consolidated financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. The aggregate fees billed by Marcum for audit fees, inclusive of required filings with the SEC, for the year ended (i) December 31, 2024 totaled $258,015 and ii) December 31, 2023 totaled $97,850.
Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end consolidated financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Marcum for any audit- related fees for the year ended December 31, 2024 and 2023.
Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. We did not pay Marcum for services relating to tax compliance, tax planning and tax advice for the year ended December 31, 2024 and 2023.
All Other Fees. All other fees consist of fees billed for all other services. We did not pay Marcum for other services for the year ended December 31, 2024 and 2023.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
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Item 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
| (a) | The following documents are filed as part of this Form 10-K: |
| (1) | Consolidated Financial Statements: |
| (2) | Financial Statement Schedules: |
None.
| (3) | Exhibits |
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
Exhibit |
| Description |
|---|---|---|
| | |
1.1 | | |
2.1 | | |
2.2 | | |
2.3 | | |
3.1 | | |
3.2 | | |
3.3 | | |
3.4 | | |
3.5 | |
32
Exhibit |
| Description |
|---|---|---|
| | |
4.1 | | |
4.2 | | |
4.3 | | |
4.4 | | |
4.5 | | |
10.1 | | |
10.2 | | |
10.3 | | |
10.4 | | |
10.5 | | |
10.6 | | |
10.7 | | |
10.8 | | |
10.9 | | |
10.10 | | |
10.11 | | |
10.12 | |
33
Exhibit |
| Description |
|---|---|---|
| | |
10.13 | | |
10.14 | | |
10.15 | | |
10.16 | | |
10.17 | | |
14.1 | | |
19.1* | | |
99.1 | | |
99.2 | | |
21.1 | | |
31.1* | | |
31.2* | | |
32.1* | | |
32.2* | | |
97.1 | | |
101.INS | | Inline XBRL Instance Document |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF XBRL | | Inline Taxonomy Extension Definition Linkbase Document |
101.LAB XBRL | | Inline Taxonomy Extension Label Linkbase Document |
101.PRE XBRL | | Inline Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
April 3, 2025 | | |
| | |
| | |
| IX ACQUISITION CORP. | |
| | |
| By: | /s/ Noah Aptekar |
| Name: | |
| Title: | Chief Executive Officer and Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name |
| Title |
| Date |
| | | | |
/s/ Noah Aptekar | | Chief Executive Officer, Chief Financial Officer and Director | | April 3, 2025 |
Noah Aptekar | | (Principal Executive, Financial and Accounting Officer) | | |
| | | | |
| | | | |
/s/ Eduardo Marini | | Director | | April 3, 2025 |
Eduardo Marini | | | | |
| | | | |
/s/ Shannon Grewer | | | ||
Shannon Grewer | | Director | | April 3, 2025 |
36
IX ACQUISITION CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
| Page |
| F-2 | |
Consolidated Balance Sheets as of December 31, 2024 and 2023 | | F-3 |
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 | | F-4 |
| F-5 | |
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 | | F-6 |
| F-7 – F-29 | |
Auditor PCAOB ID Number: | | |
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
IX Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of IX Acquisition Corp. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Notes 1 and 2 to the financial statements, the Company is a Special Purpose Acquisition Company that was formed for the purpose of completing a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities on or before April 12, 2025, or by resolution of its Board of Directors and if requested by the Sponsor, to extend the business combination deadline by one month each time from April 12, 2025 to October 12, 2025. The Company entered into a definitive merger agreement with a business combination target on March 29, 2024; however, the completion of this transaction is subject to the approval of the Company’s shareholders among other conditions. There is no assurance that the Company will obtain the necessary approvals, satisfy the required closing conditions, raise the additional capital it needs to fund its operations, and complete the transaction prior to April 12, 2025, if at all. The Company also has no approved plan in place to extend the business combination deadline and fund operations for any period of time after April 12, 2025, in the event that it is unable to complete a business combination by that date. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Notes 1 and 2. The financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum LLP
We have served as the Company’s auditor since 2021.
April 3, 2025
F-2
IX ACQUISITION CORP.
CONSOLIDATED BALANCE SHEETS
| | December 31, | ||||
|
| 2024 |
| 2023 | ||
Assets | | | | | | |
Current assets: | | | | | | |
Cash | | $ | | | $ | |
Prepaid expenses | | | | |
| |
Accounts receivable, net of allowance of $ | | | — | | | — |
| | | | | — | |
Total current assets | | | | | | |
Non-current assets: | |
| | |
| |
Cash and Investments held in the Trust Account | | | | | | |
Total Assets | | $ | | | $ | |
| | | | | | |
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | |
|
| |
|
|
Current liabilities: | | | | | | |
Accounts payable | | $ | | | $ | — |
Accrued expenses | | | | | | |
| | | | | | |
Total current liabilities | | | | | | |
Non-current liabilities: | | | | | | |
Derivative warrant liabilities | |
| | |
| |
Deferred underwriting fee payable | |
| | |
| |
Total non-current liabilities | | | | | | |
Total Liabilities | |
| | |
| |
| |
| | |
|
|
Commitments and Contingencies (Note 6) | |
|
| |
|
|
Class A ordinary shares subject to possible redemption, $ | | | | | ||
| |
| | |
|
|
Shareholders’ Deficit: | |
| | |
|
|
Preference shares, $ | |
| |
| ||
Class A ordinary shares, $ | |
| | |
| |
Class B ordinary shares, $ | |
| | |
| |
Additional paid-in capital | |
| — | |
| |
Accumulated deficit | |
| ( | |
| ( |
Total shareholders’ deficit | |
| ( | |
| ( |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | | $ | | | $ | |
The accompanying notes are an integral part of the consolidated financial statements.
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IX ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | For the Year Ended | ||||
| | December 31, | ||||
|
| 2024 |
| 2023 | ||
Operating and formation expenses | | $ | | | $ | |
Loss from operations | | | ( | | | ( |
| | | | | | |
Other (expense) income: | | | | | | |
Income from cash and investments held in the Trust Account | | | | | | |
Interest (expense) on operating cash account | | | ( | | | |
Gain on forfeiture of deferred underwriting fee payable | | | — | | | |
Change in fair value of derivative warrant liabilities | | | ( | | | — |
Total other income, net | | | | | | |
| | | | | | |
Net (loss) income | | $ | ( | | $ | |
| |
| | |
| |
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to redemption | |
| | | | |
Basic and diluted net (loss) income per share, Class A ordinary shares subject to redemption | | $ | ( | | $ | |
Basic and diluted weighted average shares outstanding, Class A (non-redeemable) and Class B ordinary shares | |
| | |
| |
Basic and diluted net (loss) income per share, Class A (non-redeemable) and Class B ordinary shares | | $ | ( | | $ | |
The accompanying notes are an integral part of the consolidated financial statements.
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IX ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
| | Class A | | Class B | | Additional | | | | | Total | ||||||||
| | Ordinary Shares | | Ordinary Shares | | Paid-in | | Accumulated | | Shareholders’ | |||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance — December 31, 2022 | | | | | | | | | | | | | ( | | | ( | |||
Remeasurement of Class A ordinary shares to redemption amount |
| — | | | — | | — | | | — | |
| ( | |
| ( | |
| ( |
Gain on forfeiture of deferred underwriting fee payable |
| — | | | — | | — | | | — | | | | | | — | | | |
Class B to Class A Conversion |
| | | | | | ( | | | ( | |
| — | |
| — | |
| — |
Net income |
| — | | | — | | — | | | — | | | — | | | | | | |
Balance — December 31, 2023 | | | | $ | | | | | $ | | | $ | | | $ | ( | | $ | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | ( | | | ( | | | ( |
Net loss |
| — | | | — | | — | | | — | |
| — | |
| ( | |
| ( |
Balance — December 31, 2024 |
| | | $ | | | | $ | | $ | — | | $ | ( | | $ | ( | ||
The accompanying notes are an integral part of the consolidated financial statements.
F-5
IX ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | For the Year Ended December 31, | ||||
|
| 2024 |
| 2023 | ||
Cash Flows from Operating Activities: | | | | | | |
Net (loss) income | | $ | ( | | $ | |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |
| |
| | |
Change in fair value of derivative warrant liabilities | | | | | | — |
Income from investments held in the Trust Account | | | ( | | | ( |
Gain on forfeiture of deferred underwriting fee payable | |
| — | |
| ( |
Changes in operating assets and liabilities: | | | | | | |
Prepaid expenses and due from related party | | | ( | | | |
Accounts payable | |
| | |
| ( |
Accrued expenses | | | | | | |
Net cash used in operating activities | |
| ( | |
| ( |
| | | | | | |
Cash Flows from Investing Activities: | | | | | | |
Cash withdrawn from Trust Account in connection with Redemptions | | | | | | |
Cash deposited in the Trust Account | | | ( | | | ( |
Net cash provided by investing activities | | | | | | |
| |
|
| |
|
|
Cash Flows from Financing Activities: | |
|
| |
|
|
Proceeds from Extension Promissory Note | |
| | |
| |
Redemption of ordinary shares | |
| ( | |
| ( |
Net cash used in by financing activities | |
| ( | |
| ( |
| |
|
| |
|
|
Net change in cash | |
| ( | | | ( |
| | | | | | |
Cash - beginning of the period | |
| | |
| |
Cash - end of the period | | $ | | | $ | |
| |
| | |
| |
Supplemental disclosure of noncash investing and financing activities: | |
| | |
| |
Deferred underwriting fee reduction | | $ | ― | | | |
Remeasurement of Class A ordinary shares to redemption amount | | $ | | | $ | |
Conversion of Class B shares to Class A | | | ― | | | |
The accompanying notes are an integral part of the consolidated financial statements.
F-6
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Overview
IX Acquisition Corp. (the “Company”, “our Company,” “we” or “us”) is a blank check company incorporated in the Cayman Islands on March 1, 2021. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company has a wholly-owned subsidiary that was created on March 15, 2024, AKOM Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”) and AERKOMM Inc., a Nevada corporation (“AERKOMM”). The transactions contemplated by the Merger Agreement are intended to serve as the Company’s initial Business Combination. See Note 6 for further information.
As of December 31, 2024, the Company had not commenced any operations. All activity for the period from March 1, 2021 (inception) through December 31, 2024 relates to the Company’s formation and the initial public offering consummated on October 12, 2021 (“Initial Public Offering”), which is described below, and since the Initial Public Offering, the search for a prospective initial Business Combination. The Company generates non-operating income in the form of interest income from the amount held in the Trust Account (as defined below).
The Registration Statement on Form S-1 initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 16, 2021 (File No. 333-259567), as amended (the “Registration Statement) for the Initial Public Offering was declared effective on October 6, 2021. On October 12, 2021, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of
Transaction costs amounted to $
Upon the closing of the Initial Public Offering on October 12, 2021, an amount of $
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If the Company does not invest the proceeds as discussed above, the Company may be deemed to be subject to the Investment Company Act. If the Company is deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which the Company has not allotted funds and may hinder the Company’s ability to complete a Business Combination. If the Company is unable to complete the initial Business Combination, the Public Shareholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and the warrants will expire worthless.
The Company will provide its holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. All Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $
The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association as then in effect, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the holders of the Founder Shares prior to the Initial Public Offering (other than the Anchor Investors) (the “Initial Shareholders”), the Anchor Investors, and the Company’s executive officers and directors (“Management” or “Management Team”) agreed to vote any Founder Shares held by them, and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they (i) vote for or against the proposed transaction or (ii) were a Public Shareholder on the record date for the general meeting held to approve the proposed transaction.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of
The Initial Shareholders agreed to (i) waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of an initial Business Combination, (ii) waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to the Amended and Restated Memorandum and Articles of Association to modify the substance or timing of the Company’s obligation to redeem
Combination Period and Share Redemption/Conversion Events
If the Company is unable to complete a Business Combination within a certain period of time as outlined below (“the Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $
F-8
which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and Board of Directors (as defined below), liquidate and dissolve, subject, in each case, to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Company initially had 18 months from the closing of the Initial Public Offering (by April 12, 2023) to consummate a Business Combination as the Combination Period, prior to any amendments to the Amended and Restated Memorandum and Articles of Association to extend the duration of the Combination Period. As outlined through a series of proposals below, the Combination Period has since been extended. The Company had until January 12, 2024 to complete a Business Combination, with the right to extend the Combination Period through no later than October 12, 2024, subject to making required monthly extension deposits into the Trust Account of the lesser of (x) $
On April 10, 2023, the Company held an extraordinary general meeting of shareholders (the “2023 Extraordinary Meeting”). At the 2023 Extraordinary Meeting, the Company’s shareholders approved, among other things, a proposal to grant the Company the right to extend the Combination Period, from April 12, 2023 to May 12, 2023 (the “Extended Date”), and to allow the Company, without another shareholder vote, by resolution of the Company’s board of directors (the “Board of Directors”), to elect to further extend the Extended Date in one-month increments up to eleven additional times, or a total of up to twelve months total, up to April 12, 2024 (the “Extension Proposal”) by amending the Amended and Restated Memorandum and Articles of Association. Under Cayman Islands law, such amendment of the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal. As a result of the approval of the Extension Proposal, the Company was provided the ability, with monthly extension payments, but without another shareholder vote and by resolution of the Board of Directors, to extend the Extended Date in one-month increments through April 12, 2024, and further extending the Combination Period up to October 12, 2024 to complete a Business Combination which was approved during the Extraordinary General Meeting held on December 11, 2023.
At the 2023 Extraordinary Meeting, the Company’s shareholders also approved to further amend the Amended and Restated Memorandum and Articles of Association (i) to eliminate (x) the limitation that the Company may not redeem Public Shares in an amount that would cause the Company’s net tangible assets to be less than $
Additionally, the Sponsor agreed that if the Extension Proposal was approved, it or its designee would deposit into the Trust Account as a loan, an amount equal to the lesser of (x) $
In connection with the Contribution and advances the Sponsor may make in the future to the Company for working capital expenses, on April 13, 2023, the Company issued a convertible promissory note to the Sponsor with a principal amount up to $
F-9
On April 13, 2023, the Sponsor advanced $
On May 9, 2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association, the Sponsor, the holder of an aggregate of
On September 8, 2023, the Company issued an amended and restated promissory note in the principal amount of up to $
At the election of the Sponsor, up to $
On October 12, 2023, the Company issued a press release announcing that the Board of Directors has elected to extend the Combination Period for an additional month, from October 12, 2023 to November 12, 2023. In connection with the seventh extension of the Extended Date, the Board of Directors delivered the Sponsor a written request to draw down $
On November 13, 2023, the Company issued a press release announcing that the Board of Directors has elected to extend the Combination Period for an additional month, from November 12, 2023 to December 12, 2023. In connection with the eighth extension of the Extended Date, the Board of Directors delivered the Sponsor a written request to draw down $
On December 11, 2023, the Company held an extraordinary general meeting. At the meeting, the Second Extension Amendment Proposal to give the Board the right to extend the date by which the Company must consummate a Business Combination from December 12, 2023 on a monthly basis up to
The meeting was held, in part, to satisfy the annual meeting requirement pursuant to Listing Rule 5620(a) (the “Rule”) of The Nasdaq Stock Market LLC. Pursuant to the Rule, the Company was required to hold its first annual meeting of shareholders on or prior to December 31, 2023. Because the Meeting did not technically constitute an “annual general meeting” under Cayman Islands law, the terms of the Company’s Class I directors did not expire at the meeting.
F-10
In connection with the approval of the Second Extension Amendment Proposal, the Sponsor agreed to contribute to the Company, as a loan (the “Contribution”), the lesser of (x) $
In connection with the vote to approve the Second Extension Amendment Proposal, the holders of
In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $
On January 19, 2024, the Company issued a press release announcing that the Board had elected to extend the date by which the Company has to consummate a business combination from January 12, 2024 for an additional month to February 12, 2024 and further extend March 12, 2024 and April 12, 2024. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company with the right to extend the Deadline Date
On March 29, 2024, the Company entered into a Merger Agreement, by and among Merger Sub and AERKOMM (as it may be amended and/or restated from time to time, the “Merger Agreement”). Pursuant to the Merger Agreement, the Company was obligated to enter into simple agreements for future equity (the “SAFE Agreements”) with certain investors providing for investments in shares of the Company’s Common Stock in a private placement in an aggregate amount of not less than $
On August 12, 2024, the Company and AERKOMM entered into one new SAFE Agreement (the “PIPE Minimum Investment Amount”) and amended one of the SAFE Agreements previously executed on May 13, 2024. Additionally, on July 8, 2024, the Company canceled the other SAFE Agreement that was entered into on May 13, 2024. Furthermore, on June 26, 2024, the Company and AERKOMM entered into one new SAFE Agreement. As a result, as of August 12, 2024, SAFE Agreements for an aggregate of $
F-11
On December 4, 2024, the Company and AERKOMM entered into one new SAFE Agreement. As a result, as of December 4, 2024, SAFE Agreements for an aggregate of $
On October 9, 2024, the Company held an extraordinary general meeting of its shareholders. At the meeting, the Third Extension Amendment Proposal to give the Board the right to extend the date by which the Company must consummate a Business Combination from October 12, 2024 on a monthly basis up to
Nasdaq listing
On October 9, 2023, the Company received a letter (the “Total Shareholders Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5450(a)(2), which required the Company to main at least 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders Rule”). The Total Shareholders Notice stated that the Company had until November 24, 2023 to provide Nasdaq with a plan to regain compliance. If the plan was accepted, Nasdaq might grant an extension of up to 180 calendar days from the date of the Total Shareholders Notice to evidence compliance. If Nasdaq did not accept the Company’s plan, the Company would have the opportunity to appeal that decision to a Nasdaq Hearings Panel (the “Panel”). The Total Shareholders Notice had no immediate effect on the listing of the Company’s securities, and the Company’s securities continued to trade on the Nasdaq Global Market. On November 24, 2023, the Company provided plan to Nasdaq for meeting the requirements under Nasdaq Listing Rule 5450(a)(2), and evaluated available options to regain compliance. However, there could be no assurance that the Company would be able to regain compliance under Nasdaq Listing Rule 5450(a)(2), or would otherwise be in compliance with other Nasdaq listing criteria. On October 12, 2023, the Company filed a Current Report on Form 8-K with the SEC (the “Oct. 2023 Current Report”) to disclose its receipt of the Total Shareholders Notice in accordance with Nasdaq Listing Rule 5810(b). On January 18, 2024 the Company provided an update to Nasdaq of its progress on fulfilling the plan to regain compliance and received a request to provide an additional update to Nasdaq on February 20, 2024. On February 20, 2024 the Company again updated Nasdaq on its progress in fulfilling the plan to regain compliance and continues to be proactive in regaining compliance. Pursuant to the 180-day deadline from the letter received October 9, 2023, the date for the Company to demonstrate compliance is April 6, 2024. In the event that the Company is not able to demonstrate compliance to Nasdaq on such date, there is a reasonable possibility that the Company may receive a de-list letter from Nasdaq, at which point the Company would need to request a hearing.
On April 30, 2024, the Company received a Total Shareholders Notice from Nasdaq indicating that the Company did not regain compliance with the Minimum Total Holders Rule. The Company timely requested a hearing before the Panel to appeal the Total Shareholders Notice from Nasdaq and the hearing was held on June 18, 2024. On August 5, 2024, the Panel granted the Company’s request for continued listing on the Nasdaq Global Market and confirmed that the Company was in compliance with the Minimum Total Holders Rule.
On October 7, 2024, the Company received a notice from the Nasdaq’s Listing Qualifications’ Staff stating that as the Company had not completed an initial business combination within 36 months of the effective date of its registration statement in connection with its initial public offering, it was not in compliance with Nasdaq IM 5101-2 and was therefore subject to delisting. The Company had until October 14, 2024 to request a hearing before the Panel. The Company decided to request a hearing before the Panel. Trading in the Company’s securities was suspended at the opening of business on October 14, 2024. The Company had the hearing on December 10, 2024.
Additionally, on October 7, 2024, the Company submitted its initial listing application for conducting a change of control combination for the combined company on the Nasdaq Global Market—the application used for de-SPAC (special purpose acquisition
F-12
company) business combinations. On October 11, 2024, Nasdaq provided the Company with a comment letter and required documentation that the Company will need to close the initial business combination.
On December 10, 2024, the Company received a notice from the Nasdaq Listing Qualifications Hearings acknowledging that the Company had withdrawn its appeal of the October 7, 2024 delist determination issued by the Nasdaq Listings Qualifications Staff. Accordingly, trading in the Company’s securities was suspended at the open of trading on December 12, 2024. Nasdaq will file a Form 25 Notification of Delisting with the SEC. When the Company’s securities are delisted from Nasdaq, its securities are expected to trade over-the-counter.
Resignation of Directors and Certain Officers
On September 23, 2024, Karen Bach resigned as the Company’s Chief Executive Officer and Andrew Bartley resigned as the Company’s independent director, chair of audit committee and member of compensation committee. The Company’s board appointed Eduardo Marini, an independent director, as the Company’s chair of audit committee and member of compensation committee.
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN
Basis of Presentation
The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, which was formed on March 15, 2024. All significant intercompany balances and transactions have been eliminated in consolidation.
Going Concern Consideration
As of December 31, 2024, the Company had approximately $
Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution of the Company raises substantial doubt about its ability to continue as a going concern for a period of time within
Management plans to address this uncertainty through the initial Business Combination as discussed above. There is no assurance that the Company’s plans to consummate the initial Business Combination will be successful or successful within the Combination Period. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the
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requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the accompanying condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates are related to the fair value of the warrants.
Making estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. As of December 31, 2024 and 2023, the Company has not experienced losses on these accounts.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did
Cash and Investments Held in the Trust Account
The Company’s portfolio of investments was initially comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account were comprised of U.S. government securities, the investments were classified as “trading securities”. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at “fair value”. Trading securities and investments in money market funds are presented on the accompanying consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, on November 13, 2023 the Company instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account to the Company’s shareholders (see Note 1). As of December 31, 2024 and 2023, the assets held in the Trust Account were in cash.
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Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the accompanying consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The Company evaluated the Public Warrants and Private Placement Warrants in accordance with ASC 480 and ASC 815 and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Public Warrants and Private Placement Warrants from being accounted for as components of equity. As the Public Warrants and Private Placement Warrants meet the definition of a derivative as contemplated in ASC 815, they were recorded as derivative liabilities on the accompanying consolidated balance sheets and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with FASB ASC Topic 820, “Fair Value Measurement” (“ASC 820”), with changes in fair value recognized in the accompanying consolidated statements of operations in the period of change. The determination of fair value for the warrant liabilities represents a significant estimate within the accompanying condensed consolidated financial statements.
Convertible Instruments
The Company accounts for that feature conversion options in its promissory notes in accordance with ASC 815. ASC 815 requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) a promissory note that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Fair Value of Financial Instruments
“Fair value” is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.
The carrying amounts reflected in the accompanying consolidated balance sheets for cash, due from related party, and accounts payable approximate fair value due to their short-term nature. The three levels of the fair value hierarchy under ASC 820 are as follows:
| ● | “Level 1”, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | “Level 2”, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | “Level 3”, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.
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See Note 9 for additional information on assets and liabilities measured at fair value.
Class A Ordinary Shares Subject to Possible Redemption
All of the
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
As of December 31, 2024 and 2023, the Class A ordinary shares subject to redemption reflected in the accompanying consolidated balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption — January 1, 2023 |
| $ | |
Less: | |
|
|
Redemption of ordinary shares | |
| ( |
Plus: | |
| |
Increase in redemption value of Class A ordinary shares subject to redemption | |
| |
Class A ordinary shares subject to possible redemption — December 31, 2023 | | $ | |
Less: | | | |
Redemption of ordinary shares | | | ( |
Plus: | | | |
Increase in redemption value of Class A ordinary shares subject to redemption | | | |
Class A ordinary shares subject to possible redemption — December 31, 2024 | | $ | |
Offering Costs associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the accompanying consolidated statements of operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. Deferred underwriting commissions are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the condensed consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes a recognition threshold and measurement process for condensed consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transitions. Based on the Company’s evaluation, it
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has been concluded that there are no significant uncertain tax positions requiring recognition in the accompanying condensed consolidated financial statements.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
Net (Loss) Income Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share” (“ASC 260”). The Company has two classes of shares, the Class A ordinary shares and Class B ordinary shares. Income is shared pro rata between the two classes of shares.
Net (loss) income per ordinary share is computed by dividing net (loss) income by the weighted-average number of ordinary shares outstanding during the period. Remeasurement associated with the redeemable Class A ordinary shares is excluded from net (loss) income per share as the redemption value approximates fair value. Therefore, the (loss) income per share calculation allocates income shared pro rata between redeemable and non-redeemable ordinary shares. The Company has not considered the effect of the exercise of the Public Warrants and Private Placement Warrants to purchase an aggregate of
The following tables reflect the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
|
| For the Year | ||||
| | Ended December 31, | ||||
| | 2024 |
| 2023 | ||
Class A Ordinary Shares subject to possible redemption | | | | | | |
Numerator: Net (loss) income allocable to Class A ordinary shares (Redeemable) | | $ | ( | | $ | |
Denominator: Weighted Average Class A ordinary shares (Redeemable) | | | | | | |
Basic and diluted weighted average shares outstanding | | | | | ||
Basic and diluted net (loss) income per share | | $ | ( | | $ | |
| |
|
| |
| |
Class A (non-redeemable) and Class B Ordinary Shares |
| | |
| | |
Numerator: Net (loss) income allocable to Class A ordinary shares (non-redeemable) and Class B ordinary shares | | | ( |
| | |
Denominator: | | | | | | |
Weighted Average Class A (non-redeemable) and Class B ordinary shares — Basic and diluted weighted average shares outstanding | | | | | | |
Basic and diluted net (loss) income per share | | $ | ( | | $ | |
Recent Accounting Pronouncements
Adopted in fiscal year 2024
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. At December 31, 2024, the
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Company adopted the standard, retrospectively. The adoption of ASU 2023-07 had no material impact on the Company’s financial statements (see Note 10 for details).
To be adopted in future periods
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its condensed consolidated financial statements and disclosures.
Management does not believe there are any material recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the accompanying condensed consolidated financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, which was consummated on October 12, 2021, the Company sold
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor, Cantor and Odeon purchased an aggregate of
Each Private Placement Warrant is exercisable to purchase
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On March 11, 2021, the Sponsor was issued
On May 9, 2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association, the Sponsor elected to convert all
The Initial Shareholders agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, or sold until the earlier of (i)
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exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
A total of (i)
Each Anchor Investor entered into separate investment agreements (the “Anchor Investment Agreements”) with the Company and the Sponsor pursuant to which each Anchor Investor purchased a specified number of Founder Shares, or an aggregate of
The Company estimated the fair value of the Founder Shares attributable to the Anchor Investors to be $
Prior to the First Extension vote in April 12, 2023, the owners of all of the Founders Shares distributed pursuant to the Anchor Investment Agreements all entered into a first amendment of such agreement, such that the transferred shares shall, in the same proportion applicable to the Founder Shares held by the Sponsor, be automatically, and without further action of any of the parties, subject to any cut-back, reduction, mandatory repurchase, redemption, forfeiture, vesting or revesting, earnouts or other concessions agreed upon by the Company and the Sponsor in connection with the Company’s entry into an agreement with respect to, or the consummation of, an initial business combination.
Administrative Support Agreement
On October 6, 2021, the Company entered into an agreement with the Sponsor, to pay up to $
Related Party Loans
The Sponsor has committed to loan the Company an aggregate of up to $
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Committed Sponsor Loans) may be convertible into warrants of the post Business Combination entity at a price of $
In connection with the Contribution and advances the Sponsor may make in the future to the Company for working capital expenses, on April 13, 2023, the Company issued the Extension Promissory Note to the Sponsor with a principal amount up to $
On September 8, 2023, the Company issued the Amended and Restated Extension Promissory Note in the principal amount of up to $
On April 18, 2024, the Company amended and restated the convertible promissory note, dated as of September 8, 2023, previously issued to Sponsor, to increase the aggregate principal amount to up to $
On September 20, 2024, the Company amended and restated the convertible promissory note, dated as of September 8, 2023, previously issued to Sponsor, to increase the aggregate principal amount to up to $
At the election of the Sponsor, up to $
As of December 31, 2024 and 2023, the Company had a total of $
Due from related party
The Company covered certain expenses on behalf of its Sponsor, paying $
NOTE 6. COMMITMENT AND CONTINGENCIES
Registration Rights Agreement
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the registration statement. The holders of these securities are entitled to make up to
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demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement and may not exercise demand rights on more than one occasion. We bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with the Initial Public Offering, the underwriters were granted a
The underwriters were paid a cash underwriting discount of $
On April 12, 2023, the Company entered into a fee reduction agreement (the “Fee Reduction Agreement”), which amends the Underwriting Agreement. According to the Underwriting Agreement, the Company previously agreed to pay to the underwriters of the Initial Public Offering an aggregate of $
On April 4, 2024, the Company entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Cantor Fitzgerald & Co. (“CF&CO”). Pursuant to the Amended and Restated Fee Reduction Agreement with CF&CO, in the event that the Company consummates the Business Combination with AERKOMM, CF&CO agrees that it will forfeit $
On April 4, 2024, the Company entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Odeon Capital Group LLC (“Odeon”). Pursuant to the Amended and Restated Fee Reduction Agreement with Odeon, in the event that the Company consummates the Business Combination with AERKOMM, Odeon agrees that it will forfeit $
Merger Agreement
On March 29, 2024, the Company, a Cayman Islands exempted company (which will de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation prior to the closing date) entered into a Merger Agreement, by and among the Company, AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and AERKOMM Inc., a Nevada corporation (the “AERKOMM”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
On September 25, 2024, the Company, Merger Sub and AERKOMM entered into an amendment to the Merger Agreement to (1) provide that any lock-up period applicable to the Sponsor or any officers, directors or affiliates of the Company will terminate at the closing of the Merger, (2) change the percentage of the Founder Shares being treated as Escrowed Sponsor Shares from
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AERKOMM or any Subsidiary of AERKOMM enters into voluntary bankruptcy or fails to remove within 60 days any petition in bankruptcy filed against it prior to closing.
On February 12, 2025, the Company, Merger Sub and AERKOMM entered into a second amendment to the Merger Agreement (the “Amendment No. 2”) to amend and restate the definitions of both “Indebtedness” and “Working Capital”.
As of December 31, 2024, the Company recorded a $
The PIPE Investment
Concurrently with the execution of the Merger Agreement, the Company and AERKOMM entered into subscription agreements (the “Subscription Agreements”) with certain accredited investors providing for investments in the Company’s Common Stock in a private placement for an aggregate cash amount of $
The SAFE Investment
On March 29, 2024, the Company entered into a Merger Agreement, by and among Merger Sub. and AERKOMM (as it may be amended and/or restated from time to time, the “Merger Agreement”). Pursuant to the Merger Agreement, the Company was obligated to enter into simple agreements for future equity (the “SAFE Agreements”) with certain investors providing for investments in shares of the Company’s Common Stock in a private placement in an aggregate amount of not less than $
As of August 12, 2024, an aggregate of $
On December 4, 2024, the Company and AERKOMM entered into one new SAFE Agreement. As a result, as of December 4, 2024, SAFE Agreements for an aggregate of $
The Company analyzed the SAFE agreement under ASC 480 and ASC 815, noting that the Common Stock and Incentive Shares issuable under the SAFE Agreement do NOT meets the requirements for equity classification. As a result, the Common Stock and Incentive Shares are required to be classified as a liability and measured at fair value with changes in fair value recorded in earnings, the SAFE notes were issued by AERKOMM and as such the liability has been reflected in the consolidated financial statement of AERKOMM at issuance and as of December 31, 2024.
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, the Company entered into a support agreement (the “Sponsor Support Agreement”) with the Sponsor and AERKOMM, pursuant to which the Sponsor agreed to, among other things, (i) vote all of its shares in favor of each the Company Proposal sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby, (ii) vote against any Alternative Proposal or proposal relating to a business combination transaction, (iii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company (other than the Merger Agreement and transactions relating to the Merger), (iv) vote
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against any change in the business, management or Board of Directors of the Company (other than in connection with the Merger), (v) vote against any proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of the Company, Merger Sub or the Sponsor under the Merger Agreement or the Company Support Agreement, and (vi) vote in favor of any proposal to extend the period of time the Company is afforded under its organizational documents to consummate an initial business combination, in each case, subject to the terms and conditions of the Company Support Agreement.
AERKOMM Support Agreement
In connection with the execution of the Merger Agreement, the Company entered into a support agreement (the “AERKOMM Support Agreement”) with AERKOMM and certain shareholders of AERKOMM (the “AERKOMM Supporting Shareholders”) pursuant to which the AERKOMM Supporting Shareholders agreed to, among other things,(i) vote to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger (“AERKOMM Transaction Proposals”); (ii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by AERKOMM (other than the Merger Agreement and the transactions relating to the Merger); (iii) vote against any change in the business (to the extent in violation of the Merger Agreement), management or Board of Directors of AERKOMM (other than in connection with AERKOMM Transaction Proposals and the transactions contemplated thereby); and (iv) vote against any proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of AERKOMM or AERKOMM Securityholders under the Merger Agreement or the AERKOMM Support Agreement.
Registration Rights Agreement
The Merger Agreement contemplates that, at the closing, Pubco, the Sponsor and certain former shareholders of AERKOMM (collectively, the “Holders”) will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which Pubco will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain the Company’s Common Shares and Domesticated the Company Warrants that are held by the Holders from time to time.
The Registration Rights Agreement amends and restates the registration rights agreement that was entered into the Company, the Sponsor and the other parties thereto in connection with the Company’s initial public offering. The Registration Rights Agreement will terminate on the earlier of (a) the five year anniversary of the date of the Registration Rights Agreement or (b) with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities.
Capital Markets Advisory Agreement
On September 29, 2024, the Company and AERKOMM signed an engagement letter to appoint Benchmark to serve as a non-exclusive PIPE placement agent for a private placement of securities of approximately $
On October 9, 2024, the Company and AERKOMM entered into an amendment with Benchmark that
On November 26, 2024, the Company and AERKOMM entered into a second amendment with Benchmark that Benchmark shall be entitled to engage sub-placement agents in connection with the Offering. The Company and AERKOMM agree that any fees payable to sub-placement agents shall be in addition to the Company Sourced Offering Fee payable to Benchmark.
On December 9, 2024, the Company and AERKOMM entered into Sub Placement Agreement with Yuanta Securities (Hong Kong) Company Limited (“Yuanta”). In connection with its services under the Sub Placement Agreement, Yuanta may solicit potential investors for both the Company and AERKOMM. Benchmark agreed to pay Yuanta a sub-placement fee of an amount equal to three
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percent (
NOTE 7. WARRANTS
As of December 31, 2024 and 2023, there were an aggregate of
Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a)
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying the obligations described below with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Class A ordinary shares upon exercise of a warrant unless the Class A ordinary shares issuable upon such warrant exercise have been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant.
The Company agreed that as soon as practicable, but in no event later than fifteen () business days after the closing of an initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of an initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Once the warrants become exercisable, the Company may call the warrants for redemption:
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon not less than |
| ● | if, and only if, the closing price of the ordinary shares equals or exceeds $ |
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The Company will not redeem the warrants for cash unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the
If the Company calls the warrants for redemption as described above, Management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” Management will consider, among other factors, its cash position, the number of warrants that are outstanding and the dilutive effect on the Company’s shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants by (y) the fair market value. The “fair market value” will mean the average reported closing price of the Class A ordinary shares for the
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $
The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until
The accounting treatment of derivative financial instruments requires that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants have been allocated a portion of the proceeds from the issuance of the Units equal to their fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities will be adjusted to its current fair value, with the change in fair value recognized in the Company’s consolidated statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
NOTE 8. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT
Preference Shares
The Company is authorized to issue
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Class A Ordinary Shares
The Company is authorized to issue
Class B Ordinary Shares
The Company is authorized to issue
Ordinary shareholders of record are entitled to
The Board of Directors is divided into
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NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| | Amount at Fair | | | | | | | | | | |
Description |
| Value |
| Level 1 |
| Level 2 |
| Level 3 | ||||
December 31, 2024 | | | | | | | | | | | | |
Liabilities | |
|
| |
|
| |
|
| |
|
|
Warrant liability – Public Warrants | | $ | | | $ | — | | $ | | | $ | — |
Warrant liability – Private Placement Warrants | | | | | | — | | | — | | | |
Total Liabilities | | $ | | | $ | — | | $ | | | $ | |
| | Amount at Fair | | | | | | | | | | |
Description |
| Value |
| Level 1 |
| Level 2 |
| Level 3 | ||||
December 31, 2023 | |
| | |
| | |
| | |
| |
Liabilities | |
|
| |
|
| |
|
| |
|
|
Warrant liability – Public Warrants | | $ | | | $ | — | | $ | | | $ | — |
Warrant liability – Private Placement Warrants | | | | | | — | | | — | | | |
Total Liabilities | | $ | | | $ | — | | $ | | | $ | |
Cash and Investments Held in Trust Account
As of December 31, 2024, assets held in the Trust Account were comprised of approximately $
Fair Value Measurements
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in November 2021, when the Public Warrants were separately listed and traded, and subsequently transferred to a Level 2 measurement during the quarter ended March 31, 2022 due to low trading volume.
The Company utilized a Monte-Carlo simulation model for the initial valuation of the Public Warrants. Beginning in November 2021, the fair value of Public Warrants has been measured based on the listed market price of such Public Warrants under the ticker “IXAQW”.
On December 10, 2024, the Company received a notice from the Panel acknowledging that the Company had withdrawn its appeal of the October 7, 2024 delist determination issued by the Nasdaq. Accordingly, trading in the Company’s securities was suspended at the open of trading on December 12, 2024.
The Company utilized a probability-adjusted Black-Scholes method to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the Private Placement Warrant liabilities is determined using Level 3 inputs. Inherent in pricing models are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
F-27
The following table provides the significant inputs to the probability-adjusted Black-Scholes method for the fair value of the Private Placement Warrants:
|
| December 31, 2024 |
| December 31, 2023 |
| ||
Stock price | | $ | | | $ | | |
Exercise price | | $ | | | $ | | |
Dividend yield | |
| — | % |
| — | % |
Expected term (in years) | |
| | |
| | |
Volatility | |
| | % |
| | % |
Risk-free rate | |
| | % |
| | % |
Fair value | | $ | | | $ | | |
Probability of Business Combination | | | | % | | | % |
The following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis:
Fair value at December 31, 2023 |
| $ | |
|
| | |
Fair value at December 31, 2024 | | $ | |
| |
| |
Fair value at December 31, 2022 | | $ | |
| | — | |
Fair value at December 31, 2023 | | $ | |
The Company recognized $
Derivative Liability-Conversion Feature
The Company utilizes a Monte Carlo model to estimate the fair value of the conversion feature within the Extension Promissory Note, which is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the conversion feature are recognized as non-cash gains or losses in the accompanying consolidated statements of operations.
The key assumptions in the model relate to expected share-price volatility, risk-free interest rate, exercise price, expected term and the probability of occurrence of the transaction. The expected volatility was based on the average volatility of special purpose acquisition companies that are searching for an acquisition target. The risk-free interest rate is based on interpolation of Treasury yields with a term commensurate with the term of the warrants. The Company anticipates the dividend yield to be
The estimated fair value of the conversion feature related to the Extension Promissory Note as of issuance and for the period ended December 31, 2024 is
F-28
NOTE 10. SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their consolidated financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s chief operating decision maker has been identified as the Chief Executive Officer and Chief Financial Officer (“CODM”), who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has
The CODM assesses performance for the single segment and decides how to allocate resources based on net loss that also is reported on the consolidated statement of operations as net loss. The measure of segment assets is reported on the consolidated balance sheet as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net loss and total assets, which include the following:
| | December 31, | | December 31, | ||
|
| 2024 |
| 2023 | ||
Trust Account | | $ | | | $ | |
Cash | | $ | | | $ | |
| | For the Year Ended | | For the Year Ended | ||
|
| December 31, 2024 |
| December 31, 2023 | ||
Operating and formation expenses | | $ | | | $ | |
Interest earned on the Trust Account | | $ | | | $ | |
The CODM reviews interest earned on the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.
Operating and formation expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction within the business combination period. The CODM also reviews operating and formation costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Operating and formation costs, as reported on the consolidated statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net loss are reported on the consolidated statement of operations and described within their respective disclosures.
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the accompanying consolidated financial statements were issued. Based upon this review, other than below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying consolidated financial statements.
On February 12, 2025, the Company, Merger Sub and AERKOMM entered into a second amendment to the Merger Agreement (the “Amendment No. 2”) to amend and restate the definitions of both “Indebtedness” and “Working Capital”.
On February 12, 2025 and March 12, 2025, the Company made two deposits of $
F-29
Exhibit 19.1
IX ACQUISITION CORP.
INSIDER TRADING POLICY
and Guidelines with Respect to
Certain Transactions in Company Securities
In order to take an active role in the prevention of insider trading violations by directors, officers and other employees of IX Acquisition Corp. (the “Company”), as well as by other related individuals, the Company has adopted the policies and procedures described in this Policy.
Applicability of Policy
This Policy applies to all transactions in the Company’s securities, including shares of common stock, options for shares of common stock and any other securities the Company may issue from time to time, such as preferred shares, warrants and convertible debentures, as well as to derivative securities relating to the Company’s shares, whether or not issued by the Company, such as exchange-traded options. It applies to all directors, officers and all other employees of, or consultants or contractors to, the Company, as well as family members of such persons, and others, in each case where such persons have or may have access to Material Nonpublic Information (as defined below under the caption “Definition of Material Nonpublic Information”). This group of people (including the Company as an entity), and members of their immediate families, and members of their households, who are sometimes referred to as “Designated Insiders,” are collectively referred to in this Policy as “Insiders.” This Policy also applies to any person who receives Material Nonpublic Information from any Insider. Any person required to file reports with the SEC under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is referred to herein as a “Section 16 Person.”
Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known. Any employee can be an Insider from time to time, and would be subject to this Policy.
Compliance Officer
The Company will from time to time appoint an individual to serve as the Company’s Insider Trading Compliance Officer, who may be an officer of the Company or an outside legal counsel to the Company. Please contact such person (or anyone that he or she has designated to field questions) with questions as to any of the matters discussed in this Policy.
Statement of Policy
General Policy
It is the policy of the Company to oppose the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading.
Specific Policies
1. Trading on Material Nonpublic Information. The Company (as an entity), no director, officer or other employee of, or consultant or contractor to, the Company, and no member of the immediate family or household of any such person, shall engage in any transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the open of business on the second full Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which the NASDAQ Stock Market is open for trading. A Trading Day begins at the time trading begins on such day. This restriction on trading does not apply to transactions made under a trading plan that has been adopted pursuant to Rule 10b5-1(c) promulgated under the Exchange Act, and that has been approved in writing by the Company (an “approved Rule 10b5-1 trading plan”).
2.Tipping. No Insider shall disclose (“tip”) Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company’s securities.
3. Confidentiality of Nonpublic Information. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden. In the event any director, officer or other employee receives any inquiry from outside the Company, such as from a stock analyst, for information (particularly financial results and/or projections) that may be Material Nonpublic Information, the inquiry should be referred to the Company’s Compliance Officer, who is responsible for coordinating and overseeing the release of such information to the investing public, analysts and others in compliance with applicable laws and regulations.
You must treat all Material Nonpublic Information carefully and avoid inadvertent or indirect disclosure of it. Even within the Company, such information should be distributed to or discussed with others only on a need-to-know basis, and those people should be told that such information is confidential. Be careful that your conversations are not overheard on elevators, restaurants, airplanes, or other public places; do not leave confidential documents on conference tables, desks or otherwise unguarded; and take whatever steps are reasonably necessary to keep Material Nonpublic Information from being disclosed.
4. Blackout Period. All Section 16 Persons and Designated Insiders (contact the Compliance Officer if you are unsure whether you fall into either of these categories) must refrain from engaging in transactions involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during the period in any fiscal quarter commencing two weeks prior to the end of the fiscal quarter and ending at the open of market on the second full Trading Day following the date of public disclosure of the financial results for the prior fiscal quarter or year. This is a particularly sensitive period of time for transactions in the Company’s shares from the perspective of compliance with applicable
securities laws. This sensitivity is due to the fact that directors, officers and certain other employees will, during that period, often possess Material Nonpublic Information about the expected financial results for the quarter. All Section 16 Persons and Designated Insiders of the Company are prohibited from trading during this “blackout period”. The prohibition against trading during the blackout period encompasses the fulfillment of “limit orders” by any broker for a Section 16 Person or Designated Insider, and the brokers with whom any such limit order is placed must be so instructed at the time it is placed.
5. Trading Window. The “Trading Window” is that period of a fiscal quarter during which the Section 16 Persons and Designated Insiders of the Company are not precluded (assuming they do not possess Material Nonpublic Information) from trading in the Company’s securities as described in the paragraph directly below.
The safest period for trading in the Company’s securities, assuming the absence of Material Nonpublic Information, is generally the first 20 days of the Trading Window. However, even during the Trading Window any person possessing Material Nonpublic Information concerning the Company should not engage in any transactions in the Company’s securities until such information has been known publicly for at least one full Trading Day. This trading restriction does not apply to transactions made under an approved Rule 10b5-1 trading plan. Each person is individually responsible at all times for compliance with the prohibitions against insider trading.
6. Pre-clearance of Trades. The Company has determined that all Section 16 Persons and Designated Insiders of the Company should refrain from trading in the Company’s securities, even during the Trading Window, without first complying with the Company’s “pre-clearance” process. Each Section 16 Person and Designated Insider should contact the Company’s Insider Trading Compliance Officer prior to commencing any trade in the Company’s securities. The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from certain other employees who have access to Material Nonpublic Information. A Section 16 Person or Designated Insider wishing to trade pursuant to an approved Rule 10b5-1 trading plan need not seek pre-clearance from the Company’s Insider Trading Compliance Officer before each such trade takes place; however, such person must obtain Company approval of the proposed Rule 10b5-1 trading plan before adopting it.
7. Prohibition Against Margining of Company Securities. No Section 16 Person of the Company shall margin, or make any offer to margin, any of the Company’s securities as collateral to purchase the Company’s securities or the securities of any other issuer at any time. Notwithstanding the previous sentence, this paragraph is not meant to, and shall not be construed so as to, affect the ability of any Section 16 Person of the Company, from using his or her Company’s securities as collateral to securitize a bona fide loan.
8. Prohibition Against Short Sales. No Section 16 Person or other employee of the Company shall, directly or indirectly, sell any equity security of the Company if the person selling the security or his or her principal (1) does not own the security sold, or (2) if owning the security, does not deliver it against such sale (a “short sale against the box”) within 20 days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation. Generally, a short sale, as defined in this Policy, means any transaction whereby one may benefit from a decline in the Company’s share price. While employees who are not
executive officers or directors are not prohibited by law from engaging in short sales of the Company’s securities, the Company believes it is inappropriate for employees to engage in such transactions.
9. Prohibition Against Trading in Derivative Securities. No Section 16 Person or other employee of the Company shall purchase or sell, or make any offer to purchase or offer to sell, derivative securities relating to the Company’s securities (so called “puts” and “calls”), other than transactions in the exchange traded warrants issued by the Company in July 2020 that are otherwise in compliance with all other requirements of this Policy. This paragraph is not meant to, and shall not be construed as to, affect the ability of the Company to grant options to officers, directors and employees under employee benefit plans or agreements adopted by the Board of Directors, or the ability of officers, directors and employees to exercise such options and sell the underlying shares, provided that any such sale is otherwise in accordance with this Policy.
10. Prohibition Against Internet Disclosure. It is inappropriate for any unauthorized person to disclose Company information on the Internet and more specifically in forums (chat rooms) where companies and their prospects are discussed. Examples of such forums include but are not limited to Yahoo! Finance, Silicon Investor, Seeking Alpha, Reddit and Motley Fool. The posts in these forums are typically made by unsophisticated investors who are sometimes poorly informed, and generally are carelessly stated or, in some cases, malicious or manipulative and intended to benefit their own stock positions. Accordingly, no director, officer, employee, consultant or contractor or other party related to the Company may discuss the Company or Company-related information in such a forum regardless of the situation. Despite any inaccuracies that may exist (and often there are many), posts in these forums can result in the disclosure of Material Nonpublic Information and may bring significant legal and financial risk to the Company and are therefore prohibited, without exception. Any post that is made by any person with access to Material Nonpublic Information, or information supplied by any such person for someone else to post, will be treated as a violation of this Policy.
Potential Criminal and Civil Liability and/or Disciplinary Action
1. Liability for Insider Trading. Pursuant to federal and state securities laws, Insiders may be subject to criminal and civil fines and penalties as well as imprisonment for engaging in transactions in the Company’s securities at a time when they have knowledge of Material Nonpublic Information regarding the Company.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Nonpublic Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities. The Securities and Exchange Commission (the “SEC”) has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority, Inc. use sophisticated electronic surveillance techniques to uncover insider trading.
3. Possible Disciplinary Actions. Employees of the Company who violate this Policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive plans or termination of employment.
4. Individual Responsibility. Every person subject to this Policy has the individual responsibility to comply with this Policy against insider trading, and appropriate judgment should be exercised in connection with any trade in the Company’s securities. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.
Applicability of Policy to Inside Information Regarding Other Companies
This Policy and the restrictions and guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company’s customers, vendors or suppliers (“business partners”), when that information is obtained in the course of employment with, or other services performed for, the Company. Civil and criminal penalties, and termination of employment, may result from trading on inside information regarding the Company’s business partners. All directors, officers and other employees should treat Material Nonpublic Information about the Company’s business partners with the same care required for information related directly to the Company.
Definition of Material Nonpublic Information
It is not possible to define all categories of “material” information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company’s securities. In this regard, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information include:
Financial Related Events
| ● | Financial results |
| ● | Projections of future earnings or losses |
| ● | Stock splits |
| ● | New equity or debt offerings |
| ● | Impending bankruptcy or financial liquidity problems |
| ● | Creation of a material direct or contingent financial obligation |
Corporate Developments
| ● | Pending or proposed merger or acquisition |
| ● | Disposition or acquisition of significant assets |
| ● | Significant litigation exposure due to actual or threatened litigation |
| ● | Major changes in senior management |
| ● | Material agreement not in the ordinary course of business (or termination thereof) |
“Nonpublic information” is information that has not been previously disclosed to the general public and is otherwise not available to the general public. Either positive or negative information may be material.
Certain Exceptions
For purposes of this Policy, the Company considers that the exercise of stock options for cash under the Company’s option plans or the purchase of shares under the Company’s employee share purchase plan (but not the sale of any such shares), if any, is exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.
Additional Information - Directors and Officers
Directors and officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions set forth in Section 16 of the Exchange Act. The practical effect of these provisions is that officers and directors who purchase and sell the Company’s securities within a six-month period must disgorge all profits to the Company whether or not they had knowledge of any Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of an option under the Company’s option plans, nor the exercise of that option, nor the purchase of shares under the Company’s employee share purchase plan, if any, is deemed a purchase under Section 16(b); however, the sale of any such shares is a sale under Section 16.
Persons subject to the reporting requirements of Section 16 must file their statements of change in ownership on Form 4 before the end of the second business day following such change in ownership and, within 45 days of the end of the fiscal year, file their annual statement of beneficial ownership, if necessary. These reports will be made available on our corporate website and are publicly accessible on the SEC’s website at www.sec.gov.
Inquiries
Please direct your questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer.
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Noah Aptekar, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2024 of IX Acquisition Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 3, 2025 | By: | /s/ Noah Aptekar |
| | Noah Aptekar |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Noah Aptekar, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2024 of IX Acquisition Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 3, 2025 | By: | /s/ Noah Aptekar |
| | Noah Aptekar |
| | Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of IX Acquisition Corp. (the “Company”) on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 3, 2025 | By: | /s/ Noah Aptekar |
| | Noah Aptekar |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of IX Acquisition Corp. (the “Company”) on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 3, 2025 | By: | /s/ Noah Aptekar |
| | Noah Aptekar |
| | Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |